- City Fajr Shuruq Duhr Asr Magrib Isha
- Dubai 04:51 06:04 12:14 15:38 18:18 19:32
Sharjah Islamic Bank (SIB) has moved into international markets through partnerships and acquisition of companies in Turkey, Europe, Malaysia, the Gulf and other Arab countries.
CEO Mohammed Abdullah said the bank has enough liquidity and it will expand further in the Gulf and examine opportunities that have not been impacted by the financial crisis.
Asked how the performance of Islamic banking compares with that of conventional ones, he said Islamic banks are built on more solid ground.
But he urged both Islamic and conventional banks to consider diversifying their investment portfolios to help minimise the negative impact from the collapse of any sector.
He said the reason SIB managed to record 12 per cent profit in 2009 was that it had diversified investments. "Our investment portfolio cover industrial, trade, shipping, aviation and property sectors and the property sector represents no more than 20 per cent of our investments. We finance only 60 per cent of the value of a property.
"In addition, since the bank is a risk-sharer our policy was to take into consideration, when setting a mortgage rate, a probable reduction in property prices. I can say we are in a safe position with regard to current property prices." Abdullah said the bank would never take a defaulter to court, adding: "We had a few default cases and we rescheduled the instalments. The main principle of Islamic banking and finance is caring about society and people's welfare and ensuring economic and social development. We do not take harsh actions."
Asked whether the bank had considered reducing its mortgage rates, he said: "Since the beginning of the crisis the bank has reduced rates whenever it was considered necessary."
Regarding profit rates on deposits, he said the bank did not specify rates in advance but based them on year-long performance and end-of-year results. "Some Islamic banks do specify profit rates on deposits, but we do not do that and rates are based on performance."
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