IslamicFinance.de

Kuwait’s Warba Bank achieved net profit of KD1.251 million ($4.12 million) in the third quarter (Q3) of the year compared to KD318,000 for the same period in 2014. The bank’s total assets grew by 34 per cent reaching KD682.760 million compared to KD507.140 million as on 30 September 2014.
The bank’s financing portfolio grew by 42 per cent reaching KD492.386 million by the end of the third quarter 2015 compared to KD346.747 million for the same period last year.

Emad Abdullah Al Thaqeb, chairman of Warba Bank, said: “Warba Bank’s strong performance continues to the third quarter with growth ascending trend reflecting the bank’s solid financial position, successful and flexible strategy that adapts to accelerating economic and legislative recent changes despite the ongoing political and security turbulences in the region.”

QInvest, Qatar’s leading investment group and one of the most prominent Islamic financial institutions in the world, announced the completion of its debut $200m five year syndicated facility.

The facility is in line with the bank’s funding diversification and capital efficiency plan and was arranged by QInvest’s key regional and international relationship banks, namely Masraf Al Rayan, Al Khaliji France S.A. and Natixis. QInvest previously announced that it was named the “Most Innovative Investment Bank from the Middle East” at The Banker magazine’s Investment Banking Awards 2015.

Muhammad Samiullah is currently associated with NBFI & Modaraba Association of Pakistan as Secretary General. From the platform of the Association, he has organized a number of workshops and seminars on different topics relating to the NBFI and Modaraba Sectors.
Samiullah is an active Member of FPCCI Standing Committee for Islamic Banking & Takaful. He is also a Member of the Arbitration Panel of Karachi Stock Exchange and holds a Master’s degree in Economics from Karachi University, Law Graduate and Dipomaed Associates of Institute of Bankers in Pakistan. He also has a Post Graduate Diploma in Islamic Banking & Takaful from Darul Uloom, Korangi. By profession Samiullah is a banker and has worked in Habib Bank Limited (HBL) in different disciplines for about 27 years, with his last posting in HBL as Vice President & Company Secretary, First Habib Bank Modaraba. He also officiated as Chief Executive of First Habib Bank Modaraba for quite some time.

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).

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.

Kuveyt Türk Participation Bank has been licensed by the Federal Financial Supervisory Authority (BaFin) to offer banking services in Germany. Thus, the first bank based on an interest-free Islamic business model is licensed in Germany.

Kuveyt Türk has obtained its license from the Federal Financial Supervisory Authority (BaFin) to provide fully-fledged banking services in Germany according to the interest-free Islamic banking principles. Kuveyt Türk is the first Islamic bank that has been fully licensed to operate its deposit and debt business in Germany. With this license, Kuveyt Türk is the pioneer that introduces the Islamic banking model in Germany.

KT Bank AG with headquarters in Frankfurt am Main and as a 100 percent subsidiary of Kuveyt Türk Participation Bank, will start to offer its reliable, high-quality, fast and user-friendly services from July 01, 2015 onwards. KT Bank AG will provide its private and commercial clients with products and services according to interest-free Islamic banking principles.

“KT Bank AG is an ethical, innovative and socially responsible bank”

As Islamic finance emphasizes the connection between real economy and financial activity this BIS Working Paper is very interesting and supportive for the understanding:

Abstract:
"In this paper we examine the negative relationship between the rate of growth of the financial sector and the rate of growth of total factor productivity. We begin by showing that by disproportionately benefiting high collateral/low productivity projects, an exogenous increase in finance reduces total factor productivity growth. Then, in a model with skilled workers and endogenous financial sector growth, we establish the possibility of multiple equilibria. In the equilibrium where skilled labour works in finance, the financial sector grows more quickly at the expense of the real economy. We go on to show that consistent with this theory, financial growth disproportionately harms financially dependent and R&D-intensive industries."

The board of directors of Turkey’s VakifBank’s has authorized a major loan procurement to set up an Islamic banking operation and confirmed that the bank’s general directorate office now has the authority to push ahead with the $300 million financing. The Turkish government wants to see the establishment of three Islamic banks as subsidiaries of the current state-run conventional banks by the end of 2015.

World Bank and IMF annual meetings began in Washington. IMF Managing Director Christine Lagardes opening remarks addressed inclusive growth for the MENA region. The growth is projected to average 4.2 percent in 2015, up from 3.5 percent this year. The World Bank adds though, that violent conflicts in the region in countries such as Syria, Iraq, Gaza, Yemen and Libya, as well as their effects into neighboring countries like Lebanon and Jordan, were seriously hampering regional growth. The region is said to thus have “great potential”.

Kuwait stocks pulled higher as the month started on a positive note. The bourse rose to 7321.12 pts. Some mid and small caps shined but heavyweights closed mixed. The market was mainly cautious even when investors looked for direction. The sectors closed mostly positive.

Richard Clare has been appointed as new Lending Manager at Saffron Building Society. He will take responsibility for assessment and preparation of mortgage cases as the underwriting capability.
Besides their rainge of Everyday and Special Situations Mortgages, Saffron Building Society will also consider more complex cases which are in need for bespoke lending solutions.
Richard Clare has more than 20 years of experience in financial services gained with organizations including UBS, Coutts, Ahli United Bank, United Trust Bank, Clayton Euro Risk, Pure Bridging Ltd, Rooftop Mortgages, SPML and Halifax plc. His considerable experience is as a senior lending manager.

