Financial Institutions

Loan moratorium: Borrowers need to inform banks on consent, says finance minister

Malaysian borrowers who wish to continue with the six-month moratorium need to inform their respective banks of their consent via the banks’ designated platforms. Although the moratorium is automatic starting April 1, the borrowers’ consent is still legally required. Bank Negara Malaysia (BNM) said starting from May 1, bank customers with hire-purchase loans and fixed rate Islamic financing will receive a notification on the steps they must take to complete the deferment process under the six-month moratorium on loan and financing payments. Customers will be notified via SMS, email or registered mail from their banking institutions.

#Bahrain's Al Baraka Bank looks for acquisitions as coronavirus pandemic hits valuations

Bahrain's Al Baraka Banking Group plans to expand into India, China and Indonesia as the coronavirus pandemic pushes valuations down. The pandemic, which has tipped the global economy into a recession, slated to be the deepest since the Great Depression, has dented lending. Al Baraka Banking Group plans to setup a small commercial bank in China focusing on trade financing to capitalise on growing commercial ties. In Indonesia, the lender has already explored the possibility of taking a stake in Bank Muamalat three years ago and will continue to look for further opportunities. Al Baraka currently operates in Sudan, Turkey, South Africa, Algeria, Pakistan, Syria, Tunisia, Saudi Arabia and Lebanon.

#Bahrain’s Al Salam Bank exits $182.5 mln U.S. multifamily real estate

Bahrain's Al Salam Bank has sold a portfolio of seven multifamily assets in the United States for $182.5 million. Al Salam acquired the real estate assets in North Carolina and Texas in 2016. The bank said the sale price exceeds the original underwriting for the portfolio. Al Salam Bank’s head of private banking Ali Habib Qassim said the exit comes at an opportune time ahead of the uncertainty of the current COVID-19 crisis.

Bahrain Islamic Bank launches Tejoori Instant Finance

Bahrain Islamic Bank (BisB) launched the Tejoori Instant Finance service allowing customers to obtain instant finance within 5 minutes. According to BisB Chief Retail Banking, Dalal Al Qais, customers can get instant finance on amounts ranging between BD 200 and BD 2,000, which will be credited to their Saving or Current Account in less than 5 minutes. Customers will be required to pay upfront fees that vary between BD30 and BD70, depending on the required amount. They can choose a minimum tenor of three months up to a maximum tenor of 12 months to repay the amount with no profits. The monthly instalment will be deducted directly from the customer’s Tejoori account.

Temenos helps Yemeni bank to digitalise operations

Yemen’s Al Kuraimi Islamic Bank (KIB) is replacing its legacy IT systems with a single cloud-native, cloud-agnostic digital banking platform from Temenos. Temenos Infinity will support the delivery of hyper-personalised, omnichannel customer experiences and allow KIB to provide faster, seamless customer service. Temenos Transact will optimise KIB’s operations and enable the delivery of enhanced digital products with shorter timescales for delivery. Established in 2010, KIB has 1.2 million customers and is aiming to reach 5 million by 2023. Its goals include making financial services easily accessible across Yemen, supporting socioeconomic development, and raising the national standard of living.

#UK digital challenger bank Rizq eyeing summer launch

Rizq, a UK-based Islamic digital challenger bank is preparing for its launch this summer. Akmal Saleem, the fintech’s co-founder and CEO is positioning Rizq from the Muslim lifestyle perspective, so the new bank wants to solve mainstream banking issues for Muslims in the West. According to Saleem, Muslims in the UK still use conventional current accounts because they do not see a true alternative. Established in late February, Rizq will be both an app and web-based digital challenger bank. The company has applied for a license from the Financial Conduct Authority (FCA) and the registration is on track for acceptance by May 29. The digital challenger will offer a current account first and a premium account at a later stage. The company is working with a major card provider and will offer a debit card for both accounts.

#Oman's Taageer Finance and Sohar disclose 4.67m rial exposure to NMC

Oman's Taageer Finance and Sohar International Bank disclosed they have exposures to NMC Health. Taageer has a 1.23 million rial (Dh11.72m) exposure to NMC, while Sohar International Banke's exposure stays at 3.45m rials. Last week NMC was placed in administration by a UK court on the application of one of its biggest lenders, Abu Dhabi Commercial Bank. The joint administrators from turnaround advisory firm Alvarez & Marsal will take immediate control of NMC Health and will work on behalf of all stakeholders. In February, the UK’s Financial Conduct Authority launched an investigation into NMC's activities after the company's shares were suspended from trading on the London Stock Exchange.

