Kuwait Finance House (KFH) has signed a bilateral cooperation agreement with KT Bank AG, the first bank in Germany and in the Eurozone with Islamic business model, in terms of Euro Vostro Account Services.
From now on, KT Bank would provide Euro clearing and settlement services for KFH, one of the foremost Islamic financial institutions in the world, and main shareholder of KT’s mother bank Kuveyt Türk Katılım Bankası A.Ş. With the signature of the Vostro account agreement, Kuwait Finance House, Kuveyt Türk and KT Bank AG, jointly renowned to be the driving pioneers of Islamic banking in the Eurozone, are moving even closer together as a group.
KT Bank AG as a direct member of Target 2 and SEPA payment schemes, provides Clearing and Settlement Services in Euro currency to financial institutions and automatically routes all incoming and outgoing Euro payments all over the world according to EU standards.
Group Chief Treasury Officer at KFH, AbdulWahab Al-Roshood said: “With the launch of KT Bank via our subsidiary Kuveyt Türk in the year 2015, KFH has become strongly invested in Germany. Now we are also able to use KT Bank as our Euro clearer which provides added value for the whole group.”
KT Bank’s Chairman of the Management Board Ahmet Kudsi Arslan emphasizes: “With creating such correspondent banking synergies within our group, we strengthen our overall market position in the Euro area.”
A vostro account is the account a correspondent bank holds on behalf of another bank. These accounts are an essential aspect of correspondent banking in which the bank holding the funds manages the account of a foreign bank.
A vostro account is established to enable a foreign correspondent bank to act as an agent or provide services as an intermediary for a domestic bank to execute wire transfers, withdrawals and deposits for customers in countries where the domestic bank does not have a physical presence.