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The role of Islamic endowments need to be further streamlined and redefined to unlock their true potential, experts said during a panel discussion on ‘Mobilising Capital from Waqf, Pension Funds and Unit Trusts’ at the the 10th World Islamic Economic Forum (WIEF) in Dubai. Abdullah M Al Fouzan, Founder and Chairman of the Investor for Securities Company in Saudi Arabia, called endowments 'a sleeping giant', which suffer from a state of negligence with annual returns at less than 3 per cent. He called for tapping the true potential of endowments through a structured and concerted effort. The panelists were unanimous on the role of Islamic endowments in driving social growth and urged to explore innovative, Shariah complaint ways to further build asset base and value.

International ratings agency Fitch on Thursday upgraded Al Hilal Bank and affirmed 8 other banks and one non-bank financial institution rating. Fitch said it had upgraded Al Hilal Bank's (AHB) Viability Rating (VR) and affirmed the VRs of the other seven banks and all other ratings. The affirmation of the banks' Long-Term IDRs, Support Ratings and Support Rating Floors, reflects the extremely high probability of support available from the UAE authorities and governments, if required. Abu Dhabi Islamic Bank, Al Hilal Bank, Dubai Islamic Bank, Mashreqbank, Commercial Bank of Dubai, RakBank, Sharjah Islamic Bank, Bank of Sharjah and Dunia have been rated in the report.

More Islamic banks are expected to issue sukuks eligible for Additional Tier (AT1) capital over the next two years as countries start to implement Basel III, according to Standard & Poor's Ratings Services. Over the past two years, there have been Tier 1 sukuk issuances from three UAE Islamic banks that reportedly qualify as Additional Tier 1 (AT1) capital under Basel III. The oversubscription rates of these three Tier 1 sukuk and their tight pricing suggest a very strong market appetite, which S&P expects to linger unless market conditions shift over the next few months. The introduction of a liquidity coverage ratio might address some of the industry's long-standing weaknesses, particularly the lack of high quality liquid assets.

Abu Dhabi-based Al Hilal Bank has issued $500 million Perpetual Additional Tier 1 sukuk. The transaction, which was 9 times oversubscribed, drew demand worth $4.5 billion from over 200 investors. The offering follows Al Hilal Bank’s inaugural senior sukuk offering in October 2013 and has been structured to increase the probability of compliance with Basel III. The issuance was priced at par with a profit rate of 5.5 per cent, which represents the lowest coupon achieved by any bank for a USD Tier 1 issuance outside of the United States since 2008. Joint lead managers for the issue included Al Hilal Bank, Abu Dhabi Islamic Bank, Al Rayan Investment, Citigroup, Emirates NBD Capital, HSBC, Sharjah Islamic Bank, National Bank of Abu Dhabi, and Standard Chartered Bank.

The Dubai-listed Dar Al Takaful will raise paid-up capital by 50 per cent, or Dh50 million, to Dh150 million through right issues, plunging its shares by nearly 3.5 per cent in the early morning trade of May 8. Rights shares will be offered to shareholders who own shares at the close of trading on Wednesday, May 14, 2014. The right issue will be issued at the par value of Dh1 per share and one ordinary share for every two shares. However, any surplus shares will be allocated to subscribers from shareholders or non-shareholders on a pro rata basis. The Islamic insurance company earlier this year signed a deal with Daman Investments to manage it investment account.

Dubai-based Noor Bank has reported record net profit of Dh85 million for first quarter of 2014, up from Dh31 million for first quarter 2013, an increase of 174 per cent. Return on equity improved to 14 per cent, total assets grew 9 per cent to Dh25.2 billion. Total customer financing increased by 14 per cent to Dh16.3 billion. Customer deposits grew by 11 per cent, reaching Dh20.7 billion. Hussain Al Qemzi, CEO, Noor Bank and Group CEO, Noor Investment Group said that the bank's business strategy continues to focus on satisfying the needs of its customers across wholesale, capital markets, corporate, commercial and personal banking. He believes the franchise is well capitalized and positioned for balanced and sustainable growth.

Dubai World has prepaid $284.5 million (Dh1 billion) to creditors under its $25 billion debt restructuring plan. The conglomerate reportedly obtained money for the prepayment from asset sales. Under the terms of the restructuring deal, cash raised from asset sales above a threshold of $300 million is to be distributed as early repayments to creditors, which include big Western and Gulf banks. Last December, a unit of Dubai World sold its 50 percent stake in Miami Beach's landmark Fontainebleau hotel. The price was not disclosed, but Dubai World originally had paid $375 million for the stake in 2008. Moreover, Nakheel said last month it was repaying Dh2.35 billion ($640 million) of bank debt 18 months ahead of its maturity in September 2015.

The Board of Ajman Bank has decided not to confirm CEO, Mohammed Zaqout and instead named on an interim basis Seifeldin Abdelkareem as the Acting CEO. The decision has been taken by mutual agreement, the board said. The bank maintained earnings momentum recording a breakthrough performance with record growth rate of 382 per cent in 2012 year-end compared to 2011 year-end. Ajman Bank began its operations in 2008 and now operates 11 branches across the UAE.

HH Sheikh Hamdan Bin Mohammed bin Rashid Al Maktoum has launched the Dubai Center for Islamic Banking and Finance as a new step in support of the efforts towards establishing Dubai as the world's capital for Islamic economy. The centre is a collaboration between the Hamdan Bin Mohammed e-University and the emirate's initiative: 'Dubai: Capital of Islamic Economy'. The new centre will provide support to the initiative through three academic programs on human resources development, scientific research and community service. In the area of Human Capital Development, the Centre offers programs and courses. On the research front, The Centre conducts and facilitates research to advance the professional and theoretical foundation for Islamic Banking and Finance.The Center will also play a role in widening access to Islamic banking and finance education to the wider community.

Dubai Islamic Bank (DIB) has repaid the Dh3,752,543,000 deposit, in full and well ahead of contractual maturity which it received from the Ministry of Finance in 2008. In March 2013, Dubai Islamic Bank announced the successful pricing of a US$1 billion Tier 1 Capital-eligible issuance, with a perpetual (non-call 6) maturity which will provide a significant boost to the current Tier 1 Capital ratio. For the 12 months ended December 31, 2012, DIB group reported a net profit of Dh1.19 billion, compared to Dh1.05 billion in 2011, an increase of 13 per cent while the bank continues to boast one of the best liquidity ratios (88.7% as December 2012) in the market.

The Dubai Islamic Bank PJSC (DIB) intends to acquire 100 per cent of Tamweel PJSC, the UAE-based Islamic home finance provider. DIB is the major shareholder of Tamweel, and will offer the other shareholders ten DIB shares for every 18 Tamweel shares. After approval by all regulators the date of the offer will be communicated individually to all Tamweel shareholders giving them adequate time to respond.

The draft of Dubai Financial Market's 'Standard for Issuing, Acquiring, Trading Sukuk' has been published on DFM's website. Numerous Islamic finance professionals have been invited to counsel and feedback on the comprehensive standard. The consultation period will last until February 28, 2013. At the beginning of March, a hearing session will be held, eventually followed by the issuance itself later the same month. The Standard includes thorough explanations of different types of sukuk. Among them are Sukuk of ownership of tangible assets, Sukuk of usufructs, Sukuk of lease of services, Mudaraba, Musharaka and Salam Sukuk.

Editorial Note:
You can download the paper at: http://www.dfm.ae/Documents/gen/SukukStandards.pdf