Turkish lender Kuveyt Turk is set to become first Islamic bank to get approval from the German financial regulator Bafin to launch a full-fledged Islamic bank in the country and offer sharia-compliant retail banking services.
Kuveyt Turk, which is 62% owned by Kuwait Finance House, set up a financial services branch in Germany’s Mannheim in 2010 and has applied for a full banking license in 2012.
The wholly-owned subsidiary of Kuveyt Turk, scheduled to be launched in July, 2015, will operate under the name KT Bank and will use Frankfurt as its base with plans to open offices in Berlin and Cologne.
The subsidiary will serve Germany’s roughly four million Muslims in addition to targeting a wider client base, expanding its branch network across the country and later into the rest of Europe.
Kuveyt Türk head Kemal Ozan said: "Our market research has shown that 21% of Muslims in this country would see an Islamic bank as their natural household bank."