Financial Institutions

Fitch has affirmed Al-Rajhi A+

Fitch Ratings affirmed Al-Rajhi's long-term issuer default rating (IDR) at "A+" with a stable outlook. Its short-term IDR at "F1", individual rating at "B/C" and support rating at '1'. The bank continues to dominate the Islamic market segment and retail banking, which has been historically its main focus. The bank's long-term IDR is unlikely to change unless the sovereign rating changes.

ABC International Bank plc ("ABCIB") has appointed Faisal Alshowaikh as Head of Islamic Financial Services

ABC International Bank plc ("ABCIB") has appointed Faisal Alshowaikh as Head of Islamic Financial Services, based in London, to grow and develop its Islamic finance business, which was first established in late 1999, and includes Real Estate, Leasing and Islamic home finance through its alburaq retail finance business

IDB unit funds PT Bank Negara Indonesia expansion to Asia

Islamic Corporation for the Development of the Private Sector, a unit of Islamic Development Bank plans to invest as much as USD 500 mn in PT Bank Negara Indonesia’s Shariah- compliant banking unit to help it expand in Asia, specifically Indonesia, Southern Thailand and Malaysia.

The nation’s Shariah-compliant banking assets rose 47 % to 48.4 trillion rupiah (USD 4.6 bn) at the end of 2008, according to Bank Indonesia data.

Islamic National Bank in Gaza as sign of divide

The new Islamic National Bank is regarded as sign of divide between the Palestinians. The Palestinian Monethariy Authority refused the license, being the recognised body according to the Oslo agreement in 1993 and Paris economic agreement on 1994 between the Palestinians and Israelis. Alternatively the bank has sent its establishing papers to the Prime Minister's office in Gaza and they have given it authorisation to start banking activities in Gaza.

Unlike other banks, it has no global serial number (swift code) which makes it impossible to work with other banks around the world or even in the Palestinian territories. The main clientele of the bank are Gaza Government employees, approximately 31,000.

Islamic Bank of Asia launches its first liquidity product

The USD Islamic Placement is similar to a conventional fixed deposit, except it is based on the Shariah principle of Murabaha, with a minimum of USD 500.000.

Islamic Bank of Asia considers license in Malaysia

Islamic Bank of Asia reacts positive on the announcement that Malaysia would issue up to 6 new licences for foreign institutions.

Barwa considers acquisitions in Qatar

Barwa is studying acquisition of a number of financial and investment companies in Qatar, under the umbrella of Barwa Bank, including "The First Finance", "The First Investor" and "The First for Renting" companies.

First Islamic window in Mauritius by HSBC

HSBC launches its Amanah Islamic banking services in Mauritius, being the first Islamic window provider. The new services is primarily for international business clients in the offshore sector. Local clients may follow later.

Sandeep Uppal is the CEO of HSBC in Mauritius.

Creditworthiness Of Gulf Banks Is Likely To Weaken In 2009, S&P says

Press Release

LONDON, April 29, 2009--The credit profile of Gulf banks will likely deteriorate this year, notably because of the tougher operating environment, lower business volumes, tighter liquidity, and the region's stock market slump since the end of third-quarter 2008, said Standard & Poor's Ratings Services in a report published today.

"We believe that as a result, asset quality and profitability of the banks that we rate are likely to suffer," said Standard & Poor's credit analyst Mohamed Damak, lead author of the report, "Tougher Environment Weakens Financial Profile Of Gulf Banks And Pressures Their Credit Ratings."

Indeed, we believe that 2009 will prove to be a difficult year for most Gulf Cooperation Council (GCC) banks.

"On a positive note, thanks to their good financial profile, Gulf banks have entered this tougher environment from a position of relative strength," said Mr. Damak.

Dubai Islamic Bank's shareholders agreed Monday to increase its capital

Dubai Islamic Bank's shareholders agreed Monday to increase its capital by 3 billion dirhams (USD 816 mn) over five years. The bank said in an emailed statement that shareholders at a general assembly also agreed to convert an 3.75 billion-dirham deposit from the Ministry of Finance into Tier 2 capital.

Gassner's picture

Need for SME finance? Lack of cooperative banks in the GCC!

Dear Reader,

Just reading an article how much the UAE economy needs the small and medium sized companies and how much difficulties they face to be financed by banks:

http://www.business24-7.ae/articles/2009/4/pages/26042009/04272009_46940...

