IslamicFinance.de

Bahrain-based Ithmaar Bank reported an increase in total income and operating income from its core retail banking operations during 2015 but this improved performance was impacted by recognition of certain investment related impairment provisions. Net income before provisions for impairment and overseas taxation increased 169.2 percent including a 18 percent increase in Operating Income. Overall, the Bank recorded a net loss of $46.4 million in 2015. This compares to a net loss of $8.8 million in 2014. This was mainly due to significant impairment provisions of $95 million in 2015, compared to provisions of $26.1 million in 2014.

The Financial Services Authority (OJK) is encouraging sharia-compliant lenders to improve their standard of service to increase their competitiveness alongside conventional banks that have greater experience. Citing a 2008 Bank Indonesia (BI) survey, OJK sharia banking head Ahmad Buchori said customers were mostly concerned about the benefits offered by the lenders when choosing who to bank with. The 2008 survey also shows that sharia lenders’ use of verses from the Koran to market their products is not effective despite the fact that more than 80 percent of Indonesians are Muslim, he added.

Investors can now look forward to investing directly in and sharing the profits from shariah-compliant investment activities via the first Islamic bank-intermediated financial technology (fintech) platform in the world. The Investment Account Platform (IAP) was launched by Bank Negara Malaysia on Feb 17. Similar to crowdfunding and peer-to-peer lending platforms, the IAP allows investors to fund either private or government-related ventures that are seeking financing to grow their business. Investors will be allowed to choose the ventures they invest in and may define the investment mandate and eligibility criteria for their financing, for example, the investment tenure and types of industries.

Bank of London and The Middle East (BLME) said it would acquire Renaissance Asset Finance as part of efforts to grow its leasing business. Dubai-listed BLME said in a statement the acquisition would be finalised in early April, without disclosing a deal size. The Islamic lender helped launch Renaissance in 2014 when it provided a financing line of 35 million pounds, with both firms seeking to fill a funding gap for mid-sized companies. Renaissance offers financing solutions including sale and leaseback transactions, with a maximum advance of 2 million pounds.

The Islamic Research and Training Institute (IRTI) and the General Council for Islamic Banks and Financial Institutions (CIBAFI) have signed a deal for a joint project to establish the first-of-its kind Islamic financial industry data repository. The online repository, to be named the ‘Islamic Financial Industry Intelligence (IFII)’, is aimed to be a one-stop shop for comprehensive and reliable Islamic financial and non-financial data and information. IFII would comprise several integrated databases covering all the components of the Islamic finance industry—including banking, insurance, and social finance.

East Africa could be the new frontier for Islamic finance following the launch of the first East Africa Islamic finance summit in Nairobi. Financial experts drawn from the region noted that East Africa features a potentially strong demand for Islamic services and that its growing reach promises a number of benefits. The Islamic finance industry has seen tremendous increase in recent years transcending its traditional geographic boundaries and its entrance into East Africa could revolutionize the financial sector. The summit which attracted participants and speakers from the region’s key institutions, financial regulators from Mauritius and Malaysia and experts in Islamic Finance charted the way forward for Islamic finance development in the region.

Many tout the promise of Islamic banking in Africa, but retail consumers have been hesitant in many markets. hough Muslims make up a large portion of the unbanked population in many target countries, they just weren’t coming into the fold—at least not at a significant rate. This admission may come as a surprise to anyone reading the parade of headlines about ‘unlocking the potential’ for Islamic banking in Africa. There’s been quite a few. While this is still true, the reality on the ground—literally, because we’re talking about retail here—is more complicated than that. In its recent 2016 Outlook, Moody’s Investor Services largely predicted challenging times in African banking due to sinking commodities prices, China’s slowdown and regulatory difficulties.

Islamic banking and finance (IBF) is swiftly growing in countries outside the Organisation of Islamic Cooperation (OIC) block, especially in the United Kingdom. The global Islamic financial services industry attained the size of $2 trillion by the end of 2015. Islamic banking segment, which accounts for 75%, dominates the industry. Sukuk, although much talked about, is only 15% of the total Islamic financial assets. Islamic fund management segment, albeit a small component, is slowly developing. Takaful and microfinance, on the other hand, have yet to attain any significant level of development.

Turkey plans to sell Islamic lender Bank Asya by the end of May and will liquidate it if a buyer is not found, Sakir Ercan Gul, chairman of the Savings Deposit Insurance Fund (TMSF) that controls the bank said. Gul said that some of the bank's partners have accepted it, some of them have not. The bank will be sold in any case, he added. Last year the government seized the assets of Bank Asya, saying its financial structure and management presented a threat to the financial system, and took over more than 20 companies with ties to Gulen.

Ali Ibrahim Al-Abdulghani, Chief Executive Officer, of Qatar Islamic Insurance, was awarded the Takaful CEO of the year award in a ceremony held last week during the 10th International Takaful Summit 2016 at Jumeirah Carlton Tower, London. This award was presented to him in recognition of his leadership that witnessed the Company grow steadily to the benefit of both shareholders and policyholders alike adding credibility to the Takaful model worldwide as viable alternative to the conventional insurance. Speaking at the occasion, he invited Takaful industry leaders to cooperate in establishing a ReTakaful syndicate at Lloyds of London.

Kuwait International Bank (KIB) in 1973 started out as a specialised bank in real estate under the name of Kuwait Real Estate Bank. KIB later helped with the constructional evolution of the country and has since expanded to other areas of the economy. In 2007, KIB converted into a fully-fledged bank operating under Islamic sharia provisions and changed its name. KIB sees the drop in oil prices as an opportunity to expedite the implementation of fiscal reform, in order to mitigate pressures on government budget and diversify the sources of income. Doing so will push forward the wheel of economic development and maintain a sustainable economy in the long run.

