Financial Institutions

Abu Dhabi Islamic Bank gets nod for $270m rights issue

Shareholders of Abu Dhabi Islamic Bank (ADIB) have approved proposal for a rights issue of AED1 billion ($270 million) by offering 464 million new shares. Shareholders also approved the issuance of a $750 million sukuk and the repayment of its $1 billion sukuk issued in 2012. Khamis Buharoon, ADIB vice chairman and acting CEO, said the bank will continue to focus on expanding its retail business, providing market-leading digital banking services, while capturing opportunities across corporate, transaction and correspondent banking. ADIB reported a 3% increase in net profit for the first half of 2018, which reached AED 1.16 billion.

Faisal Islamic Bank of #Egypt to employ women for first time

Faisal Islamic Bank of Egypt (FIBE) will start appointing women to all of its branches for the first time since the bank was established in 1979. Egyptian member of parliament Inas Abdel Halim had submitted May 31 a briefing paper to then-Prime Minister Sherif Ismail about reports whereby the FIBE does not employ women. Abdel Halim stressed that the bank is violating Article 9 of the Egyptian Constitution, which stipulates that the state shall ensure equal opportunity for all citizens. She called on both the prime minister and the governor of the Central Bank to investigate the incident. According to Sahar el-Damaty, the first female vice president of Banque Misr, FIBE and its relationship with its founders in Saudi Arabia is the main reason behind the strict rules relating to the appointment of women. It seems the FIBE decision falls within a series of societal changes both in Egypt and Saudi Arabia aimed at granting women their full rights.

Abu Dhabi Investment Council increases Al Hilal Bank's capital

Abu Dhabi Investment Council has increased the share capital Al Hilal Bank by AED 400 million. Al Hilal Bank's CEO Alex Coelho said this move will allow the lender to meet the growing demand for Islamic finance by investing in areas with the greatest prospects. The Central Bank of the UAE (CBUAE) raised this year’s economic growth forecast to 2.7% from its previous projection of 2.5% while non-oil GDP growth is forecast to increase to 3.9% this year from 3.4% in 2017.

#Indonesia’s Bank Mandiri is on track to list its Islamic finance unit in 2020

Indonesia’s Bank Mandiri plans to list its Islamic finance unit Mandiri Syariah in 2020. According to Mandiri’s president Kartika Wirjoatmodjo, the Islamic bank is seeing 16% to 17% growth in savings, triple the pace of conventional banks. Indonesian authorities are nudging commercial banks to widen the pool of Shariah-compliant products for the nation’s more than 260mn people and the government is aiding the efforts by selling sovereign sukuk. With assets of about 93tn rupiah ($6.4bn), Mandiri Syariah is Indonesia’s largest Islamic finance company. Wirjoatmodjo expects the pool to top 100tn rupiah by the end of this year. Total assets at Indonesian Shariah banks were 426tn rupiah at the end of May, compared with 7,673tn rupiah for conventional banks.

ADIB’s Shareholders approve ADIB’s capital proposal to support growth

Shareholders of Abu Dhabi Islamic Bank (ADIB) have approved proposal for a rights issue of AED 1 billion to raise the Paid and Issued Share Capital through a tradeable rights issue of 464 million new shares. Shareholders also approved the issuance of USD 750 million (AED 2.75 billion) perpetual Tier 1 sukuk, and the repayment of its USD 1 billion (AED 3.67 billion) sukuk issued in 2012. The capital plan has been developed to support the bank’s continued growth and its objectives in achieving its strategy while meeting regulatory requirements.

#Saudi’s Al Rajhi Bank says expat exodus could impact its remittance business

Al Rajhi Bank expects low-single digit loan growth for the rest of 2018 as it curtails its loans while economic reforms take shape. A plan to reduce reliance on expatriates to generate jobs for Saudis has seen the number of foreign workers fall by more than 700,000 since last year. Al Rajhi's CEO Steve Bertamini said the expatriate exodus might have some impact on its remittance business. The bank has already seen an overall rise in banking for women and car loans for women have begun to rise substantially from a low base. Bertamini said that their entry into the workforce will mean more demand for accounts, loans and saving products.

#Kuwait’s Warba Bank receives licence to conduct securities activities

Warba Bank has obtained licence from the Capital Market Authority (CMA) to engage in certain securities activities. The new licence allows the lender to conduct activities like investment portfolio manager, collective investment scheme manager as well as investment manager, subscription agent and custodian.

