Islamic finance and asset management industry have brighter prospects in the region and will see some consolidation in 2009, regional banking experts said.

Jamal Hijres, Chief Executive of Capinnova Investment Bank – an Islamic investment banking arm of Bank of Bahrain and Kuwait, said: "We are confident about the Islamic finance industry's future and we are one of the prime examples to support that confidence as our bank was launched in January 2009. The key fact that the Islamic finance industry is asset based and not debt financed, has protected and prevented this sector from the crises that has brought the downfall of conventional financial giants worldwide."

Islamic banking industry has been remarkable in recent years and it is expected to reach $4 trillion in the next five years according to the recent Standard and Poor's rating agency report. Hijres said Capinnova aims to leverage on this exponential growth and further strengthen the Islamic Banking industry in Bahrain and across the region.

Capinnova's core areas of business include private equity, asset management and corporate finance and the bank hopes to close its first deals during the first half of the year.

"Capinnova's vision is to be a world class Islamic investment bank offering a range of high quality products and services to a diverse clientele. Our mission is to become the Islamic investment bank of choice and a niche player, providing clients in the GCC and Mena region with superior investment products aimed at building and sustaining shareholder value, whilst maintaining an optimal balance between risks and returns," he said.

Ziad Makkawi, founder and CEO of Algebra Capital, said the future of Shariah-compliant asset management industry remains extremely positive.

"Islamic financial institutions have passed through the initial turbulence of the financial crisis but should remain vigilant in improving their management of risk and developing liquidity management options. I believe that the future of Shariah-compliant asset management remains extremely positive and that the industry will emerge stronger as a result of the current global crisis as it will force companies to address lots of concerns in the industry that aren't currently addressed."

He expects that over the next 10 years, there will continue to be a convergence in regulatory as well as product know how between the conventional and Shariah markets.

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