IslamicFinance.de

Islamic Corporation for the Development of the Private Sector (ICD) has signed a new agreement with Azerbaijani microfinance institution VisionFund AzerCredit (VF AzerCredit). The objective is to provide advisory services with the aim of developing a comprehensive Shariah-compliant microfinance solution for the country. Vision Fund AzerCredit's work emphasizes the provision of loans to small and micro entrepreneurs in rural areas, especially those remote regions which remain largely unbanked, through 45 outlets in 38 districts. With more than 80,000 borrowers and a portfolio of over US$83 million, the group is a leader in the Azerbaijani microfinance field. The VF AzerCredit agreement represents the latest step in the ICD's program to support and develop the growth of the private sector in Azerbaijan.

Russian banks are developing their expertise in Islamic finance to help broaden funding sources for local firms, though Western sanctions over the Ukraine crisis could hinder those efforts. Banks in the Middle East and southeast Asia, the major markets for sharia-compliant debt, are wary of becoming tangled in the EU sanctions. So some Russian lenders are trying to build their own in-house knowledge of Islamic finance. State development bank Vnesheconombank (VEB) is seeking help from Middle East firms to develop its Islamic finance expertise. VTB Bank is exploring sukuk deals for several of its clients. However, the lack of a Russian regulatory framework for Islamic finance is an obstacle.

The Islamic Corporation for the Development of the Private Sector (ICD) has signed a new agreement with Azerbaijani microfinance institution Vision Fund AzerCredit. The objective is to provide advisory services with the aim of developing a comprehensive Shari’ah-compliant microfinance solution for the country. VF AzerCredit's work emphasizes the provision of loans to small and micro entrepreneurs in rural areas, especially those remote regions which remain largely unbanked, through 45 outlets in 38 districts. With more than 80,000 borrowers and a portfolio of over $83 million, the group is a leader in the Azerbaijani microfinance field.

Turkey’s takeover of Bank Asya is making the government an even bigger player in the Islamic finance industry, just as state-owned lenders Ziraat Bank, Halkbank and Vakifbank prepare to start Shari’ah-compliant units to challenge the privately-owned banks. Vakifbank will get a $300 million loan from the Islamic Development Bank to help fund its Islamic finance arm, while Halkbank plans a capital raising to finance its unit. The initial idea as announced by officials was that the newly-established banks would not chase existing participation banks’ clients but instead focus on rural areas and increase the total pie. Finance Minister Mehmet Simsek said in an October interview he considered the Islamic finance industry in Turkey to be “under-banked” and that the government looked favourably on the idea of issuing new licenses to lenders.

Al Salam Bank Bahrain has reported total comprehensive income for 2014 down 52 per cent at BHD 16.68 million. The bank showed a 79.6 per cent increase in total assets to BHD 1.96 billion while liabilities rose 95 per cent to BHD 1.6 billion. Income from financing contracts was up from BHD 26.1 million to AED 51.5 million while total operating income was up 76 per cent to BHD 46 million. However, earnings per share slipped from 8.3 to 8 fils. Al Salam Bank Bahrain reported a jump in operating expenses from BHD 11.4 million to BHD 26.4 million.

The International Islamic Banking and Finance Law Conference took place in Kuala Lumpur, Malaysia, February 4-5, 2015. The conference hosted many high profile speakers including the CEO of CIMB Islamic Bank, Badlisyah Abdul Ghani, who stressed the point that everyone now working in Islamic finance should make a strong effort to learn or further develop their skills in Shari’ah. Camille Paldi, FAAIF CEO, noted that it is imperative for the Islamic Finance industry to develop a unique dispute resolution system tailored for Islamic finance. In addition, Paldi suggests that it might be wise to form a global Islamic finance bankruptcy court to handle the world’s sukuk defaults.

