IslamicFinance.de

When last week Vice President of the UAE and Ruler of Dubai Sheikh Mohammed bin Rashid explained his vision of the emirate becoming a global hub for Islamic finance and economy, the head of Islamic finance structuring at Deutsche Bank (DB) in Dubai Ibrahim Qasim was pleased but not really caught by surprise. He considers the initiative a very positive one and thinks it will solidify Dubai and the UAE's current standing as an important Islamic finance hub. He further explains that the UAE already has an advantage in the area of Islamic economy. DB is prepared to help and support the policymakers of the emirates in their ambitions.

In a recent announcement SHUAA Capital made known that its wholly-owned subsidiary - Gulf Finance Corporation - has engaged with the UAE Central Bank for a license which shall serve to establish an Islamic Window for some of its financing activities. The plans of Gulf Finance include the submission of the necessary applications in the first quarter of 2013. It is expected to be market-ready in the spring of 2013, subject to regulatory approvals. The proposed programme to offer Islamic financial services is consistent with the vision of Sheikh Mohammed bin Rashid Al Maktoum, Prime Minister of the UAE and Ruler of Dubai. He recently explained the necessity to establish a platform of Islamic economic products and services aiming to grow the Islamic economy.

The deadline for Qatari lender Masraf Al Rayan to come up with an offer for Islamic Bank of Britain (IBB) concerning its takeover has been extended. It initially lapsed on December 10th and was now extended to January 7th. IBB is majority-owned by Qatar International Islamic Bank. The latter has been discussing selling a controlling stake in the British bank with Masraf Al Rayan since June 2012.
According to a statement by IBB, its lending growth for the first nine months of 2012 have been driven by two new home financing plans. Furthermore, the bank will search for ways to offer more products.

Alinma Bank registered a net income for the fourth quarter as high as SAR 208 million. Compared to that, it was SAR 136 million in the same period in the previous year. Thus, the increase is 53%. Compared to the third quarter of 2012, the increase is 6%. The total operating income in 2012 reached SAR 490 million, which with SAR 490 million is 0.6% higher than the SAR 487 million for the same quarter of last year.

Standard & Poor's affirmed the rating of the Islamic Development Bank at 'AAA/A-1+'. The stand-alone credit profile of the bank is 'aaa', which is a reflection of the rating agency's assessment of the bank's "very strong" business profile and "extremely strong" financial profile. The outlook is said to be stable. According to expectations, IsDB will continue and maintain its strong credit metrics.

Amlak Finance PJSC is discussing with creditors the restructuring of about US$2 billion of bank and government debt. The negotiations are being held between the company and a committee of five banks representing creditors. Amlak is being advised by PricewaterhouseCoopers LLP on the matter. Since the suspension of shares of Amlak and Tamweel PJSC in November 2008 following the blockage of the companies' access to borrowings by the global credit crisis, Amlak has experienced serious losses. In 2011 the company registered a third-quarter loss of 40 million dirhams (US$11 million).

A Gulf investment bank has provided sharia-compliant funding worth millions of dollars for a Brazilian sugar and ethanol maker. The deal is an example of how smaller firms can be considered new investment possibilities for the wealthy Islamic lenders of the Gulf region. The deal is brokered by Abu Dhabi Equity Partners and will ensure financial means for an unnamed chemical alcohol producer in the Brazilian state of Mato Grosso do Sul. This will be at the same time a three-month investment opportunity for the lending company.

Recently, the president of Iraq - Jalal Talibani - gave his apprval to the new law establishing a state-owned Islamic bank. The name of the bank is "The Islamic Bank of Mesopotamia." According to the law, the bank starts with an initial working capital of 50 billion Iraqi dinars (about $43 million). Resources developed by the bank itself can later be used to raise that sum. The law further states that the purpose of the bank is to provide financial and banking services which are to be in accordance with Islamic shari'a and the development of the Iraqi economy. The law marks the first public effort of the country's government to enter into the rapidly developing and expanding field of Islamic finance.

Central Bank of Oman (CBO) has given its final approval to the Islamic banking arm of Bank Muscat - Meethaq - to start full-fledged operations. The starting date of the bank's operations is January 21st. Meethaq will begin functioning as a bank with 150-million-rial capital at its disposal. The money is intended to be used to boost growth opportunities. A full suite of regulated Islamic banking products will be offered.

Bankers have an optimistic attitude towards a full-scale restructuring of the US$10 billion (Dh36.72bn) debts of Dubai Holding. They consider such a move to be imminent following the settlement of a legal action against a unit of the conglomerate. Four banks, one of which Royal Bank of Scotland, have reached an agreement on the terms of restructuring debts of Dubai Group, the financial arm of the holding company. This will include their dropping a controversial legal action against the Dubai company.

