Islamic Banking

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Malta appointed working group for Islamic finance

The Malta Financial Services Authority (MFSA) has set up a five-person working group chaired by its director for strategic development, Dr Michael Xuereb, to identify further necessary legal and regulatory changes and related implementation procedures with respect to Sharia Institutions and Sharia Funds.

Standard & Poor’s Publishes Islamic Finance Outlook 2009

The new yearbook includes Standard & Poor’s latest analysis and rating methodologies on almost 40 rated Islamic debt issues and issuers, and an overview of its suite of global benchmark and investable Sharia indices.

While total global sukuk issuance more than halved to $14.9 billion in 2008 from $34 billion in the previous year, Standard & Poor’s believes the outlook for Islamic finance remains strong. Sharia-compliant assets now total about $700 billion after growth exceeding 10% annually during the past decade.

Full 70+ pages report for free download at:

http://www.gcc.standardandpoors.com/islamic_finance/Islamic%20Finance%20Outlook%202009%20(12).pdf

German: Die Wirtschaftskrise aus islamischer Sicht

The presentation is in German only.

Am 10. April wurde in der Volkshochschule Bielefeld in Zusammenarbeit mit dem Bündnis Islamischer Gemeinden ein Vortrag zur Wirtschaftskrise aus islamischer Sicht gehalten.

Die Präsentation wird hier als PDF Dokument zum Herunterladen angeboten. Die lebhafte Diskussion zu den einzelnen Punkten islamischer Finanzwirtschaft, Wirtschaftstheorie und Empfehlungen zur Wirtschaftskrise enthält sie leider nicht.

OIC Member States' Stock Exchanges Forum in Teheran took place

Beginning of May the OIC Member States' Stock Exchanges Forum took place in Teheran, which was themed: enhancing cooperation among the Islamic countries' Exchanges.

First Islamic bank in France already in June?

Gilles Saint-Marc, a Paris based lawyer is cited that the first Islamic bank in France may start already in June 2009.

Malaysia to Seek Large Islamic Banks for International Reach

Malaysian Governor Zeti Akhtar Aziz said to Bloomberg, that an international Islamic financial institution of a large size that can take international business, whether business in Europe, or South Korea or any part of the world is wanted to be seen, reported Shanthy Nambiar and Haslinda Amin on Bloomberg.

Mawarid and Al Arabiya launching portal for Islamic economics

Mawarid Finance announced in cooperation with Al Aswaq Al Arabiya of Al Arabiya News Channel the launch of an e-portal dedicated to Islamic economics. The new e-portal features a database of Islamic financial companies and institutions in addition to fatwas related to Islamic financial transactions, products, updates on Islamic financing.

A link was provided in the Press Release.

Stress testing Islamic finance

Ayah el Said and Rachel Ziemba discussed risk management considerations comparing stress testing in conventional finance and the Islamic finance industry on RGEMonitor.

For Islamic financial institutions, a plausible scenario means factoring in possible contractions in several of the economies that have been the centers for Islamic finance as well as significant asset market corrections which would weaken the balance sheets of Islamic financial institutions. A stress scenario should factor in at least another 40% drop in property prices in Dubai and considerable drops in other markets. The increased risks of investment losses on the one hand, and rising non-performing loans on the other, adds to the vulnerability of Islamic banks.

Middle East covers more than half of the Islamic Finance market

Research conducted by Shariah-Fortune screened around 810 companies in 50 countries worldwide offering Shariah compliant financial services. The Middle East covers more than half (around 56 %) of the Islamic Finance market. Around 450 companies are located in this region. Leading countries are the UAE, Bahrain, Kuwait, Iran and Saudi Arabia. Asian companies compound to a market share of about 20 %. In particular. Malaysia is one of the key players, not only in Asia, but also globally.

114 companies have been screened in Europe, which accounts for around 14 % of the global market share. On top position in Europe is the UK, boosted by the FSA´s regulatory initiatives. Compared to its global importance North America takes only a small part in the listing for Islamic Finance. Around 44 companies (ca. 5 %) are located in the USA and Canada.

Azerbaijan is reaching out to Islamic finance

Azerbaijan, the oil-rich Caspian country with a population of about 9 million and a member of the Jeddah-based Islamic Development Bank (IDB), is reaching out to Islamic finance. Faig Mammdov, special adviser to the chairman of the International Bank of Azerbaijan (IBA), Jahangir Hajiyev, focuses on the current developments and future prospects for Islamic finance in the country and region and gave an interview to Mushtak Parker, Arab News. Currently there is no specific regulation and no stand alone Islamic banks, but some products, as well as Islamic microfinance.

FT Special on Islamic finance

FT has today a 4 page special on Islamic finance. The link below leads to its pdf version (size 10 MB), discussing standardisation issues, credit crunch and other topics.

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

Arthur D. Little: Shariah-Compliant Banking is an Increasingly Attractive Option for Western Players

A new report released today by management consultancy Arthur D. Little entitled “Islamic Finance Comes of Age” has identified a surge in activity around Islamic finance as a promising opportunity for the global financial services industry as it emerges from the current recession. With Islamic finance assets currently standing at USD 800 bn, Arthur D. Little expects this figure to surge to as much as USD 4 trillion in the next six years, representing a major opportunity for Western financial institutions looking to develop new partnerships and global markets.

The report can be downloaded after free registration at: http://www.adlittle.com/islamic_finance

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.

Chase bank in Kenya has launched Shariah compliant products

Chase bank in Kenya has launched Shariah compliant products writes Mwaniki Wahome in the Daily Nation.

Known as Imam Banking, products are tailored for corporate, small-and-medium enterprises, as well as individuals. The accounts will include current accounts, savings accounts and fixed period investments. Together with Genghis Capital Limited and Winton Investment Services Sharia compliant investment banking and wealth managements products are planned. Further the management studies to introduce Takaful.

Zafrullah Khan is the MD of Chase.

Opening Ceyhan Bank for Islamic Investment and Development in Iraq

The Minister of Finance in the Government of Kurdistan province, Baez Talabani has opened Ceyhan Bank for Islamic Investment and Development. The chairman of Ceyhan sets as goal of opening this bank to provide qualified and new services, on the basis of Islamic shareholders for people, companies and government institutions.

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.

CEO Faisal Private Bank ask for harmonization of Sharia standards

Faisal Private Bank's Chief Executive, Marco Rochat, said the absence of a global set of harmonised rules on sharia compliance created an unlevel playing field, reported Martin de Sa'Pinto on Reuters. Faisal Private Bank adivses on nearly USD 500 mn.

GFH plans UK property fund and Sukuk fund

Gulf Finance House plans to launch a GBP 50 mn UK commercial property fund and a USD 50 mn Sukuk fund in the GCC. The USD 50 mn sukuk fund, to launch in the next two weeks pending regulatory approval, would focus on government, quasi-government, or very stable GCC issues, reported Ulf Laessing and Raissa Kasolowsky on Reuters.

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