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Islamic Finance Briefing - Archive | November, 2012

Islamic funds: Potential and pitfalls

Posted on 30 November 2012 by Laxman  |  Email|Print

The Shari’ah-compliant funds industry may prove to be the dark horse of Islamic finance as it gains ground outside the Muslim world. The Islamic funds industry may still be dwarfed by the likes of Takaful, Islamic banking and Sukuk but, after a troubled start, it is finally coming into its own. However, it will take a long time for the industry to recover from its tough upbringing.
In 2007 173 funds were launched, then in 2008 the recession set in and the Islamic funds industry suffered alongside ailing Western markets, with the number of funds launched falling to 78. In 2009, that figure plummeted to just 29. Islamic equity funds, which make up 10 per cent of the market, returned 10 per cent in 2010, compared with the 15 per cent return on the global equity index and significantly less than the 22 per cent average of 2009………………………………………..Full Article: Source

Global Islamic banking market to exceed $2.6 trillion by 2017

Posted on 30 November 2012 by Laxman  |  Email|Print

75 per cent of the world’s UHNW (Ultra-High Net Worth) population who engage in Shari’ah-compliant finance is represented by UHNWIs in MENA, South Asia and Southeast Asia. By 2017, we expect an additional 960 UHNWIs to adopt Islamic banking, representing an average annual increase of 7.7 per cent.
With the global Islamic banking market forecast to exceed $2.6 trillion by 2017 there is immense potential in engaging UHNWIs who wish to invest in Islamic finance………………………………………..Full Article: Source

The role of banks towards development of Bangladesh : Islamic Banking perspective

Posted on 30 November 2012 by Laxman  |  Email|Print

After the inception of Islamic banking in Bangladesh in 1983 there was a consistent growth and today out of 47 commercial banks in Bangladesh 7 are full-fledged Islamic banks. In addition, 15 other regular commercial banks and two foreign banks are offering Islamic products through their Islamic banking branches/windows.
Currently, the combined share of Islamic banks accounts around 25 per cent of the total banking market of Bangladesh. Thus, Islamic part of banking sector contributing greatly in the development of national economy. Special contribution of Islamic banks is the inclusion of those un-banked in the banking sector who kept themselves away from the conventional banking system because of Riba or interest. ……………………………………….Full Article: Source

UMNO: Malaysia boasts comprehensive Islamic banking services - Najib

Posted on 30 November 2012 by Laxman  |  Email|Print

Malaysia is the only Muslim country offering Islamic banking and finance services extensively, from the pawn system to sukuk issuance. It is among the country’s leading edge which resulted from Umno’s efforts in championing Islam, Umno president Datuk Seri Najib Tun Razak said.
“We are proud for a global forum has recognised Malaysia’s success as the world’s leading Islamic financial centre,” he said………………………………………..Full Article: Source

Malaysia: Banking sector to grow at double GDP rate in 2013

Posted on 30 November 2012 by Laxman  |  Email|Print

The banking sector could grow at double the country’s gross domestic product (GDP) rate in 2013 based on strong third-quarter (3Q) growth this year and various projects under the Economic Transformation Programme (ETP) that will be implemented, says Malayan Banking Bhd (Maybank) president and chief executive officer Datuk Seri Abdul Wahid Omar.
The products offered are savings, financing and insurance which are under conventional banking model and it is planning an early 2013 offering of Islamic banking products………………………………………..Full Article: Source

Barwa Bank’s equity fund has good first month

Posted on 30 November 2012 by Laxman  |  Email|Print

Barwa Bank’s newly launched The First Investor GCC Equity Opportunities Fund attracted nearly QAR 90 million during its first month of subscription. Going forward, subscriptions will be on a monthly basis.
The Shari’ah-compliant fund, launched at the end of September, has started investing in equities and equity-related securities listed on exchanges within the Gulf Cooperation Council countries………………………………………..Full Article: Source

