Khaleej Times

New round of GCC bank #mergers in the offing

GCC's banking sector is expected to see a new round of mergers and acquisitions (M&A) in the wake of the latest such move initiated by Kuwait Finance House and Ahli United Bank of Bahrain. According to U Capital, at least five M&A deals are in various stages of discussion. The new round of M&A follows the merger between National Bank of Abu Dhabi (NBAD) and First Gulf Bank (FGB) in the UAE, resulting in creation of the regions second biggest bank. Combined assets of four top conventional banks in the region stand at $621 billion whereas the assets of entire Islamic banks in GCC stand at $563 billion as of second quarter 2017. According to banking sources, Masraf Al Rayan, International Bank of Qatar and Barwa Bank are in the due diligence phase. The three-way merger is expected to create the largest Islamic bank in Qatar. Saudi British Bank and Alawwal Bank are also said to be discussing a potential merger that would create the third-largest bank in Saudi Arabia.

New Shariah #standards for Islamic financing, banking launched in Dubai

A set of new Shariah standards for Islamic banking and financing have been launched by the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI). The launching ceremony was attended by Islamic finance scholars and specialists from across the region. The recently issued Shariah standards include No.(55) Competitions and Prizes Standard, No.(56) Liability of Investment Manager Standard, No.(57) Gold and its Trading Controls Standard and No.(58) Repurchase Standard. These standards are deemed important Shariah reference for the industry, including legislative bodies, regulatory authorities and financial institutions. They are also important to other professional entities such as law firms, accounting and consultancy firms, universities, academic institutions and research centres.

GLOBAL #INVESTING: Why investors should look at Makkah hotels

Land prices in Makkah are higher than in downtown Tokyo or Paris, this ensures that five-star luxury hotel supply growth is the norm. Makkah is also at a macro inflection point since 25,000 three-/four-star rooms were demolished or reclassified by the Saudi authorities. The Saudi government intends to triple Umrah visas to 15 million by 2020 as per the kingdom's Vision 2030 policy. Makkah hotel investing is also attractive because the Makkah's religious tourism market is dominated by tour operators who pre-book rooms en masse and place a premium on new hotels. Makkah is unquestionably the world's most resilient, low-risk, price/demand inelastic, supply constrained, foreign capital inaccessible, secular growth hotel market.

#Pakistan's National Savings Scheme may offer #Islamic #banking services

Pakistan's government-operated National Savings Scheme (NSS) is evaluating whether to offer Islamic banking services. This plan will help depositors put their cash into Islamic Shariah-compliant Ijara sukuk. As soon as that happens, millions of new accounts are expected to be opened, bringing a huge population of medium and small savers into the banking stream. Millions of others who are currently operating accounts in conventional banks may also be snatched away by the NSS. Investments in all types of the NSS go directly to the government of Pakistan, which uses this cash inflow to fill the budgetary gap and to fund its development projects. NSS deposits by people totalled Rs233 billion in 2015-16 and Rs337 billion in 2014-15. In the event of introduction of Ijara sukuk, some of these deposits are likely to be switched to this Islamic mode.

#Pakistani #girl #sold off to #pay #debts

The girl called Jeevti was just 14 when she taken from her family in the night to be married off to a man who says her family owed him $1,000. Her mother, Ameri Kashi Kohli, is sure that her daughter paid the price for a never-ending debt. Ameri says she and her husband borrowed roughly $500 when they first began to work on the land, but she throws up her hands and says the debt was repaid.
It's a familiar story here in southern Pakistan: Small loans balloon into impossible debts, bills multiply, payments are never deducted. In this world, women like Ameri and her young daughter are treated as property: taken as payment for a debt, to settle disputes, or as revenge if a landowner wants to punish his worker. Sometimes parents, burdened by an unforgiving debt, even offer their daughters as payment. The women are like trophies to the men. They choose the prettiest, the young and pliable. Sometimes they take them as second wives to look after their homes. Sometimes they use them as prostitutes to earn money. Sometimes they take them simply because they can.

DWE supports female leaders, strengthens role in corporate #governance

Dubai Women Establishment (DWE) in collaboration with the Institute for Corporate Governance recently held the second session of its training programme entitled "The Principles of Corporate Governance in Government Entities". The session targeted second and third level female leaders to promote the role of Emirati women and support their leadership. Shamsa Saleh, CEO of Dubai Women Establishment stressed the important role of the training in highlighting good corporate governance practices. The training session was attended by representatives of various sectors and featured presentations about a range of governance elements. The session supports the UAE Cabinet's decision to make the representation of women on boards of directors compulsory.

