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Westpac to embrace Islamic finance market

Published 6:14 AM, 12 Feb 2010 Last update 6:14 AM, 12 Feb 2010

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Westpac Banking Corporation plans to boost its exposure to the rapidly expanding Islamic finance market, by offering a commodity trading facility intended for overseas investors operating under the Sharia principles of Islamic law, The Age reported.

The move by Westpac comes at a time when the Australian government is believed to be placing a new emphasis on Islamic financing, which prohibits the earning of interest, instead focussing on profit sharing based on the buying and selling of tangible assets such as property, under the principles known as Sharia law.

Trade Minister Simon Crean is today set to launch a study outlining opportunities for Australia's financial services sector to increase involvement in investment and banking markets that comply with Islamic law.

This follows urgings from a government-backed taskforce last month that tax rules be overhauled to ensure that Islamic financing products be given equal treatment.

All the major banks now provide Islamic-style banking products for retail investors.

The global market for Islamic financial services, which has been propelled by surging oil prices, is estimated to be worth close to $1 trillion, and the issue of sukuk - the Islamic alternative to conventional bonds - is worth greater than $50 billion each year.



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