IslamicFinance.de

A new bank is set to be inaugurated in the Gaza Strip next week, although it has not yet received the necessary licence from the Ramallah-based Palestinian Monetary Authority (PMA). The Al-Intaj bank has a capital of $20m and a board of directors chaired by Kuwaiti businessman and member of the International Islamic Fiqh Academy, Dr Riyadh Al-Khulaifi. The bank... will be headquartered in Gaza City and have branches in other parts of Gaza Strip in the coming years. 50% of its capital will be channelled to production-oriented activities, while 40% will be allocated to the traditional transactions. The remaining 10% will be set aside to the 'murabahat' (Shari'ah-compliant transactions), the lender's deputy board chairman Rushdi Wadi said.

The Board of Governors of the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), member of Islamic Development Bank (IDB) Group, approved in its 20th Annual Meeting the Annual Report and the Financial Results for 1433H (2012). Last year, the Corporation has continued to enhance the support it provides for exports from and investments into our Member Countries. Despite the existing challenges, the Corporation's Business Insured numbers remained strong at USD 3.07 billion, which is comparable to the business insured numbers achieved last year. ICIEC Chief Operating Officer Khemais El-Gazzeh said, especially the Political Risk Insurance (PRI) program stood out, having increased by 167% to reach a record high of USD 825 million.

The opposition Syrian National Coalition has received a last-minute invitation to Wednesday’s Friends of Syria meeting in Amman, which acting chief George Sabra will attend. The meeting is expected to focus on efforts spearheaded by the United States and Russia to organise a peace conference in Geneva next month. In the same time, Islamic Development Bank has temporarily suspended Syria’s membership, according to IDB President Ahmad Mohamed Ali Al Madani. Mr. Madani said the decision was taken by the bank’s Board of Governors, citing a Syria resolution by the Organisation of Islamic Cooperation that was discussed at the board’s recent meeting. He added the IDB was set to give Syrian refugees any kind of help, but stressed its humanitarian funds were strictly limited.

The Islamic Development Bank's Board of Governors (BoG) has approved to more than triple the Bank's authorized capital to 100 billion Islamic Dinars (about US$150 billion) from 30 billion. The BoG also increased the Bank's subscribed capital from 18 billion to 50 billion Islamic Dinars. The capital increase reflects the Bank's strong balance sheet and the growing economic development needs of its 56 member countries. The Bank also announced it will immediately tap the public market with a US$1 billion offering of sukuk. The five-year offering is rated Triple A by each of the three major bond rating agencies (Standard & Poor's, Moody's and Fitch), and will be dually listed on the London Stock Exchange and Bursa Malaysia. The Bank has been designated as a Zero Risk Weighted Multilateral Development Bank by the Basel Committee on Banking Supervision and the Commission of the European Communities.

Kenya's only Shariah-compliant insurer Takaful Insurance of Africa Ltd (TIA) plans to expand its operations into five East African nations, according to its Chief Executive Officer Hassan Bashir. Under TIA’s five-year plan it will expand into Ethiopia, Tanzania, Uganda, Somalia and the autonomously governed enclave of Somaliland, where it was granted a license this year. CIC Insurance Group (CIC) is one of the largest investors in TIA with about 22 percent, while four investment companies also have stakes. In Kenya, TIA has four outlets and 80 agents in Nairobi and Mombasa. The company plans to add at least two more outlets this year and double the number of agents, Bashir said.

The Indonesian government is planning to establish a Shariah-compliant bank in order to manage Rp 40 trillion ($4 billion) worth of Indonesian hajj funds. State-Owned Enterprises Minister Dahlan Iskan said the establishment of the bank will support the implementation of a new policy issued by the Ministry of Religious Affairs obliging hajj funds to be managed exclusively by Shariah banks.Dahlan said the government wants to support the development of Shariah banking in Indonesia with the new bank since the sector controls only 4.9 percent of market shares in Indonesia’s banking industry, The government has stakes in four lenders that run their own Shariah units. None of these banks, however, focus solely on Shariah banking.

