GCC

National Bank of #Bahrain offers to acquire Bahrain Islamic Bank

The National Bank of Bahrain, which owns a 29% stake in Bahrain Islamic Bank (BisB), has made an offer to acquire the entire Islamic lender. Lower oil prices over the past five years are forcing Gulf lenders to consolidate for scale and to better compete in a crowded market. Subdued credit growth, competition for deposits, higher cost of funds and deteriorating asset quality are driving consolidation in the regional banking sector. In the UAE, Abu Dhabi Commercial Bank merged with Union National Bank and the combined entity acquired Al Hilal Bank, creating a banking group with AED 423 billion in assets in May 2019. Similarly, in Saudi Arabia, National Commercial Bank is in the process of merging with Riyad Bank to create the Gulf’s third-largest lender with $193 billion in assets.

Islamic banking penetration in the #UAE hits new high

According to the Islamic Banking Index by Emirates Islamic, Islamic banking penetration in the UAE has reached its highest level for five years. The survey showed that three out of five respondents now have at least one Shari’a compliant product. The perception of Islamic banks has improved steadily from 26 percent in 2015, with significant improvements in key areas relating to technology and customer service. However, knowledge or awareness of Islamic banking terminology has not seen clear improvement since 2015. The 2019 edition of the Islamic Banking Index indicates that the sector continues to widen its appeal to an increasing number of both Muslim and non-Muslim customers.

Emirates Islamic: "The time for Islamic banking to come to the forefront of the finance sector is now"

The 2019 edition of the Islamic Banking Index by Emirates Islamic demonstrates significant progress made by the Islamic banking sector. Islamic banking penetration has reached its highest level since the inception of the Index five years ago. The Islamic Banking Index is a benchmark survey revealing the progress, penetration and perception of the Shari’a-compliant banking sector in the UAE. The 2019 edition indicates that the sector continues to widen its appeal to an increasing number of both Muslim and non-Muslim customers. Knowledge of Islamic banking terminology has not seen clear improvement, but has risen for some products, such as Takaful, that have become successful in the financial sector. Perception of Islamic banks has improved steadily, with significant improvements in key areas relating to technology and customer service.

SEDCO Holding CEO talks ethical investments at WGES

The World Green Economy Summit (WGES) 2019 was held in Dubai and saw the attendance of over 3,000 delegates. The plenary session of the summit explored lucrative opportunities presented by green finance and how businesses can tap into this promising market. Hasan Al-Jabri, CEO of SEDCO Holding Group, highlighted the company’s Prudent Ethical Investing (PEI) strategy and stressed the significance of ethical and socially conscious investing. SEDCO Holding’s PEI-based portfolios combine the principles of responsible and Shariah-compliant finance, bringing together the many benefits of both approaches. The portfolios ensure long-term risk-adjusted returns to support the performance of businesses and promote greater sustainability.

#Saudi Arabia's new bankruptcy law faces key test in the courts

Saudi Arabia's new legislation is part of broader efforts to overhaul the economy, create employment and wean off the economy from reliance on hydrocarbons. Simeon Djankov, World Bank Senior Research Director and Founder of the Doing Business Report, said the bankruptcy law was passed and now investors are eager to see whether the courts actually understand how to implement it. Djankov believes the merit of the law should become clearer in about a year after courts handle initial cases. Only three cases were settled using the new bankruptcy law and around a dozen more are expected to be resolved over the next year. Resolving insolvency was an area of improvement for Saudi Arabia, climbing 30 places to 62nd in the World Bank report.

Fintech Abu Dhabi festival culminates with focus on the next generation

FinTech Abu Dhabi Festival attracted 5,000 registrations and brought together world-class business leaders and FinTech innovators. Future trends in the FinTech industry and the next generation of start-ups took centre stage. Start-ups RISQ and Jibrel Network were announced as the two winners of the FinTech Abu Dhabi Innovation Challenge and took home SGD 200,000 (AED 540,000) each. The panelists discussed how China’s Belt and Road Initiative (BRI) is providing US$8 trillion of infrastructure investment to 65 countries. Fintech companies discussed how they are facing issues with many banks not sharing key information. According to Omar Christidis, Founder of ArabNet, Bahrain is the only place that has mandated open banking by the banks, but it needs to happen elsewhere too.

