IslamicFinance.de

Islamic banks around the globe view risk management, equity financing and deepening their client base as the most pressing issues facing the sector in coming years, a survey released on Friday showed.
The survey drew input from the heads of 83 Islamic finance institutions, the first comprehensive attempt to measure business sentiment in a growing-yet-diverse industry which holds around $2 trillion in assets globally.
The General Council for Islamic Banks and Financial Institutions (CIBAFI), a non-profit organisation headquartered in Manama, conducted the survey between April and June. Two-thirds of the respondents were full-fledged Islamic banks.
Commercial financing remains the top revenue driver, but financing to small and medium sized enterprises (SMEs) ranked second-highest, the survey showed.
SMEs are seen as leading revenue for Islamic banks in Asia, with trade finance ranking highest in sub-Saharan Africa.
In the Gulf region SMEs are also in focus, partly due to concerns about over concentration of business from large firms.

The Bahrain-based International Islamic Financial Market (IIFM) launched a standard contract template for sharia compliant cross currency swaps on Thursday, as the industry body seeks to enhance use of hedging tools in the sector. As Islamic finance grows, institutions are increasingly taking larger positions, often in various currencies, prompting the need for widely-accepted mechanisms to manage such risks.
It is the seventh standard issued by the IIFM, a non-profit industry body which develops specifications for Islamic finance contracts. Applications of the standard are mainly for interbank treasury placements, but it can also be used alongside Islamic bonds (sukuk) as well as trade and corporate finance deals, chief executive Ijlal Ahmed Alvi told Reuters.

The nation’s eight largest banks, representing 46 % of national banking assets, have committed to implementing sustainable financing as part of global environment goals.

Bank Mandiri, Bank Rakyat Indonesia (BRI), Bank Central Asia (BCA), Bank Negara Indonesia (BNI), Bank Muamalat, BRI Syariah, Bank Jabar Banten (BJB) and Bank Artha Graha Internasional signed the commitment with the Financial Services Authority (OJK) and the World Wildlife Fund (WWF) Indonesia on Monday. The commitment was manifested in a pilot project called “first step to becoming a sustainable bank”, marking a big move taken by the banks less than a year after the OJK launched the 2014-2019 Sustainable Financial Roadmap, according to OJK head Muliaman D. Hadad.

“I hope these eight banks, which are the prime movers in this project, can encourage other banks and financial institutions to join the country’s implementation of sustainable finance,” Muliaman said in his speech. Through the green banking pilot project, Muliaman said participating banks were expected to balance their pursuit of profits with willingness to conserve the environment, serving as examples to their peers.

The Islamic Financial Services Board (IFSB) is pleased to announce the second dissemination of its Prudential and Structural Islamic Financial Indicators (PSIFIs) from 16 member countries. The PSIFI data, which aims to provide data on the financial soundness and growth of the Islamic banking systems in participating IFSB member jurisdictions, covers the quarterly data from December 2013 to December 2014.
Secretary-General of the IFSB, Mr Jaseem Ahmed stated that "The support of multilateral organisations - such as the IMF, ADB and IDB - have greatly assisted the progress on this project. It is our aim to continue to expand the scope of the PSIFI to include the participation of new jurisdictions, as well as expansion of data to the Islamic capital market and Takaful sectors of the industry".

The merger negotiations between Bank Muamalat and Malaysia Building Society Bhd (MBSB) is going on very well and smoothly, says Bank Muamalat Chairman Tan Sri Dr Munir Majid. He said there was no conclusion yet but the progress, thus far, was good. "We will still have to report to Bank Negara on what we have achieved by year-end, after which we will proceed to the next stage," he said at a 'Charity Free Market - Back to School' programme, organised by the bank.

Bank Negara Malaysia gave its approval to Bank Muamalat and MBSB to begin merger talks on Sept 30, a move that could pave the way for the creation of the countrys biggest standalone Islamic bank.
The central bank required the merger negotiations to be finalised within three months from the date of the approval. It was reported earlier that assuming the merger talks go through, the combined asset size of the two lenders is estimated to be over RM60 billion, higher than the RM54 billion asset size of BIMB Holdings Bhd, the holding company of Bank Islam Malaysia Bhd, Malaysias largest full-fledged Islamic bank.

