The Managing Director of Jaiz Bank, Hassan Usman, has assured that the bank’s loan profile is very healthy. Jaiz Bank, he noted, was not heavily or significantly exposed to the oil sector, but the bank’s exposure is to real estate. While justifying the listing of the bank’s shares in the Nigerian Stock Exchange (NSE), he said Jaiz Bank’s activities remain transparent and open. Jaiz Bank has challenges like any growing institution. One of such challenges has to do with perception, as many people thought it was a charity organization. Other challenges include the enabling environment like infrastructure for non-interest banking like liquidity instruments. Another challenge is the limited number of qualified trained manpower to manage Islamic banking. Inspite of these challenges, Jaiz Bank has proved itself to be sustainable. It has grown into a national franchise with branches in South and South West and is also opening more branches in other parts of the country.
A global body for Islamic finance has issued a draft standard on centralized sharia boards, aiming to improve corporate governance in the industry. The proposed rules come at a time when Islamic banks are trying to widen their appeal in the Middle East and Southeast Asia, while opening up entirely new markets in Africa. The Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) is seeking industry feedback on the proposed standard until the end of February. AAOIFI said the standard would encourage convergence of industry practices by avoiding contradictory rulings and fostering consistency across products and services. While the standard does not prescribe term limits for scholars, it does require sharia boards to implement a rotation policy for its members while including members with expertise in areas such as accounting and law.
Due to sharp declining trend in oil prices, slow economic pace and Arab spring, the trend of the Islamic Banking & Finance had been slow in 2016 in the Middle East and Arab region. A sufficient development was recorded in Africa, Central Asia and Far East, especially in the African market. Indonesia, Malaysia, Turkey, Pakistan, UAE, Qatar, Saudi Arabia, Kuwait and Bahrain are prominent where the contribution of their total assets of Islamic banking is 82% to the Global Islamic Banking market. According to a research by CIBE CEO Zubair Mughal, there will be a steady growth of approximately 13% to 15% in Islamic finance market during 2017 and the total volume of Islamic finance will cross $3 trillion figure by 2020, which will be accompanied by a definite addition of Sukuk along with Islamic banking. While the Sukuk market in Malaysia, Pakistan, UAE, Turkey, Central Asian countries and Africa seem determined in 2017.
According to law firm Hogan Lovells, the launch of Sukuk bonds by three West African governments will open up a vast financing channel for the region. Hogan Lovells advised the Islamic Corporation for the Development of the Private Sector (ICD) as lead arranger on the issuance of three sovereign Sukuks in West Africa. These include Cote d’Ivoire, Senegal and the Republic of Togo. The Sukuks were listed on the Bourse Régionale des Valeurs Mobilières (BRVM), Abidjan, Cote d’Ivoire. Altogether with the debut issuances for Senegal and Cote d’Ivoire, the combined listing value was CFA 766 billion. Imran Mufti, who led the Hogan Lovells’ team, said the landmark Sukuk bonds will enhance the development of Islamic finance in West Africa.
The Islamic Development Bank (IDB) has promised to continue its support for Jaiz Bank Nigeria given that that Jaiz bank now has a national licence. IDB president Ahmad Mohamed Ali assured officials that IDB as an institution will continue to assist the Jaiz Bank. Chairman of the Jaiz Bank, Alhaji Umar Mutallab said with Jaiz bank’s newly acquired national licence from the Central Bank of Nigeria, the bank will soon start rolling out services nationwide. IDB is a shareholder in the Jaiz bank.
The State of Osun in southwestern Nigeria raised a sukuk bond worth 10 billion naira ($62 mn) from the capital market to fund educational development. After the recent trend of Eurobond issuance by African countries, Osun’s offering was sowing the seeds for more African sukuk. Prior to Osun, only Gambia and Sudan had issued local-currency short-term domestic notes. Osun's Governor Rauf Aregbesola believes that the potential of Islamic finance can also attract investors from the Middle East. Osun State’s planned multi-billion naira sukuk fund for education represents Nigeria’s most ambitious attempt to promote Islamic finance.