Islamic banking and loans without interest are the key to Indonesia's growth in the field of Islamic finance. A good example of such loans is the story of 50-year-old widow Nur Hanifah, who took out a Shariah-compliant loan from Bank Muamalat Indonesia in order to help finance a store on the ground floor of a shophouse. She does not pay interest but instead she must give the bank a certain percentage of her profit plus part of the principal each month. The percentage usually is about 40%. Hanifah explains that even when times are bad, she does not have any financial worries because then she does not have to pay anything compared to times when she has good profit.

Qatar Islamic Bank is introducing specific sector-related packages which shall correspond to the different needs of SMEs. The first such packages focus on the key sectors of construction, trading and services. A new programme is being launched which shall providing special services to the country's small and medium sized enterprises. Exclusive financial benefits, guidance and advice will be offered. The programme is named Aamaly and will support SMEs which are recognized as one of the main contributors in innovation and job creation in the country.

Gatehouse Bank is making efforts to attract Oman's Sharia-compliant institutions to invest their funds in the UK and vice-versa. They are showing keen interest in establishing a business relationship with all Islamic banks. Gatehouse already have treasury services, capital market products like sukuk and real estate financing. There will be an official meeting between Gatehouse Bank's officials and such of Bank Nizwa and Bank Muscat. The goal of the meeting will be to explore cooperation possibilities and opportunities.

The euphoria of the Arab Spring has turned to disappointed expectations because building Arab democracies with open economies has proved to be much harder than expected. Countries like Tunisia, Egypt and Libya are stuck in a situation of instability which hampers economic recovery. Meanwhile, lack of growth and jobs nurtures instability. If the vicious circle is not broken, it is highly probable that radical Islamists will become more active. Thus, modernity would be rejected and a relapse to the corrupt crony-state systems would threaten to become reality. That is why an altered mini-version of the Marshall Plan could play the role of the necessary bigger and more focused effort.

According to a recent announcement, Abu Dhabi Islamic Bank (ADIB) has achieved a huge number of the Global Village visitors through its Financial Education Campaign. As the main sponsor of the campaign for the second year, ADIB supports the event as part of its strategy to help and promote initiatives launched by the government endorsing the UAE’s tourism and entertainment industries. Some of the exclusive services the bank offers at the venue are providing ATMs as well as setting up specially designed mobile branches. There, visitors have the opportunity to receive information about financial management and ADIB’s unique products and service.

Islamic Bank of Britain (IBB) has brought diversity to its Sharia compliant Buy to Let Purchase Plan product palette by launching a rent only BTLPP. It is a variable rental rate product which will be available to landlords of any faith. The deposit will be 35% and the rental rate 5.49%. Some of the other features of the product are the lack of early payment charge for clearing the finance in full and An administration fee of 1%. In addition, additional acquisition payments can be made without penalty, subject to a minimum amount of £4,000.

According to announcement, Emirates NBD's Islamic unit plans will start with a rights issue worth Dhs1.5bn ($408m) this month. Emirates Islamic Bank (EIB) will offer 1.5 billion shares at Dhs1 each between January 25 and February 3, thus increasing its capital to Dhs3.93bn. Since last year, Dubai Bank is formally part of Emirates NBD, since it was rescued by the Dubai government in May 2011.

The Nigerian Stock Exchange (NSE) has been a witness of several stimulating initiatives in 2012 which were designed to to encourage growth in capital market activities and give the market depth. An example: Early in 2013, The NSE Lotus Islamic Index was launched to track Shariah-compliant stocks, listing rules were revised, and recently, the central government stopped value added tax (VAT) and stamp duties charged on market transactions. As a whole, the initiatives aim to transform the Nigerian market to make it more attractive for local and foreign portfolio investments and engender investor confidence.

The headquarters of Bank Nizwa will open today at Al Qurum. At the same time, its branches in Sohar and Nizwa will be opened as well. Gradually, several further branches will be opened. The launch of the bank was announced after the Central Bank of Oman (CBO) released the Islamic Banking Regulatory Framework (IBRF). It is expected that Bank Nizwas launch will push Islamic banking and economy in Oman and attract more deposits from Omanis, who have their deposits outside the country.

The Dubai Government is set to create a comprehensive platform of Islamic economy products and services, thereby strengthening its position as a global centre for Islamic economy. The initiative includes standardization and regulation of Islamic products, services and practices. Thus, Islamic economy will become stronger and independent from conventional and interest-based financial practices. As a regional business and trade centre, the UAE already has world class ‘hard’ infrastructure. According to Chief Economist of National Bank of Abu Dhabi Dr. Giyas Gokkent, now the ‘soft’ infrastructure will be added thanks to the initiative, this way encouraging and attracting Sharia compliant activity in various services and industries.