GCC

Kuwait Finance House’s 2008 posts profit before provision and increase income

Edward Russell reported on Financeasia on 2 February, that Kuwait Finance House’s (KFH) 2008 posts profit before charges but faces falling revenues. In Q4, KFH's revenue fell 16.3 % quarter-on-quarter to KD 185 mn. The revenue decline increased 3.7 % from the previous quarter when it fell 12.5 % quarter-on-quarter. Despite the decline in revenues in the second half of the year, the bank managed to report an overall increase in income of 6.5 % year-on-year.

The finance house's unaudited full-year net profit totalled KD 157 mn(USD 542 mn on revenues of KD 884.9 mn. Given the current economic environment, KFH announced to retain KD 211 mn as a "provision". After the KD 211 mn provision, KFH lost anywhere between KD4 8 mn and KD54 mn for the year. Full-year and fourth-quarter audited results have yet to be released.

Darakhim Sukuk Basket presented in Kazakhstan

Caspionet reported on 28 January, that Darakhim Sukuk Basket have been presented in Kazakhstan. It is expected that insurance companies, unit investment funds and pension funds will become the chief buyers of the new investment offer. Basically, they represent the companies of the Middle Eastern states, so they are issues of the central bank of Bahrain, the government of the Arab emirates, Kuwait and Saudi Arabia. It is expected that the profitability will amount to 10 % at a minimum with a circulation period of 3 years.

Tamweel restructuring including layoffs

Suzanne Fenton reported on 29 January on Gulf News, that Dubai-basedm mortgage lender, Tamweel PJSC - a company which is currently under merger process with Amlak - is restructuring its business plans and organisational structure that involves a reduction of 57 staff members from its workforce. Tamweel, Amlak, Real Estate Bank and Industrial Bank are about to merge to UAE`s largest mortgage provider. Emirates Development Bank will have access to government funds.

Gulf Finance House targets undervalued assets in the region

Frederik Richter reported on Arabianbusiness on 1 February that Gulf Finance House is looking for acquisitions of undervalued assets in the region.

Deputy Chief Executive Mehran Jamsheer was cited.

Millennium Finance Corporation (MFC) on expansion course

Waheed Abbas from Emirates 24/7 reported on 2 February about the regional investment bank and private equity company Millennium Finance Corporation (MFC), which aims to expands its reach to Saudi Arabia, India and Nigeria through joint ventures and acquiring licences. The firm is also considering IPO.

CEO is Keba Keinde, which gave an exclusive interview with Emirates Business. Please click on the source below.

Dubai Islamic Bank partners with Hawkamah Institute

Rebecca Bundhun reported on Arabianbusiness on 29 January that Dubai Islamic Bank partners with Hawkamah Institute has signed a "founding member" sponsorship agreement with corporate governance organisation the Hawkamah Institute.

SCOTTISH Widows Investment Partnership enters Saudi market

The Scotsman reported on 29 January that SCOTTISH Widows Investment Partnership has launched a joint venture with Manar Financial Investment Company; Swip Saudi Asset Management. It will mainly focus on investment in the insurance sector, but will also manage shariah-compliant global emerging market equities.

Gulf Finance House reports quarterly loss and 14 % lower annual profits

Bahrain's Gulf Finance House has reported a Q4 loss of USD 10 mn after it made 'provisions on investments' compared with net income of USD 108.8 mn for the same period. Total year earnings are down to USD 291 mn (Dh 107 mn) in 2008 compared to USD 340 mn in 2007.

Shortfalls and Overbanking in the GCC

Rohit Chawdhry, portfolio manager of Bahrain Islamic Bank, analyses the issue of overbanking in the Gulf region and the institutions anticipating mergers in the February issue of The Middle East. He concludes that all state plans fostering project developments are not covered by a sufficiently large banking sector. The Institute of International Finance estimates there are about USD 1.9 trillion worth of projects under way in the region, making the GCC one of the largest project finance markets in the world. But analysts estimate that the present project finance, which includes bank lending, bond and equity issuance, has a funding shortfall of at least $900bn, if not more. To create banks which are able to shoulder a greater proportion of the financing needs of projects under construction, by state and private investors is the challenge of the policy makers.