Abu Dhabi’s Mubadala launches $250 million MENA tech investment vehicles

Mubadala Investment Company has launched AED 918 million ($250 million) MENA-focused tech investment funds to support start-ups from the GCC as well as the entire Middle East region. The state investor stated that its new MENA tech funds will invest in companies and venture funds that help boost local tech incubator Hub71. The funds will include a AED 550 million ($150 million) programme, which is committed to support the Hub71 ecosystem. Mubadala Capital stated that it will commit to San Francisco-based Data Collective Venture Capital (DCVC), Middle East Ventures Partners (MEVP) and Global Ventures as a part of its first funds cohort. Similarly, the investment programme will also include a further AED 367 million ($100 million) fund dedicated to direct investments in early-stage technology companies. Microsoft and SoftBank Group are partners in Hub71, and the Abu Dhabi-based scheme offers incentives like office space and health care coverage to encourage start-ups to set up shop in the region.

#Oman to introduce bankruptcy and insolvency law in July 2020

Oman’s Ministry of Commerce and Industry said that the Sultanate’s new bankruptcy and insolvency law will come into effect from July 2020 and it will help companies to get out of the financial turmoil. The bankruptcy law allows the debtor to request a protective settlement if their financial business is disturbed which would lead to suspension of payment of debts. Heirs to the business may apply for protective reconciliation if they decide to continue trading. The debtor continues to manage his funds during the implementation phase of the restructuring plan and remains responsible for any obligations arising prior to or after the date of the adoption of the restructuring plan. Similarly, the bankruptcy law grants the right of every trader to file for bankruptcy, in case they stop paying their commercial debts following the disruption of business activities. A bankruptcy case shall not arise except by a court ruling.

Region’s P2P lending platform Beehive funds first SME in #Bahrain

Beehive, the region’s first regulated peer-to-peer lending platform has funded its first SME in Bahrain. The funding was granted to Bahrain-based Mira Packaging Factory, which manufactures disposable cups in addition to other food packaging solutions for the GCC, and the African F&B industry. Mira Packaging Factory has a large customer base in Bahrain, Saudi Arabia and the regional neighbouring countries. This includes international airlines, global HORECA brands and local coffee concepts. Beehive CEO Craig Moore confirmed Mira Packaging Factory's eligibility for peer-to-peer finance after Beehive’s thorough credit assessment, which determines the company’s ability to repay the loan and provide excellent returns to its global investors.

Aldar Investments' Landmark US$500 million 10-year #Sukuk attracts strong investor demand

Abu Dhabi-based Aldar Investment Properties issued a fixed rate US dollar-denominated sukuk with a tenor of 10 years for a nominal amount of US $500 million. The sukuk carries a coupon rate of 3.875%, following strong investor demand. The transaction, which marked the first 10-year public Sukuk offering by an Abu Dhabi-based issuer, was over 6 times oversubscribed. Aldar Investments owns and manages a AED 20 billion diversified portfolio of high-quality income-generating residential, retail, commercial and hospitality assets. Aldar Investments owns and manages a AED 20 billion diversified portfolio of high-quality income-generating residential, retail, commercial and hospitality assets.

The Use Of Cayman Islands SPVs In Shariah Compliant Aircraft Financing

Islamic finance has grown significantly over the past few years into an estimated US$2.4 trillion industry. While the use of Shariah compliant financing for the acquisition of aircraft is not a new development, aircraft leasing firms and operators are increasingly looking at Islamic finance as a source of funding for the acquisition of aircraft , whether that be via Islamic banks or through the issuance of Shariah compliant bonds (Sukuk) to raise funds via the debt capital markets.

Al-Nahedh: KFH Has a Proven Track Record in Digital Transformation

Kuwait: Group Chief Executive Officer at Kuwait Finance House(KFH), Mazin Saad Al-Nahedh said that the banking and financial industry is undergoing a process of digital transformation where many processes – often transactional – are being fully automated.

