Islamic Banking

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Reuters: Dubai Islamic Bank prepares USD 817 mn capital hike

Dubai Islamic Bank is considering raising AED 3 bn (USD 817 mn) in fresh capital and converting emergency government deposits into regulatory capital. The bank's board of directors would discuss the two measures on March 25, the bank said on Tuesday in a statement on the bourse website.

Rival banks, such as Union National Bank, National Bank of Abu Dhabi and Emirates NBD Bank in the UAE have already launched similar moves.

KuveytTürk aims to enter German retail market

KuveytTürk aims to cater for German Muslims from payment services to the whole range of Islamic finance products in the years to come. The application process for a financial services branch with both regulators is ongoing but not yet finished contrary to what media sources were reporting yesterday.

Export Credit Insurance by ICIEC

The Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) is offering Export Credit Insurance which offers to protect the exporters from the risk of payment default by their buyers or importers on one hand, and offers them a number of indirect and direct financing products on the other hand. This dual solution approach mitigates the principal inherent risks in international trade, encouraging exporters in entering new markets and expanding customer base.

The concept was presented in Saudi-Arabia and the ICIEC is going to present the possibilities to other IDB member countries.

Nigeria circulates draft of Islamic banking regulation

According to Les Afriques the Central Bank of Nigeria is circulating a draft of their regulation for Sharia compliant financial institutions.

Unicorn Bank to make further investment of USD 12.9 mn in Dawood Islamic Bank

Dawood Islamic Bank Limited has received Rs. 1 billion (USD 12.9 mn) investment from Unicorn Investment Bank Limited, based in Bahrain , this was stated in a statement issued from Bank’s headoffice in Karachi. Dawood Islamic Bank launched in 2007 with an initial paid-up capital of Rs. 3 billion. The Dawood Islamic bank has a branch network of 21 branches spread over the major cities of Pakistan , including Karachi , Lahore , Islamabad , Faisalabad , Multan , Sialkot , Iqbalabad and Joharabad.

Unicorn already had a 22.2 % equity stake in Dawood Islamic Bank prior to the current investment. With the new investment the equity of Unicorn Investment Bank, in Dawood Islamic Bank has increased to 37% percent

Aamir Khan is Managing Director and Head Global Private Equity of Unicorn Investment Bank and a founder Director of Dawood Islamic Bank

Said Rafique Dawood is Chairman Dawood Islamic Bank.

Malta as Centre of Islamic finance

The Malta Institute of Management (MIM) met up with Opposition Leader Dr Joseph Muscat, to present a copy of Dr Robert Attard’s Principles of Maltese Taxation.

Hon Dr Muscat said that Malta has a big opportunity ahead of it. MIM has spearheaded the discussion in Islamic Finance in Malta and the Labour Party has supported it throughout. Reuben Buttigieg explained how Malta can be marketed as an Islamic Finance centre through the direct intervention of the government through the issuance of Sukuk.

BBK looking for other acquisitions after merger with Shamil Bank was cancelled

Frederik Richter reported on 15 March based on Reuters that Bank of Bahrain and Kuwait (BBK) is looking for opportunities to acquire after the planned merger with rival Shamil Bank was put on hold.

BBK recently created its fully-owned Islamic investment bank Capinnova. BBK has a market capitalization of about $1.04 billion and a market share of 15-20 percent in the Bahraini retail market, according to its own estimates. (Reuters)

KFAED, KFH intend to invest USD 100 mln in Morocco

Kuwait News Agency citing that the Moroccan newspaper "Al-Jareeda Al-Oula" reported that three Gulf investment groups have revealed their intention to invest USD 250 mn this year in Morocco, including the Kuwait Fund for Arab Economic Development (KFAED and the Kuwait Finance House Group (KFH).
In the same context, the newspaper quoted an official from the "ENOCENOC" group of the United Arab Emirates as saying that the group decided to invest USD 150 million to set up an investment project in the northern city of Tangier.

The Executive Director of the ENOCENOC Group Saeed Khoury said the investment will be to build the first phase of the plant in Tangier which is scheduled to enter service in the first quarter of next year.

First Leasing Bank posts net profit of USD 3 mn

Bahrain-based First Leasing Bank (FLB) made a net profit of USD 3 mn in 2008 last year. The bank's income from financing activities grew to USD 8.4 mn from US 3.6 mn in 2007 and total portfolio grew to USD 142.5 mn from USD 54.5 mn at the end of 2007.

Khalid Kanoo is Chairman.
Greg Brinkerhoff is CEO.

Tunisia: New Islamic bank ahead: Banque Islamique Zitouna

Les Afriques reported on 7 March that Mohamed Sakhr El Materi, President of Princesse El Materi Holding has received end of January the regulatory agreement to create the commercial bank Zitouna.

Existing Islamic banks in Tunisia are Best Bank (Bank Ettamwil Tounsi Saoudi) and Noor Islamic Bank, the latter with its regional office.

