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Dubai Islamic Bank Group (DIB) today announced that its Long Term Issuer ratings have been affirmed by Moody’s at Baa1 and the outlook has been moved to “Stable”. The confirmation of DIB’s ratings reflects the recent capital injection and the expectation that asset quality pressure will ease which, in turn, should support profitability, according to Moody's. Morover, the systemic importance of the bank to the banking sector and the government ownership of 34% were also cited as some of the factors for the decision. Moody’s also affirmed the long term issuer ratings of Tamweel, which is a subsidiary of the bank (86.5% owned by DIB) at Baa3 and with the recent move by DIB to take over the company, Tamweel’s outlook on ratings has been upgraded to “Positive.”
BMI Bank , the Bahrain based associate of Bank Muscat , has announced that they have agreed in principle in favour of a merger with Al Salam Bank, an Islamic Bank incorporated in Bahrain. The completion of the transaction, including final share-swap ratio, is subject to satisfactory due-diligence as well as regulatory and shareholder approvals, Bank Muscat said in posting on the website of the Muscat Securities Market. Bank Muscat has a shareholding of 49 per cent in BMI bank.
Stuart Crocker, global head of private banking and wealth management at Abu Dhabi Islamic Bank and Merrill Lynch veteran, has left the bank. Regional private banks were supposed to be making a challenge to the dominance of big international players and Crocker was one of the landmark hires to bolster the case for the local Banks. Crocker joined Abu Dhabi Islamic Bank (ADIB) in May 2011 as global head of private banking and wealth management. Apparently, there is no replacement lined up and Crocker's exit comes amid a change of strategy at the bank. ADIB didn't respond to requests for comment.
A new bank is set to be inaugurated in the Gaza Strip next week, although it has not yet received the necessary licence from the Ramallah-based Palestinian Monetary Authority (PMA). The Al-Intaj bank has a capital of $20m and a board of directors chaired by Kuwaiti businessman and member of the International Islamic Fiqh Academy, Dr Riyadh Al-Khulaifi. The bank... will be headquartered in Gaza City and have branches in other parts of Gaza Strip in the coming years. 50% of its capital will be channelled to production-oriented activities, while 40% will be allocated to the traditional transactions. The remaining 10% will be set aside to the 'murabahat' (Shari'ah-compliant transactions), the lender's deputy board chairman Rushdi Wadi said.
The Islamic Development Bank's Board of Governors (BoG) has approved to more than triple the Bank's authorized capital to 100 billion Islamic Dinars (about US$150 billion) from 30 billion. The BoG also increased the Bank's subscribed capital from 18 billion to 50 billion Islamic Dinars. The capital increase reflects the Bank's strong balance sheet and the growing economic development needs of its 56 member countries. The Bank also announced it will immediately tap the public market with a US$1 billion offering of sukuk. The five-year offering is rated Triple A by each of the three major bond rating agencies (Standard & Poor's, Moody's and Fitch), and will be dually listed on the London Stock Exchange and Bursa Malaysia. The Bank has been designated as a Zero Risk Weighted Multilateral Development Bank by the Basel Committee on Banking Supervision and the Commission of the European Communities.
The Department of the Treasury has lifted sanctions against the Elaf Islamic Bank in Iraq following the bank’s significant and demonstrated change in behavior. On July 31, 2012 the Treasury Department imposed sanctions under the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (CISADA), against Elaf Islamic Bank for knowingly facilitating significant transactions and providing significant financial services for the U.S. and EU-designated Export Development Bank of Iran (EDBI). Following the CISADA finding, Elaf immediately began an intensive course of action to stop the conduct that led to the CISADA sanction. Now, U.S. financial institutions are once again permitted to open or maintain correspondent accounts or payable-through accounts in the United States for Elaf Islamic Bank.
Moody's Investors Service has downgraded Kuwait Finance House's (KFH) long term ratings by one notch to A1 from Aa3. Moody's also downgraded KFH's baseline credit assessment (BCA) and bank financial strength rating (BFSR) by two notches to ba1/D+ from baa2/C- respectively. The Prime-1 short term rating was confirmed. All ratings assigned to KFH carry a negative outlook. The rating actions reflect (1) continued asset quality pressures (2) an increasing reliance on volatile investment income and (3) the current organisational complexity and overall risk profile inconsistent with global peers. The rating action concludes the review for downgrade initiated for Kuwait Finance House on 7 November 2012.
Bahrain-based Al Baraka Banking Group (ABG) announced net income increased by 15 per cent to $66 million, and total operating income by 16 per cent to $233 million in the first quarter of 2013 compared to the same period of 2012. Total assets increased by 2 per cent and amounted to $19.5 billion. Total deposits including equity of investment accountholders grew by 2 per cent while total financing and investments remained unchanged at the end of March 2013 as compared with the end of December 2012. According to the group's CEO Adnan Ahmed Yousif, the good results are due to the bank's initiatives like introducing more innovative products, expanding the branch network of ABG subsidiary units, and entering new markets as well as modernizing and developing the group's infrastructures.
The Board of directors of Jordan Islamic Bank that is represented by Mr. Adnan Ahmad Yousif approved the financial statements of the 1st quarter of the current year. The Bank has achieved net profits after tax that amounted to $14.67m compared to $10.16m during the same period last year. Shareholders' equity at the end of the first quarter of the current year increased by 4.6% to reach about $336.95m. The Bank's assets with the managed accounts added to (restricted investment accounts and Muqarada bonds) amounted to about $4.67bn. Customers' deposits (including managed accounts) at the end of the 1st quarter of the current year reached approximately $4.200bn. Mr. Adnan Ahmed Yousif expressed his satisfaction over the results the Bank.