Qatar Financial Center Expands Number of Licensed Fintech Activities, Releases New Rules and Guidance

The Qatar Financial Centre (QFC) has expanded the number Fintech-related activities that will be awarded licenses and the agency plans to extend support to an increasing number of financial services firms through the QFC platform, according to a release.

KFH-Turkey... Robust Financial Position, Very High Liquidity Ratios

Group Chief Executive Officer at Kuwait Finance House(KFH), Mazin Saad Al-Nahedh, emphasized that KFH-Turkey enjoys robust financial position and very strong liquidity ratios as per the regulatory authority’s requirements in Turkey and Kuwait, not to mention as per the international standard Basel III.

Alwaleed Philanthropies invests $5 million to mitigate disease in impoverished cities around the world

Alwaleed Philanthropies has made a new $5 million investment, in their partnership with Gavi, the Vaccine Alliance, in a proposed commitment to further prevent the spread of disease in low-income urban areas in which additional funds are proposed to be made between 2020 and 2024.

Al Ghurair Foundation announce grantees of £5.5 million Refugee Education Fund

The Abdul Aziz Al Ghurair Refugee Education Fund announced its grantees for their second round of funding, following the end of the inaugural round in 2018. The fund aims to support 10,000 students through secondary level and vocational education. First two of funding dispersed AED74 million (approximately £16 million) supporting the education of over 17,000 youth in Jordan, Lebanon, and UAE.

Gulf Bonds Go From Haven to Hazard as Saudi Strikes Stun Market

Money managers poured into the Gulf region till Saturday’s unprecedented attack on Saudi Arabia’s key oil facilities. That drove record gains for bonds in August as they sought refuge in securities boasting an average credit score of A+ amid global trade tensions. According to a Bloomberg Barclays index, Saudi Arabian bonds handed investors the biggest loss, about triple that of Qatari securities. The strikes in Saudi Arabia could escalate into a showdown, with the kingdom and U.S. on one side, and Iran and proxy groups from Yemen to Lebanon, on the other. Iranian-backed Houthi rebels in Yemen claimed responsibility for the assault and warned that oil installations in the Arab nation remain a target.

Assets under management in GCC to grow steadily from $260bn in 2018, Moody's says

The asset management industry in the Arabian Gulf is set to grow, as regional governments overhaul their hydrocarbon-dependent economies and ease regulations. According to Moody’s Investors Service, investment managers in the six-member economic bloc of the GCC had $260 billion (Dh954bn) of assets under management at the end of last year. The Gulf states are trying to overhaul their economies and cut their dependence on oil. Saudi Arabia and the UAE are pursuing their own economic reforms to develop alternative lines of revenue. Both countries have introduced laws to broaden their appeal to foreign investors. Moody’s expects global market leaders to expand their presence in the Saudi Arabia due to a relaxation of foreign ownership limits coupled with more transparent regulations.

Boards of Kuwait Finance House and Ahli United Bank agree terms of possible #merger

The boards of Kuwait Finance House and Ahli United Bank agreed on a share swap ratio. AUB said its board approved a final exchange ratio between the two lenders of one KFH share for every 2.325581 AUB shares. A final decision on the deal is subject to approval from shareholders of both banks, central banks and other authorities in Kuwait and Bahrain. The approved ratio is the same as the one announced in January, when the lenders hired HSBC and Credit Suisse as advisers to carry out financial and legal due diligence of each other’s accounts. According to equity analysts Mohamad Al Hajj and Elena Sanchez-Cabezudo, this merger would increase KFH’s expected weight within MSCI Emerging Market Index by 8 basis points and increase expected flows in May 2020 by $370 million. KFH has tried to acquire AUB in the past, but talks stalled over a difference in valuation.

CBK amends guidelines of corporate governance in Kuwaiti banks

The Central Bank of Kuwait (CBK) has amended governance regulations for Kuwaiti banks, allowing them to add independent members to their boards of directors and subcommittees. The new regulations define independent board members and the conditions of such independence. Dr Mohammed Yousef Al-Hashel, the Governor of CBK, said that independent members to banks’ board of directors will enhance board members’ independence as a basic principle of sound governance practises. The amendments also allow a minimum of two independent members from 30 June 2020, then four from 30 June 2022 to avoid unexpected demand for independent members and allow gradual implementation of the decision.

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