Mortgages set to boost lending at #Saudi banking giant Al Rajhi

A jump in mortgages and a recovery in Saudi Arabia’s economy may help Al Rajhi Bank to reverse a decline in lending. According to CEO Steve Bertamini, higher government spending and faster economic growth amid higher oil prices should help the revival. Home loans have risen as much as 6% this year and there are 450,000 Saudis eligible to purchase a home under one of the government programs. Saudi Arabia’s new housing project announced in February includes an 18 billion riyal ($4.8 billion) loan-guarantee program to boost access to funding and 12.5 billion riyals to support down-payments. Al Rajhi Bank in July reported an 18% rise in second-quarter profit to 2.57 billion riyals. According to Bloomberg economists, Saudi Arabia’s economic expansion will accelerate to 1.6% this year from 0.9% in 2017.

Noor exits $6mln stake in #Pakistan’s Meezan Bank

Noor Financial Investment announced selling 9 million shares or 0.85% of its equity ownership in Meezan Bank, Pakistan's first and largest Islamic bank. The equity transaction is valued at $5.57 million or KWD 1.68 million. Following this exit transaction, Noor currently owns 39.53% equity in Meezan Bank. The financial impact of this transaction will be a profit of KWD 293,000 that will be registered in Noor's income statements of the third quarter of 2018, in addition to an increase of KWD 648,000 in the shareholders' equity rights. In mid-July, Noor announced selling 27.23 million shares or 2.56% of its equity in Meezan Bank at a value of $15.76 million or KWD 4.77 million.

Jaiz to commence disbursement of $20m SMEs #fund

The Managing Director of Jaiz Bank Hassan Usman has said the bank would soon begin the disbursement of the $20m facility for Small and Medium Enterprises (SMEs). The bank had in March signed the agreement with the Islamic Corporation for the Development of Private Sector to finance SMEs with $20m (N6.1bn). Usman said the bank would soon begin the disbursement, adding that the fund would be disbursed before the end of the year. He said the bank had commenced a five year strategic plan to provide better services to its customers. For example, the bank had increased its visibility in Lagos by opening more branches and plans to extend to other regions of the country as well.

Enact legislation tailored to Islamic finance sector, CBK urged

The Central Bank of Kenya (CBK) is asked to enact a sector-specific legislation tailored to Islamic finance sector to monitor and regulate transactions. According to Jacqueline Wangui, Partner at MMC Africa Law, the absence of specific legislation on Islamic finance is in itself a hindrance to the realization of the financial benefits. Wangui proposed that embedding a Shariah council within the structure of the CBK could go a long way. The Sharia council would constitute of local and international Islamic scholars to sit in an advisory capacity with the aim of producing a congruent regulatory framework for Islamic financing. Currently, there is no overall regulator at the level of the CBK appointed to specifically oversee the management of Islamic financing and its products.

ADIB plans a Dh1.16bn rights issue and tapping the #sukuk market

Abu Dhabi Islamic Bank (ADIB) plans to maintain growth and pay off some of its old debt. The board of ADIB is recommending to increase the bank’s issued capital through more than a Dh1.16 billion rights issue. The proposed deal includes issuing 464 million new shares at a nominal face value of Dh1 per share. The bank’s board has also proposed the issuance of a $750m (Dh2.75 billion) perpetual tier 1 sukuk, and the repayment of its $1bn hybrid tier 1 sukuk issued in 2012. ADIB’s vice-chairman Khamis Buharoon said the pace of the bank's growth has been fast, increasing its number of customers to 1 million in the UAE, nearly double the number it had five years ago. He noted that the bank was raising capital to maintain its growth trajectory, while maintaining a capital buffer.

#Bahrain's Bank Alkhair sells stake in Turkish investment firm

Bahrain’s Bank Alkhair has sold its majority stake in Turkish investment firm Alkhair Capital, as the lender exits some markets. Bank Alkhair entered the Turkish market a decade ago, acquiring an initial 75% stake in the investment firm. The bank has faced a challenging business environment over the past year and is currently streamlining its business lines. Additionally, the bank sold its stake in Pakistani lender Burj Bank and in 2017 the firm upgraded its business licence in the UAE and expanded its capital markets business in Saudi Arabia in a bid to focus on other markets. Now Bank Alkhair has received approval to transfer its 95.79% stake in Alkhair Capital to Ankara-based A1 Capital. The value of the transaction was not disclosed.

