Financial Institutions

ICD, the private sector arm of the Islamic Development Bank Group (“IDB”) cooperates with Coris Bank International to launch Islamic windows

The Islamic Corporation for the Development of the Private Sector (ICD) and Coris Bank International have entered into a Joint Strategic Collaboration to establish Islamic windows. ICD is assisting Coris Bank International’s subsidiaries in launching four dedicated Islamic windows in Cote d’Ivoire, Mali, Senegal and Benin. The advisory agreement was signed by the CEO of ICD, Mr. Khaled Al Aboodi and Mr. Idrissa Nassa, CEO and Chairman of Coris Bank International. Mr. Nassa stated that the signature of this advisory agreement with ICD aims to achieve the bank's objectives. The current strategy of the group is to implement an Islamic Window in all its banking network. In midterm the group aspires to create sharia compliant subsidiaries.

No big surge in bank #mergers expected in the #GCC

According to analysts, GCC’s banking sector is not expected to see a big surge in mergers and acquisitions. National Bank of Abu Dhabi (NBAD) and First Gulf Bank (FGB) in the UAE recently merged to create the largest bank in the UAE. Masraf Al Rayan, International Bank of Qatar and Barwa Bank are in the due diligence phase of a planned three-way merger that would create the largest Islamic bank in Qatar. Saudi British Bank and Alawwal Bank are discussing a potential merger that would create the third-largest bank in Saudi Arabia. Despite market conditions and numerous rumours, a big surge in mergers is unlikely due to structural impediments. Some countries have only a small number of local banks, which limits competition. This means that profitability has remained solid despite the macroeconomic pressures. Thus, there is no compelling reason for a big number of regional banks to rush into merger deals.

Islami Bank transfers executive in a move to curb Jamaat's control

Islami Bank Bangladesh has removed the head of its human resource division amid a war between the old guard belonging to Jamaat-e-Islami and newly-appointed executives. The removed executive, Md Mahboob Alam, is also an executive vice president of the bank. The bank's board of directors took the decision to remove him from the division on Saturday. The new leadership of the bank are fighting for control of the bank with Jamaat supporters after taking charge five months ago. Vice-Chairman Professor Syed Ahsanul Alam Parvez said Mahboob was removed from the human resource division because he was appointing Jamaat loyalists to top posts of the bank. Another director, Professor Dr Qazi Shahidul said that Jamaat supporters were conspiring in various ways because they plan to take back control of the bank after changes through the next election.

Married banker from Norbiton takes Abu Dhabi Islamic Bank to employment tribunal after she was 'pimped out' to secure Arab client worth £25m

A married senior banker was "pimped out" by her boss in a bid to get a wealthy Arab client to open an account with £25 million. Suemaya Gerrard, a relationship manager at the Abu Dhabi Islamic Bank, claimed the client bombarded her with love songs and inappropriate text messages. She added that bank CEO Jawdat Jawdat put pressure on her to go out to dinner with the man and she was threatened to lose her job if she did not go. Suemaya Gerrard resigned from the bank last November and is now suing it for sexual discrimination, sexual harassment and constructive dismissal. The bank and Mr Jawdat deny all the allegations. Mr Jawdat claimed it was normal practice to entertain clients and dine with customers.

Shake-up on the way with DIB entry into market

Dubai Islamic Bank’s (DIB) formal entry into the Kenyan market is expected to shake up locally-owned Islamic lenders that have faced little competition for a decade. The Central Bank of Kenya (CBK) has now opened the door for the bank after more than a year of waiting. Kenya has until now had only two fully-fledged Islamic banks, while five other conventional lenders have been offering Shariah-compliant services and products through "Islamic Windows". DIB makes its foray into Kenya at a time when authorities are keen to make Kenya a hub for Islamic finance in Africa with ongoing reforms expected to drive the growth of Islamic-finance operations. The Kenyan government has recently unveiled a package of initiatives to develop a policy framework for Islamic finance in the country.

Burj Bank cement strong reputation

With a strong background in Middle Eastern banking, Burj Bank has been building a solid reputation based on integrity. Burj Bank was founded in 2007 under the name of Dawood Islamic Bank as a central pillar of Pakistan’s Islamic Banking landscape. In 2011 the bank was renamed and launched as 'Burj Bank Limited', following a massive capital injection by some Middle Eastern investors of the bank. At present, almost 85% of Burj Bank’s shareholding stems from the Middle East, with majority ownership belonging to the Islamic Corporation for Development of the Private Sector (ICD). In 2012 Burj Bank grew its deposit base by 77% and the financing portfolio also reflected a growth of 67%. The branches grew from 50 to 75, reflecting a percentage distribution network growth of 50%. The bank has entered into diverse new lines of business including SME (small- and medium-sized enterprise) banking, investment banking, agricultural financing, cash management and home Musharaka.

