Financial Institutions

#Pakistan updates guidance for Islamic banks' external #audits

Pakistan's central bank has updated guidance on sharia governance for Islamic finance institutions. The goal is to expand the scope of external audits to help mitigate conflicts of interest and increase transparency. Those religious scholars who are members of an Islamic bank's sharia board are now barred from serving in any external audit firm. From now on, external sharia audits will have to cover pool-management practices and technology systems. This includes the way Islamic banks calculate distribution of profit and loss to depositors, the tracking of assets, and the allocation of income and expenses. The move is designed to separate the verification of profit and loss distribution between the banks and the external auditors, in contrast to the joint verification that was allowed under earlier guidance.

Maybank Islamic launches new products to boost deposit base

Maybank Islamic hopes to attract RM2 billion (USD453 million) in deposits – within a year – by launching two new financial products. The products are Foreign Currency Mudharabah-i (FCM-i) and the Profit Now Account-i (PNA-i). FCM-i is a short-term Islamic foreign currency term deposit account based on the principle of Mudharabah. Dividends on FCM-i are based on an agreed profit-sharing ratio which is agreed up-front. The actual dividend will then be calculated on this ratio and the amount payable will be known upon maturity of the investment. The minimum deposit for individual customer is equivalent to USD5,000; tenures range from one to 12 months.

Discussion - Islamic Finance: what it means & the opportunities for the UK post-Brexit

Wednsday 5th April 2017: 18:00 – 20:30. Discussion starts promptly at 18.30

PwC, 1 Embankment Place, London WC2N 6RH, United Kingdom.

The Committee of IoD City of London in partnership with The British Malaysian Society invites IoD members
and guests to a discussion on ‘Islamic Finance: what it means & the opportunities for the UK post- Brexit.

The Islamic Finance Industry is predicted to reach $2.7 trillion in 2017. Islamic Banking contributes
80% to a total of $2.3 trillion. Other components of Islamic Finance include Sukuk Bonds (14%), Asset
Management (3%), Insurance (2%) and Micro finance (1%). Source for all figures – Centre of Islamic
Banking and Economics.

Our speakers are:
• Dato’ Faiz Azmi – Chairman, PwC Malaysia and Global lead
• on Islamic Finance for PwC
• Andrew Gosnay, Head of Banking and Finance,
Laytons Solicitors LLP
• Iqbal Asaria CBE , Islamic Finance expert and
Special Advisor to the Muslim Council of Britain
on business and economics affairs

After the panel presentations there will be opportunities for Q & A and discussion, followed by a drinks reception.

The evening is kindly hosted by PwC London. Dress code is business wear.

Bhaimia named CEO of Asian Finance Bank

Asian Finance Bank (AFB) has appointed Khalid Mahmood Bhaimia as its new chief executive officer effective from March 21, 2017. Bhaimia has over 20 years of experience in the global Islamic banking industry. He previously served as the CEO of Unicorn International Islamic Bank and RHB Islamic Bank as well as Hong Leong Islamic Bank’s managing director. AFP is a full-fledged Islamic bank and is backed by a consortium of shareholders comprising Middle Eastern financial institutions.

BRIEF-Abu Dhabi Islamic Bank appoints Khamis Buharoun as acting CEO

On March 15 Abu Dhabi Islamic Bank appointed Khamis Buharoun as acting CEO. The appointment of acting CEO Khamis Buharoun is in context of CEO Tirad Marouf Al Mahmoud's medical leave.

Islamic Bank invites financial institutions to invest in it

Islamic Bank of Thailand plans to set up an asset management team to handle its Bt48 billion in non-performing loans. The bank also plans to invite 35 financial firms to invest in the bank to restructure its business and boost its new loans, which stand at Bt30 billion. Chairman Chaiwat Utaiwan said Islamic Bank aimed to sell its 74.5% stake in the bank, the remaining stake is owned by Finance Ministry. According to its restructure plan, the bank needs new capital of Bt20 billion in order to adhere to Bank of Thailand standards. The bank has outstanding loan worth Bt95 billion.

#Bahrain's GFH banks says it may merge with Dubai's Shuaa Capital, others

Bahrain's GFH Financial Group may merge with Dubai-based Shuaa Capital, GFH said in a statement. A web of ties between GFH and Shuaa began forming last year. In May, Abu Dhabi Financial Group (ADFG) and GFH said they were jointly setting up an Islamic bank called ADCorp with initial capital of $100 million. In November, ADFG bought a 48.36% stake in Shuaa, which has a market capitalisation of about $535 million. In December, Shuaa bought 14% of Bahrain's Khaleeji Commercial Bank for $25 million. GFH owns 47% of Khaleeji. On Sunday, Shuaa said it would acquire Integrated Capital and Integrated Securities, both controlled by ADFG. Integrated Capital owns 11.74% of GFH. ADFG officials did not respond to requests for comment about the possible merger.

