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GLOBAL: In a previous
IFN report, IFN observed that there has been an increasing gravitation
towards Islamic finance exhibited by South Korea as the Asian tiger,
despite its deep ties with the GCC, faces the growing challenge of
attracting business without Shariah compliant financial instruments (See
IFN Report Vol 11 Issue 33: ‘South Korea & Islamic finance – Strategy
re-think required’). And it seems that the trend is gaining momentum as
this week the market welcomes a promising partnership between Korea’s
largest bank, Woori Bank, and Qatar’s pioneering fully-fledged Islamic bank,
Qatar Islamic Bank (QIB).
Aimed at both existing and future Qatari and South Korean entities in
Qatar and/or South Korea, the agreement will see a stronger relationship
between QIB and Woori Bank so as to facilitate bilateral trade finance
and corporate businesses.
"We are pleased to have partnered ourselves with Woori Bank, one of
the leading banks in South Korea, and look forward to expanding our
relationships with the South Korean market and Korean companies working
in Qatar which has shown significant growth and development in the last
several years,” said Bassel Gamal, Group CEO of QIB, in a statement to
the media. Bassel added: “We believe that such cooperation between our
institutions should facilitate engagements and exploit new financing opportunities.”
Hitting US$30 billion last year, trade exchange between the two nations
has been steadily increasing evident by the 15% growth in value from
2013. According to QIB, South Korea is a leading importer of
Qatar-supplied liquefied natural gas, with 30% of the republic’s energy
demand being met by oil and gas products provided by the Middle Eastern
state. Qatar on the other hand imports electronics and automobiles from
South Korea. It is this upward trajectory of trade growth between the two
countries that has motivated QIB and Woori Bank to form ties – an
arrangement which was successful due no less to the significant role of
the Korea Trade-Investment Promotion Organization of South Korea.
“We hope that this MoU will serve as a starting point for mutual
development and believe it will provide opportunities for Woori Bank and
QIB in the upcoming era of increased trading between the two nations,”
expressed Lee Dong-gun, the deputy CEO of Woori Bank, in a press release.
South Korea may lack the legal infrastructure (and political will) for
the development of Islamic finance; however, it seems that domestic
market players are nonetheless keen to leverage the Shariah compliant
platform to maintain and enhance their relationship with the Middle Eastern
liquidity pool – and this bodes well for the Islamic finance industry.
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