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Dubai Islamic Economy Development Centre Reviews Developments of Strategic Initiatives

The Dubai Islamic Economy Development Centre (DIEDC) recently held its third virtual board meeting of 2020. Dubai has successfully positioned itself as a prestigious regional centre that offers significant opportunities to traders and investors. DIEDC’s board discussed the GIES Virtual Series that is organised in collaboration with the Centre’s strategic partners, to prepare for the upcoming Global Islamic Economy Summit in 2021. With four webinars already held to date, the virtual series is set to continue until end-2020. With the participation of leading local, regional and international industry experts, the virtual webinars have highlighted many topics of interest to Islamic economy stakeholders.

The ethnicity pensions gap

The People’s Pension identified that pensioners from ethnic minorities are on average £3,350 a year, or 24.4%, worse off than other pensioners – calling this the ‘ethnicity pensions gap’. Furthermore, the Black and Minority Ethnic population is projected to grow by about 50% reaching 21% of the population by 2051 – so this is a growing problem that needs our attention now. Governmental changes to remove the pensions barriers will go some way to help the lower earners, such as removing the earnings trigger for automatic enrolment of £10,000 – but these are yet to be implemented.

Emirates Islamic's $500m #sukuk issue draws in a substantial $1.2b

Emirates Islamic has closed a $500 million five-year sukuk forming part of its $2.5 billion 'Certificate Issuance Programme'. The issue, rated A+ by Fitch, will be listed on Nasdaq Dubai and Euronext Dublin. Bank ABC, Citigroup, Dubai Islamic Bank, Emirates NBD Capital, HSBC, Standard Chartered Bank and The Islamic Corporation for the Development of the Private Sector acted as joint lead managers and bookrunners. Investors showed strong appetite, ensuring an order book of $1.2 billion and nearly 2.4 times the issuance size with a profit rate of 1.827 per cent. This is the lowest achieved by a UAE bank in the past 10 years.

FinCEN files: Big banks let $2 trillion 'dirty money' move around world

The FinCEN files show that the world's biggest banks have allowed criminals to move "dirty money" around the globe. In total, these reports flagged more than $2 trillion in transactions. The BBC reported that Russian oligarchs used banks to avoid sanctions and moved their money into the West. The FinCEN files are more than 2,500 documents, most of which were files that banks sent to the US authorities between 2000 and 2017. It has been revealed through these documents that a bank allowed fraudsters to move millions of dollars even after it learned from US investigators that the scheme was a scam. There have been a number of big leaks of financial information in recent years, including 2017 Paradise Papers. The 2016 Panama Papers - Leaked documents from the law firm Mossack Fonseca showed more about how wealthy people are using offshore tax regimes.

Saudi Re receives Sharia certification from Shariyah Review Bureau

Saudi Reinsurance Company (Saudi Re) announced receiving the Sharia certificate for its offerings from Shariyah Review Bureau (SRB). With a solid financial base of total assets SAR 2.9 billion and an A3 rating by Moody's, Saudi Re is eyeing opportunities to strengthen its presence in its target markets in the Kingdom, the Middle East, Asia and Africa. CEO Fahad Al-Hesni said that Saudi Re has identified Environmental, Social and Governance (ESG) objectives from investors perspective, among which Sharia compliance was emphasized as a key factor in reflecting the responsible conduct. SRB apply various Sharia supervisory actions like reviews, investment screening, interactive consultations, Sharia Board administration and periodic Sharia audits.

Munir Lallmahamood, CEO de la Century Banking, interrogé par l'ICAC pour transactions frauduleuses

Century Banking Corporation, qui opérait dans la finance islamique, fait l’objet d’une enquête de la Commission anticorruption. C’est avec effet immédiat que la Banque de Maurice a pris la décision de révoquer le permis de Century Banking Corporation qui opère dans la finance islamique. L’ancien Premier ministre malaisien Najib Razak a été reconnu coupable des sept chefs d’accusation dans le premier de plusieurs procès pour corruption de plusieurs millions de dollars. Il a été condamné à 12 ans de prison. Le CEO de l’établissement, Munir Lallmahamood a été interrogé dans les locaux de la Commission anticorruption par les hommes de Navin Beekarry le vendredi 4 septembre.

Saudi German Hospital secures $81.33mln loan from Al Rajhi Bank

The Middle East Healthcare Company (Saudi German Hospital) received Sharia-compliant credit facilities worth SAR 305 million from Al Rajhi Bank. A total of SAR 120 million of the financing is revolving loans that will be renewed periodically, while the remaining sum of SAR 185 million will be paid within six years. The first amount is short-term financing that aims to cover working capital needs whilst the second sum is a medium-term loan that will be used in financing the healthcare provider's digital transformation. The loan is guaranteed by a promissory note.

