Abstract

Switzerland based UBS, one of the largest wealth management companies in the world, launched Noriba Bank in May 2002 in Bahrain, to establish its presence in the Islamic Banking industry. Noriba exclusively provided products which were designed according to the Shariah, the Islamic Laws, which prohibited receiving or paying interest or investments in industries such as alcohol, tobacco, pork etc. The case describes the challenges faced by Noriba in the course of its operations. It examines various innovative Islamic Banking products like Shariah-Compliant Deposit (which provided returns through investment in commodity transactions), Shariah-complaint FX Bloc (which provided returns through commodity transactions and foreign exchange transactions) and Personal Shariah Trust, which provided complete wealth management solutions to its clients. Since March 2006, UBS started providing both strictly Islamic products as well as conven

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Examine the growth of UBS in Islamic banking industry
• Understand and critically evaluate how UBS redesigned its financial products in line with Shariah principles
• and Analyze the characteristics of Islamic banking vis-à-vis conventional banking.

Keywords

UBS AG, Noriba Bank BSC, Islamic Banking, UBS' Integrated Business Model, Performance Measurement and Management, Islamic Finance, Shariah-compliant Products, Murabaha Transactions, UBS Islamic Finance Group, Shariah-Compliant Deposits, Shariah-Compliant FX BLOCs, UBS Personal Shariah Trust, Shariah Principles