Financial Institutions

Hong Leong Islamic Bank appoints Jasani Abdullah as CEO

Hong Leong Islamic Bank (HLISB) has appointed Jasani Abdullah as chief executive office. HLISB said Jasani has been acting CEO since December 2016. He has been in the financial industry for more than 30 years and his contribution towards the Islamic banking sector is very much valued. Jasani has been with HLISB since 2007 when he first joined as the head of shariah and product development. Jasani graduated with a Diploma in Public Administration from MARA Institute of Technology Malaysia, Bachelor in Business Administration from Ohio University, USA and has a Post Graduate Diploma in Islamic Banking and Finance from International Islamic University Malaysia.

#Qatar banks face liquidity challenge over Arab diplomatic feud

Qatari banks may need more cash injections from the state because of the risk of investor withdrawals. Banks have been feeling the fallout of the feud with Saudi Arabia, the United Arab Emirates, Bahrain and Egypt, which cut diplomatic and transport ties with Qatar on June 5 and imposed economic sanctions. They accuse Qatar of financing Islamist militant groups and allying with their regional adversary Iran. Because of the sanctions, several Qatar banks have seen an outflow of deposits. Fitch Ratings estimates that the majority of deposits in Qatar from other Gulf Cooperation Council countries are Saudi and United Arab Emirates' deposits, and that they are being withdrawn as they mature. Analysts expect funding challenges for the Qatari banks, considering the government would still intend to continue their project plans for FIFA 2022.

Alinma Bank's CEO on Growth Strategy, #Sukuk Issuance

In this interview Abdulmohsen Al-Fares, CEO of Alinma Bank, discusses the growth in the company's balance sheet, credit growth, their Sukuk issuance and competition from other banks. Alinma Bank has maintained its growth pace and Al-Fares is optimistic about the upcoming Saudi Arabian government sukuk. It is an opportunity not only for companies and banks, but also for the secondary markets. Timing and size of the sukuk has not been decided yet. In his opinion, competition from other banks will not affect Alinma Bank, as they will compete only in very small segments, not in retail. He added that the stand-off with Qatar would not have a negative impact on the Saudi economy, as the kingdom's economy is strong and the economic relationship with Qatar is small in size.

Bosna Bank International, Una-Sana Canton sign deal to back business

The government of Bosnia's Una-Sana Canton said it has signed a deal with Bosna Bank International (BBI) to fund business entities in the area. Under the deal BBI will provide financing to businesses in the canton under favourable conditions at a subsidized rate of 2.3%. BBI has secured 12.49 million marka ($7.4 million/6.4 million euro) for the project. The maximum amount that can be approved per business is 1 million marka, with a repayment period of three to seven years depending on the size of the loan.

Kuwait Finance House studying #merger with Ahli United Bank

Kuwait Finance House (KFH) is looking to merge with Bahrain's Ahli United Bank. The Gulf's banking sector is in consolidation as three years of low oil prices squeeze deposits and push up bad loans. KFH Chief Executive Mazin Al-Nahedh said the merger was currently only under study and there has been no agreement so far. In other regional bank mergers, First Abu Dhabi Bank was recently created in the United Arab Emirates after a tie-up between two Abu Dhabi lenders, while mergers are under way in Qatar and Saudi Arabia. KFH said in the statement that it was looking at a range of alternatives to boost its profitability, adding that such decisions require approval from regulators, including the central bank.

Yeow joins Alkhair International Islamic Bank as CEO

Alkhair International Islamic Bank (AKIIB) has appointed Yeow Tiang Hui as its chief executive officer effective Aug 1.
AKIIB said in a statement that he succeeded Datuk Adissadikin Ali, who left the bank last year to head RHB Islamic Bank. Yeow has worked at several multinational banks, including managing the multinational portfolio at Deutsche Bank and being vice-president of Citibank/Citicorp’s venture capital outfit and its head of commercial banking. From 2007 to 2016 he served as head of corporate banking at Kuwait Finance House in Malaysia.

AfDB, Islamic bank sign agreement to fund energy, SMEs

The African Development Bank (AfDB) and the Islamic Development Bank (IDB) have signed an agreement to support projects in energy, agriculture and SME sectors on the continent. Both parties agreed to jointly pool together $2 billion over the next three years to finance projects in agriculture and food security, renewable energy, small and medium enterprises (SMEs). They also agreed to contribute $1 billion each over three years for joint activities focusing on these priority areas. CEO of AfDB, Akinwumi Adesina, reaffirmed the bank’s commitment and interest to build a stronger partnership with the Islamic Development Bank.