S&P: Shamil Bank of Bahrain 'BBB-/A-3' Ratings Withdrawn At Bank's Request

Press Release

PARIS (Standard & Poor's) Jan. 28, 2009--Standard & Poor's Ratings Services said today that it affirmed its 'BBB-/A-3' ratings on Shamil Bank of Bahrain. The outlook on the ratings remains negative. The ratings were subsequently withdrawn at the bank's request.

As a result of the withdrawal, Shamil will no longer be subject to Standard & Poor's review. At the moment of the ratings withdrawal, the bank had no rated debt outstanding.

S&P: Arcapita Bank B.S.C. Downgraded To 'BB+/B'; 'BB+' Placed On CreditWatch Negative

Press Release

PARIS (Standard & Poor's) Jan. 28, 2009--Standard & Poor's Ratings Services said today that it has lowered its long- and short-term counterparty credit ratings on Bahrain-based Arcapita Bank B.S.C. to 'BB+/B' from 'BBB/A-2' and placed the long-term rating on CreditWatch with negative implications.

"The downgrade and CreditWatch placement reflect our opinion of Arcapita's weak liquidity profile amid an increasingly difficult operating environment," said Standard & Poor's credit analyst Mohamed Damak.

At the same time, we believe that the value of Arcapita's own investments--mainly in private equity and real estate--could decline in value given current market conditions (like other private equity firms). We view Arcapita's leverage as high. We understand that Arcapita made certain investments in 2008 that it was not able to fully place with customers that triggered a decline in liquidity and an increase in investment leverage (as measured by the ratio of total investments to total equity).

Amlak meeting to consider job cuts

Amlak Finance, the mortgage financer will consider job cuts at its board meeting on 31 January the company announced in a statement along to discuss the merger proceedings with Tamweel and earnings. Amlak and Tamweel will be both taken over by Abu-Dhbai based Real Estate Bank, merge with the Emirates Industrial Bank under the new name Emirates Development Bank according to reporting by the state news agency WAM in November.

ALAFCO Aviation Lease And Finance Company Financial Results

ALAFCO Aviation Lease And Finance Company released their Financial Results as published on Zawya on 27 January. Ahmad A. Alzabin announced that the operating profit of the company during the 1st quarter of the current fiscal year that ended 31 December 2008 reached KD 3 million, and that ALAFCOearned a net profit of KD 1.45 mn. The company's assets reached KD 281.21 mn and shareholders equity reached KD 82.29 mn during the quarter.

New Saudi-Arabian Property Financer as JV between Al-Khabeer and Al Mutajara

Al-Khabeer Merchant Finance Corporation built a Joint-Venture with Al Mutajara installments company to establish ‘Dari for Home Loans,’ a new SAR 1 bn capitalised Saudi joint-stock company-under development stage, which will specialise in financing the construction and purchase of houses and residential properties in accordance with Islamic Sharia principles.

Dari Home Loans will become one of the first real estate financing companies in the Kingdom to specifically cater to the middle income sector. It will not include property developers among its pool of clients.

Dari Home Loans is currently appointing personnel and officials for managing its human resources and is negotiating with a global partner for the transfer of management experience to this sector in the Kingdom. Al-Khabeer is adopting its turnkey and integrated banking solutions to develop Dari, as Al-Khabeer directs the finance and advisory for the company. The new property funding firm’s founders are confident that it will be fully established in a short span of time given the strength of the Kingdom’s economy.

Mohammad Sheikh is Chief Operating Officer of Dari Home Loans.

Dow Jones Islamic Market Index Monthly Performance Report

Press Release - full text attached:

New York (January 27, 2009) — Based on the close of trading on January 26, the global Dow Jones Islamic Market Titans 100 Index, which measures the performance of 100 of the leading Shari’ah compliant stocks globally, lost -5.55% month-to-date, closing at 1646.71. In comparison, the Dow Jones Global Titans 50 Index, which measures the 50 biggest companies worldwide, posted a loss of -9.00%, closing at 131.03.

