IslamicFinance.de

Pakistan's banking sector enters 2015 promising more deal-making activities. State-run National Bank of Pakistan has expressed interest in potentially acquiring Burj Bank Ltd. NBP recently said it will conduct due diligence on Burj, and hoped to complete the exercise in a ‘short timeframe’. The Burj deal is being closely watched by the market, as it has so far failed to meet the central bank’s minimum capital requirement (MCR) of Rs10bn. In case the deal goes through, it remains to be seen if Burj would exist as a standalone Islamic bank, or if its operations will be merged with NBP’s Islamic banking section.

Inaugural issue reporting about the work and new strategic plan of CIBAFI, the General Council for Islamic banks and financial institutions.

Tunisia will delay its planned issue of $500 million in Islamic bonds until the third quarter of the year to allow parliament time to rectify a law concerning the sale, Finance Minister Hakim Ben Hamouda said on Monday. Tunisia had initially said it would issue the Sukuk by the end of last year.

SEDCO Holding Group presented its ‘Towards Sustainability’ CSR umbrella during the annual business and law faculty week held at Dar Al-Hekma University. The presentation underlined the Group’s major achievements since its launch in 1976 in the fields of commerce and investment, and focused on its sustainability and CSR platform. SEDCO Holding Group CSR platform stands on 3 main pillars – “Our Environment, Our People, Our Community”. The presentation demonstrated a set of initiatives under each pillar, developed by SEDCO Holding Group.

The Thomson Reuters Global Sukuk Index is at 116.23797 points, up from 115.79726 at the end of last month. The Thomson Reuters Investment Grade Sukuk Index is at 114.27454 points against 113.69014 at end-December. Some of the sukuk in the pipeline include: Dubai Islamic Bank announced plans for a benchmark-size U.S. dollar sukuk issue to boost its Tier 1 capital. Indonesia plans to issue 7.14 trillion rupiah (US$572 million) of project-based sukuk in 2015 to finance the development of three infrastructure programmes. Turkiye Finans received regulatory approval for a 71 million lira sukuk issue by trailer manufacturer Tirsan Treyler Sanayi ve Ticaret.

Turkey's Bank Asya said it was selling its 40 percent stake in Senegal-based Tamweel Africa Holding for 31.8 million euros ($37.7 million). Asya is selling the stake in Tamweel, which promotes Islamic finance in sub-Saharan Africa, to the Saudi-based Islamic Corporation for the Development of the Private Sector (ICD). The bank obtains 41.3 million lira profit through this sale and expects an positive impact on first quarter profitability, Cengiz Onder, Bank Asya's head of investor relations said. Besides, Bank Asya has laid off 1,708 staff and closed 80 branches, out of the 5,074 staff and 281 branches it had at the end of 2013.

TL 92 million ($396.46 million) has been collected from the financiers of the Gülen Movement for Bank Asya this week in order to fulfil the capital increase of Bank Asya. While some of the businessmen have previously refused any connection with the Gülen Movement, it became clear who their supporters were when the amount required for the capital increase of Bank Asya was collected without waiting for the approval of the Capital Market Board. Authorities from the Capital Market Board revealed that the bank's application for capital increase has not been confirmed yet. The board said the financial conditions of companies that will participate in the capital increase will also be investigated.

Pakistan's Minister for Finance, Muhammad Ishaq Dar, Friday reiterated the government's resolve to switch over from conventional banking to Islamic banking and finance to enhance shariah compliant assets. Dar said that Pakistan has taken several steps to promote Islamic banking and finance in the country, such as issuing sukuk bonds in international markets as well as forming a steering committee which was actively working on the development of reliable database and human resource needed by the Islamic banking. The industry now constitutes over 10 percent of the country's financial system but needs trained human resource in order to realize the true market potential, he added.

In November last year, the International Finance Facility for Immunisation (IFFIm) issued a US$500 million sukuk using the funds to buy vaccines. As an added bonus, the sukuk pays, in quarterly coupons, a Sharia-compliant profit rate equivalent to the US 3-month London Interbank Offered Rate plus 0.5 per cent. IFFIm’s sukuk indicates a growing similarity between two heretofore disparate areas of asset management: Islamic finance, and the largely western socially responsible investment (SRI) tradition. Islamic finance-SRI crossover products will appear if investor demand requires it, although the level of cross over suggests there may not be a need for separate Shariah-compliant SRI products.

Turkey's Bank Asya has signed a deal to sell its 40 percent stake in Tamweel Africa Holding to the Islamic Corporation for the Development of the Private Sector (ICD) for 31.8 million euro ($37.7 million). Bank Asya suffered a run on deposits last year as it became embroiled in a power struggle between now President Tayyip Erdogan and his former ally-turned-foe Fethullah Gulen, the Islamic cleric whose sympathisers founded the bank.

