HSBC’s Islamic closures highlight dilemma
Last week HSBC decided to close down its Islamic retail banking operations in six markets so that it will be present only in Malaysia, Saudi Arabia and, in shrunken form, Indonesia. This event underlined the contradictions of the broader sector. On one hand, Islamic banking is continuously reported to be growing at e very high rate - more than 20% a year. On the other hand, there is a huge difference between asset growth and revenues and profit. Poor performance in retail banking markets is the reason for HSBC's withdrawal as well as for the decrease of Barclays' and Deutsche Bank's Islamic banking teams in Dubai.