Financial Institutions

EIB offers complete suite of deposit products

Silkbank introduced Emaan Islamic Banking (EIB) through conversion of its seven conventional banking branches into dedicated Islamic Banking branches. Emaan Islamic Banking offers a complete suite of deposit products including Current Account, Saving Accounts and Term Deposits. Diminishing Musharaka, Musawamah, Murabaha, Musharaka and Trade Finance facilities are also available. The Emaan Islamic Banking’s branch network stands at a total of 10 branches in 8 cities across Pakistan.

Kuveyt Turk claims 37 per cent share of #Turkey's participation banking

According to Group CEO Mazin Saad Al-Nahedh, the market share of Kuwait Finance House-Turkey (KFH-Turkey) accounts for 37% of the participation banking in Turkey. The total assets of participation banks as percentage of the total assets of banks in Turkey account for 5-6% and is expected to surge. Growth rates in KFH-Turkey have outpaced the rates in Kuwait, Bahrain and Malaysia. Noting that all Kuwaiti banks were strongly capitalised, Al-Nahedh mentioned that KFH Group’s own capital adequacy ratio surpassed 17% as of end Q1. Commenting on Kuwaiti sovereign debt issuances to Islamic banks, he said that KFH’s share of the debt was 50 per cent, mirroring its market share among Islamic banks in Kuwait.

Former CIMB Islamic’s Badlisyah is now deputy CEO of Tabung Haji

Badlisyah Abdul Ghani, the former CEO of CIMB Islamic Bank, has been appointed deputy CEO of pilgrim fund Lembaga Tabung Haji. Badlisyah gained fame when he disputed the authenticity of banking documents released by The Wall Street Journal relating to 1Malaysia Development, which touched on US$700 million being transferred to Prime Minister Datuk Seri Najib Razak’s personal accounts. While an internal inquiry was ongoing at CIMB, Badlisyah resigned in mid-August last year. It is not clear how Badlisyah is already stated on the company website as deputy CEO, when no formal announcement has been made in this respect.

Update on The Investment Dar’s court cases

In #Kuwait the Court of Appeal has set a new date for the case against Islamic finance group The Investment Dar (TID). The case was brought by Noor Investments of Kuwait and aims to have TID declared bankrupt. A date of 26 October has been set for the court’s committee of experts to report back. The Investment Dar said it would continue to defend the company’s assets from attacks. In their opinion, these court cases are brought by a small number of creditors who wish to put themselves in a preferential position.

Major breakthrough sought to propel sharia banking industry

In #Indonesia the Islamic banks’ market share has remained below 5% for the last several years, despite having existed since the 1990s. Now the State-Owned Enterprises Ministry is mulling a proposal to allow Islamic lender subsidiaries owned by the four state-run banks to be merged into two new entities. The ministry’s assistant Gatot Trihargo said the state would still control the two new sharia lenders as majority shareholders. He added that at least two of the four sharia banks should be merged in order to become a BUKU III lender, which has capital between Rp 5 trillion and Rp 30 trillion. Bank Aceh, a regional development bank, is currently in the process of being converted into an Islamic lender, while Bank Syariah Mandiri is seeking strategic investors from the Middle East.

Bank Asya’s banking license cancelled over Gülen links

Turkish regulators have cancelled the banking license of Islamic lender Bank Asya. The Turkish Banking Regulation and Supervision Agency’s decision (BDDK) came after the Turkish Deposit Insurance Fund (TMSF) temporarily suspended Bank Asya’s banking operations on July 18. According to the TMSF the sale of the bank did not attract any bids on July 15. The tender was for the sale of a minimum 183.6 million A group shares, amounting to 51% of the bank. Bank Asya is affiliated with Fethullah Gulen, who the Turkish authorities accuse of heading a clandestine 'parallel state' to undermine the Turkish government.

