22.03.2015 14:18
Istanbul based participation bank Kuveyt Turk has been fully licensed from Germany’s regulator Bafin to offer interest free banking services in Europe's largest economy.
Istanbul-based participation bank Kuveyt Turk said Sunday that its German subsidiary, KT Bank AG, obtained a full banking license from Germany's regulator Bafin, making it the first interest-free bank in Europe's largest economy.
Islamic banking adheres to the principle that money should not simply be lent, but rather invested in a productive process.
"Kuveyt Turk Islamic Bank has been fully licensed by the Federal Financial Supervisory Authority (Bafin) to offer banking services in Germany. Thus, the first bank based on an interest-free Islamic business model is licensed in Germany," the bank said in a statement on Sunday.
The bank said that with this license, Kuveyt Turk is the pioneer that will introduce the Islamic banking model to Germany.
KT Bank AG has its headquarters in Frankfurt am Main and is a 100 percent subsidiary of Kuveyt Turk Islamic Bank. It will start to provide interest-free Islamic banking to its private and commercial clients this July.
"We support KT Bank AG in its mission to become the leading ethical, innovative and socially responsible participation bank," Kuveyt Turk's major shareholder, Kuwait Finance House's Chairman Hamad Abdulmohsen Al-Marzouq, said.
"The Islamic banking market is growing globally. We consider it an important initiative and a great innovation for Germany that an Islamic bank such as KT Bank AG has been licensed in Germany," the CEO of Kuveyt, Ufuk Uyan, said.
Kuveyt Turk closed the year 2014 with a net profit of 370.5 million Turkish lira ($144 million), an increase of 23 percent compared to the previous year. Its total assets have reached 34.8 billion lira ($13.5 billion), up 31.3 percent from previous year. Kuveyt Turk currently has 5,200 employees and 321 branches in Turkey and abroad.
KT Bank AG was established as a 100 percent subsidiary of Kuveyt Turk Participation Bank AS. Its shareholders include the Kuwait Finance House, with 62 percent of the shares, and the Turkish General Directorate of Foundations with 18 percent. It is headquartered in Istanbul.
The licensing process started with the opening of a representation office in Germany in 2004, followed by a third country deposit brokerage license in 2010 and finally a fully-fledged banking license in 2015.
Islamic finance is a system that has existed for over a century, but has only really taken off in the last 40 years. The system broadly refers to financial market transactions, operations and services that comply with Islamic rules, principles and code of practices.
www.aa.com.tr/en - Ankara