FIRST National Bank (FNB) says it is looking to expand its Islamic banking offering to Zambia and Tanzania before the end of its financial year in June next year.
FNB, which has been on an expansion phase in select countries in the rest of Africa, is looking to use the Islamic banking offering to capture clients, especially in those countries that have big Muslim communities.
"The two countries that we are focused on are Zambia and Tanzania," Amman Muhammad, the CEO of FNB Islamic Banking, said on Monday.
"We are hoping by the next financial year, we will be active there." Mr Muhammad said about half of the 1.1-billion people in Africa were Muslim.
He said that in sub-Saharan Africa there were about 280-million Muslim people and the FirstRand group had a presence in countries that had about 200-million Muslims.
The bank already offers Islamic banking in Botswana.
As governments look to raise Islamic bonds, known as Sukuks, FirstRand is looking to position itself through its franchise, Rand Merchant Bank.
Last year, SA sold its first Islamic bond and raised $500m with the debt carrying a coupon as low as 3.9% over a five-year period.
Mr Muhammad said there was now demand for Islamic banking.
Islamic banking does not invest depositors’ money in what is considered "sin stocks" involved in activities Muslims frown upon.
Absa, the other company which offers Islamic banking in SA, said that as part of Barclays Africa group, it had the opportunity to team up with Barclays Bank Kenya and NBC in Tanzania to enhance their Islamic banking offering.
(Business Day Live / 20 October 2015)---
Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com