#Turkey's banking watchdog temporarily shuts down Bank Asya

The Savings Deposit Insurance Fund (TMSF) announced that the operations of Bank Asya will be temporarily frozen. According to the official announcement, the decision was made by the Fund Council in accordance with Article 107 of the Banking Law. The tender for the sale of Bank Asya's shares was scheduled for Friday and TMSF announced that no bid had been offered for the tender. Although shares were planned to be opened to transactions following the bank's sale, Bank Asya's shares are now closed for transactions. Bank Asya is believed to be the main financial institution for the controversial Gülen Movement, which is accused of large-scale cheating and nepotism.

Turkish regulator shuts down Gulen-linked bank

The Turkish Deposit Insurance Fund (TMSF) announced it would temporarily suspend operations in Bank Asya, which is closely associated with the cleric Fethullah Gulen. Turkish President Recep Tayyip Erdogan blamed Gulen and his supporters for the coup attempt on Friday in which more than 200 people have been killed. The coup attempt was suppressed by early Saturday as 103 army generals and admirals were detained. The arrests now amount to a third of the country’s top military officials.

#1MDB agrees to request for arbitration filed by IPIC

1Malaysia Development (1MDB) agreed to the Request for Arbitration filed by International Petroleum Investment Company (IPIC) and Aabar Investments (Aabar). 1MDB is confident of its legal position and reiterated that, notwithstanding the dispute with IPIC, it would continue to honour its current debt obligations. Last month, 1MDB paid the RM1.579 million interest coupon on the RM2.4 billion Bandar Malaysia sukuk, due 2024. In May, 1MDB made a scheduled coupon payment amounting to RM143.75 million on its RM5 billion 5.75% Islamic Medium-Term Notes due 2039.

VHP against Islamic Development Bank’s plan to open branch in #India

Vishwa Hindu Parishad expressed reservations over the Islamic Development Bank’s plan to open its branch in India. VHP joint general secretary Surendra Jain is currently attending a two-day meeting in Ahmedabad to discuss various issues. He said they will also deliberate on the strategy to oppose the opening of the new branch. Although IDB recently announced that it will open its first Indian branch in Ahmedabad, VHP insists that such banks are against the Constitution and banking norms set by RBI.

Bank Asya sale scheduled for July 14

The tender for the sale of Bank Asya is set to take place on July 14. Turkish Deputy Prime Minister Nurettin Canikli stressed the importance and the magnitude of the sale, as Bank Asya was subject to financial maladministration by the previous management. While sunken credit totaled TL 2.2 billion ($750 million), credit volume in September 2015 reached TL 6.5 billion. The bank's capital dropped to TL 1.2 billion in 2015. Upon inspection of the actual amount of sunken credit, Bank Asya's cumulative losses totaled TL 1.6 billion.

Ithmaar gets FPB's entire #shareholding in Faysal Bank

In #Pakistan Faisal Private Bureau (FPB) has transferred its entire shareholding in Faysal Bank Limited (FYBL) to Ithmaar Bank. On June 30 FPB has transferred over 38.686 million of its stakes in Faisal Bank into Ithmaar's CDC account. However, FYBL secretary Aurangzeb Amin said the transaction had no affect in terms of change of ownership. He also added that the State Bank of Pakistan had already granted its approval for transfer of shares to Ithmaar Bank on April 29, 2016.

#1MDB confirms second interest payment on Bandar #Malaysia #sukuk

1Malaysia Development (1MDB) has paid the RM1.579 million interest coupon on the RM2.4 billion Bandar Malaysia sukuk due in 2024. This is the second interest payment made by 1MDB since its dispute with the Abu Dhabi’s state-owned investor, International Petroleum Investment (IPIC). The first payment was in May, when 1MDB made a scheduled coupon payment amounting to RM143.75 million on its RM5 billion 5.75% Islamic medium-term notes due 2039. The two payments strongly indicated that the company had ample liquidity to make interest payments. According to 1MDB president Arul Kanda Kandasamy 1MDB was focused on resolving the dispute with IPIC and would continue to honour current debt obligations.

Islami Bank: #Bangladesh's Most-Watched Bankers

Islami Bank is the largest and most profitable bank in Bangladesh. It has 10.7 million depositors, 27% of Bangladeshi remittances and 23% of the small and medium enterprises market. While most of the 56 banks in the country are plagued by rising nonperforming loans, poor management and operational inefficiency, Islami Bank isn’t. The bank has a rigorous recruitment and training process and the churn at the company is low. Despite its success, the bank has been dogged in recent years by suspicion that it has been used by Islamic terrorists. CEO Mohammad Abdul Mannan is cognizant of the image problem. No wrongdoing has been proven, but Islami Bank seems to be attending to image cleanup.

