IslamicFinance.de

Abu Dhabi Islamic Bank PJSC is planning expansion in Africa markets to tap demand in countries with a large Muslim population. In Africa, the bank has looked closely at Algeria and Morocco, Chief Executive Officer Tirad Mahmoud said. The bank may consider an acquisition next year as part of the plan, he added. The bank also applied for licenses in Algeria and Libya and is considering Tunisia and Morocco. The bank was among lenders that bid to buy the retail banking assets of Citigroup Inc. in Egypt this year, losing out to Commercial International Bank Egypt SAE last month. Mahmoud believes the banking industry is on the cusp of a historic transformation that will see a convergence between conventional and ethical banking.

La banque Emiratie, ‘Abu Dhabi Islamic Bank’ s’apprêterait à entrer au marché bancaire marocain, par des investissements programmés pour l’année 2016. Selon le PDG du groupe, Tirad Al Sheikh Mahmoud, Abu Dhabi Islamic Bank serait à la recherche d’opération de rachat de banques au royaume sachant que le banking islamique y est en lancement. Tirad Al Sheikh Mahmoud a exprimé le même intérêt de son établissement, pour des investissements similaires en Malaisie, en Indonésie ou en Jordanie. Au Maroc, en Novembre 2014, la chambre des représentants a adopté une nouvelle loi sur la finance islamique, autorisant la création au Maroc, de banques ou filiales islamiques et autorisant l’émission des Sukuks.

President Abdel-Fattah al-Sisi aims to slash a subsidy bill, mostly for food and energy, that ballooned to about 8 percent of economic output last fiscal year. Instead, money will be directed to those who need it most – eventually, about 18 million Egyptians, the poorest 20 percent of the population. After years of political turmoil the government is eager to make sure they’re spared the impact of spending cuts. Yet it’s also under pressure from investors to trim one of the region’s biggest budget deficits. Targeted handouts are a way of achieving both goals. The program called Takaful or Solidarity gives cash to families on condition that their children attend school and undergo regular medical checkups. Another plan, Karama or Dignity, covers the elderly and the disabled.

Egyptian Takaful Insurance Company (Non-life) aims to achieve premiums worth EGP 10 million (US$ 1.3million) in FY 2015-16, Managing Director Ahmed Arfeen revealed. The company expects to attain premiums volume of EGP 350 million at the end of June 2015, Arfeeen said. The initial indicators showed that the company has achieved 95% of its plan for current FY 2014-15. On other side, Egyptian Takaful Company is negotiating with a number of banks to sign bankassurance agreement in 2016, Arfeen said, noting that banks had not signed any agreements with non-life insurance companies till now. It is worth mentioning that 66% of the shareholding structure of Egyptian Takaful Company (Non-life) is divided equally among seven financial institutions.

Silatech, a Qatar-based social enterprise aiming to increase employment and entrepreneurship among youth in the Middle East and North Africa, recently announced the development of Narwi, a nonprofit crowdfunding platform that will support microentrepreneurs via Islamic charitable giving. The platform is scheduled to be launched in late June 2015. Through Narwi, donors will be able to establish an endowment called a “Narwi Waqf” to fund microentrepreneurs with donations as small as USD 25. Projects featured by Narwi are sourced solely from lenders in Egypt, Iraq, Jordan, Lebanon, Palestine, Somalia and Yemen that are compliant with Shariah.

Globally, the Middle East and Africa (MEA) region has the largest share of private wealth booked offshore, thanks to the political and economic tensions in the region, according to the Global Wealth Report 2015 by BCG. The report showed that while the MEA region held 31 per cent wealth offshore, Latin America and Eastern Europe have 28 per cent and 19 per cent respectively. While economic and political instability is a key factor in driving assets offshore, shortage of onshore asset classes and management skills are driving demand for offshore domiciles. In 2014, Caribbean and Panama remained the preferred destinations for wealth originating from North America. For Middle East and Africa region, Switzerland was the top destination attracting 37 per cent of offshore assets booked from the region followed by UK 22 per cent and Dubai 12 per cent.

