#Bahrain Counts on #Fintech, #Saudi Ties to Revive Indebted Economy

Bahrain FinTech Bay is part of the kingdom's drive to revive its reputation as the Middle East's top banking and business center. After the plunge of oil prices in 2014, state revenues fell, credit ratings fell and debt soared. Large debts still pose a risk as interest rates rise, but Bahrain is starting to see initial signs of recovery. PayTabs, a Saudi company specializing in online payment solutions, will set up a base in Bahrain FinTech Bay in May. Tap Payments, a mobile payment company founded in Kuwait, moved to Fintech Bay last month. CEO Ali Abulhasan said Bahrain had regulatory advantages when compared to other Gulf Cooperation Countries. Foreign investment from 71 companies was $733 million last year, up from $281 million and 40 companies in 2016. This contributed to an average annual GDP growth of more than 3.5%. Central bank governor Rasheed Mohammed al-Maraj said that growth could accelerate further, as strong oil prices have bounced to around $65 a barrel from below $50 in mid-2017.

GFH joins as a founding partner in #Bahrain’s #fintech hub

GFH Financial Group said its recent partnership with Bahrain Fintech Bay (BFB) as a founding partner will drive innovation and create opportunities for growth. The partnership reflects GFH’s strategy to strengthen the integration of Fintech in the region. According to GFH Financial Group's CEO Hisham Alrayes, GFH provides new entrants access to a sophisticated network and gives advice on how to reach regional and international capital and markets.

#Bahrain Islamic Bank partners up with the largest dedicated #FinTech hub in the MENA region

Bahrain Islamic Bank (BISB) has announced its partnership with the Bahrain FinTech Bay (BFB). As the first dedicated FinTech hub and corporate incubator in the Middle East and Africa region, it will be located in the Arcapita building overlooking Bahrain Bay. The venue comprises state-of-the-art facilities, co-working spaces and a variety of other shared infrastructure. BISB CEO Hassan Amin Jarrar said that with the strong support provided by the Government and the Central Bank of Bahrain Bahrain FinTech Bay would further strengthen the Kingdom’s financial position. Bahrain FinTech Bay aims to develop and accelerate financial technology in the region by creating a platform to fuel the growth of the industry.

#Bahraini bank plans aggressive #expansion in #Pakistan

Bahrain-based Ithmaar Bank plans to add more than 100 branches in Pakistan this year through its subsidiary Faysal Bank. Ithmaar's deputy CEO Abdul Hakeem al-Mutawa says banking penetration is less than 20% in Pakistan, so there are good opportunities to grow. Ithmaar Bank's parent company, Ithmaar Holding, listed recently on the Dubai Financial Market. Al-Mutawa believes the company is well established now to approach the capital markets and the bank has no imminent plans to raise funds through a bond or loan. Ithmaar Holding is also exploring the sale of its 25.4% stake in Bahrain's BBK, which has operations in Bahrain, Kuwait, India and Dubai. Al-Mutawa declined to comment on the timeframe for the disposal of the BBK stake.

Islamic #FinTech in 2018

2018 may prove to be a pivotal year for Islamic finance stakeholders and their approach to FinTech. Potential areas where FinTech is likely to have an impact on Islamic finance are remittances, takaful, investment advisory services and online trading. Commentators see FinTech as an opportunity to provide genuine Islamic-compliant alternatives to the traditional banking model. In December 2017, KFH Bahrain, Al Baraka Banking Group and Bahrain Development Bank announced the establishment of a company dedicated to research and development in the Islamic-compliant FinTech sector. Operated by the Bahraini bank consortium, ALGO Bahrain will open in February 2018 and will be the largest dedicated FinTech hub in the Middle East and Africa. Bahrain FinTech Bay is operated by Singapore-based fintech incubator FinTech Consortium.

Head of Islamic finance body AAOIFI resigns

The head of the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) has resigned. Hamed Hassan Merah presented his resignation after more than three years and the board of trustees accepted it. As a complex organisation with 200 institutional members from across 45 countries, the AAOIFI had been slow to respond to issues relating to conflicts of interest and product standardisation. Under Merah, the AAOIFI tackled such issues head on, launching a review of its accounting, auditing and sharia standards. In November, Merah said AAOIFI would now prioritize wider adoption of its standards by engaging national regulators in key markets, including Turkey and Malaysia. Saudi Arabia’s central bank joined AAOIFI as an institutional member in October 2017.

#Bahrain-headquartered investment firm buys controlling stake in Mentor-based MC Sign

Bahrains's Arcapita has acquired 75% interest in Mentor-based signage and lighting services firm MC Sign. The deal is worth more than $100 million. Atif A. Abdulmalik, Arcapita's CEO, said the company was well positioned to acquire market share in a highly fragmented industry that is dominated by locally-focused, sub-scale service providers. Arcapita's investment in MC Sign reflects the firm's global presence, with offices in Bahrain, Atlanta, London and Singapore. The investment firm has been active in the Middle East too. In October 2017, the firm partnered with Bahrain's sovereign wealth fund Mumtalakat to acquire 90% stake in Abu Dhabi's NAS United Healthcare Services. This was preceded by another deal through which Arcapita acquired logistics assets worth $150 million in Dubai.