Will BIMB be reorganised soon?

After the listing of RHB Bank, attention is now on whether BIMB will do the same with Bank Islam Malaysia. Bank Islam is the oldest and largest standalone Islamic bank in Malaysia with an asset size of RM55.46 bn as at March 31. It also owns a 59.9% stake in insurer Syarikat Takaful Malaysia, while its other core business is BIMB Securities. BIMB, in turn is 53.6% controlled by pilgrim fund Lembaga Tabung Haji (LTH). It is believed that the bank still holds the dream to move into the big league and grow market share. However, it will not be able to achieve mega Islamic bank dream unless it mergers.

#Australian Islamic Finance Juggernaut Moving Forward with Middle-East #Expansion

Equitable Financial Solutions (EFSOL), Australia's largest, international Islamic finance company has announced the establishment of its Dubai office at Emirates Towers. EFSOL is actively pursuing its Middle-East expansion strategy, following the successful establishment of its ASEAN office based in Singapore. Usman Siddiqui, Managing Director of EFSOL said the new Dubai office will give investors access to the company's superior products and returns. He is confident that the EFSOL team will boost their financial products' offerings in key areas of Islamic finance.

#Morocco to start approving Islamic banks for business to begin in 2017

Morocco's central bank will start issuing approvals for Islamic banks this year so that they can begin business in early 2017. The North African country had long rejected Islamic banking due to concerns about Islamist movements. Now the central bank has set up a central sharia board with the country's body of Islamic scholars to oversee the new industry. Lhassane Benhalima, the central bank's head of banking supervision said it was absolutely wrong that some banks had been pushing to delay the process. The central bank received seven requests to open Islamic banks and three to open windows selling Islamic finance products. According to Benhalima the bank is planning an Islamic interbank market and is encouraging the government to issue regular sukuk to ensure liquidity.

UPDATE 1-#Morocco to start approving Islamic banks for business to begin in 2017

Morocco's central bank will start issuing approvals for Islamic banks this year so that they can begin business in early 2017. The North African country had long rejected Islamic banking due to concerns about Islamist movements. Now the central bank has set up a central sharia board with the country's body of Islamic scholars to oversee the new industry. Lhassane Benhalima, the central bank's head of banking supervision said it was absolutely wrong that some banks had been pushing to delay the process. The central bank received seven requests to open Islamic banks and three to open windows selling Islamic finance products. According to Benhalima the bank is planning an Islamic interbank market and is encouraging the government to issue regular sukuk to ensure liquidity.

#Malaysia approaches #fintech with Islamic twist

Malaysia is adapting to fintech revolution by adjusting its financial regulatory guidelines with an Islamic angle. According to Muhammad bin Ibrahim, governor of the Central Bank of Malaysia, the recent Islamic finance initiative could be the next game changer. The Investment Account Platform (IAP) is a platform that connects lenders, banks and enterprises seeking funds, one that could shift the role of Islamic lenders to investment intermediaries. Serving as a central marketplace to finance small and medium-sized enterprises (SMEs), the IAP was launched by six Malaysian Islamic banks: Affin Holdings, Bank Islam Malaysia, Bank Muamalat Malaysia, Maybank Islamic, Bank Kerjasama Rakyat Malaysia and Bank Simpanan Nasional.

Gulf African Bank: Why we don't lend to casinos, breweries

In #Kenya the Gulf African Bank has ambitious expansion plans for the local market. The bank, which is so far only represented in five counties, plans to open ten new branches between 2016 and 2017. Follwoing Sharia rules, the bank does not finance casinos, breweries and anything that is hazardous to the human body. Gulf African Bank is stable and prepared to increase core capital which now stands at Sh3.8 billion. At the end of the year the bank's capital will be above Sh4 billion, while by 2017 above Sh5 billion.

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