No #mergers likely in #UAE’s Islamic banking industry, says Noor Bank CEO

Noor Bank CEO Hussain Al Qemzi has ruled out possibilities of any possible mergers in the UAE’s Islamic banks. The last merger is between First Gulf Bank and National Bank of Abu Dhabi, expected to complete by end of first quarter 2017. The merged entity is likely to create one of the largest banks in the Middle East and Africa, with assets of $175 billion (AED642bn). Al Qemzi said Islamic banks need innovation to integrate and position themselves to offer value and a better choice for Muslim and non-Muslim customers in order to grow. The CEO said a shortage of Sharia scholars was also impeding growth of the Islamic finance industry with many institutions in the country sharing advisors.

Why do #Iranian #banks remain stuck with toxic assets?

On Feb. 26 the Iranian government got the parliament approval to sell a total of 10 trillion rials ($308 million) worth of excess properties owned by its ministries. The raised money is expected to help shore up the troubled Post Bank of Iran and the Cooperative Development Bank. According to economic newspaper Donya-e Eqtesad, toxic assets account for 40-45% of total banking assets in the country. Nearly 15% of these assets consist of immovable assets such as land and buildings. The rest consists of nonperforming loans and government debt. The sale of at least 33% of the surplus assets could have taken place in the fiscal year running to March 20, but banks eventually decided to find a legal way to postpone the sale process. Real estate expert Farhad Beizaei accused banks of wasting time so that they can sell properties at higher prices next year.

Islami Bank is not operating in Islamic way: Ibrahim Khaled

According to Bangladesh Bank's former deputy governor Khondkar Ibrahim Khaled, Islami Bank Bangladesh speaks about Islamic banking, but it does not act in that way. In his view, the private bank is not following Islamic banking rules of keeping customers as partners of profit or loss. He also alleges that remittances are dropping due to 'dishonest' mobile banking abroad. The statements were made at a seminar in Dhaka where several professors of Bangladesh Institute of Bank Management (BIBM) were present. Khaled said that remittances were dropping because money is being sent through illegal channels in the name of bKash. He advised the Bangladesh Bank to open a new wing to research mobile banking in order to stop transactions outside banking channels. In a research paper published at the seminar, it was said that a large section of the customers of Bangladesh's banks did not have clear ideas about the sector.

Jaiz Bank officially lists on #Nigerian Stock Exchange

Jaiz Bank is now a public quoted company listed on the Nigerian Stock Exchange. To commemorate the listing, Jaiz Bank’s Executive Management, led by Chairman Dr Umaru Abdul Mutallab, were honoured with a closing gong ceremony to officially close trading on the bourse for the day. Hassan Usman, Jaiz Bank's CEO noted that the listing of the bank’s shares was a fulfillment of an earlier promise made at inception of the Bank. He added that the listing would elicit public confidence that Non-Interest Banking provides alternative model that contributes to the socio-economic development of the country. Oscar Onyema, CEO of the Nigerian Stock Exchange, said this listing would promote liquidity for the bank, enhance its value and increase its transparency.

BankIslami signs strategic alliance with CompareOn

BankIslami Pakistan and fintech startup CompareOn Pakistan have signed a strategic alliance that will further enhance BankIslami’s reach. CompareOn Pakistan provides the online comparison platform Karlocompare.com.pk, which delivers product information and enables customers to apply without the need of visiting or calling BankIslami branches. The agreement was signed by Sumair Farooqui, CEO of CompareOn Pakistan and Yasser Abbas, Head of Islami Auto Finance. Speaking on the occasion, Sumair Farooqui said CompareOn Pakistan intends to serve the growing customer base of Auto Financing Industry and contribute to enhancing awareness around BankIslami’s products.

#Morocco central bank okays five Islamic financial products

Morocco's central bank has approved the use of five types of Islamic banking transactions. This means a final regulatory nod for the country to launch an Islamic finance industry. The central bank has recently set up a central sharia board to oversee the sector. The five approved transactions include murabaha, musharaka, ijara, mudaraba and salam. The central bank also set regulations for conventional banks to open windows selling Islamic products. It had given regulatory approval to three major Moroccan banks to open Islamic subsidiaries: Attijariwafa Bank, BMCE of Africa and Banque Centrale Populaire, as well as to smaller lenders Credit Agricole and Credit Immobilier et Hotelier. Subsidiaries of Societe Generale of France, Credit du Maroc and BMCI have also won permission to sell Islamic products.

