Kuwait Finance House's Turkish operation, Kuveyt Turk, has applied for a German banking licence and aims to become the first Islamic bank in Europe's largest economy, Chief Executive Ufuk Uyan told Reuters.

Kuveyt Turk - which issued a $350 million sukuk, or Islamic bond, last year - is waiting for a response from German financial watchdog BaFin, Uyan said. It hopes the application process will be completed next year.

"We are trying to obtain a full banking license," he told Reuters in his office in Istanbul. "We plan to open branches in Germany, and if this model becomes successful, we could consider going to other European countries."

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