GCC

International Investment Bank posts USD 13.5 mn net profit and announces 7 % cash dividend for the year 2008

International Investment Bank (IIB), Bahrain announces a Net Income of USD 13.5 mn and the approval of a cash dividend payment of 7% for the year ended 31 December 2008.

At USD 13.5 mn, the 2008 Net Income represents a 12.3% return on Paid up Capital (ROC). The Capital Adequacy ratio at 31 December 2008 of 86% is over 7 times of 12% required by the Central Bank of Bahrain.

Mr. Aabed Al Zeera is the Chief Executive Officer and Board member.

For full details on IIB’s financial results, please see the ‘Financial Section’ on IIB’s website at source.

Takaful Re Ltd. Ratings Unaffected By Arab Insurance Group Ratings Withdrawal

Press Release

LONDON (Standard & Poor's) March 11, 2009--Standard & Poor's Ratings Services said today that the ratings and outlook on Dubai-based reinsurer Takaful Re Ltd. (TRL; BBB/Stable/--) are unaffected by the withdrawal of the ratings on Arab Insurance Group (B.S.C.) (ARIG) at ARIG's request. ARIG is the majority shareholder of TRL, with a 54% holding, and is also the major service provider.

Dubai Islamic Bank sets aside cash amid fraud probe

Adam Schreck wrote on 10 March on Associated Press that Dubai Islamic Bank sets aside cash amid fraud probe and that it has foreclosed on a real estate project after court papers indicated the bank was the victim of a half-billion dollar fraud. In a statement, Dubai Islamic Bank said it had exposure of about USD 330 mn to a company named CCH linked to some of the suspects in the court papers.

Islamic Wealth Management benefits from Crisis

James Rutter wrote on 9 March in Wealth Bulletin that the crisis creates opportunity for Islamic wealth management as conventional wealth management and its brands looking less attractive. Current market conditions favour more simple products. Ironically, the trend in Islamic finance in recent years has been towards trying to mimic complex and risky western financial products.

By giving money to a counterparty which separately invests in underlying hedge funds or derivatives, an Islamic investor is able to receive a payout that tracks the performance of assets to which he would not otherwise be able to gain exposure. Islamic investors who bought such products have seen hefty losses, prompting a backlash against financial institutions adopting more flexible interpretations of sharia law.

Humayon Dar, CEO BMB Islamic sees ongoing demand for such products in a so-called Sharia wrapper, because of the limited choice of Islamic products.

Vatican related newspaper: Islamic finance suggests ideas for Western financial crisis

Loretta Napoleoni and Claudia Segre suggesting in the Vatican related L'Osservatore Romano, that Islamic finance offers ideas for the Western financial crisis. Citing the main concepts of Islamic finance and emphasizing specifically Sukuk.

The original article is in Italian linked via Source.

Dubai Islamic Insurance & Reinsurance Co. (Aman) Outlook Revised To Negative; 'BBB' Ratings Affirmed

Press Release

PARIS (Standard & Poor's) March 9, 2009--Standard & Poor's Ratings Services said today that it revised its outlook on Dubai-based insurer Dubai Islamic Insurance & Reinsurance Co. (Aman) to negative from stable. At the same time, we affirmed the 'BBB' long-term counterparty credit and insurer financial strength ratings on Aman.

"The outlook revision reflects the increasing pressure on Aman's risk-adjusted capital adequacy, arising mainly from the continuing decline in investment markets in the Gulf region," said Standard & Poor's credit analyst Lotfi Elbarhdadi.

President of IDB addresses the 5th World Islamic Economic Forum

Press Release

Jakarta, 3rd March, 2009

The Islamic Development Bank Group (IDB Group) provided “Gold Sponsorship” to the 5th World Islamic Forum WIEF being held in Jakarta, Republic of Indonesia. In his speech in the Leadership Panel on “Innovative Solutions to Global Challenges”, HE Dr. Ahmad Mohamed Ali, President of the IDB Group praised WIEF for addressing these critical topics, and emphasized three avenues to new innovative solutions to meet global challenges, namely, ethics-based rather than rule-based financial governance structure, investment partnership with the poor and the vulnerable, and unleashing the God-given potential and innate strength of the full human resources. In his speech, he briefed the participants on IDB Group activities in meeting global challenges.

