IslamicFinance.de

Civil proceedings against former UM Financial CEO Omar Kalair and his associates have come to a close since prospects for recovery of expropriated money are limited even in case of a favorable judgment. However, the Royal Canadian Mounted Police and Office of the Superintendent of Bankruptcy are still investigating the events which may lead to criminal charges against Kalair and others.

Last Sunday, Meethaq, the Islamic banking window of bank muscat opened its first branch in Ghubra. More branch openings are planned in all major cities across Oman this year aiming to reach customers and attract them through Sharia-based products and services. The final amount of capital for the bank’s operations will be determined by business opportunities.

Since 2009, the emirate’s financial authorities and indebted government related enterprises (GREs) have adapted new tactics to overcome the debt crisis. The actions include negotiations with creditors and mortgage providers as well as repayments and restructurings. However, Dubai’s debt is still as high as $110bn, so this year’s debt deals are just the beginning of the approach to manage the crisis and avoid legal actions.

The Financial Regulation Advisory Council of Experts (FRACE) were inaugurated by the governor of Central Bank of Nigeria on January 10th in their headquarters. Governor Mallam Sanusi Lamido Sanusi pointed out that the establishment of the FRACE was part of the provisions of the bank's Guidelines aimed at regulating and supervising institutions which offer financial services compliant with Islamic commercial jurisprudence. FRACE will further ensure that products and services offered by the non-interest financial institutions meet the requirements for compliance to the principles underpinning their mode of operation.

Qatar Islamic Bank (QIBK) registered a decline of 9.5% in terms of profit last year. Meanwhile, the biggest Shariah-compliant lender in the country raised provisions against bad loans. According to a recent statement, the net income was 1.24 billion riyals ($341 million). In comparison to that, it was 1.37 billion riyals in 2011. Estimations of seven analysts pointed at a profit of 1.46 billion riyals. In 2012 the bank raised provisions from 194 million riyals in 2011 to 502 million riyals.

Juris Corp is about to open an office in Chennai, the opening is scheduled for next week. Two weeks ago Hufriz Wadia, who is a former Wadia Ghandy associate and the sister of long-time Mumbai partner Hoshedar Wadia, became partner at the company. Her focus of operation will be growing the firm’s banking, corporate, dispute resolution and real estate practice in Chennai. She will particularly concentrate on Islamic finance.

RAKBank has recently launched an Islamic banking unit. According to a statement by the Ras Al Khaimah-based lender, it had received approval from the Central Bank to start an Islamic offering. The new unit will offer customers debit and credit cards with discounts at Sharia-compliant outlets, as well as car loans and takaful policies. As a subsidiary, RAKBank Amal becomes part of a continuously increasing number of lenders seeking to capitalise upon a development drive into Islamic finance.

As a global leader in the field of Islamic finance, Malaysia boasts with state-of-the-art infrastructure and unparalleled government support. The development of Commodity Murabaha (CM) transactions on Bursa Malaysia under its Bursa Suq Al Sila’ enabled the country to try to snatch away the business of liquidity management by Islamic banks from the London Metal Exchange (LME). Bursa Malaysia’s Suq Al Sila’ is a representation of trading in commodities with complete irrelevance of commodities to the intended outcome. This exceeds simple exchange of cash between two participating banks.

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.

Private banks in Iraq have almost utterly ceased to fulfill their traditional functions, e.g. giving out loans, lending credit and issuing letters of credit. The reason is the risk of default. That is why Iraqi private banks resort to participation in the currency auction regularly held by the Iraqi Central Bank instead. In order not to face defaults on payments, they demand exaggerated guarantees for the granting of any loans to local investors. Banking experts say that the value of some loans is not able to cover more than 40% of the guarantees which are demanded by the banks.

Fimbank is about to make the first step into introducing Islamic banking to Malta. Provided that Middle Eastern institutional investors take a controlling interest in the near future, the bank will be able to expand into new markets and target larger clients. Fimbank has a commitment for additional equity of $160 million. According to the bank's president Margrith Lütschg-Emmenegger, it has the potential to triple or even quadruple its balance sheet over the next five years. She further stressed on the bank's striving towards a major strategic turning point. This will be possible if shareholders allow the joint offer by Kuwait-licensed Burgan Bank SAK and Bahrain-licensed United Gulf Bank BSC at the extraordinary general meeting on January 31st.

