IslamicFinance.de

Warba Bank has announced that it successfully arranged $150 million Shariah-compliant one - year receivable backed syndicated financing facility for the International Bank of Azerbaijan. The Bank reported that it participated with a stake of $20 million in this transaction along with J.P. Morgan Bank, Citigroup, Barwa Bank, Al Hilal Bank, Noor Bank and Dubai Islamic Bank. he IBA concluded last year with $526 million sharia compliant assets compared to the Islamic Banking assets at the level of $220 million at the beginning of 2014. Behnam Gurbanzade, Director of the Islamic Banking Department of the IBA, recently said that the Bank is planning to increase the amount of Islamic financing in Azerbaijan in 2015.

Kuwait's Warba Bank has successfully arranged a US$150 million, Sharia-complaint syndicated finance facility for the International Bank of Azerbaijan ("IBA"). The facility has a tenor of one year with a bullet repayment due at maturity. Warba Bank has participated in this transaction with a stake of US$20 million in a consortium of six regional and international banks: J.P Morgan Bank, Citigroup, Barwa Bank, Al Hilal Bank, Noor Bank and Dubai Islamic Bank. In addition, Warba Bank has also announced its contribution of US$15 million in an Islamic Sharia-complaint facility amounting US$80 million arranged by HSBC for the Turkish Ozun Group. Moreover, the Bank sold its real estate investment in West Bromwich in the United Kingdom achieving net profit of KD 640 K.

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.

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.

According to Behnam Gurbanzadeh, IBA Islamic Finance Department Manager, the idea to establish the CIS Islamic Development Bank, proposed by IBA several years ago, has become attractive for their Russian colleagues. The interest of Russian banks for instruments like Islamic financing has suddenly increased. Russian banks have problems with funding and are actively looking for alternative sources of financing, Gurbanzadeh said. Last November he revived the idea of the CIS Islamic Development Bank and Russia together with Kazakhstan. IBA agreed to work on the establishment of a Working Group on Islamic financing under the CIS Financial and Banking Council.

International Bank of Azerbaijan (IBA) plans to target the UAE and other Gulf investors as it plans to issue $200-$300 million debut sukuk this year, its senior manager Behnam Gurbanzade said. He further said the bank would issue sukuk in the second half of this year in order to widen its credit policy, develop business and attract alternative sources of financing. The bank, 50.2 percent owned by the Ministry of Finance, holds 40 percent of banking assets in the country. In 2014, IBA raised $252 million through an Islamic syndicated loan from UAE-based Al Hilal Bank, Dubai Islamic Bank and Noor Bank.

Baku will become the regional Islamic financial center and has a potential to press internationally recognized centers. According to Behnam Gurbanzadeh, IBA (International Bank of Azerbaijan OJSC) Islamic Financing Department Manager, the idea to establish the CIS Islamic Development Bank proposed several years ago has become very attractive for the countries of the Commonwealth. In addition to Azerbaijan, Russia and Kazakhstan are very interested in establishing such a bank, Gurbanzadeh said. Today there are up to 700 million users of Islamic financial services in the world.

A package of amendments and additions to legislation in order to regulate the activities of Islamic banking in Azerbaijan will be introduced to the Central Bank of Azerbaijan in the first half of 2015.

International Bank of Azerbaijan OJSC will provide services on Islamic financing in Russia, the director of the Department of Islamic Banking of the International Bank of Azerbaijan (IBA) Behnam Gurbanzade said.

Caspian International Investment Company CJSC (CIIC) is a private equity investment firm founded in March 2008. CIIC's shareholders are Azerbaijan Investment Company OJSC;Aref Investment Group; Al-Ahmar Group for Trading, Industrial and General Agencies; as well as The Islamic Corporation For The Development of The Private Sector and Islamic Development Bank. The main goal of CIIC is to serve as an investment vehicle in order to receive exposure to the growing Azerbaijani economy. Orkhan Aghalarov, the acting General Manager of CIIC, said that investments into the private sector is CIIC's primary goal, and thus, the company is one of the main supporters of realization of the President's economic policy.

Azerbaijani company Joint Leasing will conclude the first corporate Islamic leasing agreement next week. The company is considering the opportunity of attracting additional resources as part of the Islamic leasing project. At present, there is an opportunity to attract additional funds. In principle, leasing is a tool of Islamic finance. Ijara is among the tools used in Islamic finance.