The first day of the Forum included two panel sessions titled “Leadership Panel” and “Global CEO Panel” followed by four plenary sessions namely; Beyond Scarcity: Overcoming the Global Food Crisis, Paving Greener World: Creating a Future for Alternative Energy, Stemming the Tide of the Global Financial Crisis, and Global SMEs: Business Beyond Boundaries.

BMB Group wins mandate to manage Global Zakat and Charity Fund for OIC

The International Zakat Organisation ('IZO'), an important new charitable body of the Organisation of The Islamic Conference ('OIC'), announced its selection of The BMB Group to lead a new global charitable initiative which promises to be the largest in the Islamic world.

The proposed Global Zakat & Charity Fund would be over USD 3 bn in size and will manage charitable funds to address needy causes in the world.

The Fund will invest in community development projects with an emphasis on sustainability. The four major areas to be targeted are: (1) income generation through the provision of private equity investments to small and medium enterprises, (2) development of social enterprise through the establishment of hospitals, educational institutions and housing developments (3) development of agricultural and other vital infrastructure and (4) the provision of relief and emergency funding.

Mat Hassan Esa is the CEO of International Zakat Organisation.
Dr Humayon Dar is the CEO of BMB Islamic.
BMB appoints David Gibson-Moore as Managing Partner.

New governor of Saudi Arabian Monetary Agency may promote Islamic finance further

The appointment of Muhammad Al-Jasser last month as the new governor of the Saudi Arabian Monetary Agency (SAMA). Foreign regulatory officials and bankers expect a much more proactive policy approach from the new governor. Others expect SAMA under Al-Jasser to open up to Islamic banking in particular and to show leadership in this field in the light of the growing globalization of the industry.

Al Rajhi ahead of major international banks in market value

According to a survey published originally by the newspaper Al Qabas it results that Al Rajhi Bank with its market value of USD 22.4 bn was ahead of leading global banks, including: Morgan Stanley with USD 20.88 bn, Deutsche Bank with USD 13.83 bn, Barclays with USD 11.58 bn, Royal Bank of Scotland (RBS) with USD 10.93 bn and Citibank with USD 10.63 bn.

Moody's: Islamic Banks Not Unduly Challenged by Oil Price Drop and Crisis

According to Moody' s worldwide fall in oil prices and the global economic crisis has affected the Islamic finance industry, but the institutions' accumulated liquidity and capital will help them withstand these pressures.

According to Moody's, the drop in oil prices poses two key challenges for the Islamic finance industry. "Firstly, there is still a vital link between oil prices and Islamic banks as most of the latter operate in hydrocarbon-exporting economies. As they face increasingly limited funding sources, Islamic banks will find it more difficult to grow going forward. Secondly, oil liquidity has been a major driver of the disintermediation process in the Islamic finance industry. With reduced oil liquidity, not only have sukuk issuances been slowing sharply, thereby depriving Islamic banks of much-needed long-term funding, but pricing on such instruments has been distorted," says Anouar Hassoune, a Moody's Vice-President/Senior Credit Officer and co-author of the report.

Shamil Bank income above USD 66.8 mn

Shamil Bank said that it had made USD 66.8 mn in total income for last year. The bank's net profit last year amounted to USD 22.8 mn, while Q4 last year, the bank sustained $16.3 million in losses.

Over the year, commodity Murahabas (bank placements) increased significantly from $424 million to $1.043 billion. The bank's Murabaha Financing (loans and advances) activities also increased from $807m to $1.048 billion.

ABC Islamic registers USD 26 mn net profit

Bahrain-based ABC Islamic Bank announced a net profit of $25.6 million for last year. Gross operating income was USD 33.8 mn which, excluding an exceptional USD 32.8 mn capital gain in 2007 arising from the partial disposal of a sukuk investment, represented a 34 % increase over the previous year. It posted a net profit of USD 50.9 mn in 2007.