Jaiz Bank: First shared-profit bank in #Nigeria approaches 10 years

Nigeria’s first non-interest bank has moved from being a regional bank to a national bank, with several branches and customers. JAIZ International was established on 11th of November 2011, and began the long walk to the actualization of their dreams. On 6 January 2012, operations commenced at the branches in Abuja, Kaduna and Kano. In 2013 it was permitted to increase shareholding capital to $92.3 million (NGN14.3 billion), and subsequently applied for a national banking license which it received in 2016. Audited financials from the company show that the company is fast growing to make up for the early years of little or no profit. Total assets grew 54% YOY, from N108.4 billion in 2019 to N167 billion in 2019, while deposits rose 50% to N127 billion, from the N85 billion recorded in 2018. The recently reported Q2 2020 unaudited reports show that the bank had a fair outing in the second quarter of the year, with a clear improvement across all indicators in comparison to Q2 2019.

Vice President Ma’ruf can ‘do more’ to develop sharia economy

As a respected elder figure among the Muslim grassroots, Indonesian Vice President Ma’ruf Amin was initially expected to play a significant role in enacting policies that could benefit the country’s majority-Muslim population. But analysts have suggested that Ma’ruf could still do more to promote the sharia economy and finance. The government launched a masterplan for the sharia economy last year, which provides a five-year development roadmap. The plan hopes to transform Indonesia into a net producer of halal goods and services, instead of merely being a big market for them. According to analysts, Ma’ruf should encourage the state to focus more on developing the sharia economy, particularly in providing stimulus programs among sharia-based businesses and strengthening sharia institutions.

Responsible Investing: Combining ESG and shariah principles in a fund

Sustainable investing is increasing in popularity as more investors and companies prioritise the need to act responsibly in order to create a positive lasting impact on the community and the environment. Shariah-compliant investing shares many similarities and goals with sustainable investing. Governments, institutions and the younger generation are more concerned about environmental issues such as climate change. As such, they demand more independent governance structures and want corporations to fulfil social responsibilities. Maybank Asset Management recently launched the Maybank Global Sustainable Equity-i Fund, its first actively managed shariah-compliant ESG fund that invests in both shariah-compliant and sustainable companies in the global markets. A minimum of 80% of the fund will be in shariah-compliant equities and shariah-compliant related securities. The rest of the fund will be invested in Islamic liquid assets.

Demand for green Islamic bonds gain momentum in GCC states

Investor appetite for green sukuk is growing in the Arabian Gulf countries despite the lukewarm economic growth amidst the ongoing pandemic. Saudi Arabia’s electric transmission monopoly, Saudi Electricity Company (SEC), issued a multi-tranche $1.3 billion green sukuk and reported an order book of more $5.2 billion, indicating the immense appetite for sustainable Islamic bonds. The proceeds of SEC’s sukuk will be used to finance green projects relating to energy efficiency and renewable energy. Currently, Saudi Arabia is almost exclusively reliant on fossil fuels for power generation and has a high energy usage per capita because of its reliance on air conditioning and desalinated water. The green sukuk market is still in its infancy, with only a handful of issuances taking place.

Egypt's Faisal Islamic Bank records $7.15bln in business volume during August

The Faisal Islamic Bank of Egypt has reported a 9.3% increase in its volume of business to EGP 112.751bn in August 2020, compared to EGP 103.149bn in August 2019. The bank’s total assets reached EGP 109.713bn in August 2020, which reflects a 13% growth compared to the EGP 97.124bn reported in August 2019. Faisal Islamic Bank aims to open five new branches over the course of the current year, bringing its total network of branches to 41. It aims to further expand its branch network to 46 by the end of 2021. The bank also plans to offer a number of new services, including “Meeza” debit and pre-paid cards, and new bill e-payment service “Fawri”.

Malik Riaz’s Bank ‘EIBL’ to offer Islamic Housing Financing for Bahria Town

Escorts Investment Bank Limited (EIBL) is planning to launch Islamic housing finance. Malik Riaz, the Pakistani business tycoon owns EIBL. The new financing is expected to help in the business of the parent project of EIBL, Bahria Town. Bahria Town recently announced a cheap housing scheme in different cities for both Pakistani residents and expatriates. The scheme would appeal to customers towards the housing project as well as the bank. Shariah-compliant housing finance and micro-financing products are to be issued by EIBL besides the earlier offered interest-based products.

