Property exposures could hurt Islamic banks
While Islamic banks have so far appeared largely immune to the global credit crisis, a Reuters Wealth Management Summit in Singapore has been told that some could yet fail as a result of frozen credit markets and slumping property prices.
Leading sharia lender and chief executive of Malaysia’s CIMB Islamic Bank, Badlishyah Abdul Ghani, told the summit that sharia lenders in the Gulf would be harder hit by the credit crisis than Asian banks due to their greater direct exposure to the property market.
He said that the sovereign-backed Islamic banks were very safe and would be supported by the sovereign if they had liquidity problems, but privately-owned banks would face difficulty.
“Whether or not they are going to fail is anybody’s guess, but the expectation is that some will (fail),” Abdul Ghani said.
He said that Asian Islamic lenders were expected to fare better because they had less direct exposure to property markets and funds that invested in real estate.
Recommended for you
Australian equity ETFs attracted record inflows of $3.2 billion in 1Q25, while heightened volatility led to a decline in flows for global equity ETFs, according to Vanguard.
The failure of a clinical trial by biotech firm Opthea has caused shares in its backer Regal Partners to decline 52 per cent year-to-date and hit its funds under management, quarterly flows show.
GQG Partners has revealed its quarterly flows for the first three months of 2025 were up 5.8 per cent, after a difficult final quarter of 2024 as a result of institutional redemptions.
Global asset manager Janus Henderson has signed a strategic partnership with life insurer Guardian Life, which will commit US$400 million to accelerate the firm’s fixed income development plans.