The International Bank of Azerbaijan (IBAR), the biggest bank in Azerbaijan managing more than 35% of total banking assets in the country, has announced the signing of a Shari'a Supervisory agreement with Shariyah Review Bureau (SRB). IBAR hopes that SRB and its experience will help the bank to build the Shari'a Complaint business and lift its Islamic financial sector to a successful future. Shariyah Review Bureau is today recognized globally for its iconic Shari'a Compliance services. With more than 37 Shari'a scholars, the company's growth includes recently doubling Shari'a review and Certification capacity in the GCC. As the pace of change in the Islamic financial industry accelerates at an international level, institutionalized services of Shari'a Advisory firms like SRB has become increasingly evident.

International Bank of Azerbaijan (IBA), 50.2% owned by Ministry of Finance, is preparing to launch a separate sharia-compliant banking unit as the former Soviet state prepares an Islamic banking law slated for next spring. A stand-alone unit would allow IBA to more than quadruple its Islamic financing business in the country. IBA has thus far extended $180 million of Islamic financing in the country; after legislation is passed, this could increase to as much as $750 million within a year. IBA also wants to create a strong domestic Islamic banking platform for use with its subsidiaries in Russia, Georgia and Qatar. IBA has hired Bahrain-based consultancy Shariyah Review Bureau to help in the design of several projects.

International Bank of Azerbaijan (IBA) is the first European bank to present the Qibla card, which corresponds to the rules of Islamic banking. IBA Islamic Banking Department head Behnam Gurbanzade said the card will be released into circulation in the near future. The cost of the card is 40 manats. The debit card was issued in conjunction with MasterCard Platinum. It is equipped with an electronic compass indicating the direction of Mecca. With the help of this card, the card holder will be able to cash funds in the account, as well as pay for the purchase of various goods and services. Qibla card will be issued as a debit card, but can also be used with a limit of debt, issued by the bank.

The International Bank of Azerbaijan has announced provision of new services to clients through the first and so far only "Islamic window" in Azerbaijan. A range of services offered by the bank includes such products of Islamic banking as Ijara, Vakala deposit, Islamic bank cards, and opening of Gard Hassan accounts. All procedures and documentation on these types of services meet the standards assigned by the Islamic financial regulator AAOIFI (Accounting and Auditing Organization for Islamic Financial Institutions).It is planned to introduce in the banking legislation the concept of Islamic banking.

According to Neil Miller - Global Head of Islamic Finance at KPMG - despite the global financial crisis, Islamic banking has demonstrated rapid development and lossless operation reaching an average growth rate of 10%. He further adds that the most significant development is observed in Malaysia. Azerbaijan should learn from Malaysia as well as from Kazakhstan. Azerbaijan should first take care of the lack of legislation in the area of Islamic finance in order to work on development in the spheres of Islamic banking and Islamic insurance.

Until recently, sharia-compliant deals in Azerbaijan had to be conducted secretly, hidden under the appearance of conventional banking. Now, on the other hand, there are a couple of banks which openly offer a limited range of services compliant with Islamic principles. These include bans on interest and pure monetary speculation. However, the government still has not created a law in order to regulate the Islamic financial industry in the country. Such a law would enable expansion of operations of commercial banks and allow sukuk issuance.

A new $50 million fund - the Central Asia Renewable Energy Fund - was launched by the Islamic Corporation for Development of Private Sector (ICD). According to the CEO of the corporation, Mr. Khaled Al-Aboodi, the money will be used to benefit countries of the Caucasus and Central Asia Regions, most important of which will be Kazakhstan, Azerbaijan and Turkey. Further target countries of the fund include Kyrgyzstan, Turkmenistan, Tajikistan, Uzbekistan, Bosnia, Albania and Kosovo. Factors like growing environmental awareness, evidence of climate change, scarcity of fossil fuels, and an increasing commitment by governments to support new sources of energy lead to growing interest in renewable energy in these countries.

Read more on: http://www.abc.az/eng/news_12_10_2012_68763.html

Aproximatly 100 investment projects worth 300 billion roubles have been introduced at the 4th International Summit in Kazan.
The organizers of the forum were the government of Tatarstan, the Islamic Business & Finance Development Foundation (IBFD) with the support of the Federation Council of Russia.
The summit is attended by thousands of guests from over 30 countries of the Organisation of Islamic Cooperation including: Azerbaijan, Bahrain, Egypt, Kazakhstan, Kuwait, Morocco, Turkey, the UAE, Oman, Pakistan.

It is possible that Azerbaijan will become a regional Islamic financing centre and play a significant role in boosting cooperation in Islamic banking with Persian Gulf and Central Asian countries.
introducing actively Islamic financing in Azerbaijan, the independent authority of the International Bank of Azerbaijan (IBA) on Islamic banking will begin its work in March, which plans to present six Islamic banking products to the market during the first phase.
The Islamic Corporation for the Development of the Private Sector (ICD) is also in talks to institute the first Islamic insurance company in Azerbaijan, Takaful.