Bank Pasargad of #Iran to Open Branch in #India: Report

India has reportedly approved a proposal from Bank Pasargad of Iran to open a branch in Mumbai. The Federation of Indian Export Organizations had earlier objected the entry of Iranian banks into India. In the wake of new US sanctions, India may explore the possibility of reviving the rupee-rial arrangement to import oil from Iran that it has used in the past. The presence of an Iranian bank in India will ensure the smooth flow of funds between the two countries. US President Donald Trump announced on May 8 that Washington was walking away from the nuclear agreement between Iran and the UN Security Council. Trump also said he would reinstate US nuclear sanctions on Iran and impose economic bans on the Islamic Republic.

#Kuwait's KFH invites #Bahrain's AUB to begin due diligence

Kuwait Finance House (KFH) invited Bahrain's Ahli United Bank (AUB) to begin a due diligence process for a potential merger. KFH also asked AUB to sign a non-disclosure agreement. If the merger goes ahead, it would be the latest of several recent tie-ups to create bigger and stronger lenders in an over-banked region. If the merger proceeds, the total assets of the two banks would be $90.57 billion, making it the sixth largest bank in the Gulf. The agreement to begin due diligence demonstrates seriousness in the deal process and backing from the lenders' major shareholders. The major shareholders in the two lenders are Kuwait state-owned entities.

RAM Ratings: #Turkey rating downgrade triggers Kuveyt Turk downgrade

RAM Ratings has downgraded Kuveyt Turk's long-term rating to A1/Stable from AA3/Negative. The rating of KT Kira Sertifikalari Varlik Kiralama’s RM2.0 billion Islamic MTN Programme (2015/2025) has been revised downwards to A1(s)/Stable from AA3(s)/Negative. The Bank’s short-term financial institution rating remains unchanged at P1. The rating actions were triggered by the downgrade of Turkey’s sovereign ratings to gBB2(pi)/Stable/gNP(pi) from gBBB3(pi)/Negative/gP3(pi), due to an erosion of the country’s fiscal discipline. Kuveyt Turk has a relatively favourable funding profile, with a moderate reliance on market-based funding compared to the industry norm. The bank’s customer deposit base is well diversified. The bank’s liquidity profile is robust, with an average liquidity coverage ratio of 230% in fiscal year 2017.

#Kuwait bank in #merger talks to create $92bn Islamic lender

Kuwait Finance House (KFH) is seeking to hold talks with Bahrain's Ahli United Bank (AUB) for a potential merger. This would create an Islamic lender with about $92 billion of assets, six months after negotiations broke down. KFH sent a letter inviting Ahli United to sign a memorandum of understanding and a non-disclosure agreement to start valuation studies. The deal may provide a boost to debt-laden Bahrain, as the country struggles to cope with lower oil prices. According to Joice Mathew, the head of equity research at United Securities, the integration of business could be challenging because of the geographical dispersion of their assets and combination of Islamic and conventional banking.

Gulf banking transparency on the rise - study

Non-credit ratings agency Sigma Ratings found that Gulf countries outperform many Latin American and European countries in transparency and compliance. Among the most transparent banks in the region are Emirates Islamic Bank, Al Hilal Bank, the National Bank of RAK, Sharjah Islamic Bank, and the Arab Bank for Investment and Foreign Trade. According to Sigma Ratings CEO Stuart Jones, non-credit risk ratings were badly needed on factors like governance, compliance and financial crime risks. Jones added that specifically the GCC countries seem to be over-performing in the region, and there is lot of positive movement with regards to these countries.

ADIB launches 100% capital protected green notes

Abu Dhabi Islamic Bank (ADIB) launched a 100% capital protected smart and green energy equities basket note. The investment note, which matures in 12 months, is open for subscription until July 28, with a 31% participation rate in the upside positive performance. According to Saif Al Keem, Head of Wealth Management & Priority Banking at ADIB, this new note from ADIB focuses on equities that are driving investments in clean technology and manufacturing smart energy on a global scale. There is a growing demand for solutions which can capture and store energy generated from wind and solar power, which provides significant opportunities for the manufacturers of efficient battery technology.

MOVES-#Britain's largest Islamic bank Al Rayan appoints new COO

Birmingham-based Al Rayan Bank appointed Paul McMillan as chief operating officer as part of the bank’s expansion efforts. McMillan, a former chief executive of mortgage servicing firm Acenden, takes over the role from the bank’s previous COO Venkat Chandrasekar. Al Rayan is one of the five standalone Islamic banks in Britain and is owned by Qatar’s Masraf Al Rayan.

Syndicate content