Trade Arabia

Dubai Islamic donates $5.4m to RAK charity

The Dubai Islamic Bank (DIB) has donated Dh20 million ($5.4 million) in Zakat money to the Ras al-Khaimah Charity Association. The association will distribute the funds to those eligible for Zakat though legitimate channels during the month of Ramadan. Abdul Razzaq Al Abdullah, head of the Community Services Department of the DIB, handed the donation cheque to Abdulaziz Al Zaabi, chairman of the charity association. Al Zaabi thanked the DIB’s management for its generous support and considerable donation.

Bahraini banks acquire key US real estate portfolio

A consortium of Bahrain-based lenders Venture Capital Bank (VC Bank) and Seera Investment Bank has acquired a major real estate portfolio consisting of two multifamily residential assets in Atlanta (US) comprising 866 units. This marks the consortium’s first investment in the US multifamily sector and has been in co-operation with a local partner that has experience in the management and operation of multifamily residential assets. Atlanta remains a hot favourite among global investors, thanks to the large number of Fortune 500 companies that are headquartered there. It is also the fourth biggest city with headquartered Fortune 500 companies after New York City, Houston, and Dallas.

Arab National Bank places $533m sukuk

Saudi Arabia's Arab National Bank has issued SR2 billion ($533 million) of 10-year sukuk through a private placement, the kingdom's seventh largest lender by assets said in a bourse statement on Thursday. The bank has the right to call the sukuk after five years, it said. The yield was expected to be 140 basis points over the six-month Saudi interbank offered rate, the statement added. The proceeds of the issue will enhance the bank's capital in addition to allowing it to expand its activities through its Islamic window, the bank said.

ABG, Venture Capital top key Islamic banks list

Bahrain’s Al Baraka Banking Group (ABG) and Venture Capital Bank lead the GCC Islamic Financial Disclosure Index Rankings, it has emerged. The conveners of the 22nd annual World Islamic Banking Conference (WIBC) revealed the ranking of the top five GCC Islamic banks rated according to their financial disclosure, subsequent to the announcement of the launch of the WIBC Leaderboard. As per the rankings, the banks, both based in Bahrain are positioned at the top of the Islamic financial institutions in the GCC with a score of 69 and 68 respectively. The index ranges from zero to 100, with higher values indicating more disclosure.

NCB plans $533m capital-boosting sukuk

National Commercial Bank (NCB), Saudi Arabia's largest lender, is selling SR2 billion ($533 million) of capital-boosting sukuk, two banking sources with knowledge of the matter said on Sunday. The offer, which enhances the bank's Tier 1 - or core - capital and is compliant with Basel III banking regulations, is the third such transaction by NCB since June, and is part of a plan to raise as much as 7 billion riyals of capital before the end of 2015, one of the sources said. NCB didn't immediately respond to a request for comment.

Bahrain Bourse opens $530m sukuk subscription

A government Islamic lease (Sukuk Al Ijara) issue floated to raise BD200 million ($530 million) is open to direct subscription by retail investors, the Bahrain Bourse (BHB) announced. Both Bahraini and non-Bahraini investors can subscribe to the issue through registered brokers at BHB. Each sukuk has a par value of BD1 and the minimum subscription is 500 sukuk (BD500). The securities have a tenure of 10 years with July 9 as the issue date and July 9, 2025 as the maturity date. The subscription ends on Tuesday, and investors will be able to trade the sukuk in the secondary market at BHB post listing, expected to be on July 26. The expected annual return (rent) on the securities is five per cent, to be paid every six months till maturity.

BisB appoints new chief executive

Bahrain Islamic Bank (BisB) has appointed Hassan Jarrar as its new chief executive, with effect from July 1. Jarrar, who is currently the chief executive of Standard Chartered Bank Bahrain, will take over the reins from Mohammed Ahmed Janahi who has been Bahrain Islamic Bank’s acting CEO since September 1 last year. Janahi will become the deputy chief executive after Jarrar takes over. The new chief executive said he was confident that Bahrain Islamic Bank would assume an active role in Islamic banking field through perfecting its systems and services and the development and refining of products to enhance its role and status in the local and regional markets.

