'Opportunities are more lucrative in Islamic banking,' says Dubai Bank chief financial officer (CFO) Ahmed el-Shall. 'There's a growing pie and growing demand. When you compare growth in the banking sector with growth in Islamic banking, there's a disparity.'

The four existing sharia-compliant banks and two financial services companies in the UAE have 14 per cent market share of the banking sector in terms of credit and consumer business. According to El-Shall, in the past two-three years, Islamic banks have experienced a 45 per cent growth in assets and deposits. 'A great majority of our customers are Muslims and they are looking for sharia-compliant products and services,' says El-Shall. About 60 per cent of Dubai Bank's customers are UAE nationals.

The bank is developing ethical banking services and products to appeal to its non-Muslim customers. 'Due to the composition of the population [in the UAE], a big chunk of our customer base has to be non-Muslim. We have to offer what they identify with,' says El-Shall.

Ethical banks promote services on the basis that they consider the social and environmental impact of their activities. Dubai Bank's ethical products and services will not bear interest and will shadow its sharia-compliant business.

Dubai Bank is launching a brokerage company and is in the final stages of securing a licence. The bank is considering spinning off an investment banking affiliate, which would offer conventional and sharia-compliant services. It hopes to establish an entity within Dubai International Financial Centre (DIFC) to conduct investment banking activities. The bank is also developing insurance products.

Dubai Bank will retain its name once it has completed its conversion to a sharia-compliant institution, planned for early 2008. The bank was founded in 2002 and had assets of AED 4,800 million ($1,306 million) at the end of 2005, a 97 per cent increase over the previous year.

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