BKME finalizes transition to Islamic banking system

The Bank of Kuwait and the Middle East (BKME) has converted to an Islamic bank and changed its name to Al-Ahli United. The Bank will start transactions according to the new system by the beginning of the second half of 2010. This announcement was made during the 43rd ordinary and the 22nd extraordinary general assembly meetings held yesterday at the BKME headquarters.

This decision is a historical event for the Bank of Kuwait and the Middle East, which in 1941, was the first bank established in Kuwait. “This decision is a result of the resolution adopted at the forty-first ordinary general assembly meeting convened on July 14 2008,” said Hamad Al-Marzouq, Chairman and Managing Director of BKME. “Our shareholders expressed their desire, and will, for the conversion of the Bank’s business to be exercised in compliance with Islamic Sharia,

The bank’s management has been eager to achieve this goal and has worked on it diligently. “Notwithstanding the inconvenient economic conditions and the difficulties recently witnessed, and due to extraordinary efforts and immense cooperation, we have realized the outstanding success of converting into an Islamic banking system within the time frame set by the Central Bank of Kuwait,” Al-Marzouq said. “It is my pleasure to announce the accomplishment of this conversion within the one year time frame. This is an outstanding achievement,” he added.

According to Al-Marzouq, more than 85% of the BKME’s clients agreed to convert the bank. “The assets of the clients who didn’t agree with the conversion will be transferred to other banks,” he explained. “We haven’t decided which bank to move it to yet because we are still waiting for the final numbers.

Clients will notice the change in all levels of the bank’s business. “It covers all departments,” said Marzouq. “We have introduced state of the art technologies compatible with the specific nature of Islamic financing. We have also trained bank employees in the latest Islamic financial systems and recruited specialists to support the existing staff working at the bank. Plans were developed to ensure that we offer the latest in contemporary Islamic financing in order to satisfy the clients’ needs,” he stre ssed.

The BKME also developed business manuals and financial policies to comply with Islamic banking and the latest international accounting standards. “Measures were effected to arrange banking relations between BKME and other local, regional and international banks in accordance with Islamic banking practices,” added Marzouq. “All these achievements confirm the banks capability as a pioneer.

BKME is a great competitor on the local market. “There are already three Islamic banks in the market and there may be another one coming. We still have the chance to excel. I don’t think the new banks can compete with us because we already have a base of clients numerous branches and we offer special services as well,” Al-Marzouq concluded. The banks successful transition was recognized by the resolution passed by the Central Bank of Kuwait’s Board of Directors on Sunday Dec 13, 2009. This resolution gave BKME the Central Bank of Kuwait’s final approval to convert their banking activities in compliance with Islamic Sharia provisions.

Source : kuwaittimes