IslamicFinance.de

Pakistan's Ministry of Finance selected Citigroup, Deutsche Bank, Dubai Islamic Bank and Standard Chartered as bookrunners for a U.S. dollar sukuk issue. An official said; the tenor of the bond and the format would be decided soon

There are many reasons that Islamic financial products are popular outside the Muslim world. Britain became the first non-Muslim country to issue sukuk, the Hong Kong Monetary Authority made an issuance, and the governments of Luxembourg and South Africa will follow suit later this year. Last month Goldman Sachs issued an Islamic bond, and before the end of the year, Bank of Tokyo-Mitsubishi and Société Générale, a French bank will probably do the same. All of these entities want to get a piece of the $2 trillion Islamic finance market.

Kourosh Parvizian, the governor of Sina Bank, welcomes the move of the British Treasury's to repeal of an asset freeze on the bank. It says that other European countries are expected to make the same decision, according to Iran's IRNA news agency.

Bank Asya clients are battling help the Turkish lender against what they say is a government-orchestrated bid to scuttle it. Turkish social networking sites are full of customer’s notices to raise funds to “Save Bank Asya from sinking!” The Islamic lender has more than a million deposit-holding customers and 282 branches. President Recep Tayyip Erdo?an targeted it as part of his attacks on the Islamic cleric Fethullah Gülen. Erdo?an has long accused Gülen - now based in the United States - of seeking to overthrow him.

According to the finance minister, Luxembourg has issued its first 200 million euro ($254 million) five-year Islamic bond, distributed across 29 accounts, although the market favours dollar-denomineted sukuk. Nevertheless the country thereby becomes the first AAA-rated government to issue euro-denominated sukuk, or Islamic bonds, following London, Hong Kong and South Africa. Luxembourg hired HSBC, BNP Paribas, Banque Internationale à Luxembourg and Qatar-based QInvest to arrange its sukuk.

The synergy between the Islamic Bank of Britain (IBB) and its parent company Masraf Al Rayan will soon be reflected in the British bank’s name. Customers were informed last week that the new name for IBB to be adopted towards the end of the year will be Al Rayan Bank. Sultan Choudhury, chief executive officer of IBB, emphasised in the letter he sent out last week informing customers about the name change that the bank remains British regulated with a British board. The bank has invested heavily in its internet banking capability which has opened up its services to a much broader customer base. Its latest data also shows a big surge in non-Muslim customers.

Baraka Khan, a 23-year-old Cambridge University student, has launched a project to build Europe’s first ecologically friendly mosque in the British city of Cambridge. The Cambridge Mosque, which will hold 1,000 worshipers, will be almost entirely reliant on green energy, with an almost-zero carbon footprint. The mosque building will be naturally lit all year round using large skylights integrated into the building’s design, and it will boast a green roof as well as an air-source heat pump for regulating temperature. The man who will design the building is award-winning architect Marks Barfield, who is also responsible for the iconic London Eye. He says he is aiming to merge traditional Islamic architectural motifs with those of the European Gothic style in order to bring the two cultures together.

Speculation publicly expressed by President Recep Tayyip Erdo?an that Bank Asya doesn't have a sound structure and his obvious attempts to sink this bank constitute a crime under Turkish law, according to Selin Sayek Böke, the Republican People's Party (CHP) deputy chair in charge of the economy. Sharing her opinions about the current economic situation in Turkey, Böke stated that Turkey has further potential for growth, but its economy is currently in stagnation. She attributes this situation to structural problems. The current decline in the practice of democracy and the erosion of the rule of law will likely cause further trouble ahead, as investors are already unwilling to make big investments in a country with an increasingly authoritarian government and leaders.

The Cyprus Investment Funds Association is calling for the government to sell sukuk to lure investment from the Middle East. In addition, the Cyprus Stock Exchange wants to encourage the listing of Shariah-compliant bonds and sees potential for the nation of 1.2 million to become a “gateway to the European Union” for Islamic investors, Chief Executive Officer Nondas Metaxas said. The island, where Muslims make up 18 percent of the population and Turkey has kept troops since the 1974 conflict, is being asked by the European Union to tackle a bad-loan ratio of 45 percent after a joint bailout with the International Monetary Fund in March 2013. However, the government isn’t currently looking into developing an Islamic finance industry, Finance Minister Harris Georgiades.

Islamic Bank of Britain plc (IBB), has appointed Keith Leach to the newly created position of Chief Commercial Officer (CCO). Mr Leach’s remit is to grow IBB’s corporate and real estate business, focussing on higher value transactions. His appointment follows the Bank’s acquisition by Masraf Al Rayan (QSC) earlier in the year. A £75.8 million cash injection from IBB’s new parent company, provided in February 2014, will support its expansion plans. Appointed to the position from his role at the Arab Banking Corporation (ABC), Mr Leach has over 30 years of banking experience with Lloyds, Ahli United and ABC, 20 years of which has been spent in the UK Islamic finance industry.

Islamic International Rating Agency (IIRA) has lowered the foreign currency international scale and local currency credit rating of Bank Asya to respectively B+ and BB- (previously BB+ and BBB-), in response to the weakened financial profile of the institution. IIRA has also revised the bank's national scale rating to BB+ from A. IIRA said the bank's opportunities to raise fresh capital and to reach liquidity in the market have decreased. It can no longer endure this situation. The credit rating agency Moody's also adjusted the ratings of the bank downward in a statement released in the last week of August.

