HSBC is to significantly scale back its global Islamic finance operations and will stop offering Shari’ah compliant products in the UK as part of a global restructuring, it said yesterday.
The bank, which pioneered the first Western Islamic bond last year, said it will scrap Shari’ah loans and bank accounts for personal customers in the UK, the UAE, Bahrain, Bangladesh, Singapore and Mauritius, focusing instead on markets in Malaysia and Saudi Arabia.
The withdrawal is part of chief executive Stuart Gulliver’s plan to cut costs and improve profitability by exiting non-core businesses.
HSBC will continue to offer wholesale Islamic financing, but job losses are expected at the bank’s Islamic unit, HSBC Amanah, with the remaining staff likely to be absorbed into the main bank.
Islamic finance, which discourages pure monetary speculation and receiving interest, is expected to grow 33 per cent on 2010 levels to $1.1 trillion by the end of 2012, according to consultants Ernst & Young.