Financial Institutions

Kuwait Finance House Malaysia more than doubles paid up capital

Kuwait Finance House Malaysia said last Friday it has received a USD 300 mn capital injection from its parent, increasing the paid-up capital to USD 500 mn.

Qatar Islamic Bank announces profit growth

Mohamed Salem reported in The Peninsula that Qatar Islamic Bank released a net profit to QR 1.64 bn, representing a 30.8 % growth over 2007. The profit in 2007 was QR1.25bn. The bank also announced it plans to launch a rights issue to raise its capital by 10 %.

Abu Dhabi Islamic Bank bolsters Tier 1 capital with government funds

Abu Dhabi Islamic Bank (ADIB) is issuing a Tier 1 capital Sukuk to the government of Abu Dhabi, raising AED 2 bn (USD 545 mn). The issuance of the Sukuk was approved by ADIB's board of directors on 3 February 2009, and will be subject to obtaining shareholder approval. The Sukuk will pay an expected return at a rate of 6 % per annum, payable semi-annually in arrears from (and including) the issue date for a period of 5 years, and thereafter at a rate, reset and payable semi-annually in arrears, reflecting the initial margin above the then prevailing six month Emirates Interbank Offered Rate.

Tirad Mahmoudis the Chief Executive Officer of ADIB.

UAE Cabinet appoints Steering Committee to Review, Develop Strategies for Amlak, Tamweel

UAE Cabinet appoints Steering Committee to Review, Develop Strategies for Amlak, Tamweel. The high-level Committee, headed by H.E. Sultan bin Saeed Al Mansouri, UAE Minister of Economy, brings together experts from across ministries and regulatory bodies. The move highlights the federal government's support to the UAE economy and strengthening of its financial institutions. The Committee will draw up a comprehensive report of Amlak's and Tamweel's performances under the changed economic environment and present its recommendations on the way forward to the government by the end of February.

Saudi Credit Bureau (SIMAH) and Standard & Poor's launched National Data Pooling Project (NDPP)

Joint Press Release

Riyadh ? London, February 2 2009

Saudi Credit Bureau (SIMAH) and Standard & Poor's, the leading provider of financial market intelligence, independent ratings, indices, investment research and data across the Middle East?s credit risks launched today the National Data Pooling Project (NDPP) and signed a contract in Riyadh. SIMAH was represented by its General Manager Mr. Nabil Abdullah Al-Mubarak, Standard & Poor?s by Mr. David Pearce, Managing Director of McGraw-Hill International (UK) Ltd and Mr. Bernard O?Sullivan, Managing Director and Head of Standard & Poor?s Risk Solutions in Europe, Middle East & Africa.

In this context, Nabil Al-Mubarak stated that the project comes as the final step in the framework of specialized projects for measuring credit risks, which would enable all participating member banks to fulfill all requirements of Basel II capital adequacy issued in 2005, referring to the fact that the Kingdom has already been implementing Basel II Capital Standards since 2006, and welcoming at the same time the strategic relationship with Standard & Poor's.

Ajman Bank officially launched

Ajman Bank is officially launched as the Emirate of Ajman`s first Islamic commercial bank. The bank will serve the community and emphasize social corporate responsibility.

Yousif Khalaf is the CEO of Ajman Bank.

Kuwait Finance House’s 2008 posts profit before provision and increase income

Edward Russell reported on Financeasia on 2 February, that Kuwait Finance House’s (KFH) 2008 posts profit before charges but faces falling revenues. In Q4, KFH's revenue fell 16.3 % quarter-on-quarter to KD 185 mn. The revenue decline increased 3.7 % from the previous quarter when it fell 12.5 % quarter-on-quarter. Despite the decline in revenues in the second half of the year, the bank managed to report an overall increase in income of 6.5 % year-on-year.

The finance house's unaudited full-year net profit totalled KD 157 mn(USD 542 mn on revenues of KD 884.9 mn. Given the current economic environment, KFH announced to retain KD 211 mn as a "provision". After the KD 211 mn provision, KFH lost anywhere between KD4 8 mn and KD54 mn for the year. Full-year and fourth-quarter audited results have yet to be released.

Tamweel restructuring including layoffs

Suzanne Fenton reported on 29 January on Gulf News, that Dubai-basedm mortgage lender, Tamweel PJSC - a company which is currently under merger process with Amlak - is restructuring its business plans and organisational structure that involves a reduction of 57 staff members from its workforce. Tamweel, Amlak, Real Estate Bank and Industrial Bank are about to merge to UAE`s largest mortgage provider. Emirates Development Bank will have access to government funds.

Iran: Cooperative Development Bank planned

Iran Daily reported on 1 February that the director of Iran Privatization Organization (IPO) has said the organization plans to establish the first-ever cooperative development bank.

Gulf Finance House targets undervalued assets in the region

Frederik Richter reported on Arabianbusiness on 1 February that Gulf Finance House is looking for acquisitions of undervalued assets in the region.

Deputy Chief Executive Mehran Jamsheer was cited.