The board of directors of Faysal Bank has decided to covert make the bank’s operations Sharia compliant from conventional, but the snail’s pace migration is raising questions about its success in a highly competitive regime and in times when Islamic banking is expanding at a fast pace.

The bank is operating its 277 branches with 63 dedicated Islamic Banking branches having vision to migrate overall operation into full-fledged Islamic banking in next three to four years but its strategy is not being reflected into its plan but seems confusing with its offering to customers and investment in government papers. In a talk show “Aap Aur Karobaar” on Business Plus Tv, Host Khalil Ahmed and Banking Analyst SN Arif discussed business, operations and strategy of bank and its success in its peer in the banking industry.

The head of National Bank of Kyrgyzstan Tolkunbek Abdygulov and the president of the Islamic Development Bank (IDB) Ahmad Mohamed Ali Al-Madani had discussed the prospects of jointly opening an Islamic bank in Kyrgyzstan.
Additionally, they had talked about the other relevant things such as the perspectives of Kyrgyz Republic economy development, the establishment of a joint Shariyah compliant commercial bank and the possibility of opening an IDB representative office in Kyrgyzstan. The discussion took place during the International Financial conference “Islamic Finance: Meeting Global Aspirations” in Kuwait, on November 11, 2015.

Tolkunbek Abdygulov also had a meeting with Christine Lagarde, the Managing director of the International Monetary Fund, in which they discussed further course of cooperation between Kyrgyzstan and the IMF and drew a plan on joint actions during the financial crisis. Ms Lagarde also noted the concerted actions of Kyrgyztan’s National Bank and the government on monetary and fiscal policies.

The Kuala Lumpur-based Islamic Financial Services Board (IFSB) plans to develop guiding principles for capital markets and insurance, seeking to encourage regulatory consistency across new and established markets, its secretary general said.
The new guidelines from the 188-member IFSB, one of the main standard-setting bodies for Islamic finance, will complement existing ones which cover commercial banking.
A wider set of standards could assist the International Monetary Fund which plans to include Islamic finance in its surveillance work, known as the Financial Sector Assessment Program (FSAP).
"Before the FSAP there has to be a set of core principles and that really is the instrument that we feel is going to point the way and facilitate consistency across borders," IFSB secretary-general Jaseem Ahmed told Reuters.
The standards on capital markets and Islamic insurance (takaful) would complement regulatory guidance from the International Organization of Securities Commissions (IOSCO) and the International Association of Insurance Supervisors (IAIS).

A new international bond and grant scheme to help countries dealing with the fallout of war and instability in the Middle East and North Africa should be in place by spring, a senior World Bank official said.
In a Reuters interview, Hafez Ghanem, the World Bank's vice president for the Middle East and North Africa, said the type of investment targeted by the plan - education, infrastructure and jobs - was vital to addressing the region's refugee crises. He said that humanitarian aid alone was not enough and the alternative was “one or two lost generations” in a region with 15 million refugees or internally displaced people.

More than 1200 distinguished guests from more than 45 countries and 300 organizations participating this December, Bahrain

Key players from the global Islamic finance industry will be participating with the 22nd annual World Islamic Banking Conference (WIBC) 2015, taking place on the 1st, 2nd and 3rd of December at the Gulf Hotel, Bahrain. Focusing on 'New Realities, New Opportunities', WIBC will play host to more than 1200 leaders including Central bank governors, regulators, C-suite bankers & asset managers, policy makers, Fintech entrepreneurs and contemporary thought leaders.
WIBC 2015 will host 5 central bank Governors and deputy governors and feature speeches and discussions by the Governor of the Central Bank of Bahrain, H.E. Rasheed Al Maraj, the Executive President of the Central Bank of Oman, H.E. Hamood Sangour Al Zadjali, Deputy Governor of the State Bank of Pakistan, Riaz Riazuddin and the Deputy Governor of the National Bank of Kazakhstan, Nurlan Kussainov.

