Hurriyet Daily News - Kuveyt Türk, one of Turkey's four participation banks, is planning to launch a gold fund aimed at institutional investors who want to invest in gold on an interest-free basis. The bank's General Manager Ufuk Uyan said the lender also launched a new product for retail investors, which is a gold gram unit with the logo of Kuveyt Türk. The bank is also in the process of opening a new branch in Dubai, and will expand its network in Turkey next year.
The global crisis has boosted investments in gold globally, as the precious metal continues to appreciate, says Ufuk Uyan.
Kuveyt Türk's drive to "convert gold into a financial product", as Uyan put it, includes the so-called golden participation accounts. "This new alternative, launched earlier this year, is quite unique in the world of Islamic banking. It is unique because it is a termed product. So the client can open a gold participation account with a term from one to 12 months and at maturity receive the profit in gold terms. We developed this product to attract the under-the-pillow gold investments of Turkish people", Uyan emphasized.
Kuveyt Türk, which celebrates its 20th anniversary this year, is one of the oldest participation banks in Turkey. Currently it has 130 branches, but expansion is on the cards. "Next year, we will open between 10 and 15 new branches. We are currently working to open a branch in the Grand Bazaar in Istanbul", Uyan stated.
International expansion is also in sight, as the bank was recently granted a license to open a branch in Dubai. "Dubai is one of the global centers in the gold trade. We also have branches in Bahrain and Germany and a representative office in Kazakhstan. Our intention is to integrate our services internationally as well", Uyan added.
According to Uyan, Islamic banking in Turkey is evolving rapidly, with all participation banks planning to open new branches and introducing new products. "This is an emerging sector, which has a market share of some five percent in terms of total assets. We hope to reach a market share of some ten percent within the next five to ten years. There is important growth in the sector as interest rates decline. People are discovering the advantages of interest-free banking", he said.