Millennium Finance Corporation (MFC) on expansion course

Waheed Abbas from Emirates 24/7 reported on 2 February about the regional investment bank and private equity company Millennium Finance Corporation (MFC), which aims to expands its reach to Saudi Arabia, India and Nigeria through joint ventures and acquiring licences. The firm is also considering IPO.

CEO is Keba Keinde, which gave an exclusive interview with Emirates Business. Please click on the source below.

Dubai Islamic Bank partners with Hawkamah Institute

Rebecca Bundhun reported on Arabianbusiness on 29 January that Dubai Islamic Bank partners with Hawkamah Institute has signed a "founding member" sponsorship agreement with corporate governance organisation the Hawkamah Institute.

Gulf Finance House reports quarterly loss and 14 % lower annual profits

Bahrain's Gulf Finance House has reported a Q4 loss of USD 10 mn after it made 'provisions on investments' compared with net income of USD 108.8 mn for the same period. Total year earnings are down to USD 291 mn (Dh 107 mn) in 2008 compared to USD 340 mn in 2007.

Benchmark, India launches Exchange Traded Fund

Shailesh Menon reported in Economic Times on 29 January that Benchmark Asset Management is launching a Shariah-compliant open-ended exchange traded fund. The scheme opens for subscription on February 4 and closes on February 25.

Shortfalls and Overbanking in the GCC

Rohit Chawdhry, portfolio manager of Bahrain Islamic Bank, analyses the issue of overbanking in the Gulf region and the institutions anticipating mergers in the February issue of The Middle East. He concludes that all state plans fostering project developments are not covered by a sufficiently large banking sector. The Institute of International Finance estimates there are about USD 1.9 trillion worth of projects under way in the region, making the GCC one of the largest project finance markets in the world. But analysts estimate that the present project finance, which includes bank lending, bond and equity issuance, has a funding shortfall of at least $900bn, if not more. To create banks which are able to shoulder a greater proportion of the financing needs of projects under construction, by state and private investors is the challenge of the policy makers.

Nigeria: Micro Bank Offers Islamic Compliant Services

Mustafa Abubakar reported in Daily Trust / Allafrica on 28 January that, The Kwara Commercial Micro Finance Bank is to offering Shari'ah compliant services and was officially commissioned in Ilorin on 27 January.

The bank will also offer other conventional banking services such as Micro loan, pay plus, small business loan and agricultural loan. The director of the bank Olayinka Blackshear said the state Governor Dr. Bukola Saraki in partnership with other interests took the initiative to facilitate the incorporation of the bank, in a bid to boost grassroots economy.

S&P: Shamil Bank of Bahrain 'BBB-/A-3' Ratings Withdrawn At Bank's Request

Press Release

PARIS (Standard & Poor's) Jan. 28, 2009--Standard & Poor's Ratings Services said today that it affirmed its 'BBB-/A-3' ratings on Shamil Bank of Bahrain. The outlook on the ratings remains negative. The ratings were subsequently withdrawn at the bank's request.

As a result of the withdrawal, Shamil will no longer be subject to Standard & Poor's review. At the moment of the ratings withdrawal, the bank had no rated debt outstanding.

Amlak meeting to consider job cuts

Amlak Finance, the mortgage financer will consider job cuts at its board meeting on 31 January the company announced in a statement along to discuss the merger proceedings with Tamweel and earnings. Amlak and Tamweel will be both taken over by Abu-Dhbai based Real Estate Bank, merge with the Emirates Industrial Bank under the new name Emirates Development Bank according to reporting by the state news agency WAM in November.

Pakistan’s Islamic Banks Plan to Open 230 New Outlets in 2009

Shanthy Nambiar and Farhan Sharif reported on Bloomberg, 27 January, that Pakistan's Islamic banks plan to expand their network of outlets this year to take advantage of rising demand for Shariah-compliant financing according to Pervez Said, director of Islamic banking at the State Bank of Pakistan. These banks have 500 branches, after adding 210 outlets last year. Pakistan is promoting growth in Islamic finance to expand the reach of the banking sector which has less than 25 million deposit accounts. Shariah-compliant facilities are forecast to rise to 277 billion rupees ($3.5 billion) this year from 185 billion in 2008, according to central bank data.

New Saudi-Arabian Property Financer as JV between Al-Khabeer and Al Mutajara

Al-Khabeer Merchant Finance Corporation built a Joint-Venture with Al Mutajara installments company to establish ‘Dari for Home Loans,’ a new SAR 1 bn capitalised Saudi joint-stock company-under development stage, which will specialise in financing the construction and purchase of houses and residential properties in accordance with Islamic Sharia principles.

Dari Home Loans will become one of the first real estate financing companies in the Kingdom to specifically cater to the middle income sector. It will not include property developers among its pool of clients.

Dari Home Loans is currently appointing personnel and officials for managing its human resources and is negotiating with a global partner for the transfer of management experience to this sector in the Kingdom. Al-Khabeer is adopting its turnkey and integrated banking solutions to develop Dari, as Al-Khabeer directs the finance and advisory for the company. The new property funding firm’s founders are confident that it will be fully established in a short span of time given the strength of the Kingdom’s economy.

Mohammad Sheikh is Chief Operating Officer of Dari Home Loans.

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