The 19th Annual General Meeting of Social Islami Bank Limited was held in Sylhet, Bangladesh. A 12% cash dividend for the financial year 2013 was approved by the shareholders in the AGM. Major (Retd.) Dr. Md. Rezaul Haque, the Chairman of the Board of Directors of the Bank presided over the meeting. Directors of the Bank were present. The Managing Director of the Bank Md. Shafiqur Rahman stated that SIBL maintained and achieved a stable position in 2013 despite of many challenges in all of their key areas of operations.

Bangladesh Islamic finance industry is well developed but lacks sharia-compliant instruments such as sukuk. This is limiting further growth of the sector according to a report. Sukuk would be helpfull to diversify the funding sources and could make up for the limited scope of the Islamic money market in Bangladesh. Islamic banks that follow religious principles are now representing 18.9 percent of all Bangladeshi bank deposits.

The Islami Bank Bangladesh Limited approved 18pc dividend comprising 10pc stock and 8pc cash for the Shareholders for the year 2013. This was announced in its 31st Annual General Meeting, according to a news agency. Further in the meeting, four directors were elected. The AGM was held at the Bangabandhu International Convention Centre. Prof. Abu Nasser Muhammad Abduz Zaher, Chairman of the Bank presided over the meeting. The Shariah Supervisory Committee along with shareholders and high executives of the Bank were also present at the AGM.

Dear Reader,

On the occasion of the 10th anniversary of IslamicFinance.de please find at the hyperlink below the relaunch of the newsletter.

http://www.islamicfinance.de/files/20140529%20IslamicFinance%20dot%20de%...

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If you wish to register please go to http://www.islamicfinance.de/?q=newsletter/subscriptions or become member of the LinkedIn Group: http://www.linkedin.com/groups?mostRecent=&gid=147616&trk=my_groups-tile...

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All the best,

Michael Saleh Gassner

Contents
Revised Shariah Screening Methodology: 1
Expands ICM’s Global Reach
SHARIAH
New Shariah Advisory Council Resolutions 3
DEVELOPMENT
Region’s First Structured Covered Sukuk 7
Royal Award for Islamic Finance Calls for Global 9
Nominations
SC and Autoriti Monetari Brunei to Strengthen 9
Efforts in Greater Cross-border Activities
SC Leads Islamic Finance Taskforce to Publish a 10
Report on Enhancing Infrastructure for ICM
REGULATORY
IFSB-IOSCO-SC Collaborate on Disclosure 11
Requirements for ICM Products
SC Revises Equity Guidelines for SPACS 12
Technical Note on the Application of SC’s 13
Guidelines In Relation to Non-Tradable and
Non-Transferable PDS and Sukuk
FEATURES
2013: Another Resilient Year for the Global 14
Islamic Finance Industry
Global Islamic Funds Industry: Achieving 18
Growth Under Challenging Times
Harmonisation of Shariah Rulings 22
in Islamic Finance
News Round-up 29
STATISTICAL UPDATES
Malaysian ICM – Facts and Figures 32
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Bahrain-based Gulf Finance House has announced its fourth-quarter net profit has more than doubled due to revenue derived from investments. The investment firm made a net profit of $5.2 million in the three months to Dec. 31, up from $2.5 million in the prior-year period. However, for the 2013 full year, GFH's net profit fell 37.2 percent to $6.3 million. This decline came despite a 20 percent reduction in operating costs, as the firm continued to aggressively cut expenses in the wake of a number of debt restructurings in recent years. GFH, through its Dubai-based subsidiary GFH Capital, agreed to sell 75 percent of Leeds United to Italian Massimo Cellino earlier this month.

For many years we see in the media experts believing in inflation and even hyper inflation. However, in the same time we face proponents warning against deflation. So far we all noticed.

Only a about a week ago I read an article by Myret Zaki clarifying that unfortunately inflation and deflation co-exists.

Myret Zaki's thesis is that we face inflation on financial markets, and deflation in the real economy (in French):

http://www.bilan.ch/myret-zaki/redaction-bilan/inflation-et-deflation-co...

In my view there is a general major shift in the price matrix and I still try to figure the magnitude and implications thereof. It is a bit irritating as at University we learned about neutrality of money:

http://en.wikipedia.org/wiki/Neutrality_of_money

This means any extra supply will increase prices equally, 5 % more money, all prices going up 5 %. Pretty plausible at first hand. However, it seems it does not work in reality any more (or never did).

Dear Reader,

IslamicFinance.de is still edited by myself, Michael Saleh Gassner. In the same time the website became part of the family's publishing house, Al Kitab.

Myself I moved to Geneva for professional reasons, working as Islamic private banker. IslamicFinance.de remains to be a private passion.

Best regards,

Michael Gassner

Bahrain's Al Salam Bank has agreed to acquire fellow Bahraini lender BMI Bank , an affiliate of Oman's Bank Muscat , through a share-swap deal. Al Salam will exchange 11 of its shares for each BMI Bank share to create the kingdom's fourth-largest commercial bank. The tie-up is still subject to shareholder approval, with meetings to vote on assent due to be held in either September or October. Shares in Al Salam were 5.9 percent higher at 0726 GMT in muted trading. The tie-up will create a bank with assets worth BD1.79bn ($4.75bn), according to second-quarter results from both institutions.