Fitch cuts Sri Lanka’s HDFC Bank to ‘BBB(lka)’; outlook stable

Posted on 30 November 2012 by Laxman  |  Email|Print

Fitch Ratings Lanka has downgraded the Housing Development Finance Corporation Bank of Sri Lanka’s (HDFC) National Long-Term Rating to ‘BBB(lka)’ from ‘BBB+(lka)’. The Outlook is Stable. Its LKR195m outstanding senior unsecured redeemable debentures have also been downgraded to ‘BBB(lka)’ from ‘BBB+(lka)’.
The downgrade reflects the bank’s inability to swiftly re-price its existing housing loan portfolio to avert deterioration in profits as market interest rates started to rise since end-2011………………………………………..Full Article: Source

Islamic Bank of Britain ‘Sharia finance question time’ tour arrives in Birmingham

Posted on 30 November 2012 by Laxman  |  Email|Print

Birmingham-based Islamic Bank of Britain plc (IBB), is bringing the final leg of its national ‘Sharia Finance Question Time’ tour to Birmingham on 5th December 2012. The event, open to all members of the local community, will be held at Islamic Bank of Britain, 394 Coventry Road, Small Heath, Birmingham, B10 0UF from 6.00 pm – 7.30 pm.
‘Sharia Finance Question Time’ will be hosted by Kashif Mehboob, Deputy Branch Manager at Islamic Bank of Britain in Birmingham. It will consist of an informal debate giving attendees the opportunity to pose their questions to Samir Alamad, IBB’s dedicated Sharia Compliance Officer and a trained expert in Islamic finance………………………………………..Full Article: Source

Setting people free

Posted on 30 November 2012 by Laxman  |  Email|Print

Mention microfinance and immediately Nobel laureate Mohammad Yunus and his successful Grameen Bank in Bangladesh comes to mind. Little is known of the microfinance sector in Palestine, inspired by Yunus, but when Faten (Palestine for Credit & Development) won the Grameen Jameel Leadership Award for 2012, “for having demonstrated leadership in its local sector, client retention, human resources, new product offerings, poverty focus and operating in a difficult environment”, the focus turned to Anwar Jayosi, the Palestinian equivalent of Yunus.
“We operate on loans obtained from the World Bank and various European Banks, and, to some extent, local banks.” Jayosi says. “We’ve adopted the Islamic banking system so as to provide each borrower with a tailor-made service”………………………………………..Full Article: Source

Idealratings partner with the first sharia financial advisory firm in Kenya

Posted on 30 November 2012 by Laxman  |  Email|Print

Idealratings with its widespread network of clients in more than 15 countries and MCG LTD as a prominent Sharia financial advisory firm in the Sub Saharan Africa region with an extensive experience in the Islamic Finance arena signed a partnership agreement to offer Sharia Services Cooperation (SSC) to the financial institutions in the Sub Saharan Africa market.
The new partnership will be offering Shariah advisory services through Mash Consulting expertise as well as IdealRatings Shariah screening and purification state of the art services.(Press Release)

Offering by Abu Dhabi’s Ipic boosts bond sales to record

Posted on 30 November 2012 by Laxman  |  Email|Print

GCC bond sales jumped to a record this week after International Petroleum Investment (Ipic) seized on low borrowing costs to raise US$2.9 billion in the region’s biggest corporate offering this year.
Debt issuances in the GCC, which supplies about a fifth of the world’s oil, reached $37.4bn after the Abu Dhabi state-owned energy investor Ipic sold dollar and euro-denominated notes. That took regional sales almost 4 per cent above the previous record in 2009, according to data compiled by Bloomberg. Ipic’s offering topped the $2bn raised by Qatar National Bank this year………………………………………..Full Article: Source

