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Monday, 26 April 2010

Gulf Islamic banks eye conversion of conventional peers

More banks in the Gulf Arab region may convert to Islamic finance in a bid to tap rising demand for sharia-compliant products and to avoid the heavy investment required to launch new banks.

A source told Reuters this month that Qatari investors are planning to buy a 25 percent stake in Ahli United Bank AUBB.BH (AUBK.KW) from Kuwaiti investors and have plans to convert Bahrain's largest retail bank, which itself plans to take its Kuwaiti unit Islamic.

"Converting to Islamic is compelling in the region. In Kuwait Islamic banks have rapidly won market share from conventional ones," said Sayd Farook, senior consultant at Dar Al Istithmar.