Turkey’s stock exchange prolonged a freeze on Asya Katilim Bankasi AS’s shares, a day after it twice suspended trading in the Islamic lender. Bank Asya swung between losses and gains of as much as 11% before Borsa Istanbul called the halt because of “abnormal” buy and sell orders on Thursday. The shares had resumed trading on 15 September after a five-week suspension. The bank fell 48% in the three days through 17 September. Meanwhile, the president this week called for Turkey’s banking regulator to take action on Bank Asya, citing deteriorating finances. On the other hand, Bank Asya issued a statement earlier this week saying that it was facing an “economic lynching campaign” and continued to carry out its responsibilities to depositors and shareholders.

Turkey’s stock exchange halted trading in Asya Katilim Bankasi AS (ASYAB) twice today, deepening concern about the Islamic lender that has lost almost half of its market value this week. Istanbul-based Bank Asya swung between losses and gains of as much as 11 percent before Borsa Istanbul halted trading, saying “abnormal” buy and sell orders warranted the decision. The stock resumed trading on Sept. 15 following a five-week suspension imposed on the heels of a failed takeover bid by Qatar Islamic Bank SAQ and amid speculation the government will seize the lender. It fell 48 percent in the three days through yesterday. The lender is “just trying to stay afloat,” Erdogan said today.

Do?an Cans?zlar, former head of the Capital Markets Board (SPK), has warned, in light of claims that a number of Turkish banks are in difficulty, that a smear campaign orchestrated by President Recep Tayyip Erdo?an against Bank Asya could lead to a worse financial crisis than the one Turkey suffered back in 2001. At the beginning of the week, Erdo?an publicly threatened independent regulatory body, the Banking Regulation and Supervision Agency (BDDK), over its lack of action against Bank Asya, saying the agency must take a decision on the bank and follow through on it. The banking industry may be in worse shape than many think. On Tuesday Twitter user @fuatavni revealed the names of eight banks that he maintains are in financial difficulties.

A feud between Turkish President Recep Tayyip Erdogan and U.S.-based Islamic cleric Fethullah Gulen has made sukuk from Asya Katilim Bankasi AS (ASYAB) the worst-performing in the world. Debt from the Shariah-compliant lender known as Bank Asya has lost 29 percent this year, compared with an average 4.5 percent return for dollar-denominated sukuk globally. The government must be clear about what the “problem” with Bank Asya is and decide whether it will take over the lender or impose restrictions on it. The bank, whose shares resumed trading on Turkey’s bourse on Sept. 15 following the five-week long suspension, is planning to raise funds in a capital increase, it said yesterday. The stock slumped 42 percent this week to a record low of 72 kurus at 12:24 p.m. in Istanbul.

Shares in Bank Asya plummeted by nearly 20 per cent on Tuesday, reaching a new low, after Turkey's president Recep Tayyip Erdogan urged the country's banking watchdog to “make a decision” on the beleaguered Islamic lender's future.

Turkey's stock exchange on Monday lifted the ban on trading Bank Asya shares that it imposed on Aug. 7 amid a smear campaign conducted by pro-government media outlets about the ownership status of the lender. The stocks of the private lender slumped 20.16 percent to TL 0.99 at the end of the second session. According to a statement made before the first session by the Public Disclosure Platform (KAP), the shares of the bank has been opened to trade at the base price of TL 1.23 within a price margin of plus or minus 10 percent.

The state-run Anadolu Agency cited last week an official from the Banking Regulation and Supervision Agency (BDDK) as saying the Islamic lender Bank Asya had been put under the scope of Article 70 of Turkey's Banking Law, a move that gives the BDDK the power to restrict or temporarily halt the bank's operations, as well as to merge it with another bank. Bank Asya reacted strongly to the report, saying the bank will file lawsuits against the BDDK and media outlets that spread the speculative news report. Market observers criticized the Anadolu Agency for sharing exclusive details - the authenticity of which cannot be verified - regarding a privately run financial institution, suggesting that such reports are in violation of laws regulating and protecting banks in Turkey.

Aktif Bank has received regulatory approval to issue 200 million lira ($91 million) in Islamic bonds. The lender will sell the sukuk to qualified investors through its asset leasing company, Aktif Bank Sukuk Varlk Kiralama. It gave no time frame for the deal. Last year, Aktif Bank helped raise a small one-year 100 million lira sukuk for construction-to-energy firm Agaoglu Group using a mudaraba structure. Besides, Turkish conglomerate Dogus Group received regulatory approval last month to raise $370 million via sukuk in what would be the first dollar-denominated corporate transaction of the kind in the country. The Capital Markets Board has outlined new regulations to allow a wider range of sukuk structures.

Turkish authorities haven't responded to pleas by Bank Asya that they act to prevent what the bank has called unfair attacks on it, Chief Executive Officer Ahmet Beyaz said. The lack of action risks setting a dangerous precedent about the independence of regulatory agencies, he said. In his first interview since Thursday, when a spokesman for Turkey's Banking Regulation and Supervision Agency said that the bank had been put under review under a law that gives the regulator broad powers over the lender, Mr. Beyaz accused BRSA officials of improperly revealing that the bank was under review.