The Islamic Development Bank (IDB) has called for the creation of a global sharia advisory board that can offer greater uniformity for the Islamic finance industry. A centralised format to the supervision of sharia-compliant banking products is gaining favour across the globe, as regulators seek to standardise industry practices and improve consumer perceptions. IDB president Ahmad Mohamed Ali said that IDB and IFSB (Islamic Financial Services Board) should study ways for creating globally acceptable references for the industry. This could include striving for the concept of a globally accepted sharia committee or body, which would be able to assist all Islamic financial institutions and bring them in line with a uniform standard. A global sharia board would also allow the industry to address low penetration rates in majority Muslim countries.

Family businesses in the Middle East have performed well over the last year, with 83 %, reporting growth in sales in the past year, according to a Family Business Survey conducted by PwC. 23% of the family businesses in the region said that they are aiming to grow aggressively and quickly over the next five years. Moreover, raised standards of education coupled with improved economic conditions and financial opportunities have resulted in women contributing significantly towards the growth and success of family businesses. Family businesses are thriving regionally with sales growth particularly strong in retail, manufacturing and construction sectors. Recruitment of skilled staff, succession planning and family politics are some of the key challenges facing family businesses.

In the Middle East CSR is largely characterised by a charity mindset, easily regarded as archaic by outsiders. However, the region’s CSR focus on charity is explained by the general perception that CSR is a corporate form of Zakat, one of Islam’s five pillars, which stipulates that Muslims give a certain percentage of their wealth in charity. Saudi companies primarily focus their CSR activities on programmes that have little to do with these companies’ core activities. Some present aid to the handicapped while others support and encourage young Saudi citizens to join the labour force. Some concerns, however, receive little or no attention, such as environmental issues, human rights of guest workers or the equal treatment of women in the workplace. The CSR focus on charity is deeply rooted in religious tradition. Therefore, CSR in the Middle East will develop along its own path.

Thomson Reuters has launched an Islamic Finance Development Indicator in collaboration with the Islamic Corporation for the Development of the Private Sector (ICD), the private sector development arm of the Islamic Development Bank (IDB). The indicator is a numerical measure representing the overall health and growth of the Islamic finance industry worldwide. It measures five key components quantitative development, governance, social responsibility, knowledge and awareness. Therefore, the Islamic Finance Development Indicator is a unbiased and reliable multi-dimensional barometer of the development of the Islamic finance industry.

AlHuda Center of Islamic banking and economics (CIBE) Initiated a Islamic Microfinance research study for Yemen Microfinance Network (YMN) in Yemen. This study will be conducted in Yemen's capital Sana'a including Taiz, Adan and Almoukla, so that the Islamic Microfinance products can be examined broadly and further Islamic Microfinance products can be developed with the compatibility of the existing structure. The share of Islamic Microfinance in Yemen's Microfinance sector is approximately 90% and the remaining 10% are also converting their portfolio into Islamic Microfinance. The increased outreach of the Microfinance sector is expected to help eradicate poverty.

Last week, Arcapita took on Tide Natural Gas Storage LP's contention that Arcapita's bankruptcy plan shouldn't be approved by a judge because of $70 million it says it is owed.The $70 million lies in an escrow account and stems from Tide's 2010 purchase of natural-gas storage facilities from an Arcapita subsidiary. Tide has been fighting for the money in U.S. district court in Manhattan for two years saying its claim to the $70 million shouldn't be placed behind the claims of other creditors. In its filing made last week, Arcapita says the $70 million claim by Tide should be subordinated to those of other creditors. The filing comes as Arcapita tries to finalize its exit from Chapter 11. Tide lawyers have said they will most likely fight the plan at a hearing next month.

Saudi developer Dar Al Arkan has lowered price guidance on its planned Islamic bond issue. The company, which is planning to raise at least $300 million from a five-year Islamic bond, revised its guidance lower to around 6 percent from initial yield guidance of 6.25 percent. An update from lead arrangers on Monday indicated that order books were over $500 million. Dar Al Arkan has picked Bahrain-based Bank Al Khair, Deutsche Bank, Emirates NBD, Goldman Sachs and Qatari pair Masraf Al Rayan and QInvest to arrange the potential sale.

