Europe

QInvest, Luxembourg host workshop to focus on Shariah finance themes

Luxembourg for Finance and QInvest are hosting an Islamic finance workshop next week in the European country to debate some of the pressing themes in the Shariah finance industry.
The event, which will be held November 24, will bring together investment fund professionals, bankers, corporate houses and industry practitioners to discuss sukuk issuance and ways of promoting the Shariah bond market as well as the emergence of Islamic high yield financing as an alternative.
The workshop will have presentations from several senior officials of QInvest as Hani Ibrahim, head of Debt Capital Markets; Alexander Armstrong, head of Financial Institutions and Structured Finance; and Dr Ataf Ahmed, head of Asset Management.
They will be joined by Luxembourg and international panellists, including the chief executive of Luxembourg Stock Exchange.

Borsa Istanbul's Islamic investment success story

The Borsa Istanbul Private Market, a year-old platform for bringing companies and investors together, is a leading example of Islamic finance, the exchange’s CEO Tuncay Dinc has said.
Speaking at the G20 forum on Islamic finance on Wednesday, Dinc said: “The Islamic finance approach to risk- and profit-sharing makes it an important resource for investors who seek the greater security that this kind of finance affords.”
Islamic finance, which does not involve charging or paying interest, uses a model in which trade is backed by real assets and money is merely a medium of exchange rather than a commodity to be traded.
Under this system, the funds invested are used on a profit-and-loss sharing basis under models known as musharakah – a joint enterprise where risk and rewards are shared rather than interest paid on a loan – and mudarabah, where one party supplies funding and an agent manages a specific trade.

Albaraka Turk gets feedback in 10 % area for capital-boosting sukuk -sources

Turkish Islamic bank Albaraka Turk has received initial pricing feedback in the 10 % area for a potential U.S. dollar-denominated sukuk issue which would bolster its supplementary or Tier 2 capital, sources familiar with the matter told Reuters on Thursday.
The lender has received indications of interest totalling over $250 million, including those from joint lead managers, for the ten-year non-call five sukuk, the sources said. A potential deal is expected early next week subject to market conditions, they said.
Albaraka Turk, a unit of Bahrain-based Al Baraka Banking Group, has chosen Barwa Bank, Dubai Islamic Bank, Emirates NBD, Nomura, Noor Bank, Standard Chartered and QInvest to arrange the sukuk issue.

Kuveyt Turk says mandates banks for sukuk

Turkish Islamic bank Kuveyt Turk has mandated six institutions for a sukuk with a value of up to $400 million with a maturity of 10 years, it said in a statement to the Istanbul stock exchange late on Thursday.
Kuveyt Turk Participation Bank, which is 62 percent owned by Kuwait Finance House, said it had mandated KFH Capital, Dubai Islamic Bank, HSBC, Noor Bank, QInvest and Emirates NBD as joint lead managers. Sources familiar with the matter told Reuters in September that seven banks had been picked to arrange a potential deal.

Albaraka Türk picks long bank list for Basel III tier two

Albaraka Turk Kat?l?m Bankas? (Albaraka Türk), has mandated seven banks to arrange a Basel III compliant Reg S tier two subordinated sukuk — only the second from Turkey and the first in sukuk format.
The roadshow for the bond starts on Friday, with meetings taking place in Europe, Asia and the Middle East.

Najib: Global Islamic Mega Bank Has Yet To Materialise

The idea of having a common currency and a global Islamic mega bank among the Muslim countries is quite remote at the moment and the focus should be on increasing intra-trade, said Prime Minister Datuk Seri Mohd Najib Razak.
Najib said while talks of having a mega global Islamic bank have been on the table for some time, the idea has not materialised.
“There have been some attempts to establish a global Islamic mega bank, but it has not materialised yet. I think there are some challenges to be put together, in a serious fashion, for a mega Islamic bank. Effort should continue,” he said at a press conference at the World Islamic Economic Forum (WIEF) in Kuala Lumpur yesterday.
Najib cited the example of the European Union’s (EU) challenges in adopting a common currency as a reason why the idea of a common currency among Muslim countries is remote.
“I think it is quite remote to have a common currency among the Muslim world. I don’t think we should imply to go down the path as EU was also at the point of breaking up at one time. It is not a feasible option but what we can do is increase the intra-trade among Muslim countries.

