By Mushtak Parker It sounds like the name of a new Japanese bank entering the Gulf market for the first time. But on closer inspection Noriba Bank BSC, which was incorporated in Bahrain in May this year and due to start operations next month, is a Swiss-owned investment bank managed by an Arab banker.
LONDON, UNITED KINGDOM —
More remarkably, Noriba Bank is a dedicated Islamic bank wholly-owned by the Zurich-based UBS Group, Switzerland’s leading bank and the largest provider of private banking and asset management services in the world.
Noriba Bank, as such, is the latest venture of a blue-chip Western global banking major into the growing Islamic banking sector, and once again raises questions about the reasons why Western institutions are involved in Islamic finance.
This at a time when the global banking sector is retrenching, affected by a sluggish US economic recovery; the economic woes in Brazil; and exposure to a spate of US corporations, which have either collapsed or are in serious trouble due to accounting failures and alleged stock option frauds. Morgan Stanley and Deutsche Banks are the latest global banking majors to shed heavy job cuts.
Noriba is not just some name conjured up by executives in Zurich. It is a clever pun on the Arabic word ‘riba’ which means interest. Noriba Bank should really read ‘No Riba’ (No Interest) Bank. UBS has drafted Mohammad Toufic Kanafani as chief executive officer of the new bank — a banker of extensive experience in the Gulf countries. Kanafani, until a few months ago headed the asset management department at the Jeddah-based Bank Al-Jazira, which manages five Shariah-compliant funds.
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