The launch of the first online bank in Saudi Arabia will be announced on Friday evening. Manama-based Gulf International Bank will be launching the new bank, which will reportedly be an “online-only” service, with customers making deposits and transfers online and checks to be deposited via self-service machines at branches to be opened across the Kingdom. Customers will meet with an employee from the bank only once, when they register for a new account. The service will be open to individuals only. Despite having relatively low penetration rates for Internet banking, the Gulf region has great potential to assimilate new online banking services due to the high Internet penetration rates.

Bank Asya is planning on closing its debts by the revenues it will gain from the scheduled paid capital increase. The bank plans to increase its capital by 25 percent, from TL 900 million to TL 1.1 billion through rights issues. Out of the TL 225 million to be gained from the paid capital increases, TL 200 million will be used for the repayment of its loans to foreign financial institutions. The remaining TL 25 million will be used to cover the demands for the funding of its corporate, commercial, SME and personal customers.

The busiest year on record for sovereign Islamic bond sales is poised to be eclipsed as a revival in corporate issuance takes hold in 2015. Companies in the U.K. and Hong Kong may be among those selling sukuk this year as they follow debut issues from their governments. Corporates in the Gulf Cooperation Council will be encouraged to tap the market as bank liquidity and credit conditions deteriorate amid declining oil prices. Besides, decreasing bank liquidity and demand for public debt will make sukuk issuance more attractive for GCC corporate borrowers this year.

The board of directors of IGI Life Insurance has approved the commencement of family Takaful business in Pakistan. Total gross premiums of IGI Life amounted to over Rs1.8 billion at the end of the first nine months of 2014. In April last year, IGI Insurance acquired a 69.7% stake in American Life Insurance Company Pakistan (Alico) for Rs732 million. The establishment of the window family Takaful operation is accompanied with the allocation of Rs50 million for this purpose. In addition, Jubilee Life, EFU Life and Adamjee Life have also expressed their intention to establish Islamic window operations recently.

Product innovation and enhancement is an important aspect for the development and growth of Islamic Finance. However, this is also one of the major challenges. To create products or services in Islamic finance, one should understand that there are two common ways — Shariah-based products, or Shariah-compliant products. The product development process should be governed by very prominent parameters, standards and framework to ensure that a proper product is introduced in the market. Needless to say, Islamic banking products are constantly being compared to interest-based products in terms of cost and return without any regard for the unique product rules of Shariah.

In most of Europe, rental-apartment ownership is fragmented. That is beginning to change. In the U.K., France and Spain, institutions are accumulating multifamily properties. The fledgling industry in Europe is being powered by demographic changes, strong real-estate sales, opportunities created by the financial downturn and government actions designed to encourage development. One sign of growth: foreign investment. Legal changes also are paving the way. Meanwhile, the political winds are also changing when it comes to the multifamily sector.

La compagnie d’assurance, Salama Assurances Algérie, devra clôturer l’année 2014 avec un chiffre d’affaires en progression de 4,6 milliards de dinars, a révélé son directeur général, Hadjou Abdelhakim. L’assurance automobile représente environ 72% du portefeuille de la compagnie, soit 4% de parts de marché. L’année 2015 sera donc riche, pour Salama Assurances qui compte non seulement de lancer un nouveau produit dédié aux agriculteurs, mais aussi ouvrir avec un partenaire local une nouvelle filiale d’assurance de personnes.

The Representative of the Jaiz Bank in Nigeria, Dr. Mizanur Rahman, has disclosed the plan of the bank to extend its services to Kwara and Lagos states. He lamented that due to limited scope within the country, the bank lost about N1 billion but reiterated its hope that it would do well in 2015. Rahman made the statement at the jointly organised thematic workshop on Development of Islamic Banking in Africa at the Alhikmah University in Ilorin. The workshop was jointly organised by the Research and Training Institute (IRTI) in Saudi Arabia, the University of Ilorin and Al-Hikmah University.

According to the Crowdfunding Research Centre, global crowdfunding activity is doubling every 60 days, and represents another potentially significant shift in that way entrepreneurs and start-ups access capital and credit in the developing world. A crowdfunding report speculates that the potential market size for crowdfunding in the emerging markets could reach $96 billion by the year 2025. The continued permeation of internet connectivity in emerging markets paired with further evolution of crowdfunding platforms holds tremendous potential for access to finance for the base of the pyramid.

Islamic investment bank GFH has reported that Bahrain’s High Civil Court has dismissed the Labor Case (amounting to $13.8 million) filed by Esam Janahi against GFH. The case had been filed by Janahi against GFH in June 2014, following several claims raised by the bank against him. All other cases filed by GFH against Janahi are still in progress. GFH also reported that the Bahrain Chamber for Dispute Resolution has awarded judgement in favour of GFH in a legal case amounting to $11.47 million (BHD 4.3 million) plus profits. The case was filed by GFH against Abu Dhabi Investment House and Qatar Entertainment City Company (QEC) pertaining to GFH’s investment in QEC.