Demand grows for Islamic finance

By Laura MacInnis

GENEVA (Reuters) - Shariah-compliant bank accounts and investment tools have become mainstream product offerings for high-end wealth managers who aim to woo clients from the booming Middle East.

Increasing numbers of Middle Eastern clients are asking for Islamic financial products to invest their assets, which have swollen along with the recent oil price spike, in a way that matches their religious beliefs, private banking executives said.

"Most of our clients (in the Middle East) do want Islamic products," said Emilio Saracho, head of J.P. Morgan's European, Middle Eastern and African private banking division.

While shariah products make up a small slice of worldwide investments, successful banking in the Middle East necessitates offering these products, which do not pay interest and generally avoid investments in alcohol, gambling, and other activities barred in the Muslim faith, Saracho said.

"Islamic finance and Islamic banking is not an anecdote; it is something that is pervasive. It is in every discussion and is taken very seriously by an increasing number of people in the region," he told the Reuters Wealth Management Summit in Geneva, a traditional hub for Middle East money.

While the Swiss private banks do not reveal how much money they manage from the region, John Sandwick of Geneva-based Encore Management has estimated that up to $200 billion of Muslim assets may be under management in Geneva.

Faisal Private Bank said on Wednesday it had won Swiss regulatory approval to open shop in Geneva. The bank, which has Bahrain-based Ithmaar Bank ITHMR.BH as its principal shareholder, will be the first in Switzerland fully dedicated to providing Islamic financial products.

A PRETTY BIG NICHE  Continued...