MARC assigns final ratings to Weststar Capital’s Mudharabah programme

Posted on 30 November 2012 by Laxman  |  Email|Print

MARC has assigned a final rating of AA-IS with a stable outlook to Weststar Capital’s (Weststar Capital) MYR 900 million Sukuk Mudharabah Programme upon the receipt of final documentation for its forthcoming issuance.
The terms and conditions of the Sukuk Mudharabah Programme remain substantially unchanged from the draft documents on which the earlier preliminary rating of AA-IS was based………………………………………..Full Article: Source

Malaysia: Mortgage financing adapts to new era

Posted on 30 November 2012 by Laxman  |  Email|Print

More innovative products are being offerred by banks which are still keen to lend despite tightening of lending policieser. Islamic Lending will also become another powerhouse in the Banks’ lending arena. You can see that today, Islamic banking is getting a lot of attention by the Government. More and more people are also taking up Islamic loans nowadays.
Islamic Loan packages have evolved and have gone through a lot of improvements compared with 10 years ago. Gone are the days when Islamic Interest rates are fixed in nature………………………………………..Full Article: Source

Saudi- Export insurance support for OIC states reaches $ 17.4 bln

Posted on 30 November 2012 by Laxman  |  Email|Print

Aman Union members have contributed 17.4 billion in investment and export insurance for OIC countries this year, said its Secretary-General Dr. Abdel-Rahman Taha.
“The insurance support given by the union this year is 17.6 percent more than that of 2010 when it gave 15.06 billion,” he pointed out. Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) is an affiliate of Islamic Development Bank………………………………………..Full Article: Source

Takaful: A new and viable insurance segment in Sri Lanka

Posted on 30 November 2012 by Laxman  |  Email|Print

Sri Lankan Takaful insurance industry is exhibiting a tremendous growth potential. With the entry of various banks as Sri Lanka’s first fully fledged Islamic Bank & two commercial banks in 2011, the industry is showing a promising market for Takaful insurance, as most of the need for General insurance still stems from the banking and finance industry. At present, Amana Takaful is Sri Lanka’s only takaful insurer. On the back of more and more acceptance among the consumers coupled with rapid economic growth and sizable underinsured population, takaful insurance market is anticipated to attain a significant growth in future.
Insurance Industry in Sri Lanka is dominated by general insurance segment that witnessed 23% growth in its gross written premium in 2011, compared to the previous year. The industry is expected to grow at a significant rate in the coming years with gross written premium (GWP) growing at a CAGR of around 21% during 2012-2015. (Press Release)

Kuveyt Turk aims to be Germany’s first Islamic bank-CEO

Posted on 29 November 2012 by Laxman  |  Email|Print

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………………………………………..Full Article: Source

Islamic banking not in conflict with Shariah requirements

Posted on 29 November 2012 by Laxman  |  Email|Print

The issue of the country’s Islamic banking system being in conflict with Syariah (Islamic law) requirements does not arise as any decision made has been referred to the Bank Negara Malaysia (BNM) Syariah Advisory Council.
Deputy Finance Minister Datuk Dr Awang Adek Hussin said this advisory council had high powers to ensure that the country’s Islamic banking system adhered to Syariah requirements, specifically over issues involving BNM’s financial system. “Members of the advisory council include the Penang mufti, three members of the National Fatwa Council, a former chief justice, local ulama and one from the Indonesian Council of Ulama………………………………………..Full Article: Source

Growth prospects fuel Gulf banks’ capital-raising push

Posted on 29 November 2012 by Laxman  |  Email|Print

A ground-breaking $1 billion Tier 1 hybrid sukuk from ADIB, sold in early November, opened the way for banks to use Islamic bonds to boost core capital. The sukuk was described as “hybrid” because it had equity-like characteristics; it was perpetual, meaning it had no maturity date.
The sukuk attracted about $15 billion of investor bids, a massive oversubscription, and ADIB was able to price it at a 6.375 percent profit rate, raising money very cheaply compared to conventional hybrid bonds issued by Western banks over the past year. The sukuk’s price has continued to rise in the secondary market since issue, showing very strong investor demand for it………………………………………..Full Article: Source