Islamic #FinTech in 2018

2018 may prove to be a pivotal year for Islamic finance stakeholders and their approach to developments in FinTech. Potential areas for FinTech are remittances, insurance, investment advisory services and online trading. In the coming years, demand from consumers is expected to give rise to the faster adoption of these technologies. Instead of mirroring conventional financial products, commentators see the opportunity to provide genuine Islamic-compliant alternatives to the traditional banking model. In December 2017, KFH Bahrain, Al Baraka Banking Group and Bahrain Development Bank announced the establishment of ALGO Bahrain. It will be dedicated to research and development in the Islamic-compliant FinTech sector. In addition, the largest FinTech hub in the Middle East and Africa will open in February 2018. The new hub named Bahrain FinTech Bay is operated by Singapore-based fintech incubator FinTech Consortium.

Ibdar Bank: Islamic #fintech will foster a culture of change

In this interview Ayman Sejiny, CEO of Ibdar Bank, speaks about the future of Islamic finance. Ayman Sejiny believes that fintech is going to be one of the biggest drivers of change in the new Islamic banking era. Fintech initiatives will not only improve existing customer’s banking experience, but also have the potential to bring the two billion financially-excluded individuals into the banking system. Malaysia, Indonesia, the UAE and Bahrain, driven by an influx of start-ups in the crowdfunding and payment space, have already positioned themselves to lead the field. They started to formally regulate crowdfunding and implement sandboxes or special fintech licencing schemes. These markets should therefore see huge growth in crowdfunding, P2P and payments platforms and even an increase in the use of AI in the form of robo-advisers. The UK and even the US will also see more investment in fintech startups to meet the demand for Shari’ah products in these markets. Ibdar Bank has set out a comprehensive plan for the engagement with fintech service providers.

Ratings scheme planned for #Islamic #endowments

Islamic institutions in Bahrain and Malaysia are developing a ratings scheme for Islamic endowments, or awqaf. The Bahrain-based Islamic International Rating Agency and the Malaysia-based International Institute of Islamic Waqf (IIIW) hope that greater accountability in the management of awqaf can help integrate them into Islamic financial markets. This could mobilize idle assets which are estimated to be valued between $100 billion and $1 trillion across the globe. Awqaf operate social projects such as hospitals, mosques and schools with donations received from Muslims. Most Awqaf do not disclose financial figures, but their underperformance is believed to be considerable since they have traditionally been run by administrators rather than investment managers.

#Bahrain to launch compulsory risk regime for Islamic banks

The Central Bank of Bahrain (CBB) will publish a consultation on a proposed risk assessment framework for Islamic banks in the first quarter of 2018. Khalid Hamad Abdul-Rahman Hamad, director of banking supervision at CBB, said the bank was planning to issue a very detailed risk management toolkit to improve risk management practices taken by Islamic banks. Under the proposed new rules, banks are required to have proper reserves, be it profit equalisation reserves or investment risk reserves. Whenever banks are investing, they must have a pre-plan regarding how much of bank assets will be funded by unrestricted investment accounts and how much will be invested from funds.

Islamic banks brace to re-engineer itself to address customer needs in digital era

The World Islamic Banking Conference (WIBC) is taking place on December 4th, 5th and 6th, in the kingdom of Bahrain. The theme for WIBC 2017 is Drivers of Economic Growth & Risks: Policymakers & Regulators. WIBC is expected to draw participation from over 1,300 global industry leaders, policy makers, innovators and stakeholders, all focused on navigating through the complexities of the global financial system. CEO of Path Solutions, Mohammed Kateeb, said the Islamic finance industry was going through drastic changes as a consequence of evolving customer behavior, channel proliferation and the digitization of operations. He underlined the importance of recognizing common challenges and opportunities facing the industry at large.

Gulf Finance House begins new #land #acquisition drive

Even though its Tunis Financial Harbour (TFH) mega-project has barely got off the ground, Bahrain's Gulf Finance House (GFH) is already looking to acquire adjacent land.

Islamic banks in #Bahrain urged to fully comply with new standards

Islamic banks in Bahrain have until June-end next year to fully comply with new standards mandated by Central Bank of Bahrain (CBB). According to CBB executive director for banking supervision Khalid Hamad, the new Islamic banking legislation, where independent external scrutiny is a mandatory requirement, will promote corporate governance and compliance with Basel III norms. Hamad said the CBB was also preparing comprehensive and detailed risk management legislation. According to him, Islamic investment banking needs to develop a sustainable business model as well as more mergers for a clear competitive advantage. To enhance governance and performance, Islamic banks are required to obtain a credit rating. The industry also needs to work on building the capacity of board members, senior management and officials, particularly those in risk management, through qualifications and training.