#Kenya: CBK Licences Dubai Islamic Bank

The Central Bank of Kenya (CBK) has licensed Dubai Islamic Bank (DIB) after the bank fulfilled its stipulated requirements. Dubai Islamic Bank Kenya intends to exclusively offer Shariah compliant banking services becoming the third fully Shariah compliant bank in Kenya. The decision is seen to highlight the CBK's confidence in the stability of the banking sector, which has been experiencing turbulence in the past couple of years. DIB is a fully owned subsidiary of Dubai Islamic Bank of the United Arab Emirates, which has an asset base of Sh4.8 trillion and capital of Sh754.8 billion. The Central Bank of Kenya welcomes the entry of international brands and believes that DIB's entry will expand the offerings in the market.

Allianz ends HSBC Amanah takeover talks

Allianz Malaysia, a subsidiary of the German Allianz SE, has ended discussions to acquire HSBC Amanah Takaful. The company announced it has discontinued its negotiations with the shareholders of HSBC Amanah, namely HSBC Insurance (Asia-Pacific), JAB Capital and Employees Provident Fund (EPF). The life and general insurer did not give a reason why the talks failed. Allianz Malaysia CEO, Zakri Mohd Khir, previously said that he had been approached by takaful operators in the past, but the asking price was too high. Allianz Malaysia had been pursuing a bid for HSBC Amanah since October last year. Allianz Malaysia saw its net profit rise by a marginal 1.1% to RM312.13 million in the financial year 2016 (FY16) from RM308.87 million in FY15 due to higher gross earned premiums and investment income. Revenue also grew by 3.5% to RM4.68 billion from RM4.52 billion.

QIB-#UK finances Buy-to-Live properties in London

QIB-UK has received official licensing to provide Sharia-compliant Murabaha Facilities for London properties. The new product enables QIB-UK to finance a buy-to-live property as well as refinance customers’ existing properties in London. QIB-UK has undergone a restructuring process to focus on serving the bank’s high-net-worth clients by addressing their specific financial needs in the UK. The bank offers its customers a range of Sharia-compliant banking services including Current Accounts in GBP, inward and outward transfers, direct debits, standing orders and more. QIB-UK also provides Debit Cards which are linked to a client’s current account with a high daily allowance of £15,000. Additionally, the Bank offers Wakala Deposits, Instant Access Savings Account, Notice Accounts and other premium products and services. QIB-UK was fully authorised as an Islamic Bank by the UK Financial Services Authority in 2008 and is fully owned by Qatar Islamic Bank.

Different approach pays off for Al Rayan Bank

Sultan Choudhury, CEO of Al Rayan Bank, talks about Islamic finance in Britain and its appeal to non-Muslims. He says, Islamic finance appeals to anyone who agrees with the underlying principles: equitable distribution for everyone, prudent spending and the well-being of the community as a whole. It also provides an ethical alternative to traditional banking. Al Rayan Bank is structured to ensure that it operates ethically on a day-to-day basis. The bank's home-purchase plans (HPP) are structured differently to conventional mortgages. HPPs are based on the Islamic finance principles of ijara and diminishing musharaka. Currently the bank estimates that more than a quarter of customers are non-Muslim and the customer base is expected to grow in the coming years.

Bosna Bank International's 2016 net profit rises

Bosna Bank International's net profit increased to 6.4 million marka ($3.5 million/3.3 million euro) last year from 5.6 million marka in 2015. Net interest income grew 22.5% year-on-year to 22.3 million marka in 2016, while net fee and commission income rose to 10.9 million marka from 9.6 million marka. The bank's total assets stood at 895.4 million marka at the end of 2016.

75 academics face 15 years in jail each for depositing money into Bank Asya

77 academics from the Abant Izzet Baysal University (AIBU) face between 7.5 years and 15 years in jail on accusation of membership to a terrorist organization. 75 academics are sentenced to 15 years in prison, while the remaining two to 22 years. The prosecutor listed among evidence for terror charge the academics’ previous transactions within Bank Asya. The Turkish government closed down the Islamic lender as part of its crackdown against the Gulen movement. The government also pinned the blame for July 15 on the movement. The accused academics have withdrawn TL 2 million from other banks to deposit into Bank Asya since late 2013 when the bank was struggling. The prosecutor underscored that some academics transferred money from spouses’ accounts to another account in Bank Asya so that they could benefit from state insurance in case the bank faces closure.

The government initiates a #coup at #Bangladesh’s biggest bank

On the 5th of January military intelligence operatives phoned the chairman, a vice-chairman and the managing director of Islami Bank Bangladesh and brought them to the agency’s headquarters in Dhaka. A few hours later the bank’s board selected their replacements. Islami Bank has been of interest to the government for its association with the Jamaat-e-Islami, Bangladesh’s biggest Islamist party. In recent months, companies with ties to S Alam Group have built stakes in the bank, although the group denies any role in this. The new chairman, Arastoo Khan, declined to comment on the changes at the bank. The shareholders from Saudi Arabia and Kuwait were kept in the dark about the boardroom coup and complained bitterly about it. The Islamic Development Bank (IDB) questioned the rationale behind the changes and pointed out that there was no proper recruitment process. The Bangladeshi government has assured foreign shareholders that it will not let politicians loot the bank.