Charities must innovate for maximum social impact

The plenary session 'Philanthropy in the Muslim world: Harnessing the abundance of underutilised capital for social development' was held at the Global Islamic Economy Summit in Dubai. Tayeb Al Rais, secretary-general of the Awqaf and Minors Affairs Foundation, highlighted that Waqf was in decline and overlooked in modern Islamic societies. Clare Woodcraft, CEO of Emirates Foundation, said that foundations could benefit from narrowing their focus. Maysa Jalbout, CEO of the Abdulla Al Ghurair Foundation for Education, agreed that focus was key and added that charities and foundations need to be more innovative if they are to maximise impact. Woodcraft said that Western foundations have much to learn from Islamic finance with its focus on ethical investment.

Why #London remains a favourite destination for #GCC buyers

On a pure investment basis, London has a transparent property market. Property tenure is clear cut and underpinned by the legal system. There has long been a trend for overseas buyers to purchase homes or investment properties in central London. Over the past few years, Russian and Asian buyers have become more active, but the interest from the Middle East has never waned. While the Qatar Investment Authority (QIA) Wealth Fund has been diversifying its portfolio away from Europe, it still has at least $7 billion directly invested in equities traded on the London Stock Exchange, in which it also holds a 10.3% stake.

Sharjah Islamic Bank repays $400m #sukuk

Sharjah Islamic Bank (SIB) has successfully repaid a $400 million sukuk. The sukuk had been raised in May 2011 under challenging market circumstances. The funds raised under the sukuk were used for general corporate purposes and business expansion of SIB. The bank currently has two sukuks of $500 million outstanding which are set to mature in 2018 and 2020 respectively.

#Islamicbanking, modes moving up in #Pakistan

In Pakistan Islamic modes, financing and products have captured at least 15% of the overall financial market share in 2016. The interest is illustrated by the results attained by the UAE-based banks Alfalah and Bank Al Meezan. Bank Alfalah CEO Atif Bajwa reported a double-digit top line growth, Rs7.523 bn in CY-15, 33% growth from 2014. Meezan Bank reported a Rs2.67 bn profit for the first half of CY-2015. The bank has also introduced Meezan Asset Allocation Plan-1, Pakistan's largest asset management company.

Gold standard in Islamic finance 'almost there' for submission

Gold products used in Islamic finance would need to be physically-backed and allocated to the underlying asset, according to a draft of a standard for Shariah gold being developed. Mohd Daud Bakar, a Shariah scholar who is writing the draft for the Accounting and Auditing Organisation for Islamic Financial Institutions, said the document is almost finished. The committee formed to develop the gold standard will meet once more next Sunday and then submit the proposal to AAOIFI's Shariah Board, he said. The gold standard is expected to be completed later this year, and public hearings could be held in Morocco and Dubai and possibly Indonesia or Malaysia, Bakar said.

Sharjah launches $500m 5-year sukuk

The Emirate of Sharjah priced a $500 million five-year Islamic bond issue on Wednesday. The deal will help Sharjah narrow its budget deficit and also pave the way for other regional borrowers. In the uncertain atmosphere, the five-year sukuk drew orders north of $950 million, a comfortable amount but much smaller than the $7.85 billion the emirate attracted for a $750 million, 10-year sukuk in September 2014. The shrinking orderbook reflects foreign investors' increasing nervousness about the impact of lower crude prices on the economy and local market appetite. The deal was priced at a spread of 250 basis points over midswaps, the document showed, at around the same level as the initial price thoughts set on Tuesday.

Islamic finance holds promise for Dubai

According to a recent report by the London-listed asset management group European Islamic Investment Bank, as Dubai pushes ahead with plans to expand its offering in Shariah-compliant financial services, it will be tapping into significant pent-up global demand for Islamic asset management, which could reach as high as $185 billion by 2019. The study, issued in mid October, highlighted additional measures that could be considered in order to raise Dubai's profile as a centre for IFS. Industry growth could be accelerated through wider consultation between fund managers and the authorities, with a focus on identifying ways to spur the creation of multi-asset-class, multi-geography funds.

