IslamicFinance.de

According to Standard & Poor's' article "Turkey's Growing Islamic Banking Sector Needs Fresh Capital For An Added Push," participation banks in Turkey look set to keep increasing their market shares over the medium term. However, S&P believes sluggish domestic savings and intensifying competition from conventional banks will likely limit the sector's progress without fresh capital and funding. The local authorities' more supportive stance toward the sector contributed significantly to the growth of Islamic banks. However, participation banks' rapid growth and high exposure to the construction sector render their asset quality vulnerable to an economic slowdown. The growth momentum existing participation banks have enjoyed can continue only if their capital bases increase and they achieve some competitive advantage.

Dubai-based GEMS Education has set initial pricing thoughts of an 11.75-12.00 per cent profit rate for its planned debut sale of hybrid Islamic bonds. The company, which employs about 11,000 staff and operates around 100 private schools across the Gulf region, has hired Morgan Stanley Inc, Credit Suisse and Abu Dhabi Islamic Bank (ADIB) to arrange the sale. The sukuk sale will use a mudaraba structure and will be callable after five years. No details on the planned size of the offering was provided.

Indonesia's finance ministry did not receive any winning bids for all offered sharia bonds at Tuesday's auction, the debt office at the finance ministry said. The country offered project-based sukuk with maturities of 7-years, 24-years and 30-years with an indicative target of 1 trillion rupiah. Total bids were 366.3 billion rupiah ($31.7 million).

London has long been the default centre for international firms to issue sharia-compliant bonds, but it faces a mounting challenge from Dubai and Kuala Lumpur. The final result of the three cities' rivalry may not be known for years, but thousands of jobs and large amounts of direct investment in companies and real estate are likely to depend on the outcome. The most high-profile - and most cut-throat - area of competition between the three centres is arranging sukuk. Other areas of competition include Islamic insurance, known as takaful, and asset management. London has led in attracting sukuk issues by big international companies because of the massive size of its conventional financial markets and its globally respected legal system. However, its position looks weakest among the three centres from a long-term perspective because it is not located within a natural pool of sukuk issuers and European customers will remain a limited group.

Bahrain-based investment firm Gulf Finance House said that a family consortium led by chairman of English soccer team Leeds United had bought a 5.71 percent stake in the company, estimated to be worth around 28.9 million dinars ($76.6 million).

UDA Holdings will work with Bank Muamalat to develop 40.47ha of wakaf land with a gross development value of RM1 billion. The land, ready for development, is spread throughout the country and owned by the respective state Islamic Religious Councils. Bank Muamalat will provide the end financing for UDA to develop the land. The implementation of development projects on the wakaf land will be based on the concept of Ijarah or leasing. To realise the development of wakaf land, UDA acting as the developer, will underwrite the development costs, while also being responsible for marketing the projects.

The Dubai government plans to establish a centre that will develop standards for corporate governance based on Islamic values, guiding companies in both financial and non-financial activities. The centre is to be opened in the second quarter of next year. The standards will not be compulsory for firms but the centre will issue sharia-compliance certificates to companies and banks meeting them. The standards will cover issues such as corporate transparency and disclosure. However, certificates will not be issued for individual products.

Bangladesh has become a role model of financial inclusion for the Islamic financial world, said Mohammad Abdul Mannan, managing director (MD) of Islami Bank Bangladesh Ltd (IBBL). He came up with the observation while addressing the first ever ADB conference on Islamic finance for Asia held at the ADB Headquarters in the Philippines on 4-5 November.

Emad Mansour, a veteran Gulf Arab banker, is planning to set up an investment bank in Dubai’s tax-free financial zone. Mansour, who has about 20 years of investment banking experience in the region, was most recently the chief executive of Doha-based Qatar First Bank (QFB). The executive will file an application to the regulator of Dubai International Financial Center (DIFC), and aims to launch the business in the first half of 2014. His firm will initially focus on private equity transactions and then will move on to offering M&A, equity and debt capital markets advisory services before starting asset management operations. Other former investment bankers from the region have also set up specialist boutiques betting on a continued upturn in activity.

The Malaysian government has announced plans to transform the country’s capital Kuala Lumpur into a major financial centre in a bid to raise its profile and spark greater international trade and investment. The proposed new financial district, covering 70 acres and featuring 11 new buildings with 25 or more floors, is known as the Tun Razak Exchange (TRX). In order to achieve the goal of becoming a financial superpower, TRX must turn to a more niche approach and build on the country’s established strength in the rapidly growing Islamic financial marketplace. Malaysia must leverage its status as an established Islamic finance hub. And it must address the challenges associated with the supply of high quality human capital.

According to estimates by EY’s Global Islamic Banking Center, the pent up global demand for Islamic pension funds is currently between $160 bn and $190 bn. At present, most of these funds are parked under conventional sovereign pension funds due to lack of investing options. Since greenfield operations would take too long to satiate market demand, a more practical approach is the partial transformation of existing pension funds to carve out Shari’a compliant tranches. The transformation will need to be carefully planned to choose the right business model and operational framework. The choice of business model will determine the governance structure, the complexity of financial reporting, tax implications, and go-to-market timeframes.