Baker McKenzie wins major #litigation case for Dubai Islamic Bank

Global law firm Baker McKenzie has successfully acted for Dubai Islamic Bank in its defence of a $2 billion claim brought against it in the English Commercial Court. The claim was brought by Plantation Holdings, a holding company owned by an Argentinian-resident property developer. The allegation was breach of contract related to plot of land on the outskirts of Dubai, which Plantation had planned to develop into a high-end luxury lifestyle and equestrian complex. The Bank took security over the project as part of the restructuring of a $500 million debt owed to it as a result of a complex receivables financing fraud. The case was heard in an eight week trial, with evidence from witnesses from seven jurisdictions. The court ruled that Plantation's principal director had made up evidence and that another of Plantation's witnesses had manufactured documents, Plantation has been ordered to pay 70% of the Bank's costs on the indemnity basis. The nature of the case also resulted in examining the volatility of the Dubai property market and the functionality of its property registration system, as well as the Dubai authorities' approach to financial misconduct.

Sharia finance a growing market but NZ banks not acting yet

Sonny Bill Williams could find his rugby career curtailed if he refuses to support any sponsorship that runs contrary to his Islamic religion. Williams covered the BNZ logo on his collar in his first game for the Blues. Williams has lodged a conscientious objection in his contract to finance companies, banks, alcohol companies, tobacco companies and gambling companies. According to Victoria University religious studies professor Paul Morris, the rugby player's conscientious objection was valid if cleared with the sponsor and the management of the team. Islamic Women's Council spokeswoman Anjum Rahman said Williams was making a statement and it was a valid choice. New Zealand Bankers' Association CEO Karen Scott-Howman said banks were constantly responding to customer preferences. However, the banks do not see the demand for Sharia-compliant banking in New Zealand.

Mizuho opens $300m Islamic #credit facility to Jeddah group

Mizuho Bank #Malaysia opened a $300 million credit facility to the Islamic Corporation for the Development of the Private Sector (ICD). The two-year deal will finance projects in the member countries of ICD. According to ICD Chief Executive Khaled Al Aboodi, the $300 million accounts for 24% of funding programs earmarked by ICD in 2017. He added that funds could be disbursed for hospitals in Gambia, manufacturing facilities in Tajikistan or trade finance in Maldives. For Mizuho Bank Malaysia, the deal marks its first cross-border bilateral Islamic facility based on the concept of Murabahah. The bank's deputy CEO, Shinichi Nishiyama, said lending to ICD will expose Mizuho Bank Malaysia indirectly to the markets in Islamic countries and they are looking forward to a long-term partnership with ICD.

Wadi and Al Rajhi Bank announce new #partnership

Wadi.com, #Saudi Arabia's home-grown online shopping marketplace, announced a new strategic partnership with one of the kingdom's most trusted banks, Al Rajhi Bank.

New Islamic bank to appear in #Kazakhstan

Zaman Bank is expected to enter Kazakhstan's Islamic banking services market in near future. The news was announced by Nurlan Abdrakhmanov, director of the financial market methodology department of Kazakh National Bank. He noted that among all the products of Islamic banking, murabaha is in the greatest demand in Kazakhstan.

#Iranian Banks' L/C Boom in Post-Sanctions Era

The Iranian Ministry of Economy has published the details of letters of credit (L/Cs) that Iranian banks allocated over the past few years. The country’s international trade picked up considerable pace when the sanctions against Iran were lifted. According to the ministry’s report, Bank Melli Iran allocated 154 letters of credit worth $42.71 million over a four-year period (2013-16). During 2013-16, Bank Keshavarzi opened 19,253 L/Cs worth over $10.5 billion. It also played an important role in issuing 21 bank guarantees valued at $15 million. Bank Mellat also issued 32 export guarantees worth $15.4 million and four import guarantees worth $13.5 million. Export Development Bank of Iran opened 550 L/Cs and issued more than 1,750 bank guarantees during 2013-15 to emerge as one of the main forces in the Iranian economy.

#Malaysia’s Maybank Islamic looks to home markets to drive growth

Maybank Islamic is turning to its home markets for growth, in particularly Indonesia where it manages $2 billion worth of assets and is aiming to compete with domestic Islamic banks. According to CEO Mohamed Rafique Merican, the bank could grow beyond its core markets of Malaysia, Singapore and Indonesia, but expansion in other markets would be opportunistic. Indonesia remains a key market for the bank, after Malaysia which accounts for 90% of the bank's business. As part of the ASEAN banking integration framework (ABIF), Indonesia and Malaysia have agreed in August to give their banks greater access to each other's markets. The move would give Malaysia's Islamic banks a potential lead to tap into the world's biggest Muslim-majority country, and one that continues to restrict to foreign lenders.

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