The date for the Kazan Sukuk Conference has been shifted to Thursday, April 9, 2015. The location of the conference will remain the same, the 5-star Mirage Hotel in Kazan, Tatarstan, Russia. This change was made according to the desire of participants and speakers of the Conference. The Conference brings together over 100 representatives of the Russian government, regulators, business entities and international sukuk market players to discuss sukuk structures and their application, jurisdictions and platforms for sukuk issuances, investment projects and underlying asset pools, regulation and Sharia issues. To get more information about the event please visit: www.kazansukuk.ru.

U.S. advisers who are not alert to the special investing needs of Muslims are missing an attractive segment of the investing populace. The U.S. Muslim population is expected to reach 6.2 million by 2030, almost three times the nation's 2.6 million Muslims in 2010. Muslim-Americans are younger and better educated than the average U.S. citizen. Moreover, they want to see a greater number of appropriate financial products. Meeting their investing needs is similar to working with clients who want socially responsible investments, but it requires additional expertise. But the main point is that advisers can help Muslims get in the market.

The Turkish banking regulator's decision to take over the management of Bank Asya did not affect the country's unsolicited sovereign credit ratings, Standard & Poor's announced Feb. 6. Turkey's current credit rating stands at BB+ with a "negative" outlook. The rating agency sees this decision as an isolated incident and not a harbinger of systemic distress in the banking sector or a determined politicization of Turkey's regulatory institutions, S&P said in the statement. Bank Asya's relatively small size makes it rather unlikely that there could be any contagion effects, it added. Following the Bank Asya takeover, the United States had called on all governments to ensure the monitoring of corporate and financial activity is done in line with international legal standards.

Turkey’s government seized control of Islamic lender Bank Asya and dismissed its executives, marking the latest extraordinary step in a highly politicized monthslong battle over the company. Late on Tuesday, the country’s banking watchdog transferred 63% of Bank Asya’s preferred shares into the state-run Savings Deposit Insurance Fund, which answers directly to the prime minister. The fund then replaced the bank’s leadership with a new chief executive and board of directors. The bank’s shares, which have been allowed to trade only one houreach afternoon since September, dropped 1 kurus to 60 kurus (25 cents), a record low, and then rose to 63 kurus as Istanbul’s market closed.

The takeover of Bank Asya by the Turkish Savings Deposit Insurance Fund (TMSF) is entirely legal and judicial, but not political, Turkish Prime Minister Ahmet Davuto?lu said on late Feb. 4. Many people continued to show their support to the bank by putting money into their bank accounts Feb. 5, although some others were reported closing their bank accounts. TMSF seized some 63 percent of Bank Asya shortly after the banking watchdog (BDDK) ruled in favor of its seizure on late Feb. 3. The BDDK said in a statement on its website that it seized the bank “because the institution has not presented a partnership structure that is transparent and open enough to allow for effective regulation.” The watchdog appointed a new board of directors immediately after the seizure.

Turkey's largest Islamic lender, Bank Asya, is demanding that the state-run Savings Deposit Insurance Fund (TMSF) return the bank's rights to control its management following strong indications that the fund's decision to take over control of the lender's board has no legal basis and is politically motivated. Turkey's banking watchdog, the Banking Regulation and Supervision Agency (BDDK), handed management control of 63 percent of the privileged shares of Bank Asya over to state savings funds on Tuesday, citing a lack of certain key documents as the reason why the bank cannot maintain its operations. The bank's shareholders are currently preparing to provide the watchdog with the required documents and the bank has separately taken legal action to revoke Tuesday's intervention.

Funding for infrastructure projects will be the driver for sukuk issuances this year, says CIMB Islamic Bank chief executive officer, Badlisyah Abdul Ghani. He said the sukuk issuance in 2015 could emulate the peak of 2012, if all planned infrastructure projects such as My Rapid Transit, the Pan-Borneo highway and Kuala Lumpur-Singapore high speed train venture come on stream. Badlisyah said for the market to be sustainable, more mid size offerings of between RM1 billion and RM2 billion are needed, as compared to a single mega size issuance of RM20 billion. Meanwhile, on CIMB Islamic,Badlisyah said the bank is currently working on a few sovereign deals which are expected to come on stream in the middle of this year.