La Banque marocaine du commerce extérieur (BMCE) et le groupe bahreïni Al Baraka Banking Group projettent d’ouvrir une banque islamique au Maroc dans les prochains mois. Le PDG du groupe bancaire bahreïni, Adnan Ahmed Yousif, a déclaré que la future banque sera détenue à parts égales par la Banque marocaine du commerce extérieur (BMCE) et Al Baraka. L'institution ouvrira ses portes durant le premier trimestre 2016. Il a également ajouté que la nouvelle banque couvrira un réseau de 20 branches au cours de ses cinq premières années d’activité. Rappelons que le parlement marocain a adopté en novembre 2014 la loi n° 103.12 qui autorise les institutions bancaires locales et étrangères à créer des banques participatives (islamiques) au Maroc.

Jordan will soon launch its first sovereign issue of Islamic bonds to finance real estate projects, Finance Minister Umayya Toukan said. Toukan did not give details on the size of the planned Islamic Sharia-compliant issuance, but informed sources indicated that the sovereign sukuk could raise around JD400 million. The source said the government may enter the Islamic financial market in the coming few weeks, adding that Islamic banks in Jordan enjoy liquidity in excess of JD1.4 billion. In April of this year, the government chose the Islamic Corporation for the Development of the Private Sector to support the country's debut for the planned domestic sukuk offering. The sukuk issuance will be a dinar-dominated offering.

Bitcoin (https://bitcoin.org) started to make the idea of a cryptocurrency popular. What is missing so far is an intense discussion among Sharia scholars.

What makes Bitcoin unique is, that it is a) created by a computer program b) that it is created and verified by a decentralised process, the so-called 'Blockchain' technology (https://en.wikipedia.org/wiki/Block_chain_(database)), which is solving a practical problem for the first time: To enable trust and accounting without a central ledger, such as a central bank. c) that it faciliates payments quick, efficient and discreet - while the latter leads to accusation of misuse, e.g. for gaming, drugs, terror finance etc.

How it can be seen from an Islamic perspective is not widely discussed, despite it deserves the attention. What we find in search engines are some discussions and also an initiative, which calls itself a bank (https://bitcointalk.org/index.php?topic=21732.0).

Bahrain-based Al Baraka Banking Group plans to launch an Islamic bank in Morocco early next year after receiving approval from the country's central bank, and is looking to expand into East Africa, chief executive Adnan Ahmed Yousif said. The new bank will be equally owned by Al Baraka and Banque marocaine du commerce extérieur (BMCE), and will start operations in the first quarter of 2016. He said the new bank would open 20 branches in its first five years of business. The chief executive also said the group is considering expanding into East Africa because the banking system there is similar to that of the Gulf region, and was currently exploring opportunities in Kenya. Besides, the bank also plans to grow its operations in Egypt.

Egyptian social entrepreneur Mohamed Ashraf Abdel Samad started Shagara (‘tree’ in Arabic) back in 2011! The idea of Shagara is to act by planting trees and plants inside cities to offset problems, increase environmental awareness, and—last but not least—help the economically disadvantaged. To do this, Shagara integrates vegetation into urban areas, blending design concepts with modern agricultural techniques and architecture. The flagship project is “Shagara at School”. It was carried out for the first time at a school in Egypt’s Al-Qalyubia Governorate in February 2013. Today, it is still going, the school extending it in 2015 by using its own resources after receiving an award for quality for the second year running.

Islamic International Rating Agency (IIRA) has assigned an international scale rating of 'B-/B' (Single B Minus / Single B) and national scale rating of 'A-(eg)/A2(eg)' (Single A Minus / A Two) to AlBaraka Bank Egypt. Outlook on the assigned ratings is 'Stable'. The fiduciary score has been assessed in the range of '66-70', reflecting adequate fiduciary standards wherein rights of various stakeholders are adequately protected. Ratings assigned to ABBE derive strength from the franchise of Albaraka Banking Group (ABG) as the bank's principal owner. The bank's sound liquidity and profitability indicators in addition to favorable and improving asset quality lend support to the ratings assigned.

A branch of al-Baraka Bank Syria had been opened on Thursday in the coastal Tartous city with the participation of official and economic figures. Governor of the Central Bank of Syria (CBS) Adib Mayaleh affirmed in a press statement that banks in Syria have had an effective contribution to national economy, considering it a sign of growth and recovery despite the critical stage that Syria is passing through. Several branches of a number of banks are under construction in different areas in Syria, Mayaleh added. For his part, Mohammed Halabi, Chief Executive Officer of Al Baraka Bank Syria highlighted the importance of opening the bank’s tenth branch in Syria.