One issue I missed in this article:

Not a word mentions the role of cooperative / mutual banks or the saving & loans; both financial institutions, which are non profit by its bylaws but dedicated to their members or region. This sector has about 50 % of the total banks balance sheet in my home country Germany, where small and medium sized companies are the backbone of the economy.

So, what is missing in the GCC desperately is setting up cooperative banks and regional saving banks - both can be done Islamically.

Specialised banks needed for SME finance in UAE

Various experts were interviewed and confirmed the need for special banks addressing the needs of small and medium sized companies in the UAE.

Amlak and Tamweel still in need for refunding

The UAE’s two largest Islamic home finance companies will need to secure adequate funding before they can re-start lending, the chairman of Tamweel. Both firms have been funded by banks on short term maturities, a business model, which does no longer work.

Mega bank to be founded in Bahrain

The whole-sale "mega bank" initiated by Saleh Kamel, Chairman of Dallah Albaraka Group shall be situated in Bahrain and is going to fundraise this year reported Shakir Husain in Gulf News. The bank should be business even outside the Muslim regions.

The bank's founders will contribute USD 1 bn in equity and USD 10 bn will be raised by offering shares to the public. Another USD 200 bn is planned to come from sukuk issuance and investment funds.

Among the main shareholders will be the Islamic Development Bank (IDB), the Jeddah-based multilateral lending agency, Dallah Albaraka Group, Kuwaiti Real Estate Bank and another 10 banks. There are two possible names being considered for the bank, which are Al Imar and Al Istikhlaf.

Albaraka plans to enter France

Al Baraka Banking Group said it planned to enter the French market to tap into Western Europe's largest Muslim community reported Will Waterman in Arabianbusiness. Further Al Baraka's units in North Africa are planning tie-ups with French partners to "establish Islamic banking in France", it said in a statement on the Nasdaq Dubai, where it is also listed. However no legal agreements have been finalised

Fitch affirms Jordan Islamic Bank for Finance and Investment at 'BB-'; outlook stable

Fitch Ratings has today affirmed Jordan Islamic Bank for Finance and Investment's (JIB) ratings at Long-term Issuer Default (IDR) 'BB-' (BB minus) with stable outlook, Short-term IDR 'B', Individual 'C/D' and Support '3'.

Iran allows foreign bank branches: Citibank and Goldman Sachs among the first applicants

Iran welcomes foreign banks to establish branches in the country and engage in normal banking operations. According to Presstv, Article 44 of the Constitution had heretofore placed banking activities exclusively in the hands of government. In tandem with the Law on Usury Free Banking Operations, these two measures effectively blocked foreign banking operations from conducting business in the mainland.

With the long-awaited privatization law having already come into force in the summer of 2008, allowing the normal functioning of foreign banks in Iran is viewed as a major economy boosting initiative by the Central Bank of Iran (CBI). The rules for regulating the activity of foreign banks are set forth in four parts and 13 articles in the decree dated March 18, 2009 by the Council of Ministers and titled The Executive Bylaw of the Manner of Establishment and Operations of Foreign Bank Branches in Iran. The minimum capital for establishing a foreign bank branch in Iran is 5 million euros.

Under the new circumstances, four US banks, including Citibank and Goldman Sachs, have applied for opening a branch in Iran. The banks made a formal request to the CBI to establish a branch.

Gaza: Islamic National Bank founded in controversy

In Gaza a new "Islamic National Bank" was started with a capital of USD 20 mn reported Kifah Zaboun in Asharq Al-Awsat. The bank is licensed by Gaza without the consent of the Palestinian Monetary Agency.

The chairman of the bank, Ala Al-Rafati, denied accusations from sources within the Fatah movement which claimed that the bank is affiliated to Hamas saying that the Islamic National Bank is a private institute with a Board of Directors and an Executive Body.

Arcapita had raised more than two-thirds of a USD 400 mn rights issue

Arcapita had raised more than two-thirds of a USD 400 mn rights issue from existing shareholders and hoped to conclude the deal by the end of this month according to the CEO. Arcapita has a number of deals ahead, such as 2 acquisitions in Asian infrastructure or real estate sectors, buying up the assets from the Australian power investment firm Babcock & Brown Power and a USD 3.5 bn residential real estate project in Qatar with Kuwait's Al-Imtiyaz Investment.

New UBS Head of Islamic finance sees further growth

Armen Papazian said he was named to the post head of Islamic finance by UBS Investment Bank 2-1/2 weeks ago with a global mandate to hire staff and design innovative products and as sign of commitment, that UBS believes in the growth sector.

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