QInvest net profit up 69 % in third quarter

QInvest, Qatar’s leading investment group and one of the most prominent Islamic financial institutions globally, yesterday announced that its net profit for the third quarter grew 69 % to $33.8m while revenues jumped 37 % to $78.7m.

“We are very encouraged by our performance during the third quarter of 2015. With our commitment to drive growth and innovation across the business, we have continued to source new opportunities, strengthen our brand and deliver positive returns. Whilst we expect on-going market volatility and economic challenges to remain present, we are confident on the outlook for the business. We have an exciting active pipeline of deal flow and a unique market position to leverage investment opportunities across the GCC region and selected markets in Europe, Asia and the US” said Tamim Hamad Al Kawari, CEO of QInvest.

Islamic finance gains traction in search for alternative models

Islamic financing is gaining traction even among non-Muslim countries in a bid to use sustainable and equitable form of alternative models, the Malaysian Prime Minister said on Tuesday. London issued its second Islamic sukuk after its first bond issue was oversubscribed 14 times. In addition to London, Luxembourg and South Africa, Hong Kong has also issued sovereign sukuks.
“Ever since the global financial crisis in 2007-08 there has been a sharp demand for alternative economic and business model that reduces the level of speculation as conventional model that has inherent weakness,” Najib Razak told journalists. “Over-leveraging is believed to have been the root cause of the disaster — but again, that is prohibited in Islamic finance. As a result, Islamic banks remained strongly capitalised and resilient against financial market volatility, while continuing to contribute positively to equitable and sustainable growth,” he said.

Islamic finance captures real estate market in UK

With Islamic finance entering London’s financial market and billions of dollars of investment in the UK and global real estate coming from Gulf Cooperation Council countries and other Muslim jurisdictions, the UK government was one of the first in the West that started propelling initiatives on Islamic financing vehicles for property purchases as early as in 2013. Meanwhile, Islamic financing facilities have become so popular for real estate transactions in the UK undertaken by Arab investors that the next International Real Estate Finance Summit, the premier real estate event in the UK scheduled to take place on December 1 and 2, 2015, in London, will entirely focus on the opportunities Shariah-compliant finance vehicles entail for property financing.

Who benefits from sovereign debt crises?

Even though the struggle over Greece’s bailout has receded from the news, with many countries carrying large debt burdens, the need to restructure sovereign debts is not going away. But as Greece illustrates, the recent pattern has been to try to get blood from stones, and to be indifferent to the very real risk of turning fragile economies with weak governments into failed states (it must also be pointed out that Greece actually has gotten a lot of debt relief, but in the form of lowering of interest rates and extensions of maturities, but is being held to such unrealistic government budget and labor market “reform” targets as to virtually that the debt to GSP ratio will continue to worsen).

Iran's Saman Bank to enter Turkish market

After Bank Mellat obtained the right to expand its operations in Turkey in March 2014, Iran's Saman Bank has also applied to the Central Bank of the Republic of Turkey (CBRT) and the Banking Regulation and Supervision Agency (BDDK). The BDDK is now considering the Iranian bank's request; BDDK is expected to issue a reply around New Year's. Bank Tejarat and Pasargad Bank are also expected to reapply to be involved in the Turkish finance market after Saman Bank's application is approved. The approval of the expansion request of Bank Mellat, which had not been operationally active in Turkey due to sanctions and had downsized in 2012, also raised hopes for other banks.

Noor Bank plans Sharia-compliant European stock index

Noor Bank is all set to launch a Sharia-compliant and Sustainable Equity Index-linked investment, targeted at the bank’s high-net worth and priority banking customers, the bank’s treasurer Damian White said. Under the new index, the bank will offer its clients a basket of 20 chosen Sharia-compliant European equities screened for sustainability measures. The 100 per cent capital protected investment offers a fixed coupon for the first two years and the uncapped index performance at maturity at the end of three years. The format of the investment is through an Islamic structured deposit.

3rd Mediterranean Islamic Finance Forum to take place in Spain

The General Council for Islamic Banks and Financial Institutions and the Association of the Mediterranean Chambers of Commerce and Industry (ASCAME) and the Chamber of Commerce of Barcelona are co-organising the 3rd Mediterranean Islamic Finance Forum, themed “Building Bridges” on the 27th of November 2015, at Casa Llotja de Mar in Barcelona, Spain. This 3rd Edition will play a key role in building bridges for capital flows between Europe, the Middle East and beyond. It will bring together business leaders, policy makers and regulators to discuss challenges and opportunities for the Mediterranean region to tap into Islamic finance as a key source for Infrastructure projects and Small and Medium Enterprises (SME) financing.