Sharjah Islamic Bank signs agreement with Ruwad

Posted on 29 November 2012 by Laxman  |  Email|Print

Sharjah Islamic Bank (SIB) has signed an agreement with Ruwad Establishment to facilitate enterprise finance. The signing ceremony was held at the bank’s headquarters and attended by HE Mohammed Abdullah, CEO of (SIB) and HE Ahmed Mohammed Al Midfa, Chairman of Ruwad, who signed the agreement on behalf of their respective organisations in presence of Ruwad’s deputy chairman and members of the board as well as a number of senior officials from both parties.
As per the agreement, the bank will finance the enterprises agreed with Ruwad and that meet the criteria stipulated in the agreement………………………………………..Full Article: Source

Ahli Bank Qatar’s ratings affirmed with ’stable’ outlook

Posted on 29 November 2012 by Laxman  |  Email|Print

Capital Intelligence (CI), the international credit rating agency, announced today that it has affirmed Ahli Bank Qatar (ABQ)’s Financial Strength Rating (FSR) of ‘BBB’, on ‘Stable’ Outlook, on the basis of the recent increase in shareholders’ funds, sound asset quality, and good profitability.
The FSR is constrained by ongoing concentration risks, narrower than average interest differential, and the small Qatari banking market. The Bank’s Long and Short-Term Foreign Currency (FC) Ratings of ‘A-’ and ‘A2′, respectively, are affirmed based on the Qatari government’s demonstrated financial support for Qatari banks, and the ownership and management control by Ahli United Bank (AUB)………………………………………..Full Article: Source

Banks in Gulf raise capital to fund expansion

Posted on 29 November 2012 by Laxman  |  Email|Print

As banks in much of the rest of the world struggle to shore up balance sheets ravaged by weak economies, banks in the Gulf are sucking in capital for a very different reason: To fund expansion plans. The contrast means the Gulf banks are likely to be able to raise money cheaply and relatively easily, helping them compete as they move into markets overseas and challenge some of the big international institutions.
“Our growth rates have been phenomenal in the last few years and because of that growth, we needed to refuel after a certain stage,” Tirad Mahmoud, chief executive of Abu Dhabi Islamic Bank (ADIB), said after his bank raised $1bn of capital this month………………………………………..Full Article: Source

Maybank targets mass affluent retail customers

Posted on 29 November 2012 by Laxman  |  Email|Print

Malayan Banking Bhd (Maybank) is counting on its new offering, which bundles together seven financial products, to help it capture more mass affluent customers as it looks to strengthen its retail banking leadership at home.
Mass affluent customers typically earn about RM3,000 a month and are one of the more profitable customer segments for banks. As it stands, 95 per cent of Maybank’s retail customer base comprises the mass afluent………………………………………..Full Article: Source

Mauritania’s second Islamic bank signs for Path Solutions’ iMAL

Posted on 29 November 2012 by Laxman  |  Email|Print

Path Solutions , the global provider of Islamic banking software, today announces that Banque Populaire de Mauritanie (BPM) has selected Path Solutions ‘ next generation iMAL as its Islamic Core Banking Solution to compete both functionally and technically on the national and international level.
The Banque Populaire de Mauritanie is 100 percent owned by Groupe Mauritanie Leasing, one of Mauritania’s largest financial services groups. After it had met all necessary conditions and requirements, the Group has received approval from the Central Bank of Mauritania to open the second Islamic bank in the country. (Press Release)

Qtel bond yields set to ring up a steep rise

Posted on 29 November 2012 by Laxman  |  Email|Print

Qatar Telecom’s bond yields are set for the steepest monthly advance in almost two years as acquisitions by the Middle East’s second-largest phone company by revenue erode its cash holdings. The yield on the state-run company’s 2016 bonds, which are rated at Moody’s Investors Service’s sixth-highest investment grade of A2, has risen 20 basis points.
That contrasts with little change for the HSBC/Nasdaq Dubai’s Middle East Investment Grade US Dollar Sukuk/Bond Index………………………………………..Full Article: Source

