IslamicFinance.de

Saudi Arabia's national home finance company, Bidaya, may open its doors by the end of this year. In development since 2010, the company is a venture between the finance ministry's Public Investment Fund and the Jeddah-based Islamic Corporation for the Development of the Private Sector (ICD). Bidaya is in its last phase of development prior to launch and will submit an application for a licence as soon as regulations under the kingdom's mortgage laws are finalised. The "target size" of its paid-up capital will reportedly be 900 million riyals ($240 million). Bidaya will increase access to finance for middle-income home buyers across the Kingdom and thus, raise low levels of home ownership in the country.

Abu Dhabi Islamic Bank plans to branch out in North Africa as the UAE-based lender seeks to reach a larger population. The bank applied for licenses in Algeria and Libya and is considering new operations in Tunisia and Morocco. Chief executive Tirad Mahmoud said the bank is seeking to expand in nations with a critical mass in terms of population and economic activity. Abu Dhabi Islamic Bank has also moved into countries including Saudi Arabia, Egypt and Sudan, Mahmoud said. The bank wants to be better placed to serve companies, such as Dubai-based mall operator Majid al-Futtaim, which operate across the Middle East and North Africa. Banks that comply with Islam’s ban on interest have become increasing popular after the revolts implemented Islamists into power in some North African countries.

Tunisia's fledgling Islamic finance industry could take a 25 to 40 percent share of the country's financial sector in five years' time if necessary rules, consumer education and private investment plans materialize, according to a Thomson Reuters study. Currently, sharia-compliant business accounts for just 2.5 percent of the Tunisian financial sector. The study estimates that Islamic financial assets in Tunisia could reach $17.8-$28.5 billion by 2018, up from $1.4 billion at present. Some industry practices that are controversial among some Islamic scholars, like tawarruq or commodity murabaha, are generally being avoided in Tunisia, the study found. One boost for Islamic finance in Tunisia would be issuance of the country's first sukuk, which the government is planning. Islamic Development Bank (IDB) has given Tunisia a financial guarantee to issue a sukuk worth $600 million. Last week, the IDB extended said it would extend $1.2 billion in funding to Tunisia for industrial, agricultural and trade projects.

Kuwait-based Asiya Investments has launched an Islamic trade finance fund with $20 million in seed capital, aiming to cater to small Asian manufacturers. Asiya aims to fill a gap left by Western banks that are scaling back their trade finance business, making credit scarce for small and medium-sized firms. Due to the world financial crisis and higher capital requirements under upcoming Basel III regulations, about 20 percent of the trade finance business could be opened up to non-bank institutions. Asiya's fund aims for a net return to investors of above 5.0 percent and it has $55 million worth of assets in the pipeline, with capacity for approximately $400 million. The firm identifies clients such as denim and latex manufacturers through its Singapore-based joint venture partner, EuroFin Asia.

Islamic Bank of Britain (IBB) narrowed its losses in 2012 a week after it raised £10 million ($15.5 million) from majority shareholder Qatar International Islamic Bank (QIIB). Last week, IBB raised £10 million by placing 1 billion shares with QIIB at a price of 1 penny each, raising the number of its outstanding ordinary shares to 4.5bn. In 2012, IBB posted a loss of £6.99m versus a loss of £9m a year earlier. Home financing business helped narrow the gap by nearly doubling to £117m in 2012 versus £61m a year earlier. The bank did not disclose personnel or administrative expenses, which in the past have represented the bulk of its costs. QIIB, which now owns 91 percent of IBB, has been in discussions since last June with Qatari lender Masraf Al Rayan to sell a controlling stake in the British bank.

Arab leaders from various countries will take part in the third Arab Economic and Social Development Summit in Riyadh starting on January 21st. The summit will last two days and aims to break tradition and tackle the people's hopes in the times of the Arab Spring uprisings. The foreign minister of Saudi Arabia, Prince Saud al-Faisal, pointed out that the summit must concentrate on problems and issues concerning the lives and aspirations of the people.

Islamic finance is growing at a 20% per year rate which contrasts with what conventional banking is currently most famous for - scandals, huge pay offs and bonuses. Even non-Muslims are attracted to Islamic finance which led to the fact that numerous countries have adopted and accepted this financial model. It is obvious that there is a huge economic benefit to be sought from it due to the enormous potential of the branch. Malaysia seems to be the leader in the Islamic finance market, developing by leaps and bounds.

According to Ernst & Young’s World Islamic Banking Competitiveness Report 2013 which was released on Monday, global Islamic banking assets of commercial banks will most probably exceed $1.8 trillion next year. Compared to that, in 2011 the assets were worth $1.3 trillion. The robust growth of the Islamic banking industry continues its course on a global scale. The top 20 Islamic banks registered 16% growth in the last three years. Saudi Arabia in particular emerged as the largest market for Islamic assets.

The expectations of Sedco Capital are that its assets under management will double during the next five years due to the company's expansion into new. The expansion plans are driven by the increasing demand from Shariah-compliant investors. The investment firm established an entity in Luxembourg in July 2012 aiming to expand its reach in the Shariah-compliant private equity, real estate and commodities space. Unlike most sharia-compliant firms, which operate on a regional basis, Sedco wants to go global.