The Central Bank of Nigeria (CBN) has granted Jaiz Bank national license to operate Islamic non-interest banking in all the states of the federation. Chairman of Jaiz Bank Alhaji Umaru Abdul Mutallab said the bank intends to roll out in all the 36 states and the Federal Capital Territory (FCT) in two or three months times. Alhaji Sa’ad Abubarkar III, the Sultan of all Muslims in Nigeria, congratulated and warned that Jaiz bank must conform with all rules and regulations of Islam.
Financial experts and researchers at international conference on Islamic financing have emphasised the need for framing a holistic vision for inclusive growth and promotion of Islamic mode of financing essentially with focus on poverty alleviation, access to loans to small growers, and reducing income inequalities. The two-day international moot titled “Towards Financial Inclusion: Developments in Islamic Economics, Banking and Finance”, held under the auspices of Centre for Excellence in Islamic Finance (CEIF), IMSciences, in collaboration with the State Bank of Pakistan, and the UK Department for International Development (UK-DFID), aimed at promoting academic, research, and best industry practices of Islamic finance as joint venture with commercial banks, regulators, universities, Islamic financial resources centers.
Emir of Kano, Muhammad Sanusi II, has said Islamic Banking institution can revitalise the troubled Nigerian economy if well adopted. According to him, one of the major benefits of the system is to reduce poverty. He spoke yesterday at the Third Annual Holiday Convention of the Guild of Muslim Professionals (GMP) at the Administrative Staff College of Nigeria (ASCON), Topo, Badagry in Lagos State. The former Central Bank of Nigeria (CBN) Governor, who disclosed that non-Muslim countries including Cote d’Voire, Senegal and Gambia are picking interest in the Sukuk, the Islamic banking system, also called for increased awareness on the Islamic Banking system. He urged scholars to avail themselves of the opportunity of the training sessions organised by the Central Bank of Nigeria.
Ambassador Adamu Babangida Ibrahim, a banker, has served as Nigerian Ambassador to the Syrian Arab Republic and the Republic of Guinea. Ambassador Ibrahim is the pioneer Director-General, Jaiz Charity and Development Foundation, a charity arm of the Jaiz Bank. Jaiz Foundation uses the income that the bank cannot recognise under their profit and loss as Halal income for charity purposes. These monies are supposed to be used for charity and development purposes for interventions, especially in the poor and underserved people for economic empowerment, for intervention in health, education and so forth.
Pakistan's central bank will sell 49.5 billion rupees ($503.8 million) of Islamic bonds, the country's first such issuance in 15 months, with pricing to be set on Wednesday. The sukuk will inject a much-needed liquidity management tool for the domestic Islamic banking industry. The appetite for local currency sukuk has grown with Islamic banks posting double-digit asset growth, but the government has been unable to match demand, constraining the sector's financing and investment capability. The government has not indicated whether it would issue more local currency sukuk this year, although the finance ministry has said it was considering issuing dollar-denominated sukuk.
Pakistan will reportedly receive 250 million Euros from the Islamic Development Bank (IDB) in the ongoing month of August, which is part of 750 million Euros loan. Similarly, the country will also avail the trade facility of $150 million for import of fertilizer and Petroleum products this month. The Islamic Development Bank had agreed to the loan and the trade facility in a meeting between the President of the Islamic Development Bank, Dr. Ahmed Muhammad Ali, and Pakistan’s Finance Minister Senator Ishaq Dar in Jeddah last week. Pakistan will also receive $500 million from Asian Development Bank and $500 million from World Bank in the second half (January-June) of the ongoing financial year 2013-14. Moreover, Pakistan is expecting to receive $3.4 billion from IMF during the current financial year. The loans will help building the foreign exchange reserves, which are currently around $10.25 billion.
Emaan Islamic Banking, a division of Silkbank Limited, has been launched and is now available in 10 branches in 8 cities including Karachi, Lahore, Faisalabad and Islamabad. M. A. Mannan, Executive Director at Silkbank, said that currently, the Islamic Banking Division offers a complete suite of liability based products and services including Current Account, Savings Account, Term Deposit (01 Month to 05 Years), Online Banking, 24/7 Phone Banking, Internet Banking, Visa Debit Card, Utility Bills Payment Service and Corporate Banking solutions including Musharka, Murabaha, Diminishing Musharka and Import Murabaha. Silkbank plans to open more Emaan Islamic Banking branches throughout the country and offer more products, both in Retail and Consumer Banking in Pakistan.
