UBS has decided to absorb its shariah-compliant division known as Noriba into the firm.

Shariah is the law system inspired by the Koran, the Sunna, older Arabic law systems, parallel traditions, and work of Muslim scholars over the two first centuries of Islam.

The Swiss banking giant announced that it will fully integrate its wholly owned subsidiary Noriba into the firm by the end of 2006. UBS says that Noriba’s wealth management clients will now be able to more effectively access the full range of services provided by its global wealth management & business banking divisions and its institutional clients will similarly be served by the investment bank. The investment bank will also take over the responsibility for Sharia-compliant investment products.

UBS recently reviewed its business structure in the Middle East. The review concluded that its expansion in the region should use the full capabilities of all three business groups: global wealth management & business banking, global asset management and investment banking in a more integrated way.

UBS founded Noriba, headquartered in the Kingdom of Bahrain, in 2002. The bank specializes in institutional and high net worth private clients seeking shariah-compliant investment opportunities. “Experience has shown that the business opportunities for Noriba are concentrated mainly in the creation and distribution of shariah-compliant products. Clients have sought to receive these products from UBS itself rather than from the separately branded unit,” it notes. “For this reason, as well as the fact that UBS can better meet these client needs via its integrated business model, the integration of Noriba into its single brand makes business sense.”

For UBS, the Middle East is an important market, it reports. UBS has 200 employees in its Middle Eastern business, of which 65 are locally employed. UBS has a strategic commitment to expanding this business, and is actively exploring various opportunities to achieve this, it notes.