MENA

IIRA reaffirms ratings of Kuveyt Turk Participation Bank: August 2016

Islamic International Rating Agency (IIRA) has reaffirmed the ratings of Kuveyt Turk Participation Bank (KTPB) at "AA(tr)/A1+(tr)" on the national scale. Ratings on the international scale have also been reaffirmed, with foreign currency rating at "BBB-/A3" and the local currency rating at "BBB/A3". Outlook on the assigned ratings is "Stable". Ratings of KTPB are underpinned by its strong institutional ownership, which is led by Kuwait Finance House. The impact of regional instability on Turkey’s banking industry has been manageable so far. However, the industry may face challenges in the coming periods.

Kuveyt Türk closes H1 2016 with a profit of TRY 256 million

Kuveyt Türk Katilim Bankasi has closed the first half of 2016 with a net profit of TRY 256 million with an increase by 24.4% compared to the same period last year. The bank's total assets have reached 44,1 billion increasing by 4.9% and its shareholders equity has reached TRY 3.7 billion increasing by 8%. Ufuk Uyan, the CEO of Kuveyt Türk, said the bank added 30 new branch offices to its network throughout 2016. Kuveyt Türk aims at becoming one of the top three banks opening the highest number of branch offices in the banking sector.

Al Baraka Banking Group Increase its Total Operating Income by 7% to US$ 538 million and Total Assets Reach US$ 25 billion in the First Half of 2016

The #Bahrain based Al Baraka Banking Group (ABG) announced that it achieved an increase in total operating income of 7% and net profits before tax and provisions by 4% during the first half of 2016. Total assets increased by 2%, total finance and investments by 4%, deposits by 1% while total equity increased by 2% as at the end of June 2016. Total operating income reached US$ 538 million in the first half of 2016 compared to US$ 502 million during the same period of 2015. Al Baraka's CEO Adnan Ahmed Yousif said the Group opened 24 new branches in the first half of 2016 to bring total branches to 611. He considers the entry of the Group to Morocco market a very important achievement, because it represents one of the main markets in the Arab Maghreb and Africa. Also, it means a higher diversification in assets and income sources for the Group.

Kuveyt Turk claims 37 per cent share of #Turkey's participation banking

According to Group CEO Mazin Saad Al-Nahedh, the market share of Kuwait Finance House-Turkey (KFH-Turkey) accounts for 37% of the participation banking in Turkey. The total assets of participation banks as percentage of the total assets of banks in Turkey account for 5-6% and is expected to surge. Growth rates in KFH-Turkey have outpaced the rates in Kuwait, Bahrain and Malaysia. Noting that all Kuwaiti banks were strongly capitalised, Al-Nahedh mentioned that KFH Group’s own capital adequacy ratio surpassed 17% as of end Q1. Commenting on Kuwaiti sovereign debt issuances to Islamic banks, he said that KFH’s share of the debt was 50 per cent, mirroring its market share among Islamic banks in Kuwait.

Bank Asya’s banking license cancelled over Gülen links

Turkish regulators have cancelled the banking license of Islamic lender Bank Asya. The Turkish Banking Regulation and Supervision Agency’s decision (BDDK) came after the Turkish Deposit Insurance Fund (TMSF) temporarily suspended Bank Asya’s banking operations on July 18. According to the TMSF the sale of the bank did not attract any bids on July 15. The tender was for the sale of a minimum 183.6 million A group shares, amounting to 51% of the bank. Bank Asya is affiliated with Fethullah Gulen, who the Turkish authorities accuse of heading a clandestine 'parallel state' to undermine the Turkish government.

#Turkey's banking watchdog temporarily shuts down Bank Asya

The Savings Deposit Insurance Fund (TMSF) announced that the operations of Bank Asya will be temporarily frozen. According to the official announcement, the decision was made by the Fund Council in accordance with Article 107 of the Banking Law. The tender for the sale of Bank Asya's shares was scheduled for Friday and TMSF announced that no bid had been offered for the tender. Although shares were planned to be opened to transactions following the bank's sale, Bank Asya's shares are now closed for transactions. Bank Asya is believed to be the main financial institution for the controversial Gülen Movement, which is accused of large-scale cheating and nepotism.

Turkish regulator shuts down Gulen-linked bank

The Turkish Deposit Insurance Fund (TMSF) announced it would temporarily suspend operations in Bank Asya, which is closely associated with the cleric Fethullah Gulen. Turkish President Recep Tayyip Erdogan blamed Gulen and his supporters for the coup attempt on Friday in which more than 200 people have been killed. The coup attempt was suppressed by early Saturday as 103 army generals and admirals were detained. The arrests now amount to a third of the country’s top military officials.

