Maybank Islamic, one of the top five Islamic banks globally, aims to grow the size of its GCC lending book by more than three times in the next two years and launch Sharia-compliant wealth management solutions for affluent clients in the region, its chief executive has said.
The lender, the Islamic banking arm of Malaysia’s largest lender Maybank, is also counting on significant growth in its sustainable financing portfolio in the GCC as governments in the six-member bloc focus on reducing their carbon footprint and launch climate-focused projects, Mohamed Merican told The National in an interview.
The bank, which launched operations at the Dubai International Financial Centre in 2020, expects its GCC operations to contribute substantially to its balance sheet growth in the long term.
“We expect our lending book and our assets under management in the GCC to account for about 5 per cent of our total balance sheet by 2030, which stood at $72.65 billion at the end of last year,” he said.
Maybank Islamic has grown its financing assets from zero to about $200 million in the region, which mostly includes syndicated deals the bank has participated in.
“I think it's relatively small … but it's double-digit growth, so we're quite pleased with that fact,” Mr Merican said.
The lender initially set a target of $500 million in financing book size when it launched operations in Dubai, but that has since been revised to $700 million by 2025.
“It's dynamic; we will see if the deals actually make sense for both sides, the borrower, as well as for us, then we have an opportunity to change this target size [again],” Mr Merican said.
The global Islamic finance industry is expected to grow by about 10 per cent in 2023 to 2024 despite the economic slowdown, after posting a similar expansion in 2022 mainly led by the GCC countries, according to S&P Global Ratings.
The sector continued to expand in 2022, with assets up 9.4 per cent from 12.2 per cent in 2021, supported by growth in banking assets and the sukuk industry, S&P said in a report last month.
GCC countries, mainly Saudi Arabia and Kuwait, spurred 92 per cent of the growth in Islamic banking assets last year.
Moody’s Investors Service expects demand for Sharia-compliant financing to outpace conventional funding in 2023, driven by strong economic growth and development agendas in key markets, including Saudi Arabia, amid higher oil prices.
In the UAE, the Arab world’s second-largest economy, growth in Islamic banking outpaced that of conventional lenders last year, Fitch Ratings said in a report last month.
Islamic lenders grew by 8 per cent in 2022, more than conventional banks, which grew by 3 per cent, the rating agency said at the time.
“There's a lot of participation from this part of the world in international issues and there's a lot of interest from markets in Asia into issues here as well,” Mr Merican said.
The bank, which has mobilised 34 billion Malaysian ringgits ($7.75 billion) in sustainable finance by the end of last year, also expects significant growth potential for its green funding portfolio as government, financial institutions and corporates continue to issue green loans and bonds to fund renewable energy and climate-related projects.
The UAE alone is spending Dh600 billion ($163 billion) to finance projects that will help it reach its net zero target by 2050.
Although Maybank Islamic has recorded substantial growth in the syndicated and trade finance business over the past years, the sukuk market has been “quite challenging” amid a consistent rise in interest rates, Mr Merican said.
US interest rates need to stabilise as currently issuers have adopted a wait-and-see approach.
However, once pricing is attractive again, demand for sukuk transitions will rise, he added.
Maybank Islamic, the biggest Islamic lender in the Association of South-east Asian Nations (Asean) region, intends to expand its presence in Dubai and use the DIFC as a centre for its regional operations.
“Our objective was to establish credentials here, build relationships, get to know the market better. I think after three years … we understand the market better,” Mr Merican said.
“There are pockets opportunities, which we can actually build on.”
Sharia-compliant wealth management solutions for affluent clients in the region is one such opportunity, with potential of growth in Saudi Arabia and the UAE, he added.
The bank estimates a potential flow of about $10 billion from affluent GCC clients into Islamic investable assets in the Asean region that offer attractive returns.
However, there are “several building blocks”, including developing a product suite before it can start offering services to rich clients in the GCC.
Maybank has also yet to make a decision on whether it will start offering services directly to clients or team up with established wealth managers to offer its Sharia-compliant solution to their clients.
The bank has already held discussions with potential partners and aims to launch wealth management services within the next 12 months, Mr Merican said.
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
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More on Quran memorisation:
Hurricanes 31-31 Lions
Wellington Hurricanes:
Tries: Gibbins, Laumape, Goosen, Fifita tries, Barrett
Conversions: Barrett (4)
Penalties: Barrett
British & Irish Lions:
Tries: Seymour (2), North
Conversions: Biggar (2)
Penalties: Biggar (4)
TOUCH RULES
Touch is derived from rugby league. Teams consist of up to 14 players with a maximum of six on the field at any time.
Teams can make as many substitutions as they want during the 40 minute matches.
Similar to rugby league, the attacking team has six attempts - or touches - before possession changes over.
A touch is any contact between the player with the ball and a defender, and must be with minimum force.
After a touch the player performs a “roll-ball” - similar to the play-the-ball in league - stepping over or rolling the ball between the feet.
At the roll-ball, the defenders have to retreat a minimum of five metres.
A touchdown is scored when an attacking player places the ball on or over the score-line.
What is the definition of an SME?
SMEs in the UAE are defined by the number of employees, annual turnover and sector. For example, a “small company” in the services industry has six to 50 employees with a turnover of more than Dh2 million up to Dh20m, while in the manufacturing industry the requirements are 10 to 100 employees with a turnover of more than Dh3m up to Dh50m, according to Dubai SME, an agency of the Department of Economic Development.
A “medium-sized company” can either have staff of 51 to 200 employees or 101 to 250 employees, and a turnover less than or equal to Dh200m or Dh250m, again depending on whether the business is in the trading, manufacturing or services sectors.
Labour dispute
The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.
- Abdullah Ishnaneh, Partner, BSA Law
How to join and use Abu Dhabi’s public libraries
• There are six libraries in Abu Dhabi emirate run by the Department of Culture and Tourism, including one in Al Ain and Al Dhafra.
• Libraries are free to visit and visitors can consult books, use online resources and study there. Most are open from 8am to 8pm on weekdays, closed on Fridays and have variable hours on Saturdays, except for Qasr Al Watan which is open from 10am to 8pm every day.
• In order to borrow books, visitors must join the service by providing a passport photograph, Emirates ID and a refundable deposit of Dh400. Members can borrow five books for three weeks, all of which are renewable up to two times online.
• If users do not wish to pay the fee, they can still use the library’s electronic resources for free by simply registering on the website. Once registered, a username and password is provided, allowing remote access.
• For more information visit the library network's website.
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
The five pillars of Islam
Islamophobia definition
A widely accepted definition was made by the All Party Parliamentary Group on British Muslims in 2019: “Islamophobia is rooted in racism and is a type of racism that targets expressions of Muslimness or perceived Muslimness.” It further defines it as “inciting hatred or violence against Muslims”.
