Qatar Islamic Bank is hunting for acquisition targets in Indonesia to strengthen its presence in Asia and tap demand for sharia banking products in the world's most populous Muslim nation, the head of its Malaysian unit said on January 12.
Qatar Islamic is studying several potential candidates in Indonesia that have been identified by Asian Finance Bank, which is 62 percent-owned by the Gulf lender.
"In Indonesia, the competition is robust so we need something which is ready-made for us to kick-start immediately," Asian Finance chief executive Mohamed Azahari Kamil said.
"We need to have a partner that has both a corporate and retail basse that we can capitalise on. Azahari said "nothing concrete has transpired" in the acquisition plans and formal talks had yet to begin but declined to elaborate on the possible targets.
"We're talking about Asia as a whole because we believe there is a lot of potential for Islamic finance even to grow in South Korea," he said. "The Indonesian operations, if it materialises, will provide a very good presence within the region."
Indonesia, where about 85 percent of the population are Muslim, is seen as the next major growth centre for Islamic finance as traditional markets such as Gulf states and Malaysia reach saturation point. Indonesia has 11 Islamic banks.
Indonesia expects its sharia banking assets to reach 130 trillion rupiah by the end of 2011, from an estimated 90-92 trillion rupiah in 2010, according to the central bank. They grew by an average 33 percent in the last five years.
The Southeast Asian country is overhauling its regulatory framework to accelerate demand for Islamic products but some bankers say it could take years for the changes to bear fruit.
RUSD Investment Bank owns a fifth of Asian Finance Bank, Financial Assets Bahrain has 8 percent and Tadhamon International Islamic Bank 10 percent.
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