IFSB issues Microtakaful regulation draft

The Islamic Financial Services Board (IFSB) has issued the Exposure Draft of its joint paper with the International Association of Insurance Supervisors (IAIS). The ‘Issues in Regulation and Supervision of Microtakaful (Islamic Microinsurance)’ paper has been issued for public consultation until August 6, a statement said. It has invited comments from regulatory and supervisory authorities, international organisations, market players, academics and other interested parties, it said. The main objective of the Joint Paper is to highlight and identify regulatory issues prevailing in the Microtakaful sector and outline the role this sector can play in enhancing financial inclusion.

World Bank's IFC plans sukuk sale after Gulf summer

The International Finance Corp (IFC), the World Bank's lender to the private sector, has started work on a return to the market for Islamic bonds, with plans to issue sharia-compliant debt after summer in the Gulf region. Details such as currency, tenor and size were not yet available. The IFC, which aims to spur private investment in developing countries, last sold a $100 million five-year sukuk in 2009, listing it on the Dubai and Bahrain bourses. Its first sukuk came in 2004 in Malaysia, a 500 million Malaysian ringgit ($134 million) three-year deal. In December, the International Finance Facility for Immunisation Co (IFFIm), for which the World Bank acts as treasury manager, issued a $500 million debut sukuk.

Sedco sees more global presence by 2025

At its annual "Multaqa Sedco 2015", Sedco Holding Group has unveiled its growth strategy for 2025 through expansion of its investment ventures across the globe. The event gathered the Group's upper management, the heads of its operating companies, CEOs and senior executives, management boards, their partners along with the administrative cadre. Under the theme "Imagine Our Future with Synergy", the Group's thrust for the next decade was laid down with emphasis on teamwork, creativity and professional excellence as key to continuous growth and achievement of defined goals as enshrined in the company's "six values".

Bahrain's GFH wins investor nod for capital cut

Bahrain-based Gulf Finance House (GFH) has won approval from the shareholders for a reduction in the group’s issued and paid-up capital. GFH board chairman Dr Ahmed Al-Mutawa said the rate of reduction approved is six shares for each 10 shares held at a nominal value of $0.265 per share, thereby resulting in elimination of $897 million of accumulated losses. In addition to this, the investors also discussed the continuation of GFH’s shares listing in London and Kuwait Stock Exchange and authorised the board of directors to adopt the necessary resolutions in this respect. The firm reported a consolidated net profit of $17 million for the year 2014.

Ras Al Khaimah to meet investors for sukuk

The emirate of Ras Al-Khaimah has hired four banks to arrange fixed income investor meetings starting on Thursday for a potential US dollar-denominated sukuk offer, a document from lead arrangers showed. Ras Al-Khaimah has picked Al Hilal Bank, Citigroup, JP Morgan and National Bank of Abu Dhabi to arrange investor meetings in Asia, the Middle East and Europe, the document showed. Investor meetings will start in Singapore on Thursday, before moving to Kuala Lumpur on Friday, the UAE on Sunday and London on Monday.

Private wealth in GCC doubles to $2.2 trillion

Private wealth in the GCC has doubled from $1.1 trillion in 2010 to $2.2 trillion in 2014 at an overall compound annual growth rate (CAGR) of 17.5 percent, according to a study by management consultancy Strategy&, formerly Booz & Company. Most of the region’s private wealth resides in Saudi Arabia (44 per cent), but the UAE has made notable gains with its share increasing from 24 per cent to 30 per cent during 2009 to 2013. Together, Saudi Arabia and the UAE control 74 per cent of the region’s private wealth, up from 71 per cent in 2009. The study reveals that geopolitical events also intensified the migration of new wealth to the region. This growth in private wealth makes the GCC a lucrative market for local and global private bankers, said the study.

Shariyah advisory marks a decade of service

Shariyah Review Bureau (SRB) is celebrating its 10th anniversary of service to clients. In the last five years, SRB has intensified its dedication to serving clients by providing shari’a consultation, certification (Fatawa), Islamic industry jurisprudential foresight, and functional Shari’a compliance audit expertise. The number of Islamic projects have been increasing, so far SRB has completed more than 300 projects in the last four years, helping clients cover a wide spectrum of transactions ranging from sukuks (including trade finance sukuk), private equity funds, equity projects, trade finance transactions, margin trading, real estate developments, ICT deals, money market, textile, sports and pharma funds.