Ibdar: Pioneering a Fully Digitised Islamic Investment Bank

Ibdar Bank is directing its FinTech strategies to position the bank as a fully-digitised Islamic investment bank. The Bank has USD277 million in paid up capital and a geographical reach that spans the GCC and Middle East North Africa Turkey (MENAT) region. The Bank also transacts in Southeast Asia and select developed markets. Ibdar Bank has significant expertise in areas including aviation, infrastructure, maritime, oil & gas, and real estate. According to CEO Ayman Sejiny, Ibdar has set out a comprehensive plan in 2018 for its engagement with global Fintech service providers. In the first phase, the bank is set to digitise its operations internally, the second phase will focus on implementing its service offerings in response to the needs of a Global Islamic Digitised Economy (GIDE). Sejiny added that the Central Bank of Bahrain has taken decisive steps towards a FinTech supportive environment in order to facilitate the growth of the sector.

#Bahrain’s GFH eyes #Saudi asset management moves

Bahrain’s GFH Financial Group is considering a listing in Saudi Arabia. CEO Hisham al-Rayes said the Group was also keen to participate in Saudi Arabia’s privatisation programme in sectors such as education and healthcare. He added that GFH was looking at asset management and private equity sector as sectors to acquire. Al-Rayes also disclosed that GFH was in talks with an unnamed financial services company in the Gulf. GFH's acquisition of Dubai-based Shuaa Capital was postponed due to a failure to reach acquisition terms and a lack of initial regulatory approval.


The Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) and the Association of the Chartered Certified Accountants (ACCA) signed a landmark Memorandum of Understanding (MoU) in Bahrain. The MoU aims at enhancing the cooperation between the specialized professional accounting fellowship issued by AAOIFI, Certified Islamic Professional Accountant (CIPA) and the international professional fellowship ACCA. According to Farhan Noor, AAOIFI's Head of Professional Development, the new CIPA now requires the candidates to pass four module exams and fulfill a one-year practical experience requirement. By this agreement, ACCA qualified accountants can now get exemptions from half of the CIPA program to acquire the prestigious CIPA Fellowship. The MoU also includes cooperation in different areas such as research, events and continuous development.

Dagong and IIRA maintain the Ratings of Al Baraka Banking Group and revise the Outlook Upwards

Dagong Global Credit Rating and Islamic International Rating Agency (IIRA) have jointly maintained the ratings of AlBaraka Banking Group (ABG) at BBB+/A3. At the same time, IIRA has re-affirmed the national scale ratings of ABG at A+/A2. Outlook on the assigned ratings has been revised to 'stable' from 'negative' indicating the macroeconomic and political stability in ABG’s core countries. ABG operates through a globally diversified franchise spread across 11 jurisdictions in Europe, Africa and Asia. ABG’s ratings derive strength from the recent tier 1 Sukuk issuance this year. While the Group’s subsidiaries are individually governed by their supervisors, the Group maintains close coordination and oversight. Furthermore, Bahrain's institutional framework for Islamic banks ensures adherence to a strong framework for Shari'ah governance.

Interview: How #Bahrain Is Aiming To Position Itself As A Regional #Fintech Hub

In this interview David Parker, Executive Director of Bahrain's Economic Development Board, talks about the kingdom's efforts to position itself as a fintech hub. He recognizes that certain regulatory requirements can make it more challenging for firms to experiment. To mitigate this, the Central Bank of Bahrain launched a regulatory sandbox to help enable innovation. A number of accelerators and incubators have also launched operations recently, including the region’s first cloud accelerator, operated by C5 and powered by Amazon Web Services (AWS). When determining the structure of the regulatory sandbox, the Board was in close consultation with the industry. An agreement was signted with the Singapore Fintech Consortium and advisory firm Trucial Investment Partners to support the local Fintech ecosystem. The Central Bank also issued directives on crowdfunding for both Shariah compliant and non-Shariah compliant platforms and launched a national e-wallet.

Ibdar Bank and partners acquire Boston office building for $48mln

#Bahrain-based Ibdar Bank has acquired a prime office building in Boston, USA. The deal is a collaboration with US property manager Lincoln Property Company and asset manager Ritz Banc Group and the total size is $48 million. The Boston property is a single-let building leased to Amazon Robotics, a wholly-owned subsidiary of Amazon Inc. The area is regarded as the "technology corridor", and is home to many well-known technology-related companies making it the epicentre of robotic innovation. The bank’s head of real estate, Bassam Kameshki, said the Boston metropolitan area has witnessed substantial growth within the technology and medical sectors. He ensured that Ibdar Bank will be working to add further value to the property and ensure a profitable exit scenario.

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