#Bahrain’s Al-Salam Bank appoints new chairman

Al-Salam Bank-Bahrain has announced the appointment of Sheikh Khalid bin Mustahail Al-Mashani as the chairman of the board of directors. He is now replacing Khaleefa Butti bin Omair bin Yousif Al-Muhairi, who submitted his resignation as chairman and board member of the bank. Sheikh Khalid has more than 24 years of banking experience.

Maybank Islamic’s new Dubai branch sets out to attract Gulf investors to Southeast Asia

Maybank Islamic’s move into branch banking in the Middle East aims to attract Gulf investors to Southeast Asia. The Malaysian bank opened its first overseas branch at Dubai International Financial Centre (DIFC) in February. Maybank Islamic deputy CEO Nor Shahrizan Sulaiman said the new Dubai branch would serve as a the bank’s gateway not just to the UAE but to the wider GCC. The bank pursues further growth in Singapore and Indonesia, which it sees as home markets outside of Malaysia. The international business expansion is not new, as it has always been one of the focus areas of Maybank Islamic from early on. Maybank Islamic was granted a full Islamic banking licence from the Dubai Financial Services Authority last July, allowing it to open the DIFC branch. It replaces Maybank Islamic’s office in Bahrain, which has closed down.

Al Baraka Bank #Tunisia increases its net income by 256%

Al Baraka Bank Tunisia recently announced its financial results for the year 2019. The results revealed that the bank has moved forward with a net income that increased by 256% and total assets by 20% compared to the end of 2018. The Bank’s financial statements for the year 2019 show that the total income amounted to 133 million Tunisian dinars ($48 million), up 29% compared to the same period last year. After deducting all operating expenses, net operating income went up 54% to 30 million Tunisian dinars (US$11 million). The Bank also increased its shareholders’ equity by 9% to 174 million Tunisian Dinars (USD 62 million) at the end of December 2019.

Fitch Ratings: Coronavirus intensifies pressure on Qatari banks

The spread of the corona virus will pressure Qatari banks' asset quality and funding volatility could recur. As Fitch does not expect any changes in the Qatari authorities' ability to provide timely support all Qatari banks have a Stable outlook. The consequences of the coronavirus and lower hydrocarbon revenues will weaken government capital spending, which will in turn affect the operating environment. Fitch now forecasts Qatar's real GDP growth at minus 2% in 2020, after an estimated 0.6% positive growth in 2019. Qatari banks have adequate capital buffers but an increase in problem loans could erode these buffers quickly.

Dubai Islamic Bank shareholders approve 35 per cent dividend

Dubai Islamic Bank (DIB) announced that the Annual General Meeting has approved the bank’s 2019 financial statements and other tabled resolutions. For the year 2019, DIB reported a net profit of over Dh5.1 billion, the highest ever in its history. The shareholders also approved the dividend pay-out of 35 fils per share, increase in the foreign ownership limit in the bank’s share capital from 25% to 40% and the election of DIB Board of Directors. With the recent acquisition of Noor Bank, DIB is set to become one of the largest Islamic banks in the world, with total assets exceeding Dh275 billion ($75 billion).

Net profit of Emirates Islamic increases by 15 percent

In 2019, Emirates Islamic net income grew by 15% to stand at AED1.061 billion. Total profit rose by 8% to AED2.7 billion, and financing and investing receivables were at AED37.5 billion, climbed by 4% from end 2018. Customer deposits reached AED45.3 billion, which is a rise of 9% from end of 2018; recent and saving accounts balances show 63% of total customer deposits, as Emirates Islamic reported. Chairman Hesham Abdulla Al Qassim said the bank delivered strong results for the year, with net profit of AED1.061 billion, the highest ever in the bank's history.

Dubai Islamic Bank shareholders approve Noor Bank acquisition

Dubai Islamic Bank (DIB) received shareholder approval for the acquisition of unlisted Dubai-based Noor Bank. With the acquisition, DIB will become one of the largest Islamic banks in the world, with total assets worth 275 billion dirhams ($74.9 billion). Shareholders gave approval for the acquisition through an increase of DIB’s capital from 6.6 billion shares to 7.2 billion shares, with a share swap ratio of 1 new share in DIB for every 5.49 Noor Bank shares, translating into an issuance of about 651 million new DIB shares. The deal comes after a wave of mergers in the UAE’s banking sector on the back of tougher competition and regulation, coupled with a slowing economy and a slide in house prices.