Emirates Islamic Bank hires banks for 5-year dollar #sukuk - document

Emirates Islamic Bank has hired banks to arrange the issuance of U.S. dollar-denominated five-year sukuk.
It hired Emirates NBD Capital, HSBC, The Islamic Corporation for the Development of the Private Sector, and Standard Chartered to arrange investor calls that started on Monday.

Oman plans to launch third issue of sovereign #sukuk issue

Oman's Ministry of Finance announced to launch of the third issue of sovereign sukuk denominated in Omani rials within the framework of the sovereign sukuk programme launched in 2019. The ministry has appointed Bank Muscat and its Islamic window (Meethaq) to manage the bond issuance and it can be subscribed through all licensed banks operating in the Sultanate. Oman is currently facing financial challenges as a result of the decline in oil prices and the consequences of COVID-19 pandemic, which have directly contributed to the sharp decline in global oil prices since the beginning of this year.

ADIB partners with Ministry of Finance to offer NextGen eDirham cards

Abu Dhabi Islamic Bank (ADIB) has partnered with the UAE’s Ministry of Finance (MoF) to offer the new range of eDirham cards. eDirham cards offer a smart payment method accepted by more than 5,000 government services in ministries, federal and local authorities. The system offers many advantages, including low costs and the possibility of paying service fees through different payment channels, which include eDirham apps for phones, e-wallet, vouchers, and self-service eKiosks. The ADIB eDirham Gold and ADIB eDirham Signature cards represent the third generation of the eDirham cashless payment service.

KFH–Bahrain launches a first-of-its-kind Islamic Securitization Program

KFH-Bahrain launched a first-of-its-kind Shari'a compliant Securitization Program which offers a series of Mudaraba Sukuk under a trust structure. Under the program, sukuk will be issued against a select pool of financing portfolios, where the sukuk holders become the ultimate beneficiaries of the financing portfolio. The program can also be used for non-KFH-Bahrain financing portfolios, where the Bank acts as an arranger. Mr. Rashid Alkhan, Head of Wealth Management says the program provides an opportunity for clients to diversify their portfolio allocation strategy. The program will increase market activity and financial institution's ability to finance housing units in the Kingdom of Bahrain.

Aligning Money and Mission at Banks: What Nonprofits and Foundations Can Do

Banking has fueled racial inequity and social harm in many ways and for a long time. Before the Fair Housing Act passed in 1968, banks regularly contributed to racial segregation and wealth inequality in the US by refusing to make loans to Black Americans or in neighborhoods that were predominantly Black. In the 2000s, Black and Latin Americans who were able to purchase homes and gain some wealth were disproportionately targeted for high-cost predatory loans. When the crash came, the nation’s already enormous racial wealth gap grew even larger. Banks continue to fund fossil fuel firms, prisons, detention centers, and payday lenders. Most organizations and individuals are unknowingly funding these activities with their deposits. The Beneficial State Foundation established the Equitable Bank Standards that clearly define both mission-aligned and harmful practices of banks. With the nonprofit sector accounting for over $3 trillion in assets, aligning money with values could make a huge difference.

International Islamic Trade Finance Corporation and Mizuho Bank Malaysia sign $100 mln trade financing deal

The International Islamic Trade Finance Corporation (ITFC) signed a US$100 million Murabaha-structured line of trade finance with Mizuho Bank Malaysia, a subsidiary of Mizuho Bank Japan. This financing will help ITFC extend its support to the member countries under its COVID-19 Response Plan. The financing is ITFC’s first partnership with a Japanese bank, signalling an expansion of its partners around the world. The virtual signing ceremony took place between Eng. Hani Salem Sonbol, CEO ITFC and Mr. Shojiro Mizoguchi, the Managing Director & CEO, Mizuho Bank (Malaysia) and witnessed by Mr. Hidekatsu Take, the Managing Executive Officer of Mizuho Bank.

Nigerian Islamic bank Jaiz targets N5.41b gross income in Q4

Jaiz Bank has projected that the flagship non-interest bank will post a gross income of N5.41 billion in the fourth quarter with average pre-tax profit per average sales expected at 13.03%. The bank predicted that profit before tax will be N705.37 million while profit after tax is expected to close the three-month period at N634.83 million. Jaiz Bank Managing Director Hassan Usman said overall vision of the bank was to become the leading non-interest financial institution in Sub-Saharan Africa. The bank wants to develop small and medium enterprises (SMEs), grow with them and support them not only for profit making but to ensure the country achieves real growth. He noted that while the bank would continue to expand its operations across the country by opening more branches, it will significantly leverage on technology and bring the semi-banked and unbanked population into the formal economy.

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