GCC demand spurs Bahrain financial sector

Growing demand for more sophisticated financial products and services helped drive growth in Bahrain's financial sector during last year, according to the Economic Development Board (EDB) and Central Bank of Bahrain (CBB). Bahrain attracted a number of businesses, with the number of registered financial services firms swelling to 415 by the end of the year. Alongside strong growth last year, the kingdom also developed a number of reforms to ensure that the regulatory framework of the Islamic banking sector continues to meet the needs and encourage long-term growth. Moreover, the CBB also recently implemented new rules set to boost the takaful sector by addressing some issues around solvency. Bahrain also had one of the most developed Islamic finance knowledge landscape, and performed well in terms of governance.

Bahrain aims for new business with takaful, sukuk rules

Bahrain's central bank will release a new regulatory framework for takaful this quarter. Bahrain already has takaful-specific rules but the regulatory refom could help it grab a larger chunk of the sector. The new rules, developed after two years of consultations with the industry, cover the operations and solvency of takaful firms. They are expected to increase takaful firms' ability to distribute surpluses to policy holders and dividends to shareholders. In addition, the new rules require financial reporting by takaful firms annually rather than once every three years, restrict the use of performance fees, and introduce the concept of earmarked assets. In December, the central bank formally combined existing rules for issuing and listing financial securities, including sukuk, in an effort to make the process more efficient.

First Energy inks $34m facility with Dutch firm

Bahraini First Energy Bank (FEB) has signed a 25-million-euro ($34 million) Murabaha facility with the Netherlands-based Kore Coal Finance, a subsidiary of Sapinda Holding. The financing will assist Sapinda in enhancing its investments in an internationally operating resource company which owns coal mining assets in South Africa. This Islamic facility supplements the recently concluded conventional profit participation note of 55m euros raised by Kore Coal Finance with a similar objective. The Murabaha facility has been structured on the basis of an attractive return and will be repaid by October 2016. FEB is acting as the investment and security agent under this Murabaha financing. The bank has an authorised share capital of $2 billion and a paid-up capital of $1 billion.

Bahrain Islamic Bank swings to $10m profit

Bahrain Islamic Bank (BisB) has reported a net profit of BD3.8 million ($10.1 million) during the first nine months of the year from a net loss of BD20.8 million during the same period last year. Net profit for the third quarter this year amounted to BD1.4 million versus a net loss of BD4.9 million during the same quarter last year. This is after setting aside provisioning amounting to BD3.4 million for the quarter under review as against BD5.4 million during the corresponding previous period. The bank made an operating profit of BD12.9 million during the first nine months of the year. Operating profit for the third quarter was BD4.8 million. Chairman Abdul Razaq Al Qassim said the results reflect a prudent policy and all earnings represent principal activities involving the bank's assets.

Saudi Tasnee gets $1.06bn Islamic loan

Saudi Arabia's National Industrialization Company (Tasnee) has signed a sharia-compliant loan facility worth SR4 billion ($1.06 billion) with seven Saudi banks and Emirates NBD. The Saudi banks which contributed are Riyad Bank, Al Rajhi Bank, Bank Al Bilad, Saudi British Bank, Samba Financial Group, Banque Saudi Fransi and Saudi Investment Bank. The financing, signed on Sunday, will be repaid in eight years including a one-year grace period. The loan, which was covered 1.5 times, will finance the company's stakes in future projects and refinance existing loans.

Merger issues ‘may cause GCC insurers to default’

Inflated valuations and a reluctance to relinquish control are preventing smaller insurers in the GCC from consolidating, and in a move to avoid reporting losses, they could distort market pricing for all, according to the RatingsDirect analysis from Standard & Poor's Ratings Services. The reports adds that a small number of well-established insurers are reaping the benefits of the fast-growing insurance markets in the GCC region. The GCC insurance sector grew to nearly $16 billion in terms of gross premium written and we observed growth rates of over 10 per cent in the region's largest insurance markets in 2012. Ample capital is available within the industry to back the growth in insurance premiums. Both regional and international investors are looking for a slice of the business because of the growth potential. This creates a highly competitive marketplace in which all companies are contending for profitable business. The ensuing competition puts pressure on margins.

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