Banks picked for GIB bond issue talks

Posted on 29 November 2012 by Laxman  |  Email|Print

Gulf International Bank (GIB), majority owned by the Saudi Arabian government, has picked six banks to arrange investor meetings ahead of a potential benchmark-sized, dollar-denominated bond, lead arrangers said.
Roadshows kick off today in the UAE, before meetings in Singapore and Hong Kong, and conclude on December 3 in London. Any bond following investor meetings will be issued under the bank’s recently-updated $4 billion euro ($5.2bn) medium term notes programme, the arrangers said………………………………………..Full Article: Source

Dr Zeti: SRI has significant appeal to Islamic finance

Posted on 29 November 2012 by Laxman  |  Email|Print

Socially responsible investment (SRI), which is fast gaining currency in the global market place, will have a “significant appeal” to Islamic finance, particularly in the context of the recent global financial crisis, according to Bank Negara Malaysia (BNM) governor Tan Sri Dr Zeti Akhtar Aziz.
“Beyond financial returns, SRI also accords primary consideration to the impact on economic activity and on the broader society, thereby incorporating the important dimensions of environmental sustainability, social responsibility and governance………………………………………..Full Article: Source

Weqaya Takaful issued BBB credit rating

Posted on 29 November 2012 by Laxman  |  Email|Print

Standard & Poor’s has assigned Saudi Arabia’s Weqaya Takaful Insurance and Reinsurance Company a BBB credit rating with a stable outlook.
Standard and Poor’s (S&P’s) affirmation on Weqaya Takaful Insurance and Reinsurance company’s credit rating is a result of the “ongoing and regular surveillance of Weqaya’s performance for the second year in a row by Standard & Poor’s (S&P’s) agency,” said a statement posted on the Saudi bourse………………………………………..Full Article: Source

Solidarity opens key centre

Posted on 29 November 2012 by Laxman  |  Email|Print

Solidarity General Takaful, a subsidiary of one of the largest takaful groups in the world, Solidarity Group Holding, opened its largest insurance services centre in Muharraq. The centre was inaugurated by Central Bank of Bahrain executive director of financial institutions supervision Abdul Rahman Al Baker.
“We are delighted to announce the launch of our new Insurance services centre which can only strengthen our reach to be closer to our customers,” said Solidarity General Takaful chairman Saleh Hussain………………………………………..Full Article: Source

Morocco joins neighbours to draft sukuk law

Posted on 28 November 2012 by Laxman  |  Email|Print

Morocco is drafting a law to allow the sale of Islamic bonds, joining North African neighbours seeking to lure more investors to their debt after global sukuk offerings surged to a record.
The government, led by the Islamist Justice and Development Party, will put the bill to parliament as soon as the draft is completed, Budget Minister Driss Elazami Eldrissi said by phone on November 20. He wouldn’t say when that would happen. Tunisia and Egypt, two other North African countries ruled by Islamist parties after last year’s uprisings, are also drafting laws to pave the way for possible sukuk sales in 2013………………………………………..Full Article: Source

Saudi Hollandi Bank prices $373mln sukuk

Posted on 28 November 2012 by Laxman  |  Email|Print

Saudi Hollandi Bank, the kingdom’s eighth-largest bank, has completed a SR1.4 billion ($373.3 million) Islamic bond issue. The subordinated sukuk, which will boost the bank’s Tier two capital ratio, has a seven-year maturity but can be redeemed by the issuer after the end of the fifth year, the statement added.
No detail was provided on what the bank’s Tier two ratio was before and after the offering. Tier two is a measure of the bank’s supplementary capital reserves………………………………………..Full Article: Source