International Investment Bank posts USD 13.5 mn net profit and announces 7 % cash dividend for the year 2008

International Investment Bank (IIB), Bahrain announces a Net Income of USD 13.5 mn and the approval of a cash dividend payment of 7% for the year ended 31 December 2008.

At USD 13.5 mn, the 2008 Net Income represents a 12.3% return on Paid up Capital (ROC). The Capital Adequacy ratio at 31 December 2008 of 86% is over 7 times of 12% required by the Central Bank of Bahrain.

Mr. Aabed Al Zeera is the Chief Executive Officer and Board member.

For full details on IIB’s financial results, please see the ‘Financial Section’ on IIB’s website at source.

Dubai Islamic Bank sets aside cash amid fraud probe

Adam Schreck wrote on 10 March on Associated Press that Dubai Islamic Bank sets aside cash amid fraud probe and that it has foreclosed on a real estate project after court papers indicated the bank was the victim of a half-billion dollar fraud. In a statement, Dubai Islamic Bank said it had exposure of about USD 330 mn to a company named CCH linked to some of the suspects in the court papers.

Malaysian bourse to launch Commodity Murabaha platform in June

Liau Y-Sing reported on Reuters, 5 March that Malaysia's stock exchange will launch in June a platform to allow banks to execute Commodity Murabaha transactions, a popular but controversial Islamic contract with a market worth more than USD 100 bn according to the International Islamic Financial Market. Any tangible asset that is sharia-compliant can be used in commodity murabaha transactions and palm oil is one obvious example. Malaysia is the world's No. 2 palm oil producer.

But some religious scholars have criticised the structure, saying it resembles conventional-based lending instruments. The Accounting and Auditing Organisation for Islamic Financial Institutions is of the view that the contract, while not invalid, is not ideal.

Malaysian banks remain well capitalised

Malaysia is well placed to weather the global financial crisis, well capitalised and with adequate liquidity, Bank Negara Malaysia governor Tan Sri Dr Zeti Akhtar Aziz told the Oxford Business Group (OBG), a global publishing, research and consultancy firm. She said several years of reforms, institutional development and capacity building, continuous efforts to enhance corporate governance and risk management standards and practices had significantly strengthened Malaysia’s banking system.

OBG is to publish The Report: Malaysia 2009, the latest of its annual business guides, with a comprehensive review of the country’s economy.

Sharia scholar accepts fee for Guarantee

Liau Y-Sing reported via Reuters on 4 March that Mohd Daud Bakar, a renown Malaysian Sharia scholar, says banks may charge fees for guarantees but cannot sell the risk to a third party.

Vatican related newspaper: Islamic finance suggests ideas for Western financial crisis

Loretta Napoleoni and Claudia Segre suggesting in the Vatican related L'Osservatore Romano, that Islamic finance offers ideas for the Western financial crisis. Citing the main concepts of Islamic finance and emphasizing specifically Sukuk.

The original article is in Italian linked via Source.

New governor of Saudi Arabian Monetary Agency may promote Islamic finance further

The appointment of Muhammad Al-Jasser last month as the new governor of the Saudi Arabian Monetary Agency (SAMA). Foreign regulatory officials and bankers expect a much more proactive policy approach from the new governor. Others expect SAMA under Al-Jasser to open up to Islamic banking in particular and to show leadership in this field in the light of the growing globalization of the industry.

Pakistan still substantal cash outside the banking system

Adviser to PM on Finance Shaukat Tareen has asked Islamic banks to bring billions of rupees in formal banking which are kept with the people on religious grounds.

Tareen said that this huge amount can be brought in for productive purposes and channelised into a profit and loss based system of banking.

Dubai Islamic Bank posts USD 471 mn profit for 2008

Andy Sambidge reported on 25 February in Arabianbusiness that Dubai Islamic Banking reported only a small decline in net profit in 2008, AED 1.73 bn (USD 471 mn) in net profit for 2008. DIB’s total assets as of December 31, 2008, stood at AED 84.6 bn, up slightly compared to the end of the same period in 2007.

DIB’s full-year results reflected total impairment provisions of AED 521 million (including writedowns on its investment portfolio) and mark-to-market losses on equity investments of AED 277 million. The majority of these were recorded in the fourth quarter of the year, one of the primary reasons impacting profitability during the last quarter of 2008.

The Board of directors of Dubai Islamic Bank has proposed a cash dividend of 25 percent and bonus share of five percent for 2008.

Moody's negative on Qatar banks

Martin Morris reported on 23 February in Arabianbusiness that Moody's, says the fundamental credit outlook for the Qatari banking system is negative, reflecting expectations of a weakening in operating conditions.
In its new Banking System Outlook on Qatar the agency examines the likely future direction of fundamental credit conditions in the industry over the next 12 to 18 months. It does not represent a projection of rating upgrades versus downgrades.

Negative factors evaluated are the asset quality, impacted by property lending and the reduced profitability also impacted by stock market developments. The direct impact of the financial crisis has however so far been limited.

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