IslamicFinance.de

Al Hilal Bank plans to issue a debut Islamic bond worth $500 million in the third quarter of this year, according to its chief executive Mohamed Berro. The bank aims to fund growth, diversify its balance sheet, and benchmark the bank in on the debt market. Al Hilal Bank mandated National Bank of Abu Dhabi, HSBC and Standard Chartered Bank for the issue. Furthermore, the bank expects to obtain a credit rating in the coming two or three months.

The real-estate arm of Qinvest, the Qatari investment bank will focus on the United States and its home market and avoid Europe this year. This is because competition makes the European market tougher. With targeted returns of up to 6 percent and over, the bank's plan is to focus on assets in U.S. retail - such as single-tenant units on New York City's Fifth Avenue - and in the less liquid and less crowded Qatari market. Qinvest is in the process of taking over Egyptian investment bank EFG Hermes , though regulators have yet to approve the deal.

Al Baraka Turk, a unit of Bahraini lender Al Baraka, said on Wednesday it had started work on establishing a joint private pension company with Kuveyt Turk. The bank made the statement to Istanbul Stock Exchange. Turkish lender Kuveyt Turk is 62 percent owned by Kuwait Finance House.

Turkish Islamic lender Bank Asya said on Monday it had mandated banks for a subordinated sukuk issue worth up to $300 million with a ten-year maturity. The lender made the statement to the Istanbul Stock Exchange. Strong investor demand and a need to improve capital adequacy ratios are causing Turkey's Islamic banks to consider issuing subordinated sukuk.

Albaraka Turk mandated four banks to secure a $200 million subordinated loan from international sukuk markets. Albaraka Turk is the Turkish subsidiary of Bahraini lender Al Baraka Bank.

Dubai Islamic Bank (DIB) plans to boost its capital through the sale of a sharia-compliant debt instrument. DIB will hold investor meetings in Asia, the Middle East and Europe starting on March 7 ahead of issuing the dollar-denominated, benchmark-sized hybrid sukuk, subject to market conditions. The bank hopes to raise at least $500 million from the sale, but the final size will depend on demand. Emirates NBD, HSBC Holdings, National Bank of Abu Dhabi, Standard Chartered and the bank itself were chosen to arrange the deal.

Saudi Almarai Co picks NCB Capital to arrange local currency sukuk. The dairy group Almarai is going to hold meetings with the Saudi investors over next two weeks.

Dubai-based investment bank Arqaam Capital has hired ex-Credit Suisse banker Wafic Nsouli. He is expected to join Arqaam on March 18 and will take charge as executive director and head of institutional equity sales. Before joining Arqaam, Nsouli was head of Middle East and North Africa equities at Credit Suisse, responsible for the company's offices in Dubai and Saudi Arabia.

A new type of sukuk, introduced by Gatehouse Bank, could make inroads in the market by offering greater security to investors through a structure similar to conventional covered bonds. The Gatehouse sukuk incorporates a purchase undertaking by the bank that gives primary security to noteholders, while in case of default they have secondary security on the property. It is based on an ijara (lease) contract which is commonly used in Islamic finance. Moreover, by adding the second layer of security, the Gatehouse sukuk effectively became asset-backed and not only asset-based. The Gatehouse sukuk pays a 3 percent annual distribution and offers quarterly redemption options.

Geopolitics have a growing weight on consumer banking in Dubai because it is the Middle East's banking centre and geographically close to major countries targeted by sanctions. In theory, as long as money does not have criminal links or belong to people or companies directly targeted by international sanctions, banks should be able to accept it. But in practice, the costs of checking that rules are obeyed have become so high that banks are turning down some deposits in advance. The costs of regulatory compliance could slow Dubai's banking growth. Especially Syrian, Iranian and U.S. citizens are being affected by this concern.

Strong investor demand and a need to improve capital adequacy ratios are causing Turkey's Islamic banks to consider issuing subordinated sukuk. Ibrahim Oguducu, head of the financial institutions business at Bank Asya, said longer-tenor subordinated sukuk would help balance mismatches between the maturities of banks' liabilities and assets, while diversifying their funding sources. Subordinated issues might not be expensive for Turkey's Islamic banks that have issued only two sukuk so far.

Sharia-compliant loans are beginning to play a role in Afghanistan's farm sector through a U.S.-funded aid programme. In 2010, the U.S. Agency for International Development (USAID) set up the Agricultural Development Fund (ADF) which offers both conventional credit and Islamic financing. About $11 million of its loans approved between May 2011 and
April 2012, or 70 percent of them, were sharia-compliant. Juan Estrada-Valle, acting chief executive of the ADF, hopes that the credits will enable commercial farmers and other agribusinesses to grow at a rapid pace and contribute to the
growth of rural communities.

According to the rating agency A.M. Best, inconsistent regulation across the Gulf's takaful industry affects profit margins and credit ratings, while providing an arbitrage opportunity. The lack of coordination among regulators causes difficulties for takaful operators, increasing therefore their funding costs by as much as 1 percentage point. Some companies take advantage of the variation in rules - booking business in one country while selling policies elsewhere. Jurisdictions with specific takaful rules include the United Arab Emirates, Bahrain, the Dubai International Financial Centre and the Qatar Financial Centre. Some others, such as Kuwait, do not have specific regulations.

Dubai aims to become a top global centre for Islamic bonds by introducing more detailed standards about issuance and trading. The emirate hopes the new standards will reduce disputes between scholars, issuers and investors over what types of debt structures are permissible and attract more business to its market. Last month, Dubai Financial Market (DFB) published a draft of its proposals, which the industry can comment. DFB plans to issue the final version of the standards in March.

Alafco, a Kuwait-based Aircraft leasing group, may list some of its shares on an international exchange. The idea reportedly came from shareholders. However, the size of the stake that could be listed or on which exchange was not announced. Kuwait Finance House owns a 53.69 percent stake in Alafco, the rest belongs to State-run Kuwait Airways Corporation and private investors.

The Iranian Bank Mellat plans to sue the European Union governments for damages after a European court annulled sanctions against the company. The reasons for the court's decision are that the EU failed to provide enough evidence that Bank Mellat was linked to Iran's disputed nuclear progamme. However, EU governments may appeal the decision. Bank Mellat now plans to resume trading in Europe although broader European sanctions against Iranian banks could still limit Bank Mellat's ability to function there.

Oman is the last of the six-nation Gulf Cooperation Council to introduce Islamic banking, thus being able to encourage the development of sharia scholars. The highly detailed rules for the Islamic banking sector include the plan to enlarge the pool of qualified scholars as a scholar can only be appointed for two three-year terms in the Sharia Board. The higher demand for scholars calls for a scholar development program that needs to be developed in parallel with the initiative.

In order to finance its budget deficit, Indonesia will hold a sukuk auction on February 5. The country aims to raise 1.5 trillion rupiah (RM477 million). According to the plans, 6-month sharia T-bills and project-based sukuk maturing in 5-, 9-, 14- and 24-year will be sold at the auction.

The Italian private equity fund Investindustrial bought a 37.5 percent stake of Aston Martin. The deal was financed via a capital increase agreed with majority Kuwaiti owner Investment Dar. According to the carmaker's CEO Ulrich Bez the transaction will bring money for the next generation of products from 2015 to 2025, as well as know-how and experience. Investindustrial plans to expand Aston's model range and to strengthen its global dealership network.

Bahrain-based Gulf Finance House (GFH) is studying options to merge its affiliate, Khaleeji Commercial Bank (KCB), with other Bahraini banks. It did not say which Bahraini banks it was considering as merger partners.