Singapore: Mega sukuk issue creates ripples here

Posted on 28 November 2012 by Laxman  |  Email|Print

Singapore investors dipped heartily into the world’s first syariah- compliant Tier 1 perpetual sukuk (Islamic bonds) despite the financial centre not being known for its appetite for Islamic finance.
So keen were Singapore investors on the offering that they accounted for 23 per cent or US$3.5 billion of the US$15.5 billion order book for Abu Dhabi Islamic Bank’s (ADIB) US$1 billion Tier 1 perpetual sukuk. In the end, however, allocations were scaled back and they ended up with 18 per cent of the issue………………………………………..Full Article: Source

Islamic fund times

Posted on 28 November 2012 by Laxman  |  Email|Print

Islamic funds have come through a difficult period, registering a growth of seven per cent last year; however, compared to the conventional market, they remain a poor relation.
Sukuk is soaring, with issuances set to surpass the record levels set in 2011. Issuances in the first quarter of 2012 have already reached approximately $43 billion worldwide, which is nearly half of the total issuance in 2011………………………………………..Full Article: Source

Islamic finance’s growth much more than a leap of faith

Posted on 28 November 2012 by Laxman  |  Email|Print

Islamic finance remains widely misunderstood and, by many, significantly underestimated. The reality is that it is a USD1.3 trillion global industry – growing between 15 to 20% p.a. in the past decade – and in markets you may not expect.
The face of Islamic banking has changed markedly in just the past several years. Only five or so years ago, when I would seek points-of-view on Islamic finance, inevitably I would find myself talking to a researcher or an academic………………………………………..Full Article: Source

Zeti: Islamic finance must include lower income group

Posted on 28 November 2012 by Laxman  |  Email|Print

Islamic finance must be inclusive and accessible to all particularly the lower income group and small businesses so as to achieve a more balanced global economic growth with reduced income disparities, Bank Negara Malaysia Governor Tan Sri Dr Zeti Akhtar Aziz said.
To this end, she said Islamic financial institutions must strive to enhance the access of their financial services to all segments of society by meeting the demand for more Islamic microfinance products. “In emerging as a new market niche, Islamic microfinance would meet the differentiated demands of low income communities and provide support to entrepreneurial activities,” she said………………………………………..Full Article: Source

Indonesia: Sharia banking sees extraordinary development

Posted on 28 November 2012 by Laxman  |  Email|Print

Sharia banking has been experiencing extraordinary developments in several countries including Indonesia, home to 191 sharia banks. In Indonesia, this particular banking system has been enjoying an average growth-rate of 40.2 percent per year from 2007 to 2011.
“The potential of sharia banking is big,” director of the Risk Management Insurance Indonesia, Salustra Satria, said. Roslan Abdul Razak of the INCEIF said that the combined assets of 1,000 sharia financial institutions in 75 countries currently was US$ 1.2 trillion………………………………………..Full Article: Source

IFIs sustain growth despite global economic upheaval

Posted on 28 November 2012 by Laxman  |  Email|Print

Despite the challenging global economic environment, leading Islamic financial institutions have been able to sustain their growth ambitions, according to an expert.
“The industry, with its increasingly international footprint, continues to demonstrate its resilience and competitiveness, while the range of Shari’ah-compliant products and services available globally has significantly widened and deepened,” David Mclean, the organiser of the World Islamic Banking Conference 2102, said………………………………………..Full Article: Source

Islamic finance reporting needs consistency, says report

Posted on 28 November 2012 by Laxman  |  Email|Print

Islamic finance reporting requirements need more harmonisation and consistency, according to a report by KPMG and ACCA. Guidance is needed on applying international financial reporting standards (IFRS) when accounting for some Islamic financial products. Further help is needed to deal with the reporting to stakeholders of information on an entity’s Sharia-compliant operations.
The calls follow a series of KPMG and ACCA roundtable discussions, which included representatives of Islamic finance experts, bankers and other finance professionals………………………………………..Full Article: Source

Turkish Airlines eyes possible $500mln lease deal

Posted on 28 November 2012 by Laxman  |  Email|Print

Turkey’s national carrier Turkish Airlines is in talks with banks about a leasing arrangement worth around $500 million to help fund its plane orders from 2014, bankers familiar with the negotiations said.
Turkish Airlines was also considering issuing sukuk — Islamic bonds — or eurobonds next year to finance its aircraft acquisition plans from 2014, they said………………………………………..Full Article: Source

Islamic banking Malaysia: All business?