#Qatar- Masraf Al Rayan subsidiary to establish digital bank in Astana International Financial Centre

Al Rayan Investment is working on the requirements of authorising a new bank with an expected paid-up capital of $10mn and an authorised capital of $20mn. The new bank is intended to be the first full-fledged digital bank in the Astana International Financial Centre (AIFC). Adel Mustafawi, Group CEO of Masraf Al Rayan said that Kazakhstan represents a new hub for Islamic finance in Central Asia, which offers considerable potential; while AIFC represents the optimal platform for Al Rayan. AIFC governor Dr Kairat Kelimbetov welcomes the decision of Al Rayan Investment to establish a fintech bank in AIFC. The new digital bank will focus on the development of Islamic banking products and investments facilitated by the application of cutting edge fintech products.

Family Bank in #Bahrain opens Seef headquarters

Bahrain's Family Bank has opened its new headquarters in the Diplomatic Area of Manama. The ceremony was attended by the bank’s board members, chief executives of contributing banks and economic personalities. The establishment of the Family Bank as a first social bank in Bahrain in 2010 aimed to boost the social security network by the activation of a micro loan-giving mechanism. The bank was set up through partnership between the Labour and Social Development Ministry, the Royal Charity Organisation, the Bank of Bahrain and Kuwait (BBK), Ithmaar Bank, Ahli United Bank and Kuwait Finance House (KFH). It won Shaikh Mohammed bin Rashid Al Maktoum’s award for supporting youth projects in 2013.

#Kenya: Djibouti's East African Bank Distance Self From Kenya Registered Bank

The East Africa Bank based in Djibouti has written to the Central Bank of Kenya raising concerns of a fraud using the bank's name and logo. Curiously, the logo, colours and the information on the website of the East African Savings Bank (EASB) are similar to those of the East Africa Bank based in the capital city of Djibouti. Both East Africa Bank and East Africa Savings Bank are apparently Sharia compliant. The East Africa Bank has already reported to the Central Bank of Kenya as well as the Banking fraud investigations unit for further action. The East Africa Bank believes this is a fraudulent misrepresentation and urges all customers to avoid dealing with the said entity.

Abu Dhabi Islamic Bank to cut jobs as it seeks to save $136m

Abu Dhabi Islamic Bank (ADIB) is considering cutting jobs and closing branches as part of a series of cost-cutting measures. The cutbacks come as ADIB announced a growth of 4% in net profit for 2019 to AED2.6 billion while group net revenues increased by 2.5% to AED5.9 billion. Net profit margin was 4.25%, despite lower rates in the market, helped by the positive impact of the low cost of funds. The UAE economy is coming under pressure from regional geopolitical tensions and weak domestic demand, while business conditions worsened for the first time in over a decade. ADIB joins competitors such as First Abu Dhabi Bank (FAB) and Emirates NBD in cutting jobs.

Al Baraka Bank leveraging a robust global network

In this interview Adnan Ahmed Yousif, President & Chief Executive of Al Baraka Banking Group reviews the group’s 2019 results. Overall, Al Baraka Bank maintained its healthy financial performance despite the lower-income. However, Al Baraka's adherence to its conservative approach to set aside hedging provisions for all its units resulted in a 14% decrease in net income attributable to shareholders during the third quarter. In 2019 the bank launched the Al Baraka Global API website, a step towards innovation in open banking. Al Baraka Banking Group also inaugurated a new fintech company which focuses on e-payments ‘alneo’ in Turkey through its Turkish subsidiary. The bank’s units opened six new branches, taking the total number of branches to 703. Yousif is planning to enter new markets in the coming period through the presence in the Indonesian and Chinese markets, expansion in East Asia, as well as Africa.

#Bangladesh's Islamic finance industry keeps booming with no slowdown in sight

The central bank of Bangladesh approved applications from two domestic banks, Standard Bank and NRB Global Bank, to become fully Islamic banks. The two banks so far only operated Islamic windows but sought to convert to fully-fledged Shariah-compliant banks to enlarge their scope of product offerings. NRB Global Bank said it plans to change its name to Global Islami Bank to underscore its new role. The move brings the number of fully-fledged Islamic banks in Bangladesh to ten, with the others being Al-Arafah Islami Bank, Islami Bank Bangladesh, Exim Bank, Social Islami Bank, Shahjalal Islami Bank, Union Bank, First Security Islami Bank and ICB Islamic Bank. Analysts note that the industry has still high potential for further expansion as Bangladesh enjoys a vibrant economy with GDP per capita having more than tripled over the past decade.

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