SINGAPORE/KUALA LUMPUR, May 24 (Reuters) - DBS Group (DBSM.SI), Southeast Asia's largest lender, is shrinking its Singapore-based Islamic unit in yet another sign that the city-state's efforts to promote sharia banking is struggling.
Islamic Bank of Asia (IB Asia), in which DBS has a just over 50 pecent stake, has transferred 10 of its 65 staff to DBS and redeployed others to new roles within the Islamic bank, a spokeswoman said.
"IB Asia will continue to focus on wholesale banking but prioritise its business focus on fee-based investment banking business activities and in private equity," she added in response to queries from Reuters.
"We remain committed to growing our Islamic banking franchise in this region."
IBA, Singapore's only wholly-owned full licensed Islamic bank, suffered a loss of $77.1 million in 2009 after making specific allowances on debt owned by customers in the Gulf region. The bank had $725 million in assets as at end-2009, including $453 million in payments due from non-bank customers.
that's an AIG-like loss of about 10% of assets in one year of Islamic Banking |