(Sukuk.net - Bahrain Tribune) With major financial institutions from across the GCC already invested huge amounts in Turkey, the investors from the Middle East are also eyeing the Islamic banking and finance industry in that country as an ideal investment opportunity. As one of the largest Muslim economies with bright prospects for growth, the level of Middle East investment in Turkey has been significantly increasing in recent years, a major conference organiser on Islamic banking and finance said.

Swati Taneja, conference director of the Islamic finance industry's leading global event, the International Islamic Finance Forum that next takes place in Istanbul from October 13 to 17, said, "The Islamic banking sector in particular has been on the receiving end of large sums but other sectors are starting to attract heavy Middle East interest including insurance, energy and real estate. Internationally Sukuk is one of the fastest growing asset classes in the financial industry," she said.

"The Turkish market is in need of such instruments and investor groups from the Gulf are ready to inject more into the Turkish economy provided the right regulatory regime is put in place." Banks operating on Islamic principles in Turkey are known as participation banks. They are a small but rapidly expanding segment of the Turkish financial sector.

"Albaraka Türk, Bank Asya, Kuveyt Türk and Türkiye Finans, which holds portfolio of about $21.5 billion in assets, representing 5% of the Turkish banking system and the sector aims to double its share within the next 10 years. Albaraka Türk, with Bahrain's Albaraka Banking Group as major shareholder, successfully went public recently and valuations of Turkish participation banks are relatively attractive compared with the valuations of similar banks in the Gulf region.

Earlier this year, National Commercial Bank (NCB) Saudi Arabia completed its acquisition of a 60 per cent equity stake in Turkish Islamic bank Türkiye Finans for approximately $1.08 billion which ahs has 124 branches and had assets at the end of last year of $2.9 billion. "Meanwhile, Kuwait Finance House aims to become one of the top bankers in Turkey. It wants to boost branches of Kuveyt Turk, in which it holds a majority stake, to 113 from about 100 now by year-end and become one of the top ten lenders by organic growth. Kuveyt Turk, which had assets worth $3.18 billion at the end of 2007, is the third-largest Islamic bank in Turkey by assets.



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