Islamic banking deal a first for Japan

26 November 2007

The Boubyan Bank of Kuwait is the first Islamic bank to launch a Shariah-compliant real estate financing structure in Japan, the Kuwait News Agency (Kuna) reports.

Three Tokyo offices have been bought by Kuwait's second-largest Islamic lender for $39.4 million.

Speaking to Kuna, Abdulla Al-Mulaifi, Boubyan Bank's executive manager for international real estate, said: "As the world's second-largest property market, we have considered Japan a target investment for a long time with great potential."

He said that the bank had spent nearly two years structuring the transaction.

"Despite of the absence of Shariah compliant financing in Japan, through our commitment to innovation-driven products and determination to penetrate the Japanese market, we have achieved this breakthrough," Mr Al-Mulaifi added.

He said the bank expects to expand its Islamic services in Japan if this investment sees success.

Shariah-compliant finance prohibits charging interest, favouring partnerships in trade of services, investment and renting.

This news comes after Hong Kong regulators approved the country's first retail Islamic investment fund, the Hang Seng Islamic China Index Fund.

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