- The Dow Jones Islamic Market Asia/Pacific Titans 25 Index, which measures the performance of 25 of the leading Shari’ah compliant stocks in the Asia/Pacific region, decreased -9.90%, closing at 1252.00. The Dow Jones Asian Titans 50 Index, in comparison, posted a loss of -11.40%, closing at 90.89.

- Measuring Europe, the Dow Jones Islamic Market Europe Titans 25 Index, which measures the performance of the 25 of the leading Shari’ah compliant stocks in Europe, closed at 1596.39, a loss of -7.60%, while the pan-European blue chip Dow Jones STOXX 50 Index lost -10.97%, closing at 1926.07.

Gulf Finance House Outlook To Negative On Deteriorating Operating Environment; 'BBB-/A-3' Ratings Affirmed

Press Release
PARIS (Standard & Poor's) Jan. 26, 2009--Standard & Poor's Ratings Services said today that it revised its outlook on Bahrain-based Gulf Finance House (GFH) to negative from stable. At the same time, we affirmed the 'BBB-/A-3' long- and short-term counterparty credit ratings on the bank.

"The outlook revision reflects the increasingly difficult environment in which the bank operates, which is likely to limit its capacity to execute new transactions and therefore lead to a weaker financial performance," said Standard & Poor's credit analyst Emmanuel Volland.

In addition, the value of GFH's own investments, largely illiquid by nature, is set to decline. On a positive note, we believe that the nature of these assets means that they are less subject to marked-to-market deterioration than those of GFH's peers.

Investment Dar appoints Credit Suisse as financial adviser

AMEinfo reported on 25 January that Kuwait-based financial services company Investment Dar has appointed Credit Suisse Group to advise the firm on its financial strategy.

Saudi banks suffer end of year losses

Joanna Hartley reported on 24 January that the Saudi banking sector has posted poor results for the last quarter of 2008 impacted by the global economic environment according to Fitch rating, saying that 2009 will be challenging. The preliminary 2008 results released by the 10 main commercial banks in the kingdom confirmed that the last quarter of 2008 was the worst quarter of the year for all. Despite this the 10 banks remain among the highest rated by Fitch Ratings across the GCC region and generally have sound domestic franchises.

The expectation of tougher conditions for the banks and lower profitability in the coming months resulted in most banks' individual ratings being downgraded in December 2008. Their long-term issuer default ratings largely remain driven by the extremely high probability of support from the Saudi Arabian government (rated 'AA-').

2008 Sees Worst Decline in Sukuk Market, Improvement in Islamic Syndicated Lending, Says IFIS

IFIS published a report on 24 January discussed on Albawaba that Sukuk or Islamic bond markets have witnessed a dramatic decline during 2008, especially during the 4th Quarter, which was the lowest since 2002, and 2008 was a worse year for sukuk than both 2006 and 2007 with no issuances even of a Dollar Sukuk and the total amount dropping to only USD 584 mn in Q4 2008. South East Asia was more severely impacted than the GCC in 2008, with issuance falling by 76% down to USD 6.57 bn for the entire year. The decline in the GCC was quite severe as well, however, with issuance falling to USD 9.06 bn, a 51% drop. The global total for sukuk issuance, USD 15.77 bn, was 66% lower than the figure for 2007. This is the first year on year drop in sukuk issuance since the year 2000.

Islamic syndicated lending expanded from USD 19.6 bn in 2007 to USD 27.2 bn in 2008, a 32% increase. But as with credit markets worldwide, Islamic syndicated lending froze almost completely in Q4 2008.

Bahrain Islamic Bank lowers profits marginally

Bahrain Islamic Bank announced on 21 January that its financial results for the year 2008, decreased to BD 22.3 mn net income from BD 25 mn for the year 2007, after making provisions against contingences that may arise in case the current international financial and economic crisis continues further.

The board of Directors has decided to propose to the Bank's AGM the distribution of 20% of dividends of paid up capital as of 31st December 2008 as 10% cash and another 10% bonus shares.

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