Warba Bank ‘signs’ financial deal with #Turkey’s Ziraat Bank – Islamic banking sector growth eyed

#Kuwait’s Warba Bank announced a new Shari’ah-compliant, joint, multi-currency financial deal of $236 million with the Ziraat Participation Bank of Turkey. Warba Bank acted as the Lead Arranger and Subscription Manager of the deal, which was initially launched at $160 million. Due to oversubscription, the deal was increased so as to reach $ 236 million, with an increase of 52%. The Murabaha-based financing deal includes both US Dollars and Euros. It will be employed mainly in SME financing and income diversification at Ziraat Bank. Shaheen Hamad Al-Ghanem, Warba Bank’s CEO said the Bank was proud to be entrusted and to contribute to the financing of the agricultural sector, which is one of the pillars of the rise of the Turkish economy. This is the second participation of Warba Bank in arranging a financing transaction for the Ziraat Participation Bank of Turkey. In 2016, it contributed to a $155 million multi-currency co-financing transaction for the Turkish bank.

Shahjalal Bank director wants to sell holdings violating rules

Mohammed Younus, a director of Shahjalal Islami Bank, gave a newspaper advertisement to sell his holding in the bank violating securities laws. Directors of listed companies must give announcement on the Dhaka Stock Exchange (DSE) website if they want to sell their shares, but Younus did not make any such announcement. The board of the bank felt embarrassment about the issue as the director has not informed it about his planned sale of shares. The bank's executive director Subhankar Saha said this type of advertisement was undesirable. The current market price of 2 percent shares of Shahjalal Islami Bank is about Tk 26 crore.

#Pakistan sets rules for banks wanting to be fully sharia compliant

Pakistan's central bank has issued guidelines for banks that want to be fully-fledged sharia compliant, setting a three-year time frame for applicants to complete the process. The rules aim to accelerate the growth of Islamic banking in the country. Eligible applicants must have existing Islamic finance operations and the conversion process must start within six months of approval. After the conversion of conventional branches, the applicant can then apply for a fully-fledged Islamic banking license. Such conversions are rare in Islamic finance but are seen as a way to increase the scale of the bank and widen its reach into under-served rural areas. Islamic banking in Pakistan currently includes five fully-fledged Islamic banks and 16 conventional banks offering Islamic financial products. As of March, they held assets worth 1.9 trillion rupees ($17.9 billion), a 16% increase from a year earlier and 11.7% of total banking assets. However, their capitalization and profitability ratios remain below the industry average.

ANALYSIS: Can GCC Islamic banks escape the oil-price cycle?

More and more stakeholders concede that the Shari’ah-authorized way of banking has hit a glass ceiling. They acknowledge that Islamic banking and financial services have largely failed to innovate at the speed they were expected to. It is also admitted that Islamic finance is caught in an oil-price cycle, definitely in the Gulf and wider Middle East region. Global rating agency, Standard & Poor’s, estimates that Islamic banks in the GCC are expected to face a tough year ahead. According to S&P Head of Islamic Finance, Mohamed Damak, GCC Islamic banks’ asset quality indicators will deteriorate in the second half of this year and in 2018. Very few Islamic banks have set aside significant amounts of profit-equalization reserves. As for oil price, both Islamic and conventional banks are affected and must adopt a new strategy that is not highly dependent of energy prices. For that a diversification of the economy is needed, which doesn’t seem to be happening anytime soon.

World’s Largest Islamic Bank Successfully Completes Ripple #Blockchain Trial

Saudi Arabia’s largest bank recently completed its first cross-border transfer using Ripple technology. Having Al Rajhi Bank on board is a major validation for the blockchain service provider. Money was transferred between Al Rajhi Bank offices across Saudi Arabia and Jordan. The transfer took mere seconds to complete and reduced fees to a bare minimum. Completing this trial will help Saudi Arabia digitize the customer banking experience even further. More specifically, digitizing the banking experience will allow for faster and cheaper transactions. Al Rajhi Bank runs over 200 remittance centers across the country. The whole Kingdom of Saudi Arabia may soon see mass adoption of Ripple’s ecosystem.

Interview with Ahmed Abdul Rahim, Chief Executive Officer of Ithmaar Bank

In this interview, Ahmed Abdul Rahim talks about Ithmaar Bank’s recent performance, the global Islamic banking industry and the increasing use of technology in banking. Ithmaar Bank is now entirely focused on retail banking and is considered one of the biggest Islamic retail banks in Bahrain. The waiting period at the branches has been reduced and the customer is provided various delivery channels for services like call center, Internet banking, EasyPay and mobile banking. EasyPay is the first-of-its-kind mobile-payment service in Bahrain. The service enables customers to shop simply by tapping their mobile phones at the checkout counters of participating merchants. As a pioneering Islamic retail bank, Ithmaar ensures that all its products and services are compliant with Islamic Sharia rules and that business is conducted accordingly.