The Moroccan banking group Attijariwafa Bank plans to transform its subsidiary Dar Assafaa into an Islamic financial institution according to the group’s CEO Kettani. In this context, the banking group belonging to the Royal Holding SNI plans to increase the capital of Dar Assafaa to $ 18.40 million, and will inject more investments according to the development of this new market in Morocco. Attijariwafa Bank will develop its own participatory bank without foreign partnership, unlike Banque Centrale Populaire and BMCE Bank which have opted for the creation of joint ventures with foreign Islamic banks. Moreover, the institution will expand its range of products.

Credit guarantees are gaining traction in Islamic finance, helping a wider range of firms to tap the market for sharia-compliant debt, which remains stubbornly reliant on sovereign and quasi-sovereign issuers. A growing number of guarantors are developing expertise in this area, aiming to facilitate Islamic transactions both large and small. Among them is Britain's export credit agency, UK Export Finance, which plans this year to guarantee an Islamic bond (sukuk) issue for the first time under a capital market guarantee product that it launched in 2010. Demand is also growing for guarantees in markets where credit and political risks pose a greater challenge.

Islamic banks can play an important role in the economies of Maghreb countries – particularly those struggling with socioeconomic development. According to the 6th African Islamic Finance Forum (FAFI) in Casablanca, Islamic products should not be simply limited by halal and haram, but should be designed as a source of wealth and job creation. Africa offered real opportunities to develop Islamic finance, financial analyst Najib Foukari said. However, the shortage of suitable human resources is still a major challenge, he added. In 2015, a number of Islamic financial institutions are being set up in Tunisia, Mauritania, Mali, Côte d'Ivoire and Chad. Morocco has also just adopted a legal and regulatory framework for the establishment of Islamic financial institutions.

Bangladesh has long been a success story for women’s financial inclusion. But in terms of digital finance, the story is very different. Despite being identified as a “mobile money sprinter” by the GSMA, only 18% of digital finance users in Bangladesh are women, with even fewer holding registered accounts. This is perplexing, given the rapid growth of digital financial services now reaching more than 21 million registered account holders. There are a number of potential reasons, including the fact that women are less likely to have an official identification. Besides, English-language phone menus may have a disproportionate impact on women. Nevertheless, there are resources and market players available to bridge this gender gap.

Turkish Economy Minister Nihat Zeybekci said on Wednesday a banking regulators' decision to take over management at Islamic lender Bank Asya ends a period of speculation and restores a safer environment. Zeybekci also told a news conference broadcast live on TRT television that it was "unfair" Turkey had to pay a high cost due to its interest rates and accused the central bank of lagging the market after the bank decided against holding an extraordinary policy meeting to cut rates.

UK regulators have accepted European Islamic Investment Bank's application to vary its regulatory permissions, meaning it is now an exempt capital adequacy directive (CAD) investment firm. Last September, European Islamic Investment Bank had concluded that the scope of its UK regulatory permissions was in excess of requirements, and began talks with regulators to "vary its regulatory permissions" to enable it to focus on its core strategy. At the time it anticipated that the move would involve giving up its deposit-taking licence. The European Islamic Investment Bank is regulated by the UK's Financial Conduct Authority.

The Saving Deposit Insurance Fund (TMSF) has seized the Gülenist bank, Bank Asya, and shares belonging to 122 real and judicial shareholders of the bank, including Kaynak Holding, Ortado?u Tekstil and Forum ?n?aat, have been transferred to the TMSF. Some of the shareholders that have been deprived of their shareholding rights are known to be financers of the Gülenist Movement, such as Naci Tosun (Kaynak Holding's affiliate Sürat Bas?m), Ali Akbulut (Ortado?u Tekstil) and Forum ?n?aat. Officials said that the decision was not a political one but mainly due to Bank Asya's negligence to meet the technical requirements.