IslamicFinance.de

Prime Minister David Cameron of the United Kingdom has announced that the U.K. will become the first non-Muslim country to issue a Sukuk, with a £200 million issue planned for early 2014. Cameron also announced plans for a new Islamic index on the London Stock Exchange. These initiatives are all part of a grand plan by the U.K. government to turn London into a global capital of Islamic finance. At the same time, the World Bank Global Islamic Finance Center in Istanbul is the result of the collaboration between the Turkish government, Turkish private-sector entities and the Bank Group, aiming to create a “center of excellence” for the development of Islamic finance. However, there is a need to strengthen its legal foundations and develop robust regulatory and supervisory frameworks globally.

Kuwait Turkish Participation Bank Inc has been granted a licence by the Qatar Financial Centre ( QFC ) Authority, with effect from September 15 2013, to establish a branch in the QFC . The bank expects to open its QFC branch in about two months. It is licenced to undertake deposit taking; providing and arranging Islamic credit facilities dealing in Islamic investments and managing Islamic investments. The bank is a Turkish Islamic bank with 62 percent owned by Kuwait Finance House, Kuwait, 9 percent by PIFSS, Kuwait, 9 percent by Islamic Development Bank, Saudi Arabia, and 18 percent by Turkish Awqaf. It is the first and only Turkish bank to have a presence in Qatar.

Turkey's Islamic finance industry is being reshaped as banks widen their product range and new competitors prepare to enter the market, according to a Thomson Reuters study. Promoting Islamic finance in Turkey is part of government plans to boost commercial ties with the Gulf and diversify the country's investor base. Last year Islamic banks reached a combined $36 billion in assets, representing a 5 percent share of total banking assets. The study estimates Islamic bank assets could reach between $80 billion and $120 billion by 2017. For this to occur, however, the industry will need to do more to educate customers. Moreover, banks and companies would also need to take advantage of new rules that facilitate issuance of various types of Islamic bonds.

Islamic International Rating Agency has upgraded the national scale ratings of Kuveyt Turk Participation Bank on both the short-term and long-term scale to AA-/A-1 + (Double A Minus /A-One Plus) from A+/A-1 (A Plus/A-One) previously. Ratings on the international scale have been reaffirmed with local currency ratings at BBB/A-3 (Triple B/A-Three) and foreign currency assessment at BBB-/A-3 (Triple B Minus/ A-Three). Outlook on the ratings is 'Stable'. The ratings draw on recent, continued business expansion, reinforced by fresh capital provided by the bank's sponsors. Organization level improvements in terms of strengthening the control areas and adding focus to certain business functions, has also been noted.

The order book for the Republic of Turkey's upcoming issue of a five-year US dollar-denominated sukuk bond has swelled to over USD2.25bn. Initial profit rate guidance for the issue remains at a spread of 325bp over mid-swaps. The offering has received a balanced response across geographies, anchored by accounts in the Gulf Cooperation Council. The 144A/Reg S issue is expected to price this week, but books could go subject at short notice. HSBC, QInvest and Standard Chartered are the leads. The issue is expected to be rated Baa3 by Moody's and BBB- by Fitch.

The order book for the Republic of Turkey's upcoming issue of a five-year US dollar-denominated sukuk bond has swelled to over USD2.25bn. Initial profit rate guidance for the issue remains at a spread of 325bp over mid-swaps. The offering has received a balanced response across geographies, anchored by accounts in the Gulf Cooperation Council. The 144A/Reg S issue is expected to price this week, but books could go subject at short notice. HSBC, QInvest and Standard Chartered are the leads. The issue is expected to be rated Baa3 by Moody's and BBB- by Fitch.

Al Baraka's Turkish subsidiary, Al Baraka Turk Participation Bank, has concluded a syndicated Sharia compliant Murabaha financing, raising a total of $196m and EUR 175.5m. A total of 23 banks from 15 countries participated in the facility, managed by the lead arrangers Standard Chartered Bank, Noor Islamic Bank (Dubai), ABC Islamic Bank (Bahrain), Barwa Bank (Qatar) and Emirates NBD Capital (Dubai). Meanwhile, the Bahrain All-Share Index slipped 0.20% to 1,194.88 points on Sunday. Al Baraka Banking Group closed even at $0.725.

Bahraini lender Al Baraka Bank's Turkish unit Albaraka Turk has secured an Islamic murabaha syndicated loan of $196 million and 175.5 million euros ($237 million). The loan, in one- and two-year tranches, had a cost of LIBOR/EURIBOR +1 percent and LIBOR/EURIBOR +1.35 percent respectively.

Turkey mandated banks for its second sovereign sukuk issue in international markets and will hold a series of investor meetings in the Middle East and Asia. HSBC, QInvest and Standard Chartered have been mandated to explore opportunities for a possible lease certificate issuance in the international capital markets. Turkey has borrowed $4.2 billion from international capital markets so far this year and plans to borrow a total of up to $6.5 billion through a mix of Eurobond, Samurai and sukuk issues by the end of the year.

The New York Department of Financial Services (DFS) has asked half a dozen European banks to submit their official records pertaining to their financial dealings with Turkey's Uzan family. The six banks covered by the order are France based BNP Paribas, Societe Generale and Credit Agricole; Commerzbank and Deutsche Bank of Germany and Standard Chartered. The state banking regulator is investigating the case over the illegal business dealings with Uzans. Standard Chartered assured its full co-operation with the regulators, while representatives of the other European banks either declined to comment or did not respond to requests for comment.