Banking and financial services sectors in the GCC are actively seeking opportunities beyond their borders triggering a number of cross border mergers and acquisition deals in recent years.
Domestic markets focus of GCC banks has limited the scope for expanding their business. While this has benefited local banks in increasing their banking penetrations in the economies that they are based in significantly, it did take away from the potential to grow outside their boarders and broaden their geographic reach. This is an important point particularly as domestic markets will have limits to their potential. Expanding beyond their borders is one channel for GCC banks to add value to their business models.

JP Morgan's clients have bought around 3 % shares of Islami Bank Bangladesh Ltd or IBBL over the past several years, officials said. The US-based banking firm bought the shares for its institutional and indi-vidual investors. The shareholding empowers JP Morgan to hold a post in IBBL's board of directors as the law allows a shareholder to become a director in a publicly-listed company in Bangladesh with a stake of 2 %.
“The market plunge that began in December 2010 in Bangladesh has attracted foreign investors to buy IBBL shares,” MA Mannan, managing director of IBBL, told The Daily Star.
“JP Morgan's investment in IBBL shares reflects our strength.”
The current market price of IBBL's total shares stands at Tk 4,508 crore -- at over Tk 28 a share as of yesterday. Presently, IBBL has nearly 161 crore shares, with a face value of Tk 10 per share. If the current market price of IBBL shares is taken into account, JP Morgan's holding of 3 percent shares is valued at over Tk 137 crore. JP Morgan is one of the largest asset and wealth managers in the world with assets under its management worth $1.7 trillion (as of December 31, 2014).

Turkish Islamic bank Albaraka Turk has received initial pricing feedback in the 10 % area for a potential U.S. dollar-denominated sukuk issue which would bolster its supplementary or Tier 2 capital, sources familiar with the matter told Reuters on Thursday.
The lender has received indications of interest totalling over $250 million, including those from joint lead managers, for the ten-year non-call five sukuk, the sources said. A potential deal is expected early next week subject to market conditions, they said.
Albaraka Turk, a unit of Bahrain-based Al Baraka Banking Group, has chosen Barwa Bank, Dubai Islamic Bank, Emirates NBD, Nomura, Noor Bank, Standard Chartered and QInvest to arrange the sukuk issue.

The Board of Directors of Jaiz Bank Plc has approved the appointment of Mahe Abubakar as the acting Managing Director/CEO of the bank. He succeeds Muhammad Nurul Islam, whose two-year contract ended on November 17, 2015.
Until his appointment, Abubakar was an Executive Director in charge of Business Development. A statement by the Head, Corporate Communications Department of the Bank, Idris Salihu described Abubakar as an astute banker with over 20 years cognate experience.
Before he joined Jaiz bank, he was a General Manager/ Group Zonal Head of Zenith Bank Plc in charge of the Northwest region. His wealth of experience is expected to impact greatly on Jaiz Bank's business development drive. Abubakar has a Master Degree in Business Administration from the Ahmadu Bello University, Zaria and he is a qualified Dealing Clerk of the Nigerian Stock Exchange.
He had attended several trainings in and outside Nigeria including High Potential Leader: Accelerating Your Performance at Wharton School, Pennsylvania, USA; High Performance People Skills, London Business School; and Senior Management Programme, Lagos Business School.

Institute of Business Administration (IBA) announced the establishment of the Centre for Excellence in Islamic Finance at IBA. IBA has launched IBA-CEIF in collaboration with Meezan Bank and Dr Ishrat Hussain will be Chairman CEIF, while Irfan Siddiqui, CEO Meezan Bank Ltd, Hassan Bilgrami CEO BankIslami Ltd, Shafqaat Ahmed CEO Al Barkah Bank Ltd, Junaid Ahmed CEO Dubai Islamic Bank, Dr Imran Usmani, Shari'ah Advsior Meezan Bank Ltd, Samar Hasnain Executive Director, Development Finance Group State Bank of Pakistan (SBP) and Ahmed Ali Siddiqui, Founding Director of CEIF, are founding members of Board of Management (BoM).

