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A quick look at Germany's first Islamic bank — KT Bank AG

This subsidiary of a Turkish Islamic bank has made significant losses while establishing its business in Germany.

Posted 11 March 2023

Many of my monthly columns for the magazine "Islamic Finance News" are sparked by questions asked by website readers.

My January 2023 was another one. A reader's comment made me look for the results of Germany's first Islamic bank. You can read the column below.

How is Germany’s first Islamic bank doing?

I recently shared my column “Retail Islamic banks need to become internet-only” from IFN’s 7 September 2022 issue on my website, and then publicised it via social media. [See "Al Rayan Bank plc becoming internet-only is sensible".]

This led to a reader commenting “Just to mention that KT Bank in Germany still has branches and seems to work.” I have now been able to take a look at the bank mentioned by the reader.

KT Bank AG is a wholly owned subsidiary of Kuveyt Türk Participation Bank Inc. (the English translation of its name) of Türkiye.

The parent company’s website tells readers that KT Bank AG is the first Islamic bank in Germany and the Eurozone, having received a full banking license under German law for the provision of deposit and credit business in March 2015 and started business in July 2015. It now has four branches, in the cities of Berlin, Frankfurt, Mannheim, and Cologne.

Banks often publish their accounts on their own websites. Unfortunately, I could not find KT Bank AG’s financial statements anywhere on their website. The German Business Register website states that KT Bank AG’s financial statements are filed with the District Court in Frankfurt, but the effort of purchasing them from the Court was excessive.

Fortunately, the website contains summarised financial data on 9,000 EU banks, including KT Bank AG. However, only the total assets and the profit/loss figure is reported. I have tabulated those below.

The assets have grown rapidly.

EUR millions

31 December
















The asset growth is what I would have expected for a newly established Islamic bank in a market where Islamic banking was not previously available. After all, Germany has a Muslim population of about 4.7 million.

However, the absolute assets figure is relatively small taking the Muslim population into account. It suggests that retail Islamic banking in Germany faces the same problem as in the UK – namely that most Muslim citizens are not motivated to adopt it, regardless of what response they may give to surveys.

What was the price of the above growth? The profit and loss figures for each year are below.

EUR millions

Year to 31 December

Profit / (Loss)















The losses are no surprise, since new growing businesses often lose money.

A useful way to understand these losses is to compare the above results with those of the UK’s only retail Islamic bank, Islamic Bank of Britain “IBB” (now called Al Rayan Bank) which I listed in my 6 February 2019 column.

IBB never lost as much money in any one year as KT Bank AG did in the years 2016 – 2018, but IBB lost money for a longer period. I suspect that KT Bank AG has benefitted from the experience and knowledge its parent company provided to get to a stable position more quickly than did IBB

However, KT Bank AG is not generating anything like an acceptable return on equity. Using my reader’s word above, it is not “working”!

Mohammed Amin is an Islamic finance consultant and former tax partner at PwC in the UK.


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