S&P: Rated Gulf Islamic Banks And Takaful Companies Resilient In Global Market Dislocation But Facing Risks

Press Release

PARIS, February 27, 2009--Gulf Islamic financial institutions and takaful companies are feeling the repercussions of the current global financial market disruption less than most of their conventional counterparts because Sharia law prohibits interest-based financial products, according to a new report by Standard & Poor's Ratings Services.

"IFIs didn't invest in the structured products that have hampered many conventional banks' financial profiles and performance," said Standard & Poor's credit analyst Mohamed Damak in the report, titled Rated Gulf Islamic Financial Institutions And Takaful Companies Have Shown Resilience To Global Market Dislocation, But They Are Not Risk Immune. "And most IFIs should be equipped to weather the financial downturn and keep the effects on their financial profiles at manageable levels."

S&P: Islamic financial institutions suffer from real estate credit exposure

Islamic financial institutions (IFIs) face a significant hit on profits if real estate prices continue to fall in the Middle East according to ratings agency S&P. IFIs' direct exposure to real estate assets in 2008 reached 20 % of total loans, making them vulnerable to an ongoing correction, especially in Dubai.

Unlike their conventional counterparts, IFIs remained immune to price falls in structured products, which prompted write-downs all over the world, the report said.

Islamic gold security to launch in Dubai

A sharia-compliant tradeable security backed by gold will be launched in Dubai next week, Reuters has reported.

Dubai Islamic Bank posts USD 471 mn profit for 2008

Andy Sambidge reported on 25 February in Arabianbusiness that Dubai Islamic Banking reported only a small decline in net profit in 2008, AED 1.73 bn (USD 471 mn) in net profit for 2008. DIB’s total assets as of December 31, 2008, stood at AED 84.6 bn, up slightly compared to the end of the same period in 2007.

DIB’s full-year results reflected total impairment provisions of AED 521 million (including writedowns on its investment portfolio) and mark-to-market losses on equity investments of AED 277 million. The majority of these were recorded in the fourth quarter of the year, one of the primary reasons impacting profitability during the last quarter of 2008.

The Board of directors of Dubai Islamic Bank has proposed a cash dividend of 25 percent and bonus share of five percent for 2008.

Emirates NBD in healthy condition according to CFO

The debt level of Emirates NBD is small and manageable according to analysis given by its CFO, Sanjay Uppal.

USD 1.6 bn medium-term debt is maturing, USD 500 mn has been paid in January already, and the total balance sheet is UDD 76 bn. According to Sanjay Uppal there are no plans to raise capital by selling any of its assets or going for restructuring its debt and sees the exposure to real estate at comfortable levels.

Emirates NBD has an Islamic window.

Moody's negative on Qatar banks

Martin Morris reported on 23 February in Arabianbusiness that Moody's, says the fundamental credit outlook for the Qatari banking system is negative, reflecting expectations of a weakening in operating conditions.
In its new Banking System Outlook on Qatar the agency examines the likely future direction of fundamental credit conditions in the industry over the next 12 to 18 months. It does not represent a projection of rating upgrades versus downgrades.

Negative factors evaluated are the asset quality, impacted by property lending and the reduced profitability also impacted by stock market developments. The direct impact of the financial crisis has however so far been limited.

Fitch Ratings: Dubai Bond Positive For Government-Linked Corporations

Fitch Ratings released that the recent announcement of a USD 20 bn bond programme is improving the overall liquidity which will be positive for government-linked corporates facing the need to refinance maturing debt at a time when the impact of regional economic conditions, especially in the construction and property sector, are becoming increasingly negative.

Official figures put Dubai government and state-owned corporate debt at USD80 bn, of which Fitch estimates that around USD11 bn of foreign currency debt matures during 2009. Last week Borse Dubai raised USD2.5 bn in financing, and received an equity injection of USD1 bn from its shareholder, Investment Corporation of Dubai, to refinance an aggregate USD3.8 bn loan (part of the 2009 maturities).

Source: 

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