JPMorgan Hires UBS Banker Amid Quest for Bigger Islamic Slice

by on January 29, 2013 5:33 am BST

JPMorgan Chase & Co. (JPM) has named former UBS AG (UBSN) banker Hussein Hassan to head global Islamic finance as the biggest U.S. lender strives to boost its share of an industry whose assets are set to double by 2015.

New York-based JPMorgan said Hassan, previously global head of Islamic structuring for UBS, would focus on clients in countries including Saudi Arabia and Malaysia, according to an e-mailed statement today. Malaysia hosts the world’s biggest market for Islamic bonds, or sukuk, while Saudi Arabia boasts the world’s biggest share of Shariah-compliant assets.

“As we have observed a significant increase in the demand for Shariah-compliant banking products, we have decided to invest in high-caliber people, systems and technology,” Sjoerd Leenart, JPMorgan’s senior country officer for the Middle East and North Africa, said in the statement.

Global banks including HSBC Holdings Plc (HSBA) and Standard Chartered Plc have set up Islamic banking units to take advantage of growing demand for financial products that comply with the religion’s ban on interest. Global Islamic financial assets are set to double to as much as $3 trillion by 2015, according to Standards & Poor’s estimates.

Islamic Offering

Hassan, who also headed Zurich-based UBS’ Middle East and North Africa structuring, will be based in Dubai, a Persian Gulf emirate striving create a hub for Shariah-compliant banking that would take on such centers as Malaysia and Bahrain. He will lead JPMorgan’s effort to “further build out its Islamic offering across different lines of business and regions,” the bank said.

Global sales of Islamic bonds surged 26 percent last year to $46 billion, according to data compiled by Bloomberg. Issuers in the six-nation Gulf Cooperation Council, which includes Saudi Arabia and the United Arab Emirates, accounted for almost half of the total after sukuk sales tripled and borrowing costs plunged to records.

JPMorgan helped arrange $119 million of global sukuk sales last year, or 0.3 percent of the total, data compiled by Bloomberg show. That compares with $11 billion, or almost a quarter of the total, for HSBC, the world’s top underwriter of Islamic bonds. Dubai, which is home to the world’s tallest skyscraper, plans to sell 10-year dollar-denominated sukuk today, four people familiar with the matter said.