Three-way bank #merger in #Qatar aims to close by year end -sources

Executives working on a three-way bank merger in Qatar expect to finish valuing the deal in the coming weeks. Shareholders at Masraf Al Rayan, Barwa Bank and International Bank of Qatar are committed to pushing ahead with the deal despite the current embargo by some of Qatar's Arab neighbours. A shake-up has long been mooted in the Qatari banking sector given that 18 local and international commercial banks serve a population of 2.6 million. The more than two-week travel and diplomatic boycott could further dent bank performance if the dispute drags on. In December, Reuters reported that the trio had begun merger talks which would create the Gulf state's second-largest bank. The new bank, which would be run in compliance with Islamic banking principles, would have assets worth around 160 billion riyals ($43.6 billion).

IIRA maintains ratings of #Bahrain Islamic Bank

Islamic International Rating Agency (IIRA) has reaffirmed ratings of Bahrain Islamic Bank (BIsB) at BBB/A2 on the national scale and BBB-/A3 on the international scale. IIRA added that the bank’s rating outlook is constrained by the macroeconomic environment and tougher industry conditions for banks in the Gulf. Given the presence of external, regional concerns, the outlook on international scale ratings is assessed as Negative. Impairment in recent financings remains minimal, indicating improvement in the bank's business underwriting capability. However, overall asset quality concerns remain notable. IIRA has assigned BIsB a Fiduciary Score of 71-75, which signifies that the rights of various stakeholders are adequately protected.

Warrants issued for 78 Bank Asya senior executives: 47 detained

The Istanbul Chief Public Prosecutor’s Office issued detention warrants for 78 senior executives of Bank Asya, which was confiscated by the Turkish government. Bank Asya was associated with the failed coup attempt on July 15, 2016 due to its links to the Gülen movement. Forty-seven of the 78 bank executives have been detained so far on suspicion of membership in an armed terrorist organization and financing a terrorist organization.
Immediately after the putsch, the Justice and Development Party (AKP) government along with President Recep Tayyip Erdogan pinned the blame on the Gülen movement. According to a report by the state-run Anadolu news agency, 154,694 individuals have been detained and 50,136 have been jailed due to alleged Gülen links.

Fitch: Deposits in #Morocco Islamic Banks to Grow up to 10 %

According to Fitch Ratings, Islamic banking products in Morocco could expand their deposit bases by 5 to 10%. Fitch notes that the ability to grow the deposit base is positive for Morocco’s economic development because deposits represent about 70% of banking sector funding. The experts also noted that banking penetration is already high in Morocco, with 70% of adults holding a bank account. Therefore, participation banking is unlikely to take a significant market share from the well-established conventional banks. Growth rates in the Moroccan banking sector have been volatile in recent years, reflecting unsteady economic trends. Deposit growth has outstripped loan growth, but credit demand is set to accelerate. The ability to offer participation banking services could broaden the pool of potential depositors in the country, mitigating the competitive pressure.

Maybank Islamic named Asia-Pacific's Islamic Bank of the Year 2017

Maybank Islamic was named the Islamic Bank of the Year 2017 in Asia-Pacific by The Banker. The bank also received recognition in the country awards category for Malaysia. The Banker noted that Tier 1 capital and total Shariah-compliant assets enjoyed notable growth, climbing by 12% and 16%, respectively. Maybank Islamic’s return on equity for the year was 15.4%, while its cost-to-income ratio was a respectable 36% and non-performing financing were just 0.8%. The bank’s steady growth pace in Singapore and Indonesia also contributed to its recognition as the best in Asia-Pacific. Maybank Islamic's CEO Datuk Mohamed Rafique Merican attributed the bank’s achievements to its employees and sound risk management practices. He said the bank intends to further enhance its global brand visibility, while also deepening its existing regional presence.

#Brunei's largest bank aims to raise up $500 mln in #Malaysian #listing -IFR

Bank Islam Brunei Darussalam aims to raise as much as $500 million in an initial public offering (IPO) and the bank will be listed on the Malaysian bourse. JPMorgan and Malayan Banking (Maybank) are set to be joint global coordinators for the initial public offering of $200 million-$500 million this year. The IPO is expected to raise around $300 million but the final amount will depend on the size of the greenshoe option. Brunei is one of the world's richest countries on a per capital basis. The country does not have a stock exchange although its central bank last year announced draft rules to form one.

Maybank Islamic appoints Zainal Abidin as chairman

Maybank Islamic has announced the appointment of lawyer Zainal Abidin as its chairman. Zainal has been a director of Maybank Islamic since 2010 and previously served as chairman of Maybank Trustees. Prior to that, Zainal was a director of Malayan Banking (Maybank) from July 2009 to April 2014. Zainal, 63, is a practising corporate and commercial lawyer. As the founder and senior partner, Zainal established the firm Zainal Abidin in 1987.

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