Michael Gassner, Editor of IslamicFinance.de presented on the 3ème Congrès International de la Finance Islamique “Les Banques Islamiques et le Financement des Entreprises: Pratiques et enjeux théoriques” en Marrakech, 25/26 Mai 2015.

The presentation discussed that exponential growth of debt in Islamic finance is ruled out, nevertheless, debt and equity finance exists. The specific significance of equity finance (musharaka, mudaraba) lies in need for solid debt/equity ratio, as Muslims shall never die being in debt. Still Islamic banks barely provide any equity finance and the reason often given are moral hazard costs. This is denied as debt as well as equity has specific moral hazard problems, and if anything, even conventional banks would offer a mixture of debt and equity. Rather the assumed reason appears to be in the regulation (capital weight) and taxation (interest deductibility), which makes equity financing from a bank 2-4 times at least more expensive than debt finance, and thus not worth being offered.

The attached presentation is in French.

The Islamic Development Bank 's total funding portfolio for Egypt has reached US$12.5 billion, including US$3.1 billion in 2014, director country department Mohammad Al-Saati said. The IDB official has referred that his bank had signed financing agreements for important projects in Egypt, including US$450 million for South Helwan power station, US$460 million for Sharm El-Sheikh Airport, and US$220 million for Egyptian-Saudi electricity grid linkage project. Towards bolstering its partnership with Egypt, IDB will sign within the third quarter of this year a new agreement to launch a representative office in the North African country, Al-Saati noted.

Morocco's government adopted a bill on Thursday to regulate Islamic insurance, legislation that will face a final vote by parliament later this year. It is the last step in Morocco's legislative package to regulate the country's fledgling Islamic finance industry. Earlier this year, it issued a decree allowing the creation of a sharia board to oversee the sector. The bill adopted by the government goes into details on authorisations, takaful and retakaful products and operating process. Sharia-compliant insurance will be overseen by the same sharia board of Islamic scholars in charge of Islamic banking. The bill also includes some amendments of the law regulating the conventional insurance sector.

More than 200 angel investors, start-ups from the MENA region and members of the local media gathered in Bahrain for the commencement of the second MENA Angel Investors Summit 2015. The event was organised by Tenmou, Bahrain's First 'Business Angels, in strategic partnership with the Economic Development Board (EDB). 45 fast-growth start-ups from Bahrain, Saudi Arabia, UAE, Lebanon, Morocco, Palestine, Egypt, and Jordan presented their business pitches to the angel investors in attendance in hopes of procuring more funding to take their businesses to the next level. The highlight of the summit was the launch of the region's first networking association, the MENA Angel Investor Network (MAIN).

The volume of Faisal Islamic Bank of Egypt’s (FAIT) business increased to LE52.8 bln at the end of April 2015, compared to LE47.9 bln in the same period last year, the bank announced. The increase marks a rise of 10.3% in comparison to last year. Additionally, the total assets of the bank increased by 9.8%, from LE47.4 bln in March 2014 to LE52 bln in April 2015. Meanwhile the bank’s net profits reached LE196.97 m in the first quarter of 2015, compared to EGP 172.3m during the same period in 2014. The bank’s capital is worth LE66.8bln, divided into 13.36 m shares at LE5 per share.

Thanks to its economic diversity and proximity to Europe, Morocco is well-placed to offer a platform for Islamic banks, Lahcen Daoudi, Minister of Higher Education and Scientific Research said. Speaking at a conference organized by the national school of commerce and management (ENCG) in Tangier under the theme: “the foundations of Islamic banks” the Minister said that Islamic banks are considered as a source of wealth for Morocco that will contribute by 0.5% to 1% in PIB per year. As for human resources, the minister affirmed that the staff working in other banks will not find difficulties in joining Islamic banks.

Emirates Islamic Bank prévoit de s’implanter au Maroc et en Egypte au cours des deux prochaines années pour saisir les énormes opportunités qui se présentent sur ces deux marchés dans le segment de la finance halal. Le groupe bancaire compte se positionner dans les marchés marocain et égyptien en acquérant des banques existantes ou en demandant de nouvelles licences. A noter qu’une loi sur les banques islamiques a été adoptée en novembre 2014 par le parlement marocain. La Banque centrale marocaine a annoncé récemment avoir déjà reçu 15 demandes de licences émanant d’autant de banques islamiques étrangères.