Posted on 28 November 2012 by Laxman  |  Email|Print

Islamic banking may have been born in the GCC, but it grew up in Malaysia. To the casual observer, this has much to do with its supportive Government and majority Muslim population, who we are led to believe demanded banking products that complied with their faith.
However, a wide cultural divide exists between the GCC and Malaysia; while the Middle East banks on faith, Malaysia appears to have faith in banking; its more relaxed population, unlikely to be swayed simply by an Islamic brand, haven’t just demanded Shari’ah-compliant banking, they’ve demanded more for their money………………………………………..Full Article: Source

A Muslim bank for everyone

Posted on 28 November 2012 by Laxman  |  Email|Print

Tirad Mahmoud, chief executive of Abu Dhabi Islamic Bank, defies Gulf stereotypes. As a Qatari citizen, he has chosen not to take the easy route to work for one of Doha’s banks. Neither does he opt for the traditional white-collared dress of the country and instead wears a suit.
He makes no attempt to hide behind the oft-quoted jargon of Islamic finance. “This is not a mosque,” says Mr Mahmoud, sipping an espresso in his office, which looks out to the centre of Abu Dhabi, the capital of the United Arab Emirates………………………………………..Full Article: Source

Regulatory clarity key to Islamic banking growth

Posted on 28 November 2012 by Laxman  |  Email|Print

Why is it that while Bahrain and Malaysia have successfully established themselves as Islamic banking hubs with over 20% market share, others like Egypt and Turkey languish at 5% or below despite having had a head start? Regulatory clarity is the answer.
Experience shows that in countries where the regulator recognises the uniqueness of Islamic banking vis-à-vis conventional banking and creates a separate regulatory framework for Islamic banks, the industry responds with accelerated growth and market share gains………………………………………..Full Article: Source

Yes! Islamic banking

Posted on 28 November 2012 by Laxman  |  Email|Print

The need to reassess the opportunities provided by the Islamic finance system in combating the current financial crisis is a welcome development. The collapse of leading Wall Street institutions, notably Lehman Brothers, and the subsequent global financial crisis and economic recession, are encouraging economists around the world to consider alternative financial solutions. Nigeria has however stuck to its traditional western styled banking system.
Until recently discussions on Islamic banking and finance as an alternative model have been in muted tones and the reason is simple. Nobody wanted to stir the hornet nest and spun religious jingoism. In real terms, Islamic banking is actually an economic practice that has proven successful even in the United Kingdom and United States of America among others………………………………………..Full Article: Source

Kuwaiti lender KFH eyes 20 pct capital hike

Posted on 28 November 2012 by Laxman  |  Email|Print

Kuwait Finance House (KFH), the Gulf state’s largest Islamic lender, will recommend a 20 percent capital hike to shareholders, the company said in a bourse filing on Tuesday, which will help boost capital ratios and fund expansion.
The company’s board of directors decided on Monday to make the recommendation when it holds its annual general meeting, with proceeds to fund the bank’s expansion both at home and internationally, KFH said. Any capital issue also requires approval from the country’s regulator. A potential capital increase will boost KFH’s paid-up capital to 348.5 million dinars ($1.24 billion) from 290.4 million dinars, Al Watan newspaper reported on Tuesday………………………………………..Full Article: Source

Sharjah Islamic Bank signs agreement with Ruwad

Posted on 28 November 2012 by Laxman  |  Email|Print

Sharjah Islamic Bank ( SIB ) has announced signing an agreement with Ruwad Establishment. The signing ceremony was held at the bank’s headquarters and attended by HE Mohammed Abdullah, CEO of Sharjah Islamic Bank and HE Ahmed Mohammed Al Midfa, Chairman of Ruwad, who signed the agreement on behalf of their respective organisations in presence of Ruwad’s deputy chairman and members of the board as well as a number of senior officials from both parties.
As per the agreement, the bank will finance the enterprises agreed with Ruwad and that meet the criteria stipulated in the agreement………………………………………..Full Article: Source

