Standard Chartered Private Bank has launched a comprehensive suite of Sharia-compliant financial solutions for its Islamic clients.
The Singapore-based private bank intends to target Muslim high net worth (HNW) individuals around the world, offering them a wide range of products.
These will include among which Islamic bonds (sukuks), fiduciary deposits, property financing, equities and discretionary services, mutual funds (including exchange-traded funds) and third-party structured products.
Standard Chartered said it has identified Islamic private banking as a gap in the current market product offering.
The Islamic banking solutions will become available by mid June across the bank’s booking centers in London, Geneva, Jersey and Dubai.
The services will be delivered in collaboration with Standard Chartered Saadiq, the Bank’s Islamic banking arm, which has more than 18 years of experience in Islamic banking and finance and is present onshore in six different markets.
Lack of Sharia products for Islamic HNW
According to a report by Ernst & Young, Islamic banking assets are growing twice as fast as conventional banking assets and are expected to reach $1.1trn globally in 2012, 33% more than in 2010.
Muslim HNWIs are increasingly expecting Sharia compliance in their wealth management, making Islamic wealth management solutions a key market need, Standard Chartered said.
“Although Islamic banking solutions have become increasingly available, there are few viable Sharia-compliant alternatives for HNWIs,” said Wasim Akhtar Saifi, Standard Chartered’s global head of Islamic Banking for its consumer banking business.
“Muslim HNWIs are restricted to the conventional offering of traditional private banks. There is a need to adopt a more holistic view towards wealth management for this segment,” he added.
“The launch of Islamic financial solutions for our private banking clients broadens the overall spectrum of wealth management solutions available to those seeking Sharia compliance. We plan to continue to expand the range of Sharia-compliant solutions to address evolving client needs,” said Saifi.
Growth to come from Indonesia, Pakistan and Bangladesh
In Asian and Middle East markets, Islamic banking has turned into a mainstream development, increasing visibility and regulatory support.
Standard Chartered expects a gradual conversion from conventional banking to Islamic banking.
While Middle Eastern Islamic wealth is traditionally booked is Switzerland, Standard Chartered sees a growing trend of diversification to other hubs, such as London and particularly Singapore.
The bank also expects high growth potential for the yet underdeveloped Islamic markets of Indonesia, Pakistan and Bangladesh.