(MENAFN- Khaleej Times) Meezan Bank, the fastest-growing Islamic lender in Pakistan, plans to make forays into the international market with the opening of a representative office in the UAE, its top official said.
"We are exploring possibilities of establishing a representative office in the UAE and after which the possibilities of establishing branches in the emirate will be explored," Irfan Siddiqui, president and chief executive of Meezan Bank, told Khaleej Times at the fifth World Islamic Retail Banking Conference in Dubai on Wednesday.
The Karachi-headquartered Islamic bank, which started its operations 10 years back with one branch, has now expanded its network to about 336 across the country. "We have an extensive growth plan under which branch network will be increased up to 500 mark by 2016 with a deposit base of Rs500 billion," he said.
About the bank's performance in 2013, he said it is good and consistent in all banking segments. "The bank has continued its growth trend and recorded eight per cent growth in post-tax profit over the corresponding period. The nine-month profit increased to Rs2.87 billion from Rs2.66 billion in the similar period last year while earnings per share rose to Rs2.87 per share on enhanced capital of Rs10 billion. Apart from this, the growth rate of the bank's deposit is highest in Pakistan during the last three consecutive quarters," Siddiqui explained.
The bank is involved in Pakistan's first airtime sukuk and is planning to issue a $68.5 million Islamic bond for a telecom operator in the country. The Islamic bond will have a five-to-10-year maturity period. "The airtime sukuk is in execution stage. Our product and investment banking teams are working on several sukuks and structured Islamic syndicate transactions. A major deal in the pipeline will be jointly arranged by Meezan Bank and Habib Bank is for the energy sector to set up a power plant in the country," he said. "We will be arranging Rs18 billion through sukuk for an energy project in Pakistan."
Islamic banking
Siddiqui said Islamic banking has shown tremendous growth globally as well as in Pakistan, and worldwide it is recognised as a viable and sustainable financial system. "In Pakistan, Islamic banking has shown impressive growth with about 10 per cent of the total market share," he said.
"Among the full-fledged Islamic banks, we hold the leading position with more than 50 per cent of deposit share. We are focusing for growth in all business segments and want to make Islamic banking first choice for customers."
About the challenges to Islamic banking in Pakistan, he said the availability of long- and short-term sukuks in excess of liquidity management is a major test for the industry. "We are currently witnessing strong deposit inflow in the Islamic banks. Other challenges include creating awareness in the mass market, expansion of Islamic banking reach and branch network," he said.
Clarifying a perception of copying conventional products by Islamic banks, he said it is not true and that Islamic banking is significantly different from the conventional mode of business.
"As an Islamic bank, we strive to provide solutions to all the permissible needs of the customers as long as there are Shariah-compliant solutions are available. Moreover, a contract in Islamic banking transactions is not one-sided as it generally protects the rights of both parties involved."
In reply to a question, he said Meezan Bank is taking various steps to promote Islamic banking in the country. "We hold awareness sessions and seminars for the general public and bank's customers, collaborate with academic institutions for Islamic banking courses, join hands with different trade bodies and chambers."
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