HSBC seeks big growth, sukuk pickup in 2010

DUBAI - HSBC expects double-digit revenue growth this year in its Amanah Islamic banking division and more sukuk mandates than in 2009, Razi Fakih, deputy chief executive of Amanah told Reuters.

HSBC expects to have more than the 15 mandates it had in 2009 for sukuk, or Islamic bond issues, Fakih said at the Reuters Islamic Banking and Finance Summit.

We're confident we can do better in 2010, Fakih said. We see a very bright 2010 in the sukuk space.

New issuance will come more from the Middle East and Asia than from the West, he said, with some issues already lined up for the first quarter of the year.

Fakih's bullish outlook for HSBC-mandated issuance runs counter to consensus expectations for global sukuk volumes to weaken in 2010, in part due to a weakening in market sentiment in the wake of the Dubai debt crisis.

Global sukuk issuance totalled $19 billion last year, of which the United Arab Emirates accounted for a fifth, according to Thomson Reuters data.

By comparison, global emerging market issuance totalled close to $200 billion last year, according to Commerzbank, and is likely to match that this year as investors look for more conventional, higher-yielding assets again.

Fakih said the Islamic financial sector remained poised to outgrow conventional finance in revenue terms after both sectors suffered under the global crisis.

Islamic lenders in general and HSBC in particular have greater exposure to emerging markets with faster growth rates than developed countries, he said.

According to HSBC, the Islamic finance industry enjoyed a compound annual growth rate for 2006-2009 of 28 percent, with assets forecast to hit $1.033 trillion in 2010.
Speaking at the Islamic Banking and Finance summit held at the Reuters' offices in Dubai, Manama, Kuala Lumpur, London, Geneva and Jakarta, Fakih said:We are very bullish on the year ahead for us.

Amanah was adding staff and branches in Saudi Arabia, Malaysia, Qatar, Indonesia and perhaps in the United Arab Emirates and was preparing to launch a series of Islamic investment instruments, he said.

Other countries where Amanah is active include the UK, Bangladesh, Brunei and Singapore, Bahrain and Mauritius.

(Reporting by Thomas Atkins; Editing by Rupert Winchester)