Arab Bank recently issued its annual sustainability report for the third consecutive year; the report is a summary of the bank's performance and achievements on the social, economic and environmental levels for the year 2012. Arab Bank is the first Jordan based bank to issue a sustainability report at international standards. It focuses in detail on the internal programs adopted by the Bank, such as the integration of certain environmental and social criteria, in addition to the implementation of a number of initiatives that aim to reduce greenhouse gas emissions and also increase internal awareness levels. Also covered in the report are the Bank's social contributions, in addition to the participation of the Bank's employees in volunteering activities and capacity building programs for non-profit organizations.
Bahrain-based Islamic investment bank Gulf Finance House (GFH) reported a 50 per cent increase in net profit at $1.5 million for the first quarter this year. Total income for the period was at $11.1m. Income was primarily from fees from funds under management and a profit of $4.9m from repurchase of debts at discount. The bank's strategy of streamlined operations continued to bear results with a 30pc reduction in operating costs for the current quarter at $8.3m compared with $11.9m in first quarter of last year. GFH acting chief executive Hisham Al Rayes said GFH Capital undertook due diligence on a number of potential strategic investors for Leeds United FC and exit arrangements for Mega City Navi Mumbai focusing on profitable growth.
A consortium of Gulf-based banks has announced the successful closing of a $230.5 million and a euros 115.3 million syndicated dual-currency Murabaha financing facility for Turkish Bank Asya. Launched at $225 million, the facility was oversubscribed to close at $382 million equivalent with participation from 28 banks from across the globe. The facility carries a profit rate of 125 bppa over the relevant benchmark. The proceeds from the facility will be used by Bank Asya to expand its financing activities in Turkey. ABC Islamic Bank, Barwa Bank, Emirates NBD Capital, National Bank of Abu Dhabi, Noor Islamic Bank and Standard Chartered Bank were the Initial Mandated Lead Arrangers and also the Bookrunners for the deal.
Shares in Turkey's Gozde Girisim were up 9.49 pct to 4.50 lira, its upper limit for the session, after it mandated asset manager Unlu to sell its 11.57 percent stake in Turkish Islamic lender Turkiye Finans. Turkiye Finans is majority owned by Saudi Arabia's National Commercial Bank, and Gozde by Turkish conglomerate Ulker.
Brandon Short, a former Goldman Sachs investment banking executive for MENA, will join with two former senior executives from Deutsche Bank to form World Business Partners UAE ("WBP"), a small business finance company based in Dubai. The other co-founders of WBP are Doug Naidus, former Managing Director and Global Head of the Residential Lending Division of Deutsche Bank, and former Chairman and CEO of MortgageIT, and Alex Gemici, former Managing Director and Head of MENA Residential Finance for Deutsche Bank. World Business Partners UAE will offer a Shariah-compliant financing solution ranging from AED 35,000 to AED 1.5 million for small businesses seeking working capital. WBP’s ijara asset sale-leaseback program allows SMEs to use the cash equity of their existing assets to fund their businesses’ growth and expansion.
Liquidity Management Centre (LCM) has announced its results for the first quarter ended 31st March 2013. The insitution recorded a net profit of USD 1.427 million compared to a net profit of USD 0.511 million for the same period of the year 2012 resulting in a 179.25% increase in the net profit. The average interbank rate remains below 0.5%. Moreover, the total operating income recorded an amount of USD 3.181 million in comparison to USD 1.958 million for the same period in 2012. The positive results were due to various advisory services provided for transactions for Islamic Banks and corporations in the region and a portfolio of Sukuk and equities with a diversified investment approach. The Bank's balance sheet witnessed significant improvement in quality and liquidity. Furthermore, the Shareholders' equity increased by 2.7% during the same period.
Arcapita Bank yesterday announced that a US court has approved the disclosure statement for the amended Chapter 11 plan of reorganisation. The court's decision relates to the adequacy of the disclosures in the disclosure statement about the company and the plan, and the process for voting on it. In early May, the plan will be submitted to creditors for a vote, and following this, presented to the US court for confirmation. A hearing to confirm the plan has been scheduled before the US court for June 11. The provisions of Chapter 11 allow the filing companies to continue to operate their businesses and manage their properties under the direction and control of their boards and management.
Qatar-based bank Masraf Al Rayan is in the final stages of due diligence to acquire a stake in a Libyan lender. According to the group chief executive Adel Mustafawi, after preparing the required studies, a memorandum of understanding will be signed before proceeding to secure the required approvals from the authorities in both Qatar and Libya. Shareholders of Rayan had approved in February its plan to buy a stake in a Libyan lender, while also voting to give the board of directors control over a QR1bn ($275mn) war chest to make acquisitions over the next two years. Moreover, the bank has also made significant progress in fulfilling the requirements of acquiring a stake in Islamic Bank of Britain.
Arcapita Bank and its debtor affiliates have filed a first amended joint plan of reorganisation and a related disclosure statement in their Voluntary Chapter 11 cases in the US. The agreements implemented by the plan allow for the orderly sale of the portfolio investments at a time and price that maximises recoveries for both Arcapita's creditors and its investors. The plan avoids expensive litigation and facilitates a prompt emergence from bankruptcy. A hearing on approval of the proposed disclosure statement related to the amended plan is scheduled before the US Court on April 26. A confirmation hearing date has not yet been scheduled.
Standard & Poor's Ratings Services said that it has assigned its 'A-1' rating to International Islamic Liquidity Management 2 SA's US$500 million Islamic finance program. The vehicle has been established with the sole purpose of purchasing sovereign, sovereign-linked or supranational sukuk assets with long-term ratings that correspond to an 'A-1' rating. In addition, the vehicle is to issue short-term Sharia-compliant certificates with maturity profiles of less than one year. IILM will act as the program administrator of the vehicle.