The Ethical Finance and Innovation Challenge and Awards, sponsored by Abu Dhabi Islamic Bank (ADIB) and Thomson Reuters, have attracted over 100 entries. The awards, which address issues of ethics in finance and innovation in Islamic banking and offer prizes of up to $100,000, drew interest from individuals and institutions in 55 countries, with interest highest in the UAE, Pakistan, Malaysia, the United Kingdom and the United States. Winners will be announced in late November at the Global Islamic Economy Summit in Dubai. The Award rewards ideas or initiatives in financial services that deliver a sustainable positive impact on society or the environment. A Lifetime Achievement Award will be granted to an individual who has made a significant contribution and impact in the ethical practice of financial services.

Qatar is a major player on the growing global Islamic finance stage which is estimated to be worth, at present, around $1.9 trillion. Qatar’s Islamic banking sector is set to flourish over the next three or four years. Islamic banks currently represent one-quarter of Qatar’s banking system in terms of assets, up from 13% in 2006, and it is expected that they will continue to gain market share. Moreover, infrastructure spending in the run-up to the FIFA 2022 World Cup is expected to spur lending for roads, stadiums and hotels. Qatar’s economy is expected to grow 5.2% next year, the fastest in the GCC. Islamic finance will certainly be one of the many topics discussed at the 9th World Islamic Economic Forum which will be held on 29 – 31 October 2013 at the ExCel London.

The Islamic Development Bank (IDB) has launched The Assistance For Trade in the Arab States (AFTIAS) aimed at boosting trade and economy as well as creating jobs in the Arab countries. Dr. Waleed Al-Wohaib, CEO of the International Islamic Trade Finance Corporation (ITFC) and Chairman of Board of the initiative, said the ITFC would work side-by-side with international organizations that would implement the initiative to guarantee its success. The initiative consists of five UN agencies: the UN Development Program (UNDP), the UN Conference of Trade And Development (UNCTAD), the UN Industrial Development Organization (UNIDO), the International Labor Organization (ILO), and the International Trade Center. It also include the Arab League, the Gulf Cooperation Council (GCC), the Agadir Technical Unit and the Arab Maghreb Union, in addition to seven donor parties.

Al Rajhi Bank Malaysia has appointed Syed Maqbul Quader as Chairman effective Nov 6, 2013. Syed Maqbul, 64, has served as an independent non-executive director of the bank from Aug 1 this year. He holds a Bachelor of Commerce from Dhaka University and has over 40 years' experience in the banking industry. He was involved in establishing the Corporate Banking Group at Al Rajhi Bank in Saudi Arabia and also the Offshore Banking Unit of Chase Manhattan Bank in Bahrain. According to Al Rajhi Bank Chief Executive Officer Datuk Azrulnizam Abdul Aziz, Syed Maqbul's international exposure in particular will be highly relevant for the bank in its aspiration to be the preferred Islamic financial services bank.

Members of Saudi Arabia's wealthy Baeshen family, who control one of the Middle East's leading tea purveyors, AMS Baeshen & Co., are suing the reorganized Bahraini private equity and investment firm Arcapita Bank for the return of millions of dollars they'd earmarked for the bank's aborted stock sale. Lawyers for the Baeshens, the family behind the Rabea Tea brand, are seeking the return of some $3.5 million deposited at the bank in connection with the Bahraini bank's abandoned rights offering.

Dubai Islamic Bank (DIB) Group has reported a net profit of Dh1.2 billion for the first nine months of the year, up 33.5 per cent compared with Dh899 million reported in the same period in 2012. The bank attributes a 33.5 per cent increase in net profits to increased core business and lower provision requirements due to improved asset quality and overall improvement in the economic environment in the UAE. Net operating revenue of the bank at the end of the third quarter was Dh3.2 billion, up 5.6 per cent from Dh3 billion in the first nine months of 2012. Operating profit before impairments was up 7 per cent at Dh1.95 billion from Dh1.83 billion in the same period in 2012. The bank made provisions of Dh751 million in the first nine months of the year compared with D922 million in the same period in 2012. DIB continues to manage asset quality and non-performing assets by cautious lending and conservative provisioning approach.

Ajman Bank has appointed Mohammad Amiri as its new chief executive officer (CEO). A UAE national, Amiri served Ajman Bank in various capacities from October 2010 to April 2013, first as deputy CEO before being promoted as acting CEO. In his career in financial services, Amiri has been associated with leading organisations such as Dubai Bank, Dubai Islamic Bank and HSBC Bank Middle East Limited in senior management positions.

Gatehouse Bank announced the appointment of Mr Natale Giostra as Executive Vice President and Head of Real Estate Finance, based at its City of London offices. The Real Estate Finance department forms part of Gatehouse's business growth strategy and strives to create a new focus on UK and Continental European jurisdictions. Mr Natale Giostra has joined Gatehouse Bank from CBRE, where he led the UK debt advisory team. With more than 12 years experience working in real estate banking in several countries, Giostra brings with him a solid background in the origination and distribution of senior and mezzanine real estate loans, loan sale, and acquisition of distressed CRE loans.

Djibouti is promoting Islamic finance to increase banking penetration in the tiny African nation and help fund upgrades to the country's infrastructure. Since most people are still not customers of banks, Djibouti sees sharia-compliant finance as a way to pull itself out of poverty and to assemble capital for investment. Central bank governor Ahmed Osman said banking penetration had risen from 10 percent of the population six years ago to 17 or 18 percent now, but that conventional banks were not attractive to many people for religious reasons. The spread of Islamic banking will also help authorities move more business activity from the informal economy to the formal sector.