Qatar International Islamic Bank, CIH to Launch Islamic Bank in #Morocco

In partnership with the Moroccan Crédit Immobilier et Hotelier bank (CIH), Qatar International Islamic Bank (QIIB) will launch Umnia Bank, a joint Islamic financial institution. Licensing for the Umnia Bank had already been issued by the Central Bank of Morocco. According to QIIB chairman Sheikh Dr Khalid bin Thani bin Abdullah al-Thani, QIIB is now closer to formally launching the activities of Umnia Bank. He expressed his happiness to reach this stage and stated that Umnia Bank looks to be the best Islamic bank in Morocco. He added that QIIB is determined to contribute to the growth of the Moroccan economy.

Gatehouse set to move into Islamic mortgages after Haresnape hire

Gatehouse Bank looks set to expand into Islamic mortgage lending after registering two trademarks for shariah-compliant loans. The lender bought the trademarks for Gatehouse Mortgages and Milestone Mortgages last week. Gatehouse is currently known for shariah-compliant real estate investment and financing. Last month Gatehouse announced it had hired Aldermore group managing director of mortgages Charles Haresnape. Haresnape will join Gatehouse later this year. A Gatehouse spokesman declined to comment.

Fitch: Slower #UAE Islamic Bank growth will weaken asset quality

According to Fitch Ratings, a slowdown in Islamic financing growth in the UAE will reveal a deterioration in banks' asset quality as portfolios season more quickly. This will start to become evident as banks report their 2016 results. Financing growth slowed in 2016 and a continuing slowdown in 2017 is expected. Demand for Islamic financing in the UAE has grown rapidly with increasing customer awareness and wider adoption of Shari'ah products, especially among retail customers. Growth of Islamic bank financing in 2016 was expected to have been significantly lower than in 2015, although still higher than that of conventional bank lending. Newer Islamic banks with smaller franchises are likely to be affected first by the slowdown. Those that have been established for longer are likely to be affected later, and to a lesser degree, given their stronger franchises.

Barwa Bank is eyeing larger share of infrastructure financing in #Qatar

Barwa Bank Group said it will spare no effort to gain the largest possible share of financing infrastructure projects in the country. Barwa Bank chairman Sheikh Mohamed bin Hamad bin Jassim al-Thani said due to the national economy’s provision of promising opportunities, the bank will provide all possible support to the growth of the country’s economy. The group recorded strong growth in each of the financial position and profits, as net profit for 2016 rose to QR738.8mn and earnings per share reached QR2.49. The growth in the group’s business and the increase in its investment activities go in line with maintaining asset quality and risk management policies with total non-performing loans accounting for just 1.5% of the net financing portfolio.

ADIB dismisses Al-Hilal #merger talk as ‘rumour’

Abu Dhabi Islamic Bank dismissed reports that it may merge with Al-Hilal Bank as consolidation takes hold in the emirate’s financial-services industry. Abu Dhabi is combining National Bank of Abu Dhabi and First Gulf Bank and two sovereign wealth funds as it seeks to cut costs and merge firms with overlapping assets. The next step could be a tie-up between ADIB with Al-Hilal and a combination of Abu Dhabi Commercial Bank and Union National Bank. Tirad Mahmoud said ADIB plans to stick to its core markets and strengthen its presence. He also said that mergers were a shareholder issue and there might be 'some pressure' on net interest margins this year. ADIB posted a 1% rise in 2016 net profit to Dh1.95 billion ($530 million) on Tuesday as provisions rose to Dh970 million from Dh820 million.

#Morocco Receives $7.6 Billion from Islamic Development Bank

During the Arab-Africa Trade Bridges forum held in Rabat, bank president Bandar Al-Hajjar spoke about the strategic ties between Morocco and the Islamic Development Bank (IDB). Al-Hajjar noted that Morocco has received a total of USD 7.6 billion from the IDB since its establishment in 1974 and currently the bank is carrying out a number of projects estimated at USD 1.2 billion. Al-Hajjar also praised Morocco’s efforts towards renewable energy, saying that there is a bilateral cooperation between the IDB and Morocco to share Moroccan experiments in this field with Sub-Saharan countries. The IDB has supplied Morocco with several loans over the past few years. In 2014, the IDB amounted to MAD 1.8 billion to Morocco in order to carry out drinking water supply projects, as well as the olive sector for small farmers. The IDB has also embarked on signing agreement with partners to invest in Morocco. In 2014, it signed a joint agreement with Kuwait Investment Authority (KIA) to invest in the Moroccan private sector.

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