A consortium comprising a reputable bank, royal families, and a group of leading businessmen in the GCC, has announced that an agreement to set up the first Islamic bank in the eurozone has now been concluded. The announcement was made public during the Global Islamic Economy Summit 2013 held in Dubai last November.
Deloitte, one of the Big Four professional services companies, has completed a feasibility study for the bank, which is said to demonstrate high return on investment, taking advantage of being the first of its kind to operate from the eurozone countries.
Set to be headquartered in Luxembourg due to its robust macro-economic environment and supportive regulatory framework for (Islamic) financial services, the founders, promoters and Deloitte have concluded a meeting with the CSSF (Luxembourg’s Supervisory Authority), which has welcomed the idea and given directions to prepare the documents required to submit the bank’s file to obtain a banking licence.
Eurisbank will establish its operation in line with Luxembourg’s aim to become the first Islamic banking capital in the eurozone, delivering a spectrum of world-class financial services in retail, orporate, and private banking, with a start-up capital totalling Euro 60m , and is set to have branches in Paris, Brussels, The Netherlands and Frankfurt.
Deloitte and Excellencia Investment Management have been assigned to conduct all procedures through to finalising the establishment of Eurisbank.
Marco Lichtfous, partner in Deloitte Luxembourg, said, “As the worldwide Islamic finance industry moves from niche to critical mass Europe is becoming an attractive and promising market that is not yet served by Shari’ah-compliant banking services. Considerable potential exists for the expansion of Islamic finance and Excellencia Investment Management (ExIM) by launching Eurisbank, the first Islamic bank in the eurozone.”
He added, “The global market for Islamic financial services is estimated at $1.8 trillion, and by opening new markets the numbers are set to grow significantly in the years ahead.”
On another note, Ammar Dabbour, managing partner in Excellencia Investment Management, explained that, “A large untapped customer base with more than 20 million Muslims in the EU represents a significant market growth potential for Islamic finance, and, with the strong support of the European governments and regulatory authorities of the Islamic Finance Model, the unification of the regulatory framework within the European Union is a significant advantage to serve Muslim and non-Muslim communities across Europe.
“With Low penetration rates of Islamic banking products in Europe resulting from a lack of supply and the strong demand from Muslim clients for Shari’ah-compliant services that are not appropriately addressed by current banking offerings, Eurisbank is devised to supply a much needed spectrum of services and products unique to their audience.”
Regarding the expected launching of the bank, Dabbour added, “We will compile the file in January 2014 and submit it to the CSFF for their final screening, and anticipate their positive opinion and the ensuing final approval by the Ministry of Finance by April 2014, which gives us enough time to launch the bank’s operation in the last quarter of 2014.”
Eurisbank plans to focus on its core competency, which is the distribution, product combination, portfolio optimisation, manager selection and product screening of Islamic financial products. For the building and structuring of the products, it will utilise the longstanding expertise of its shareholders.
It’s said that “customers will be acquired through the personal relationships of Eurisbank management and its shareholders and through targeted marketing and communication campaigns while leveraging its first-mover advantage as a Shari’ah-compliant banking group in the Eurozone”.