Property exposures could hurt Islamic banks
While Islamic banks have so far appeared largely immune to the global credit crisis, a Reuters Wealth Management Summit in Singapore has been told that some could yet fail as a result of frozen credit markets and slumping property prices.
Leading sharia lender and chief executive of Malaysia’s CIMB Islamic Bank, Badlishyah Abdul Ghani, told the summit that sharia lenders in the Gulf would be harder hit by the credit crisis than Asian banks due to their greater direct exposure to the property market.
He said that the sovereign-backed Islamic banks were very safe and would be supported by the sovereign if they had liquidity problems, but privately-owned banks would face difficulty.
“Whether or not they are going to fail is anybody’s guess, but the expectation is that some will (fail),” Abdul Ghani said.
He said that Asian Islamic lenders were expected to fare better because they had less direct exposure to property markets and funds that invested in real estate.
Recommended for you
GQG Partners has completed the acquisition of the minority interests held by Pacific Current Group in three affiliates which will form its new Private Capital Solutions division.
The wealth management firm has unveiled a new fund in partnership with PG3 AG and investment specialist Longreach Alternatives, describing the investment solution as an “alternative” to traditional alternatives.
Fidante affiliate NovaPort Capital has announced the closure of its small cap and microcap funds, citing expected declining flows.
T. Rowe Price believes Australian growth is successfully managing to shrug off consumer weakness, but the firm’s multi-asset team is not yet positive enough to increase its underweight position.