The majority of Muslim-Canadians strive to lead productive lives and contribute positively to their country. The rising profile of the “Islamic banking” industry is one of these ways. However, Islamic financial instruments are often very similar to interest-based lending, leading some to criticize it as dishonestly advertised for profit, or to promote Islam. The sector’s supporters say it provides a means by which people can bank in accordance with their values by avoiding lending at very high interest rates or providing funding to activities they are religiously and/or ethically opposed to. Canada’s Islamic banking sector is still relatively small compared to that of other Western countries, but it is likely it will continue to see growth in the coming years given the rising population of Canadian Muslims, which now number nearly one million.

London-based firm Cobalt has developed a sharia-compliant insurance platform that uses a syndication model to help spread risk across a panel of underwriters. Cobalt allows multiple insurers to pool their capacity and each can subscribe to the desired level of risk though individual Islamic Windows. The company aims to address capacity constraints in the takaful industry. The platform allows each insurer to have a takaful window, where policyholder funds are segregated from conventional funds, without affecting their rating levels and helping price the risk competitively. The risk is priced by a lead insurer and other firms must then subscribe under similar terms, a similar approach to the subscription model used in London's insurance market.This novel format could boost capacity in the sector.

The Department of the Treasury has lifted sanctions against the Elaf Islamic Bank in Iraq following the bank’s significant and demonstrated change in behavior. On July 31, 2012 the Treasury Department imposed sanctions under the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (CISADA), against Elaf Islamic Bank for knowingly facilitating significant transactions and providing significant financial services for the U.S. and EU-designated Export Development Bank of Iran (EDBI). Following the CISADA finding, Elaf immediately began an intensive course of action to stop the conduct that led to the CISADA sanction. Now, U.S. financial institutions are once again permitted to open or maintain correspondent accounts or payable-through accounts in the United States for Elaf Islamic Bank.

The listed vehicle for Bank Islam Malaysia, BIMB Holdings is looking at several options to expand through overseas penetration and local expansion. According to Bank Islam Malaysia managing director Datuk Zukri Samat, the bank is still pursuing plans of expansion to Indonesia through a strategic partner with broad experience. As a fully fledged Islamic bank, the task is more challenging, he said. Moreover, the bank is also extending the time for its discussions with the Dubai Financial Group over the 30.5% stake in Bank Islam to the end of the months, said BIMB group managing director Johan Abdullah.

'My Savings' is a new initiative announced by the Government of Dubai in collaboration with National Bonds Corporation. During the introductory session on the goals and mechanism of the initiative, National Bonds elaborated on the benefits and advantages of the employee savings programme. The presentation was attended by senior officials,human resource directors and employees from Dubai Public Prosecution who confirmed their support for the initiative. Dubai Public Prosecution employees who opt to participate in the Shari'a compliant 'My Savings' programme will specify a fixed amount to be set aside from their salaries every month as part of their savings and Takaful plan with National Bonds Corporation. Moreover, the initiative also offers employees a 10% discount on Takaful family coverage programmes, as well access to free consultations pertaining to income management and financial planning.

During the 10th Islamic Financial Services Board (IFSB) Summit key leaders discussed the industry’s developments following the global financial crisis as well as regulatory reforms, cross-sectoral approach to the regulation of Islamic finance, and prospects and challenges for new jurisdictions. The event was held on 16 and 17 May in Kuala Lumpur and hosted by Bank Negara Malaysia. It consisted of three sessions themed “Financial Regulatory Reforms: Global Overview”, “Cross-sectoral Approach to the Regulation of Islamic Finance and Market Development: Lessons Learnt” and “New Markets, New Frontiers – Prospects and Challenges”. The panel discussed issues like initiatives undertaken by the Basel Committee in recent years, supervision of all the sectors of Islamic finance as well as progress and development, prospects and challenges faced by the IIFS.

German insurer Allianz Malaysia is still keen on takaful business but is in no rush to get a licence, according to its CEO Jens Reisch. The Bursa Malaysia-listed company is involved in both general and life businesses, but unlike most other insurers, it does not have any takaful tie-ups. Reisch added that Bank Negara Malaysia (BNM) is not issuing any new takaful licence. He believes, however, that the implementation of the Islamic Financial Services Islamic Act (IFSA) will consolidate the industry and require additional capital for family takaful licence. Reisch also said that they were reviewing takaful constantly and closely, and if there was a chance to get a licence or a chance to team up or acquire another takaful company, his company would explore.