The rationale then was that the bank's balance sheet was large enough and very profitable and therefore there was no need to venture beyond the shores of Saudi Arabia and into exotic products whose Shariah-compliance was contentious. This was symptomatic of an institution which had the audacity (or the folly some would say) to take the entire risk of the SR800 million Al-Shuaiba Power Plant (Eastern) on its books by refusing to sell down the financing to others or through a syndication.
Saleh passed on the project to the Islamic Development Bank, which has commissioned Ernst & Young to do a third consecutive feasibility study on the viability of such a mega bank. Last year, Bank Negara Malaysia announced that it plans to give licenses for three mega Islamic banks to qualifying promoters on condition that the paid-up capital was a minimum of $1 billion and of course subject to the provisions of the Islamic Banking Act 1983.
]The dominant market position of JIB, one of the unassuming success stories of Islamic finance, is likely to remain uncontested over the foreseeable future. But once Al-Rajhi Bank Jordan consolidates its operations and position in Jordan (like the group did in Malaysia), the bank's market share inevitably will increase. JIB is a relatively smaller bank than Al-Rajhi Bank and AIIB is inextricably linked to the group Islamic banking strategy.
Jordan is also constrained by the size of its economy and financial services sector.
As such, with their huge experience in Islamic finance, Jordanian Islamic banks should be the natural gateway for Islamic finance in the Palestinian Territories and perhaps more importantly to Iraq and Syria. While the former two are still mired in political deadlock in their respective situations, Islamic finance is starting to make genuine inroads into Syria, where the Central Bank has already authorized five Islamic banks. However, with the street protests in Syria set to continue, the financial sector there is also in retreat.