Talking to newsmen here on Friday at IBA city campus, Dr Ishrat Hussain, Chairman CEIF, said that the Center had been set-up with the objective to bridge the gap between trained human resource and industry's growing requirement. He hoped that IBA-CEIF will play a vital role for providing skilled and qualified workforce to the Islamic Banking Industry of Pakistan. On the occasion Ahmed Ali Siddiqui, Founding Director of CEIF and Dr Zeeshan was also present.

Turkish Islamic bank Kuveyt Turk has mandated six institutions for a sukuk with a value of up to $400 million with a maturity of 10 years, it said in a statement to the Istanbul stock exchange late on Thursday.
Kuveyt Turk Participation Bank, which is 62 percent owned by Kuwait Finance House, said it had mandated KFH Capital, Dubai Islamic Bank, HSBC, Noor Bank, QInvest and Emirates NBD as joint lead managers. Sources familiar with the matter told Reuters in September that seven banks had been picked to arrange a potential deal.

Bahrain-based urban development company Diyar Al Muharraq entered into a $32 million corporate agreement with Al Salam Bank-Bahrain Thursday.
The agreement will partially fund the company's Dragon City development and was signed by Diyar Al Muharraq Chairman Abdulhakeem Alkhayyat and Al Salam Bank-Bahrain Director and Group CEO Yousif Abdulla Taqi. The total price tag for the Dragon City development is $100 million.

“It is with great pride that I officiate this momentous occasion as this marks the beginning of a strong partnership that is set to produce rich rewards and collect significant milestones for a long time to come," Alkhayyat said. "With Dragon City set to start operating in full capacity before the end of the year, we are confident that our calculated and well-thought out decision will reap many benefits and look forward to reveling in the age of prosperity that will soon follow.”

QInvest, Qatar’s leading investment group and one of the most prominent Islamic financial institutions globally, yesterday announced that its net profit for the third quarter grew 69 % to $33.8m while revenues jumped 37 % to $78.7m.

“We are very encouraged by our performance during the third quarter of 2015. With our commitment to drive growth and innovation across the business, we have continued to source new opportunities, strengthen our brand and deliver positive returns. Whilst we expect on-going market volatility and economic challenges to remain present, we are confident on the outlook for the business. We have an exciting active pipeline of deal flow and a unique market position to leverage investment opportunities across the GCC region and selected markets in Europe, Asia and the US” said Tamim Hamad Al Kawari, CEO of QInvest.

Corresponding with the launch of its Social Responsibility Report for 2013 and 2014, Al Baraka Banking Group (B.S.C.) has also announced its 2016--2020 Social Responsibility Priorities.
With this announcement Al Baraka has become one of the first global financial institutions to pledge its targets for supporting the Global Goals for Sustainable Development, which were adopted by the United Nation's General Assembly on September 25, 2015.
At this occasion, Mr. Adnan Ahmed Yousif, President & Chief Executive of Al Baraka Banking Group noted that "we are very proud to continuously demonstrate our keen commitment to contributing to the communities that we serve and operate in. Being one of the pioneers of Islamic banking, we believe that we have a greater responsibility to keep our core business model socially responsible and relevant to the growth and development of our customers and their communities".
1. Adding 50,000 jobs across the countries we operate in as a result of financing new and existing customers operations. We will prefer working with customers that are adding and retaining jobs and offer equal opportunities for men and women.

In order to remove any ambiguity and doubt among the general public, the State Bank of Pakistan (SBP) has reiterated its commitment for promotion and development of Islamic banking in Pakistan.
Due to persistent efforts of SBP and the federal government, the share of Islamic banking in total deposits of the banking industry has surged to 12.8% as of June 30, 2015 and is consistently growing with a cumulative average growth rate of over 50% during the past 12 years. To-date, 5 full fledge Islamic banks, one Islamic banking subsidiary and 17 banks with dedicated Islamic banking branches are operating in the country with over 1,700 branches spread all over the country.