S&P halves forecast for global sukuk issuance

Warning that the global sukuk market is heading toward a correction in 2015, Standard & Poor’s Rating Services (S&P) has halved its forecast for global sukuk issuance in 2015 as major issuer Bank Negara Malaysia (BNM) switches to other instruments to finance the government’s spending. The global ratings agency said it was revising its forecast for total sukuk issuance in 2015 to about $50 billion to $60 billion from $100 billion to $115 billion, assuming there will be no issuance from BNM in 2015. In a statement, S&P said the move by BNM to stop issuance leaves the door open to issuers such as the International Islamic Liquidity Management Corp (IILM) and the Islamic Development Bank (IDB) to step up their issuance and provide the industry with liquidity, thereby contributing to the development of an Islamic yield curve.

UAE banks building provisions to fend off possible bad debts

Several banks and financial institutions in the UAE are building provisions as a precautionary measure in anticipation of possible bad debts they may face in the future, the chief executive officer of Abu Dhabi Islamic Bank said. Tirad Al Mahmoud also said that since not all borrowers they deal with are registered with the UAE’s Etihad Credit Bureau, their data is unknown. At present, ADIB’s rejection rate for loan applications it receives is between nine to 10 per cent, which may drop or rise once the Etihad Credit Bureau’s report on an individual or corporate covers the financial data on all the customers of all banks and financial institutions operating in the country.

Farazad: GCC investors in market for trophy assets

Tumbling oil prices may have dented Gulf investors’ surplus reserves, but their appetite for high-yield overseas-based assets remains robust, says Korosh Farazad, Chairman and CEO of Boutique Investment Bank Farazad Investments Inc. (FII). Middle East investors, particularly those from the Gulf countries such as UAE, Kuwait and Qatar, are attracted to trophy assets that could yield a minimum of 8% return on their investments, he says. These assets are typically located in Europe, Turkey and North America, where a transparent legal system, relatively stable political and security environment, and strong macroeconomic fundamentals have proven to be appealing to overseas investors.

SIB achieves Dh107m net profit for Q1 2015

Sharjah Islamic Bank achieved a net profit of Dh106.9 million for the first quarter 2015 compared to Dh110 million for the same period last year. While total assets reaching Dh27.4 billion, total assets grew by 5.3 per cent to reach Dh27.4 billion at the end of the first quarter 2015 compared to Dh26.0 billion at year end 2014. Liquid assets reached Dh5.7 billion comprising 20.7 per cent of total assets. Net customer receivables amounted to Dh16 billion growing by 10.5 per cent or Dh1.5 billion compared to year end 2014. Investment securities increased by 27.6 per cent to reach Dh2 billion compared to Dh1.6 billion at the end of 2014. Sharjah Islamic Bank was successful in attracting more deposits during the first-quarter of the year.

Debt wish: Most UAE residents use bonus to pay owed money

According to a survey for Zurich International Life by YouGov, 71 per cent of UAE residents will receive a company bonus during 2015. However, for 39 per cent of bonus recipients, the primary use of their payment will be to settle debt, with a further 16 per cent using the bonus to pay bills, such as rent or school fees. Another 13 per cent of respondents said they will leave their bonus in the bank, 11 per cent will invest in property and 10 per cent will invest in a savings scheme, while only seven per cent will spend the majority of their bonus. Besides, only 44 per cent of expats believe they will fulfil their financial goals when they leave the UAE.

Banks, financial firms on hiring spree in Middle East

Financial institutions and banks are hiring at the fastest pace in the UAE and other Middle Eastern countries as the regional economies show sign of improvement, according to the data released by recruiters Monster Worldwide. Demand for banking and finance professionals jumped in March, with a 65 per cent increase in job postings from a year earlier while job listings for the same sector climbed 38 per cent in the UAE, the Monster Employment Index Middle East revealed. Online hiring in Saudi Arabia and Egypt is soaring, with an increase of 30 per cent and 28 per cent respectively, in job listings. The UAE registered a modest growth of 17 per cent.

Takaful transactions reach Dh2.3b

The UAE’s insurance market grew 12 per cent in 2014 to Dh33 billion, said Ibrahim Al Zaabi, director- general of the Insurance Authority. The number of companies providing these sharia-compliant services has reached 11. The director-general said that the investments made by 60 insurance companies reached to Dh40 billion in the year. He said that the Insurance Authority has issued new rules and regulations in order to organise Takaful insurance business. The rules organise the financial, technical, investment, and accounting functions of Takaful insurance companies aiming to protect the rights of stakeholders, from future risks, the minister said.

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