Bank Sarasin aims to lead in Islamic Wealth Management

November 23, 2008 4:51 pm

In 1986 Swiss private bank Sarasin & Cie. decided to put a higher focus on sustainable investment.

This move was triggered by a tragic accident in the city of Basel at a chemistry storage facility.

The fire contaminated the Rhine river, and the effects affected neighbouring countries France, Germany and even the Netherlands (after the fall of the Soviet Union, however, rumours came up that the Eastern German Intelligence Service blew up the factory in order to distract the world from the nuclear reactor meltdown in Chernobyl, which happened seven months before).

Mainstream investment class

Basel is also the domicile of Bank Sarasin since its foundation in 1841.

After the UN Environmental Conference in Rio de Janeiro in 1992, investing in the environment eventually emerged from a niche and became a global mainstream. Suddenly, the bank from Basel was in the limelight of private banking.

Sarasin’s first mover advantage in offering bank products which invested in solar energy, forests and agriculture has been successful since then.

Today, $8.7bn, or 10%, of Sarasin’s client assets are managed in line with sustainable criteria. Moreover, the bank’s annual report (printed on 100% recycled paper, of course) tells you not only how much energy has been consumed in its branches globally, but also sums up how many kilometres its management board and staff have travelled by plane.

‘It was a courageous move and it paid off’, says Fares Mourad, Head of Islamic Finance at Bank Sarasin. Syrian-born Fares Mourad, is considered to be the most experienced Islamic Banker in the City of Zurich.

He joined Sarasin in July after he left Credit Suisse as its Head of Global Islamic Finance. Adriana Rocchi, who has 20 years experience in private banking, also left Credit Suisse to join Mourad’s forces. ‘We aim to serve a global industry in Islamic Finance, not only in Zurich, London and Paris but also in the GCC. Sustainable investment and Islamic Finance go hand in hand’, says Mourad.

Sarasin focuses on Islamic finance

The preconditions are good: Sarasin has been present in the Dubai International Financial Centre (DIFC) since 2005 (in a joint venture with UAE Investment Bank Alpen Capital). In the DIFC, Sarasin-Alpen broke-even in less than one year.

Sarasin is also present in Doha’s Qatar Financial Centre (QFC) and in Bahrain in partnership with El-Khereji Group (the Sarasin branch in Muscat will not be big on Mourad’s radar because in Oman Islamic Finance is forbidden by law).

‘Together with our 30 employees in the Middle East, we will design customised solutions for wealthy private customers but fewer standard products such as investment funds’, Mourad explains.

Swiss banks are in urgent need of expanding to new markets after they suffered losses in the US. Bank Sarasin’s profit declined in Q3 2008 by 23% to 75.3m Swiss Francs. Its assets under management retreated by 2% during the first six months of the year.

According to Mourad, total banking assets managed in line with Shariah in the UAE alone will reach $88m until 2010 (from around $37m in 2007). The tiny Swiss bank from Basel aims to grab its share of the cake.