IslamicFinance.de

Tamkeen and BMI Bank have announced an extension of their partnership providing Sharia-compliant financing to local enterprises. This marks the fourth contribution of BD10 million by BMI Bank, expanding its portfolio to a total of BD40m whilst the total value of the scheme is BD302m. Initially launched in November 2010, the joint scheme offers small and medium enterprises (SMEs) including startups, a suite of financial products at a competitive cost. Enterprises are eligible to receive financing ranging from BD10,000 to BD500,000. All corporations with valid commercial registrations in the kingdom can apply to benefit from the scheme, which also features repayment options of up to 10 years with a grace period up to two years according to finance procedures.

Bahrain-based Gulf Finance House (GFH) has signed a land sale agreement to establish a new mixed-use residential development in Dubailand. The agreement with Dubai Properties Group (DPG) involves the purchase of a total area of approximately 1,200,000 square feet of land. The project aims to build residential, commercial and retail space and facilities within Dubailand. The new development includes both villas and apartments in the residential part of the project and is expected to launch later this year. The project is scheduled to be completed within the next five years.

The shares Bahrain’s Islamic investment bank Gulf Finance House (GFH), at the Dubai Financial Market, rose close to limit up, by 14.86 percent last Tuesday. The number of trades in GFH stock increased by almost two and a half times on the day before, while volumes were also up many times over. On Wednesday morning, GFH put out a statement saying that it had bought a 1.2 million square foot plot of land from Dubai Properties Group in Dubailand, on which it plans to build residential property. Following the announcement GFH shares rose by another 4.6 percent on Wednesday, closing at AED3.47. The Securities and Commodities Authority (SCA) did not say whether it would take this specific issue further.

The Economic Development Board (EDB) and the Islamic Corporation for the Development of the Private Sector (ICD) signed a Memorandum of Understanding (MOU) on July 9 to promote SME growth in Bahrain. Under the terms of the joint partnership, the ICD will establish an Islamic Ijara Company in Bahrain to help SMEs succeed by offering Sharia-compliant financing products. The proposed Ijara Company will also be used as a training centre to help Bahrainis in the area of Islamic finance. In addition, ICD plans to set up a software development centre in Bahrain for software solutions for Ijara, Takaful, Mortgage and Islamic Banking, for export to the international market. Moreover, the ICD will assess the feasibility of establishing an SME Fund in partnership with the EDB, with the aim of supporting and investing in SMEs based in Bahrain.

Ithmaar Bank has issued an investor report on its Shamil Bosphorus Modaraba (SBM), indicating the fund will not achieve its investment objectives and stating that there is also a low probability that investors will have their entire capital returned. The Bank will be contacting investors to discuss the investor report and to explain available options. The SBM is a $90 million investment fund opened in November 2007 and provided equity for the acquisition, development and sale of a diversified pool of assets that included land, property and development sites in Turkey. During 2013, the Bank attempted to negotiate an exit from Turkey with its Turkish partners and more recently it has been conducting enquiries through its appointed advisers and consultants.

Khaleeji Commercial Bank (KHCB) has launched an investment account based on the Sharia principle of Mudharabah. The Call Mudharabah Account combines a current account with the concept of profit sharing of the Mudharabah Investment Account. The Call Mudharabah Account is open to companies as well as individuals who are residents of Bahrain and the GCC for a minimum BD10,000 deposit. Linked to a current account, one can make a host of transactions such as redemptions and increments, withdrawals and debits, as well as use ATM facilities and acquire 24-hour online access on the KHCB e-banking system.

Bahrain’s Gulf Finance House has become entangled in a dispute with a former executive at its Dubai-based private equity unit who the company alleges falsified invoices to siphon almost $5 million into bank accounts controlled by him. David Haigh, who was the deputy chief executive of GFH Capital until resigning this March, was arrested shortly after he arrived in Dubai about a month ago and has been in detention since. Legal authorities in Dubai are weighing criminal charges, according to an emailed statement from GFH, while the company has also filed a civil suit against him in the Dubai International Financial Centre. Mr. Haigh denied the GFH allegations.

The Bahrain-based Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) said on Thursday secretary general Khaled Al Fakih had left the organisation to pursue other opportunities. Al Fakih, a Lebanese-born commercial banker, had been secretary general since February 2012. Deputy secretary general Khairul Nizam will take over his duties while AAOIFI looks for a new secretary general, the organisation said. Set up in 1990, AAOIFI has issued a total of 88 standards for Islamic finance. Its membership includes more than 200 institutions from 40 countries, including central banks and regulatory agencies.

Bahrain-based Gulf International Bank (GIB) has announced the successful completion of a senior unsecured two billion Saudi riyal ($533 million) five-year floating rate notes issuance. The notes were issued at a spread of 72.5 basis points above three-month Saudi Arabia Interbank Offered Rate (SAIBOR). The order book was more than 1.7 times oversubscribed, reaching more than 3.4bn riyals from investors. The joint lead managers and book runners for the offering were GIB Capital, NCB Capital Company, Samba Capital and Investment Management Company and Saudi Fransi Capital. The primary shareholder in GIB is the Public Investment Fund of Saudi Arabia.

Bahrain's central bank is finalising rules for the supervision of sharia-compliant advisory firms. The rules will help small Islamic finance institutions and fund managers to outsource the process of reviewing whether their activities are compliant with Islamic principles. This will enhance their operation and reduce the costs of such services. The central bank is also set to release a new regulatory framework for Islamic insurance, and is studying changes to rules for sharia-compliant financing arrangements which can be offered to accredited investors. In December, the central bank formally combined existing rules for issuing and listing financial securities, including sukuk, in an effort to make the process more efficient.