Turkey’s large infrastructure investments may boost the country’s Islamic finance sector. Turkey’s mega projects like bridges, airports, and Kanal Istanbul are compatible with the Islamic financing structure, according to ?brahim Turhan, chairman of Turkey’s stock exchange Borsa Istanbul. Moreover, the private sector’s sukuk export needs are believed to increase due to the large infrastructure investments on the agenda. Bank Asya is planning to export at least 125 million Turkish Liras of additional sukuk before the year ended, while Albaraka Türk is mulling exporting over $200 million worth of sukuk within the last quarter or at the beginning of next year. Non-interest financial tools are accorded a great importance in Turkey’s bid to make Istanbul a global financial center as well.

Turkish Islamic lender Bank Asya plans to issue at least 125 million lira ($62 million) of lira-denominated sukuk by the end of the year, according to deputy general manager Feyzullah Egriboyun. Bank Asya applied to the Capital Markets Board to issue sukuk worth up to 1 billion lira in July.

Bahraini lender Al Baraka Bank's Turkish unit plans to issue more than $200 million of sukuk, in the last quarter of this year or early 2014, according to executive vice president Ayhan Keser. Keser said the timing would depend on market conditions and the maturity of the sukuk was likely to be 5 years.

New rules to rein in credit card debt in Turkey will force the country's banks to set aside more funds to cover non-performing loans, cutting 2 billion lira ($1.03 billion) off their annual profits. The rules obliging credit card holders to repay more of their debts each month were announced weeks after Prime Minister Tayyip Erdogan urged Turks not to use credit cards, accusing banks of locking people into poverty with excessive fees. The measures announced on Friday by Turkey's banking watchdog, the BDDK, will make it harder for consumers to pile up more credit card debt than they can afford. The government also wants to boost personal savings and reduce household spending on imported consumer goods that have bloated Turkey's current account deficit. The effect in the medium-term is that many consumers with existing debts will struggle to make the higher repayments.

Kuwait Finance House (KFH) in collaboration with Kuveyt Turk (KFH Turkey) has launched a new Turkish real estate financing service. This service provides KFH customers with an end-to-end solution to their Turkish real estate requirements, tailored to their specific needs. It will support them searching for properties in Turkey, providing assistance on negotiation of an acquisition price, competitive Islamic real estate financing and offering post-sales services, should investors need to manage the properties in their absence. A specialized section has been established by KFH in Kuwait City, in order to support customers purchasing real estate in Turkey. This office acts as a contact point and provides customers with the relevant administrative services related to Turkish real estate, like document gathering and handling, information distribution and logistics handling.

Turkish Prime Minister Tayyip Erdogan urged Turks not to use credit cards, accusing banks of locking people into poverty with excessive fees. He said banks were growing rich on high commissions and urged people to live within their means. Erdogan and members of his government have accused speculators and a "high-interest-rate lobby" of stoking volatility in financial markets to make a quick profit at the expense of the Turkish economy. The comments opened a new front in the verbal attacks Erdogan has periodically made against the financial community, which is betting the country's central bank will raise borrowing costs next week to steady the ailing lira currency. In fact, the central bank may raise rates next week to stem a slide in the Turkish currency which would make the lira and lira-denominated assets such as Turkish government bonds more attractive to foreign investors, as well as pushing up commercial banks' lending rates.

Turkish Islamic lender Bank Asya said on Monday it had applied to the Capital Markets Board to issue sukuk worth up to 1 billion lira ($520 million). The bank said in a statement to the Istanbul stock exchange it had mandated its brokerage arm for the issue.

The United Arab Emirates central bank has asked local commercial banks in the country to provide details of their financial exposure to Turkey by Tuesday. The aim is reportedly to review the investments. The UAE’s financial ties to Turkey have expanded in recent years because Gulf banks are looking to diversify out of the region’s oil-focused economy and are hamstrung by a lack of potential acquisitions at home. UAE banks have also increased their exposure to Turkish debt, particularly sukuk. Sales of Turkish sukuk to Gulf investors may increase further as Turkey expands its offerings. A new regulation limiting exposure to Turkey is not expected despite the UAE's central bank's action unless the data compiled exceeded the norm.

Bank Asya is eager to achieve bilateral trade between the Indian and Turkish economies worth $15 billion over the next five years. Officials of the Turkish Islamic lender Bank Asya were in Mumbai to discuss the rapidly growing business ties between India and Turkey. The proximity of financial institutes between the two economies would benefit business and trade, according to Cenk Karacaoglu, Vice President, Bank Asya, Turkey. The rapidly growing Indian economy presents huge potential for business and trade with Turkey, he added. The bank will further expand business with Indian companies. Bank Asya has agreed to offer Shariah compliant banking facilities in India and was awaiting the regulator's nod.

Noor Islamic Bank has completed Islamic capital market mandates valued at over $1.4 billion (AED5.14 billion) in the past six months in Turkey. As an Initial Mandated Lead Arranger and Joint Bookrunner, Noor successfully closed a $500 million equivalent dual-currency Murabaha facility for Türkiye Finans Katilim Bankasi, which was oversubscribed two times. Noor Islamic Bank has also been an Initial Mandated Lead Arranger and Joint Bookrunner for a $382 million dual currency Murabaha Facility for Asya Katilim Bankasi A.S (Bank Asya) and a $500 million Sukuk for Tukiye Finans Katilim Bankasi A.S. In total, 85 banks and financial institutions across Asia, Middle East, Africa and Europe have participated in the syndicated financing deals led by Noor this year.