Politics of Islamic finance in #Turkey

For over three decades Turkish governments did not dare speak the name Islamic banking for fear of being branded radical. These institutions were officially named special finance houses, profit-and-loss banks, interest-free banks and more recently, participation banks. Now Islamic finance public policy is elevated to a pivotal position in the official management of the Turkish economy.
Ankara has recently embarked on a wholesale restructuring of its participation banking sector, which has seen the entry of three new banks including Ziraat Participation Bank, Halk Participation Bank and Vakif Bank. This brings the total number of participation banks in Turkey to seven including the four established ones, Kuveyt Turk Participation Bank, Albaraka Turk Participation Bank, Turkiye Finans and Asya Bank. Ankara is also keen in making Turkey a leading proponent of Islamic finance and developing Istanbul into an international financial centre.

Bank Asya sale scheduled for July 14

The tender for the sale of Bank Asya is set to take place on July 14. Turkish Deputy Prime Minister Nurettin Canikli stressed the importance and the magnitude of the sale, as Bank Asya was subject to financial maladministration by the previous management. While sunken credit totaled TL 2.2 billion ($750 million), credit volume in September 2015 reached TL 6.5 billion. The bank's capital dropped to TL 1.2 billion in 2015. Upon inspection of the actual amount of sunken credit, Bank Asya's cumulative losses totaled TL 1.6 billion.

#Algérie: La finance islamique est complémentaire et non une alternative

Kader Merbouh, expert en finance islamique penser que la finance islamique est la solution pour capter l’épargne dormante et en dehors du circuit bancaire en Algérie. L’Algérie a été un point d’encouragement à la finance islamique. Tant par les banques conventionnelles qui proposeront dans les prochaines années des produits de la finance islamique pour capter leur clientèle et tant par les banques islamiques comme Salam ou Baraka. Il y a aussi l’arrivée de nouveaux acteurs qui voudront être présents sur le marché algérien. Cela va créer une triple dynamique. L’Algérie est un marché formidable. La loi de modernisation bancaire en Algérie va introduire quelques règlements pour faciliter la finance islamique.

#Morocco to start approving Islamic banks for business to begin in 2017

Morocco's central bank will start issuing approvals for Islamic banks this year so that they can begin business in early 2017. The North African country had long rejected Islamic banking due to concerns about Islamist movements. Now the central bank has set up a central sharia board with the country's body of Islamic scholars to oversee the new industry. Lhassane Benhalima, the central bank's head of banking supervision said it was absolutely wrong that some banks had been pushing to delay the process. The central bank received seven requests to open Islamic banks and three to open windows selling Islamic finance products. According to Benhalima the bank is planning an Islamic interbank market and is encouraging the government to issue regular sukuk to ensure liquidity.

UPDATE 1-#Morocco to start approving Islamic banks for business to begin in 2017

Morocco's central bank will start issuing approvals for Islamic banks this year so that they can begin business in early 2017. The North African country had long rejected Islamic banking due to concerns about Islamist movements. Now the central bank has set up a central sharia board with the country's body of Islamic scholars to oversee the new industry. Lhassane Benhalima, the central bank's head of banking supervision said it was absolutely wrong that some banks had been pushing to delay the process. The central bank received seven requests to open Islamic banks and three to open windows selling Islamic finance products. According to Benhalima the bank is planning an Islamic interbank market and is encouraging the government to issue regular sukuk to ensure liquidity.

The IFSB, World Bank and Turkish Treasury Organise a Joint #Conference on Value Proposition of #Takaful Industry in Istanbul

The Islamic Financial Services Board (IFSB), The World Bank Group (WBG) and the Republic of Turkey have organised a joint conference focusing on the takaful sector. This conference, themed "Realising the Value Proposition of Takaful Industry for a Stable and Inclusive Financial System" was held in Istanbul on May 30-31, 2016. The Keynote Address was delivered by Ramazan Ulger, President of the Turkish Insurance Association and Ozgur Koc from the Association of Participation Insurance. Mr. Ulger highlighted that there are 60 insurance companies and one reinsurance company operating in Turkey. He suggested for the takaful industry to develop a wider range of products to address the needs of individuals. Ozgur Koc reiterated the country's vision to establish Istanbul as an Islamic financial centre.

#Islamicbanking market in #Turkey to get major boost

According to Standard & Poors recent government initiatives will spur momentum for Turkey’s fast-growing Islamic banking market. Islamic banks in the country have doubled their share of overall banking assets over the past decade to roughly 5% or $42.2 billion at year-end 2015. The annual volume of sukuk issuance in the country increased nearly 20-fold over the same period, growing from $100 million in 2010 to almost $2bn by year-end 2015. Credit analyst Mohamed Damak said Turkish Islamic banks’ market share is expected to double to more than 10% by year-end 2025.