Bahrain-based Gulf Finance House (GFH) expects to complete a proposed capital reduction by the end of the second quarter. Under the proposal, which still requires regulatory approval, GFH will reduce the nominal value of its shares by 13.8 per cent to $0.265 per share from $0.3075. As a result, paid-up capital will be cut to $837 million from $972m. The cash reduction will not involve any cash transfer and will not change the bank's net equity. However, under accountancy rules, it will help remove accumulated losses from GFH's balance sheet.

Bahrain-based Al Baraka Banking Group B.S.C (ABG) announced a net profit of US$ 67 million for the first quarter of 2014, reporting an increase of 1% over the net profit of the same period of last year. While total assets increased by 1%, total financing and investments by 2% and customer accounts by 1% at the end of March 2014 compared to the end December 2013. Towards the end of 2013 and the first quarter of 2014, the subsidiary units of the Group continued their expansion plans by opening new branches, with 54 new branches in 2014. The group plans to open another 84 new branches in 2014, which will raise the total branch network to 569 branches, spread over 15 countries and providing employment to over 10,000 employees.

The first UK-Bahrain Islamic Finance Summit was held in London and highlighted the importance of co-operation in the area of educational and training development in Islamic finance. The BIBF presented a paper on that topic, saying that a million professional Islamic finance jobs are expected to be created worldwide by 2020. The paper highlighted several trends and facts within the Islamic financial sector. It also highlighted that this has produced a paradigm shift from an educational standpoint in Organisation of Islamic Co-operation countries and will generate multiple specialised training opportunities for human capital development within the sector. The BIBF team also participated in many panel discussions during the event, focusing on investment, education, and regulation.

Bahrain-based Gulf Finance House has appealed a decision by Kuwait's financial regulator to monitor its Kuwait-listed shares after the stock was traded in high volumes ahead of a company disclosure last year. In recent months, Kuwait's Capital Markets Authority (CMA) has been clamping down on what it sees as unusual market activity. Some executives and analysts have welcomed the move but others say the watchdog is being heavy-handed. Kuwait's regulator noticed GFH stock traded in high volumes in May 2013. The regulator notified GFH of its probe into the firm last September and said in April this year that it would monitor the stock for six months.

Gulf Finance House (GFH), the Bahrain-based Islamic investment bank, yesterday held the first meeting of its new board members following their election earlier this month. The eight-member board includes Dr Ahmed Khalil Al Mutawa (chairman), Musabah Saif Al Mutairy (vice-chairman) Faisal Abdulla Fouad Abubshait, Bashar Mohammed Almutawa, Yousef Ibrahim Al Ghanim, Dr Khalid Mohammed Al Khazraji, Shaikh Mohamed Daij Al Khalifa and Mohamed Ali Talib.

The Bahrain-based International Islamic Financial Market (IIFM) will develop its first standard contract template for sukuk, and aims to double the number of its standards as early as next year. A standard for leasing-based sukuk will be developed first by the IIFM to help harmonise industry practices, said chief executive Ijlal Ahmad Alvi. The move comes after a consultation meeting in Dubai this week which identified a need for guidelines covering the ijara sukuk structure as a priority. A work group will also study other common sukuk structures such as mudaraba, wakala and musharaka, as well as convertible and exchangeable sukuk. The ijara sukuk standard could be ready by the end of this year at the earliest.

Bahrain-based Gulf Finance House (GFH) plans to issue a sukuk or arrange new debt facilities of up to $500 million. The funds raised will be used to restructure the current liabilities, develop projects and for acquisitions of new businesses. The announcement follows ordinary and extraordinary general meetings of the bank yesterday, with the board getting authorisation from shareholders to determine the final structure of the sukuk or the debt facilities. GFH chairman Dr Ahmed Al Mutawa said that the bank reported a net profit of $6.3 million, reduced operating cost by 20 per cent and successfully restructured debt last year. Additionally, the shareholders approved the appointment of eight new members to the board for three years. The auditors and the Sharia supervisory board have been reappointed for the year.

In a statement to the Bahrain Bourse, Al Salam Bank-Bahrain noted the increase in its authorised share capital to BHD 250 million and in its issued and paid up share capital to BHD 214,093,075. The bank’s share capital has been increased as part of its acquisition of BMI Bank, approved by shareholders at EGM on 8 October 2013 and following the obtaining of the required regulatory approvals.

Bahrain’s Khaleeji Commercial Bank and unlisted Bank Al Khair have dropped their plan to merge after failing to agree on terms. The primary reason for this decision is due to the non-agreement on the structure and the valuation of the deal. The two lenders had been in talks since June last year. The decision to call off the merger was reportedly mutual and the two banks will continue to maintain a close business relationship. Mergers in the Gulf banking sector are rare as powerful local shareholders are often unwilling to give up controlling positions except for vastly inflated valuations.

Arcapita Bank is suing Saudi Arabia's Al Baraka Banking Group BSC and Bahrain-based Alubaf Arab International Bank to recover a total of $45.3 million the investment firm transferred to them just before its 2012 bankruptcy filing. Arcapita is suing two units of Al Baraka for a total of $35.3 million and is going after Alubaf for $10 million in a separate suit. The suits are the biggest of 59 lawsuits Arcapita has filed seeking money it shelled out within 90 days before its March 2012 bankruptcy filing. The rest of the suits are mostly against law firms, consulting groups and vendors such as information services the company paid for. Most of those are for $200,000 or less.