KFH-Bahrain deploys key Islamic banking solution

Posted on 28 November 2012 by Laxman  |  Email|Print

Bahrain (KFH) signed an agreement with International Turnkey Systems (ITS) Group to deploy the latter’s Ethix Core Solution for Islamic banking which will provide new IT solutions to the bank’s financial services.
Abdulhakeem Alkhayyat, managing director and CEO of Kuwait Finance House-Bahrain, said: “ITS will support the optimization of our core banking systems and make it more efficient and cost-effective. This will enhance our services and will allow us to provide more distinctive and versatile solutions that meet market demands.”……………………………………….Full Article: Source

Sharjah Islamic Bank takes home coveted excellence award

Posted on 28 November 2012 by Laxman  |  Email|Print

Sharjah Islamic Bank (SIB) was honoured with ‘The Best Contribution to the Mediterranean by Islamic Bank’ award at the MIM Mediterranean Awards for Excellence 2012, held under the patronage of the President of Malta, H.E George Abela.
The awards aim to reward entities for their efforts towards the developments of the Mediterranean region in multiple fields. ……………………………………….Full Article: Source

QIB gets two awards for Al Dhameen programme

Posted on 28 November 2012 by Laxman  |  Email|Print

Qatar Islamic Bank (QIB) has announced that it received two awards for ‘Al Dhameen’ programme during the Global Entrepreneurship Week 2012 (GEW 2012), which took place at Doha’s Crowne Plaza Hotel from November 11 to 17.
In January 2011, QIB signed the ‘Al Dhameen’ accord with Qatar Development Bank (QDB). Al Dhameen is a finance programme for Small and Medium Enterprises (SMEs) designed to support and encourage businesses to start up and thrive………………………………………..Full Article: Source

Financing challenge overhangs huge Dubai projects

Posted on 28 November 2012 by Laxman  |  Email|Print

Dubai is reviving massive real estate projects as its economy recovers from a corporate debt crisis, but this time around, constraints on financing are likely to slow the pace of its building boom.
Sukuk (Islamic bonds) from Dubai have attracted massive demand, partly because of a huge supply/demand imbalance among cash-rich Islamic funds. So sukuk could play a big role in Dubai’s financing activities. However, bond market traders and investors said the Dubai government might not be able to raise more than roughly $3 billion through bond issues in a single year………………………………………..Full Article: Source

Uncertain economic conditions will not impede Takaful industry’s growth

Posted on 28 November 2012 by Laxman  |  Email|Print

The takaful industry is capable of registering positive growth despite facing uncertain economic conditions, says Takaful Ikhlas Sdn Bhd, Business Operations Executive Vice President, Wan Mohd Fadzlullah Wan Abdullah.
He said although the regional economy at present was experiencing slow growth, the takaful industry was created to face all sorts of economic changes. “The opportunities for the takaful industry will always be good, irrespective of whether the economy is expanding or otherwise, as the service provided, is a need,” he said……………………………………….Full Article: Source

SHB issues 4th SR-denominated sukuk

Posted on 27 November 2012 by Laxman  |  Email|Print

Saudi Hollandi Bank (SHB), the oldest banking franchise in Saudi Arabia, has completed a SR1.4 billion ($373.3 million) Islamic bond issue. The subordinated sukuk, which will boost the bank’s Tier two capital ratio, has a seven-year maturity but can be redeemed by the issuer after the end of the fifth year, the statement said.
The sukuk priced at 1.15 percent over the six-month Saudi interbank offered rate, it added. Shareholders approved the issue of the sukuk in early October………………………………………..Full Article: Source

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