The use of Islamic finance is moving into the mainstream, says Michael Katounas, deputy CEO and head of investment banking at Qatars QInvest.
Clients are not looking at Islamic finance just as a one-off bespoke exotic structure, but are viewing it as part of a normal range of funding options, he tells MEED.
The bank is expecting to see increased sukuk (Islamic bond) issuance during 2014 from both sovereigns in the GCC region and beyond, as well as from the private sector.
Middle Eastern sovereigns expected to issue Islamic bonds this year include Oman, which plans to raise an RO200m bond on the domestic market. The Gulf country issued draft sukuk regulations last year.
QInvest has been working closely with the National Bank of Oman to promote and educate investors about the benefits of sukuk.
Outside the GCC, the UK and Hong Kong are planning debut sukuk issuances, which is an important development for the market with many Islamic banks eager to invest in highly rated sovereign paper.
Plans by other non-GCC sovereigns, such as the UK, to issue sukuk are very welcome by the market, he says.
QInvest advised on $3.5bn-worth of sukuk in 2013, including a $1.25bn sukuk for the Qatari telecoms firm Ooredoo, as well as a $1.25bn issuance for the Republic of Turkey.
The investment bank is also predicted a strong pipeline of potential acquisitions in 2014, and Katounas confirms the bank has already won five mergers & acquisitions mandates to date this year.
QInvest has posted a 40 per cent increase in revenue in 2013 and a $60m increase in net profit.
The banks increase in profits is seen as a result of its new strategy announced in October last year, which saw the bank narrow its focus to three key sectors.
These areas are investment banking, principle investments and asset management.