KENYA: Gulf African Bank, one of Kenya's two Islamic banks, has turned profitable in the last quarter of 2009

Record ID: 360964

  • Title: KENYA: Gulf African Bank, one of Kenya's two Islamic banks, has turned profitable in the last quarter of 2009
  • Date: 10th February 2010
  • Summary: NAIROBI, KENYA (FEBRUARY 8, 2010) (REUTERS) CHIEF EXECUTIVE OFFICER, GULF AFRICAN BANK, NAJMUL HASSAN TALKING TO JOURNALIST HASSAN'S HANDS (SOUNDBITE) (English) NAJMUL HASSAN, CHIEF EXECUTIVE, GULF AFRICAN BANK SAYING: "We have nearly doubled our financing, we have doubled our deposits, we have grown as far as our branch network is concerned - we have become a profitab
  • Embargoed: 25th February 2010 12:00
  • Keywords:
  • Location: Kenya
  • Country: Kenya
  • Topics: Finance
  • Reuters ID: LVABNA2K3MRDSNBQ5X9B4H1I3T4Q
  • Story Text: Gulf African Bank, one of Kenya's two Islamic banks, has turned profitable in the last quarter of 2009 after only about a year and a half of operations, its chief executive told Reuters on Monday (February 8).
    Najmul Hassan said the bank's loan portfolio has grown to about 5 billion Kenya shillings (6.5. million U.S. dollars) since it launched in 2008 and deposits now stand at 6.4 billion shillings (83.3 US million dollars).
    "We have nearly doubled our financing, we have doubled our deposits, we have grown as far as our branch network is concerned - we have become a profitable bank; it took us a little over a year, probably a year and half, you might say, So we started to break even in October last year and since October - the last quarter - we have been profitable," Hassan said.
    The bank, in which Gulf Arab investors such as the United Arab Emirates' investment bank Istithmar and Bahrain-based Bank Muscat International own stakes, opened its first branch in January 2008 with capital of 25 million U.S. dollars.
    "We have grown, so obviously we are taking share from other banks or we are creating a new market. Both of these things are good, najmul said.
    The bank caters for customers who want to follow Islamic rules on avoiding direct payment or earning of interest, which are viewed as usury under Islamic law.
    But Hassan stressed that there was no impediment to non-Muslims using the bank's services and that the bank's ethical principles could attract customers regardless of their religious background.
    "Again I think a lot of people think that this kind of banking is for a foreign niche market - it is there for Muslims but it isn't actually. There are lots of people who are doing business with us and who are more driven by ethics," Hassan told Reuters, Post election violence that wracked much of Kenya for the first quarter of 2008 prevented Gulf African from expanding even more than it has done.
    The bank now has 12 branches in four towns and is considering expansion into Nigeria and neighbouring Tanzania and Uganda, Hassan said.
    "I think there is a huge room, we are looking at the tip of the iceberg. I think there is a huge potential over here. I think if you really take the religious aspect out of it and you are able to say that this form of banking is good for everyone, I really don't think it will be restricted to the Muslim community," added Hassan.
    The Islamic finance industry is seeking to grow outside its main centres in the Gulf Arab region and South East Asia in order to tap into Muslim minorities in Western and African countries.
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