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KAI RYSSDAL: Forget Wall Street's subprime worries for just a second. Instead, turn your banking attention with me now to the Middle East. There's a brand new bank there. Noor Islamic Bank opened its doors this weekend. It's half-owned by the government of Dubai. Today its chief executive announced he's going on a multibillion-dollar spending spree. He wants to corner the market on lending to the world's 1.8 billion Muslims. Marketplace's Jill Barshay has that story.
JILL BARSHAY: Noor Islamic Bank has global ambitions for Islamic banking, but it's still a niche business.
Mahmoud El-Gamal is the chair of Islamic Economics, Finance and Management at Rice University. He says businessmen see Islamic banking as another way to mop up some of the petro dollars sloshing around the region.
Mahmoud El-Gamal: Every financial institution and every multinational corporation wants to get a piece of that action and if that gives you a competitive advantage to say that you're also going to structure your finance through Shariah-compliant means, then so be it.
El-Gamal says banks like Noor have found away around the Shariah prohibition on charging interest. They charge mark-ups or rents instead.
Khalid Howladar is an Islamic finance analyst with Moody's Investors Service. He says Noor already has a lot of competition in Dubai.
Khalid Howladar: You also have the HSBCs, the Standard Chartereds, the Citigroups that are there. And they're also opening their own Islamic windows, as they call them, which is like a subsidiary of the overall group that in turn tries to conduct its business in an ethically Islamic way.
Howladar says to compete, Noor will need to lots of customers to achieve economies of scale. One way to do it, he says, is to target populous Muslim countries that are under served such as Pakistan and Indonesia.
Noor won't find it easy, Howladar says, but its owner, the Dubai government, has deep pockets. The bank says it will grow by snapping up institutions and converting them to Shariah law.
In New York, I'm Jill Barshay for Marketplace.