Islamic insurance providers in the UAE are struggling to generate surpluses amid cut-throat competition and overcapacity, Standard & Poor's warned in its report. The takaful industry must compete directly with conventional insurance companies that benefit from established economies of scale, have longer service track records and have more established distribution mechanisms to the marketplace. According to the report, the sector is now overpopulated with insurers. Insurance companies therefore require considerable capital investment to become established. Insurance companies are the most represented on the UAE stock markets, with 23 of the almost 100 publicly listed companies coming from the sector, but they are also some of the least traded stocks.
Burj Bank has launched an employee driven CSR initiative called “Giving beyond the Workplace Campaign”. As part of the programme, Burj Bank Employees along with the Senior Management team visited the TCF (The Citizen’s Foundation) Qayyumabad campus. Burj Bank members adopted one class each for the day where they spent their time in storytelling, book reading and educating the students about the importance of Earth Day. Moreover, Mr. Ahmed Khizer Khan, President & CEO of Burj Bank also presented a donation cheque from Burj Bank’s Charity Fund to Asaad Ayub Ahmad, President & CEO of TCF. This marked the beginning of a new relationship between the two organizations.
Dubai Islamic Bank Pakistan Limited has reported a year end profit before tax of Rs501 million. Furthermore, a 38 per cent deposit growth was achieved in comparison to 2011, taking total deposits to Rs53.11 billion in 2012. DIBPL’s asset base rose by 32% in contrast to 2011 increasing the asset base to Rs63.5 billion in 2012. The Bank’s investments grew substantially by 65% over the year, taking total investments to Rs21.33 billion.DIBPL opened 25 new branches in 2012, increasing the total branch network to 100 in 35 cities. The Bank added over 20,000 more customers in 2012, taking full customer base to over 100,000.
The company owning the "Chaichana Halal" beef-noodle franchise has filed a lawsuit against Islamic Bank of Thailand manager Thanin Angsuwarangsi at Bangkok's Ratchadapisek Criminal Court yesterday. This was after the manager allegedly failed to approve loans for its franchisees, despite signing a previous MoU agreeing to loan cash to 50,000 franchise applicants over five years. Chana Rattanapakdi, executive of Tha Pisut International that owns the franchise business, accused Thanin of abusing his authority and causing damage to others according to the Criminal Code's Article 157. The court will hear the case on July 15 at 1.30pm.
Pakistan's Prime Minister Raja Pervez Ashraf emphasized the close relations between Bahrain and his country and praised the Gulf Finance House Bahrain for doing well financially. Moreover, he drew the attention of Esam Yousif Janahi, Chairman and Founder of Gulf Finance House, to huge investment potential in Pakistan and expressed the need to invest in energy. He said that there were a good wind corridor, hydel potential and coal reserves. Jahani said that his company was examining the possibility of investing in energy sector in Pakistan. He further said that the investment policies of Pakistan were conducive and attractive for foreign investors because of rewarding returns on investments.
The Takaful industry is growing but also facing certain challenges which include issues regarding re-Takaful, regulatory challenges, competition and lack of human capital. In order to overcome all these challenges and issues, Al Huda CIBE established a Takaful Consultancy Wing with consultant Captain Jamil Akhtar Khan. Khan has expertise on Takaful regulatory issues, establishment of Takaful companies and other related departments. Takaful Consultancy Wing will be an independent institution which will provide its services to other organizations for the establishment of new Takaful companies, research, advisory, training, re-Takaful, Shariah guidance and other Takaful related matters.
Former executives of the Islamic Bank of Thailand who did not adequately pay attention to cash flow, collateral value and monitoring, are to be blamed for the high amount of bad dept at IBank, according to its new president Thanin Angsurarangsit. Non-performing loans at IBank currently amount to Bt39 billion, or about 30 per cent of outstanding loans. Moreover, the Finance Ministry is investigating possible corruption at IBank. The bank will try to maintain its lending at Bt120 billion this year. New lending to large corporates will be reduced as the bank focuses on retail clients who are Muslims.