#Banque Misr obtains $105 mn #murabaha facility from #UAE banks

Banque Misr, Egypt's second-largest state lender, has obtained a $105 mn murabaha financing facility from three United Arab Emirates banks, Chairman Mohamed Mahmoud Eletreby told Reuters Tuesday.
Egypt has been struggling since a 2011 uprising drove away tourists and foreign investors, putting pressure on foreign reserves which halved to $17.5 bn in May.
Eletreby said the facility was obtained from three of the largest UAE banks, but declined disclose their names. He said the facility will strengthen Banque Misr's foreign currency resources and will be paid back in two years.

What a #Brexit could mean for the UK’s aspiring #Islamic #finance #market

As the referendum on whether to leave or remain in the European Union looms in the UK, voices are getting louder, particularly in the country’s financial industry that it would not necessarily be a good idea to vote for a Brexit. Since the weight of the UK in the global financial market is substantial – the financial sector of the City of London has a 20% share in the global market for trading foreign securities and a sizeable part of it depends on the UK’s access to the internal EU market – such a strong position would be certainly threatened.
This could have serious impact on the growing role of Islamic finance in Europe which is entrenched in the UK and from there makes its way into the continent. Since the 1990s, when the first mortgages in the UK were set up in line with Shariah law, the country has aggregated the most advanced experience in Shariah-compliant finance in the Western world. Corporate sukuk followed a decade later, and in 2014, the UK became the first country in the EU to issue some sovereign sukuk and listed them on the London stock exchange. From then on, Islamic finance steadily entered the rest of Europe.

Ramadan #Sukuk deal flow as tightest spread for a year issued by #Qatari Bank’s $750m print

A Riyal denominated Sukuk has been issued by the Saudi International Petrochemical Company. The company announced the successful completion of the issuance amounting to SAR 1.0 bn on June 16, 2016. The Sukuk was priced at 235 bps over six months SAIBOR for tenor of five years maturing on June 16, 2021. Riyadh Capital and NCB Capital helped to arrange the private issuance.
In the hard currency space, the Commercial Bank of Qatar issued a Eurobond which achieved the tightest spread for a MENA financial institution this year, conventional or Sukuk.
Whilst the issuance was not a Sukuk, demand for bond indicates strong investor appetite, a good sign of market demand which is likely to be tested with several large planned issuances post Ramadan. Most eagerly anticipated is a potential sovereign issuance by Saudi Arabia, as well as by Aramco, the Saudi national oil giant.

World’s leading financial institutions in Hall of Shame for #investments in #cluster munitions producers

From Canada, CI Financial, Manulife Financial, Royal Bank of Canada and Sun Life Financial are also included in the Hall of Shame. Jointly, these Canadian financial institutions invested US$565 million in cluster munitions producers between June 2012 and April 2016.

The report by Dutch peace organisation PAX was released today in Ottawa, together with the Cluster Munition Coalition and Mines Action Canada, to put pressure on Canada and other governments to put an end to these investments.

“It is an absolute outrage that financial institutions are investing billions into companies that produce weapons which are banned under international law”, says Suzanne Oosterwijk, author of the PAX report. “Canada has also banned these weapons. It is time for financial institutions to stop disregarding the international norm with these explosive investments into producers of illegal weapons that maim and kill civilians.”

Pre-selection process for Bank Asya sale extended for Saudi bank

The Savings Deposit Insurance Fund (TMSF) decided to extend the deadline for the preliminary qualification to offer bids in the sale of Bank Asya. Al-Rajhi Bank, Bank Al-Jazeera (BAJ), Al-Bilad Bank and Alinma Bank are the possible banks that asked for the one-week extension of the deadline from June 10 to June 17 to prepare the documents. According to Moody's, in the case that Bank Asya is sold to a well-known bank and strengthens its financial strength, it will be in a better condition to pay its debts to its creditors.

#Algeria plans to launch #Islamicfinance, push banking reform

Algeria is preparing to launch Islamic financial services as the OPEC member seeks new ways to raise money after a sharp fall in energy earnings. Algeria’s outdated financial system has been a barrier to investment as the government seeks to diversify its economy away from oil and gas, which account for 60 percent of the state budget. Boualem Djebbar, head of the state-run Banks and Financial Institutions Association, said a legal framework would need to be finalized before introducing Islamic financial services. Djebbar said developing the banking system had become inevitable, with a particular focus on electronic payment systems, which are still little used in Algeria.

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