Goldman Sachs may face Islamic mortgage hurdle

Fri, 16 Dec 2011
Goldman Sachs may find any attempts to enter the Islamic mortgage market in the future a struggle after encountering obstacles when trying to launch its first Islamic bond.

The Financial Times reports that a number of experts have warned the bank's structure could lie in breach of sharia law.

As such, the lender would be likely to face similar problems should it begin a foray into the Islamic mortgage sector.

Goldman Sachs, which was founded in 1869, revealed in October that it is to offer a $2 billion (£1.3 billion) sukuk through a Cayman Islands-registered vehicle registered on the Irish Stock Exchange - but specialists have suggested this kind of move may act against the rules on such matters.

Indeed, Mohammed Khnifer, a sharia adviser based in Saudi Arabia, claimed the action contains at least three flaws that are not sharia-compliant.

Meanwhile, a lawyer specialising in this area observed the bank could struggle to attract buyers, adding: "They may well find there is not much demand because of the widespread doubts over the issue in the market."
Salaam-u-Allaikum
Speak to us!
Speak to an Islamic mortgage specialist - free and easy.