Albaraka Turk picks arrangers for capital-boosting sukuk- sources

Turkish Islamic bank Albaraka Turk has reportedly picked seven arrangers for a potential dollar-denominated sukuk to bolster its supplementary or Tier 2 capital. The lender is expected to raise around $250 million, and the sukuk issue is planned before the end of the year. Albaraka Turk has chosen Barwa Bank, Dubai Islamic Bank, Emirates NBD, Nomura, Noor Bank, Standard Chartered and QInvest to arrange the sukuk issue. The bank, a unit of Bahrain-based Al Baraka Banking Group , didn't immediately respond to a request for comment.

QNB in preliminary talks to buy Turkey’s Finansbank

In a statement to the Qatar Exchange, QNB revealed its involvement as a potential bidder for Finansbank, the National Bank of Greece’s Turkish banking subsidiary. Established in 1987, Finansbank operates 654 branches and has more than 12,000 employees. The bank’s total assets in H1 2015 reached TRY 82.45 billion. The bank was acquired by National Bank of Greece in 2006. QNB has also recently investigated the possibility of taking over KFH Malaysia. However, a bourse statement on 22 September said the bank had stopped preliminary talks to acquire Kuwait Finance House (Malaysia) without reaching an agreement.

EIIB-Rasmala expands real estate investment business, acquires property in UK

European Islamic Investment Bank plc (EIIB-Rasmala) has announced the expansion of its real estate business. Simultaneously, the Group has also announced the acquisition of a commercial office building for GBP 11.8 million ($17.9 million, AED 65.9 million), located on the Doxford International Business Park. The real estate division will focus on identifying high quality, income generating opportunities in the UK, Europe and the United States. The primary focus will be on the UK. The Group expects to invest approximately $1.5 billion in a broad mix of real estate transactions over the next three years, with $750 million being allocated for investments in the UK.

Interview: Richard Bishop: Complex and compliant

Cobalt Underwriting founder Richard Bishop has talked about why he launched London's first Islamic insurance managing general agent – and why London needs to stay relevant. It was back in 2007, when Richard Bishop was working in general broking, that a chance conversation with a Muslim cleric sewed the seed of a business idea that would grow to become the London market’s first Islamic insurance managing general agent.

Al Rayan Bank commits to Birmingham

Al Rayan Bank is renewing its commitment to Birmingham as it gets set to relocate to a new head office in Edgbaston. The bank has purchased offices in Calthorpe Road and will move 100 of its employees from its current leased offices later this month. In February 2014, Al Rayan Bank was acquired by Masraf Al Rayan, the second largest Islamic bank in Qatar by market value. A rebrand followed before the bank posted its financial performance. In 2014, the bank’s operating income increased by 168%, customer financing increased by 86% and retail deposits increased by 59%. The bank also transformed a £5.5m loss in 2013 to an after tax profit of £1.2m.

Kuveyt Turk picks arrangers for capital-boosting sukuk - sources

Turkish Islamic bank Kuveyt Turk has picked seven banks to arrange a potential dollar-denominated sukuk to bolster its supplementary or Tier 2 capital. Kuveyt Turk Participation Bank, which is 62 percent owned by Kuwait Finance House, is planning to issue the sukuk after the Muslim festival of Eid al-Adha which begins this week. Kuveyt Turk has picked KFH Capital, Abu Dhabi Islamic Bank, Dubai Islamic Bank, Emirates NBD, HSBC, Noor Bank and QInvest to arrange investor roadshows ahead of the potential issue. The lender is expected to raise around $400 million.

Turkey's Albaraka raises $450 mln in Islamic loan deal

Turkish Islamic bank Albaraka Turk has secured a $450 million dual-tranche murabaha loan, the proceeds of which will be used to expand its financing activities in the country. The bank closed a $278-million portion and a 154.5 million- euro ($174.7 million) tranche in the 367-days and 733-days tenures paying profit margins of 1.1 and 1.25 percentage points over the London interbank offered rate/Euro interbank offered rate respectively. Sixteen investors participated in providing the murabaha facility from Europe and the Middle East and North Africa region. Due to the oversubscription, Albaraka Turk decided to increase the facility size to $450 million instead of $400 million as originally planned.

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