Speaking at the launch of the participation banking unit of state-owned Vakibank, President Recep Tayyip Erdogan said that the share of Islamic banking is around five per cent now, but the target was earlier defined to increase this share to 15 per cent by 2025. He stated his opinion that the share should reach 25 per cent instead. In December 2014 Vakifbank’s Board of Directors had authorized the bank to carry out all necessary transactions to obtain financing from Islamic Development Bank (IDB) to pledge capital for the Bank's participation banking project, amounting to $300 million with Turkish Treasury guarantee.

Islamic finance is drawing more interest in Russia as the country struggles economically and requires fundamentally new approaches to attract investments from abroad. The sector is just beginning to grow in Russia and its perspectives were discussed during the recent Gaidar’s Forum in Moscow, one of the major annual international conferences on economy in Russia. Implementation of Islamic finance in Russia started through the so-called pilot projects in the predominantly Muslim republic of Tatarstan. It has both existing infrastructure and client base. Islamic banking could account for up to 5 per cent of the entire financial market in Russia.

A statement from the deposit insurance fund (DIF) that Islamic lender Bank Asya would either be sold or liquidated by the end of May has no legal basis and its shareholders will never agree to such forced maneuvers, Süleyman Ta?ba?, a lawyer for Bank Asya shareholders said. Selling the bank is not legally possible according to banking law, he explained, adding that the bank's equity capital ratio is still strong; it has TL 1.35 billion in equities and another TL 1.4 billion deposited with the central bank. Plus, the shareholders still hold ownership. Ta?ba? criticized DIF's irresponsible statements, adding that all parties should respect the judicial process that is currently under way with regards to the bank's future.

The CMA Board has issued its resolution approving Bank Albilad’s request to increase its capital from SAR 5,000,000,000 to SAR 6,000,000,000 through issuing one bonus share for every 5 existing shares owned by the shareholders. Such increase will be paid by transferring an amount of SAR 468,000,000 from the “Retained Earnings” account and SAR 532,000,000 from the “Statutory Reserve” account to the Bank’s capital. Consequently, the Bank’s outstanding shares are increased from 500,000,000 to 600,000,000. The bonus shares eligibility is limited to the shareholders who are registered in the shareholders registry at the close of trading on the day of the extraordinary general assembly.

During a one-hour interview on the balcony of his suite at the Palazzo Versace hotel along Dubai Creek, Ibrahim calls for a change in the incommensurate philanthropic culture among wealthy Muslims in the Gulf, blames GCC government’s favourable policies for the “laziness” of Middle Eastern investors in Africa and argues there have been more commendable leaders in Africa than in the West in the past decade. Brazen or simply unwilling to rose-tint his opinions, the Sudanese businessman who founded African telecommunications company Celtel in 1998 is more than anyone else in the world holding African leaders to account. Since 2000, the annual Ibrahim Index of African Governance has provided the most comprehensive assessment of African governments’ performances.

President Muhammadu Buhari on Thursday in Mecca, Saudi Arabia, said he welcomed an offer by the Islamic Development Bank (IDB) to organisze a financing roundtable in Abuja to mobilise more funds for investment and development of infrastructure in Nigeria. The president of the IDB, Dr Ahmed Mohammed Ali made the offer at a meeting with Buhari who is currently on an official visit to Saudi Arabia. Ali assured Buhari that the IDB would work with its traditional partners such as the Saudi Fund, the Kuwait Fund, Arab Bank for Development in Africa and the Abu Dhabi Fund, to increase the quantum of funding available to Nigeria. Buhari welcomed the plan by the IDB to fast track the take-off of the Bilingual Education Programme, aimed at integrating the Almajiri system of education with western education in Nigeria.

Qatar's largest sharia-compliant bank Masraf Al Rayan is expected to post annual profit growth of between 8 and 10 percent in 2016, Chairman Hussain Ali al-Abdulla said at the bank's annual general meeting. Masraf Al Rayan reported last month a 3.6 percent rise in full-year net profit in 2015 to 2.07 billion riyals, although its fourth-quarter earnings dipped slightly. Abdulla said the bank had no plans to issue sukuk, or sharia-compliant bonds, this year as there was no need for additional liquidity. Falling liquidity is expected to be one of the main issues facing banks in the Gulf region in 2016, as governments remove cash on deposit to help replace lost revenue from lower hydrocarbon prices.

The government of Azerbaijan announced that it is in talks with the Islamic Development Bank (IDB) on application of Islamic banking instruments in the country. Deputy Economy Minister Sahil Babayev also said that the Bank is ready to provide technical assistance to Azerbaijan, which has a predominantly Muslim population. The primary scope of our model’s project has already been outlined, he added. Azerbaijan, alongside Kazakhstan, is among several central Asian countries creating a more welcoming framework for sharia-compliant banking to attract investments and financing from the Islamic capital market. Babayev faced difficulty to name the exact date of introduction of Islamic banking model in Azerbaijan, explaining it with the number of issues to be solved.

Azzad Asset Management today announced that it has further magnified the social impact of its flagship mutual fund by adding investments in ethical trade finance deals. These investments may provide returns for investors while helping underserved populations in Asia and Africa obtain reasonable financing to grow businesses and cooperatives. The Azzad Wise Capital Fund (WISEX) invests primarily in sukuk and community development banks. Through WISEX, the Virginia-based investment firm is participating in a group of syndicated ethical trade finance deals arranged by the International Islamic Trade Finance Corporation (ITFC). The ITFC is charged with advancing trade and improving the economic conditions of people around the world.