According to a statement by CIMB Group Holdings Bhd, the sale of its 49% stakes worth RM1.11 billion in CIMB Aviva Assurance Bhd and CIMB Aviva Takaful Bhd to Khazanah Nasional Bhd has been completed. The life insurance and takaful companies stake sales are satisfied by RM1.06 billion in cash combined with RM43.5 million worth of shares in a new insurance holding company called Renggis Ventures Sdn Bhd. The latter s wholly-owned by Khazanah. To sum up, CIMB will maintain an effective 2% interest in CIMB Aviva Assurance and CIMB Aviva Takaful respectively.

Bank AlJazira registered a net income of SR 98 million for the fourth quarter of 2012. Compared to Q4 2011 this is a decrease of 11% from SR110 million. The difference compared to Q3 2012 is 25% in favour of Q3. Other important parts of the annual financial results of the bank are a total operating income of SR372 million for the last quarter of 2012 which is a 13% increase to the SR330 million for Q4, 2011. The net special commission income for Q4 2012 registered an increase of 25% from Q4 2011 reaching SR247 million.

The National Bank of Abu Dhabi (NBAD) has received the award Dubai Chamber of Commerce '&' Industry Centre for Responsible Business CSR Label. The award is a reflection of the recognition of the bank's responsible and sustainable business practices in the fields environment, marketplace, workplace and community. Senior Manager of Sustainability at NBAD - Belinda Scott - explained that being a major player in the economic development of the country goes hand in hand with caring for the social and environmental effect of the bank's activities.

Bank Islam Malaysia Bhd announced the suspension of chief economist Azrul Azwar Ahmad Tajudin for allegedly breaching the bank’s internal policies. Azrul predicted at a forum in Singapore last week that Prime Minister Najib Razak will not win the upcoming general election in Malaysia. In a statement, the bank explained that the nature of the breaches would be established as soon as the investigations are completed. They further stressed that the suspension had no relation to Azrul's voicing his personal political views. It was reiteratively said that Azrul’s political views and his comments should are not to be associated with the bank.

According to Minister of Finance Al-Morsy Hegazi, Egypt is now looking for a way to change the economic reform plan in order to obtain thr IMF $ 4.8 billion loan. He further added at a meeting with the Bank Group Chairman Ahmed Mohammed Ali that a few domains of cooperation between both sides will eventually be able to ease the burden off the country's budget. Several Egyptian projects will be financed by the Bank under different systems.

Emirates NBD surged after the forecast of its Islamic unit that profits would double. The stock gained 6.4% reaching Dh3.31 a share, which is the biggest increase since April 2011. On Wednesday, about 1.3 million shares were traded, which is three times the three-month daily average. The stock is said to be the biggest gainer on the Dubai Financial Market General Index. Emirates Islamic Bank will look for ways to boost net income to Dh150 million this year increasing it from Dh80m in 2012.

According to an announcement by BankDhofar, its Maisarah Islamic banking branch in Azaiba is planned to be opened in the coming weeks. The new branch shall further cement its commitment to putting its customers first, Oman's community and economic stability. A team of highly skilled Islamic banking specialists will operate at the new branch. Most advanced technology aiming to ensure Maisarah operates smoothly will be utilized and a complete suite of services compliant with the Sharia-law will be offered.

The chief economist of Bank Islam Malaysia Bhd was suspended from his duties because of his prediction that the opposition would win the upcoming general election. He confirmed that he was fully aware that he was putting his position at the bank on risk. Kajian Politik untuk Perubahan (KPRU) urged in a statement to lift the suspension because it contradicts the right to freedom of speech of the bank's employees. However, the response of Bank Islam was that according to their policy any employee including management, if they behave irrespectively of their position, will be suspended with full pay, to facilitate investigation.

Last year the Financial Services and the Treasury Bureau presented feedback on the consultation on the amendments which were proposed aiming to ease development of an Islamic bond in Hong Kong. The government of Hong Kong has a long-standing policy initiative to develop Islamic finance in the city. As a part of it, the bureau sent out a consultation paper containing detailed proposals for the amendment of relevant tax-related legislation. The key part of the proposal states that a level playing field needs to be created to enable Islamic finance products to be structured in Hong Kong.