IslamicFinance.de

Islamic Bank of Britain's directors responded favourably to a £24.1m offer from Qatari bank Masraf Al Rayan (MAR). The offer comes through MAR’s wholly owned subsidiary, Al Rayan (UK) Limited. MAR’s offer was first muted in October 2012 when the previous offer from IBB’s majority shareholder Qatar International Islamic Bank (QIIB) lapsed. The offer is being recommended by the independent IBB directors who consider it to be fair and reasonable. The offer from Al Rayan (UK) will provide IBB with a new parent company with plans to grow the bank and inject additional capital to fund that growth. The advisory firm Cattaneo provided financial advise to the Islamic Bank of Britain, legal advice was provided by Eversheds. MAR received legal advice from CMS Cameron Mckenna.

Abed Al Zeera has been removed with immediate effect from the board of European Islamic Investment Bank (EIIB).

The European Union will maintain sanctions against all but two Iranian firms that won challenges to the bloc's sanctions regime in EU courts in September. The EU will on Wednesday formally announce it is maintaining sanctions against almost all the firms by "re-listing" them for new sanctions breaches. The EU hopes that by re-listing companies and providing additional evidence, it can secure its Iran sanctions regimefor the foreseeable future.

The Islamic Bank of Britain has launched two Sharia compliant buy-to-let products. The first of the products is a two-year fix available to those with a 25% deposit at a rate of 5.09%, fixed until 31 December 2015. The second two-year fix is available at 65% LTV at a rate of 4.69%. An administration fee on £995 applies and both products provide finance of between £30,000 and £500,000 across the UK and £750,000 in central London. The products have no early repayment charges for clearing the finance in full. The provider said the loans are available to landlords of any faith.

Private investors from Gulf Arab countries plan to establish the first full-fledged Islamic bank headquartered in the euro zone. The investors aim to launch the venture, named Eurisbank, in Luxembourg during the last quarter of 2014. With initial capital of EUR 60 million, the bank would offer retail, corporate and private banking services, and would open branches in Paris, Brussels, the Netherlands and Frankfurt. In addition to the royal family from the UAE, Eurisbank will be owned by a bank from a country in the GCC and other private investors. The founders of the bank plan to apply for a license in January and expect to obtain regulatory approvals by April.

The first sukuk proposed by Osborne will only be valued at £200m, but it would make Britain the first non-Islamic country in the world to issue sovereign sukuk. However, ensuring that the sukuk are watertight in their compliance with sharia will be the acid test for Osborne. If they’re not, they are rendered pointless and a huge waste of time and money. If Osborne’s sukuk have a successful debut, it will herald a greater level of fiscal openness and consensus between the Islamic world and Britain. But it is highly unlikely this policy will make a difference to the life of the average British Muslim, and issuing a few culturally-catered bonds will not even begin to address the rampant inequality and instability of a British economy.

Ladies and gentlemen,

One of the highlights of this year’s Euro Finance Week is the Frankfurt MENA Finance Conference on November, 21st 2013.

The speakers of the panel ‘What does Germany gain through Islamic Finance?’ are:

Dr. R. Ahmet Albayrak, Executive Vice President, Kuveyt Türk Participation Bank Inc.

Horst Bennin, Founding Managing Partner, Alp View Capital Partners GmbH

Dr. Manfred Dirrheimer, Chairman of the Board, FWU AG

Dr. Johannes Engels, Banking Supervisor for International Cooperation, BaFin

Dr. Ivo Schwartzkopff, Member of the Board, StarCapital AG

The host of this panel will be Zaid el Mogaddedi, Founder and Managing Director, Institute of Islamic Banking and Finance (IFIBAF).

Dr. R. Ahmet Albayrak will deliver a speech about ‘Opportunities in the European Financial Markets’ beforehand in the conference.

The conference language is English.

The event is without charge.

Location:

Congress Center Messe Frankfurt
Ludwig-Erhard-Anlage 1
60327 Frankfurt am Main

If you are interested to participate, please send an e-mail (company/name/e-mail address) to info@kuveytturk.de

According to Standard & Poor's' article "Turkey's Growing Islamic Banking Sector Needs Fresh Capital For An Added Push," participation banks in Turkey look set to keep increasing their market shares over the medium term. However, S&P believes sluggish domestic savings and intensifying competition from conventional banks will likely limit the sector's progress without fresh capital and funding. The local authorities' more supportive stance toward the sector contributed significantly to the growth of Islamic banks. However, participation banks' rapid growth and high exposure to the construction sector render their asset quality vulnerable to an economic slowdown. The growth momentum existing participation banks have enjoyed can continue only if their capital bases increase and they achieve some competitive advantage.

London has long been the default centre for international firms to issue sharia-compliant bonds, but it faces a mounting challenge from Dubai and Kuala Lumpur. The final result of the three cities' rivalry may not be known for years, but thousands of jobs and large amounts of direct investment in companies and real estate are likely to depend on the outcome. The most high-profile - and most cut-throat - area of competition between the three centres is arranging sukuk. Other areas of competition include Islamic insurance, known as takaful, and asset management. London has led in attracting sukuk issues by big international companies because of the massive size of its conventional financial markets and its globally respected legal system. However, its position looks weakest among the three centres from a long-term perspective because it is not located within a natural pool of sukuk issuers and European customers will remain a limited group.

Gatehouse Bank announced the appointment of Mr Natale Giostra as Executive Vice President and Head of Real Estate Finance, based at its City of London offices. The Real Estate Finance department forms part of Gatehouse's business growth strategy and strives to create a new focus on UK and Continental European jurisdictions. Mr Natale Giostra has joined Gatehouse Bank from CBRE, where he led the UK debt advisory team. With more than 12 years experience working in real estate banking in several countries, Giostra brings with him a solid background in the origination and distribution of senior and mezzanine real estate loans, loan sale, and acquisition of distressed CRE loans.

Bosna Bank International (BBI) was established in 2000 as the first Islamic bank in Bosnia and Herzegovina and the first bank of this kind in Europe. The bank resulted from a greenfield investment by Islamic Development Bank, Abu Dhabi Islamic Bank and Dubai Islamic Bank. BBI had to overcome challenges like compliance with both Islamic banking principles and State Law on Banks, and the lack of awareness among Bosnians. Additional challenges were the education of workforce and how to overcome the market challenge. Today, BBI offers all types of commercial banking products which are all in compliance with Islamic principles and competitive to other banks’ offers. For more information see the attached document.

Turkish lender Türkiye Finans plans to issue both lira and foreign currency-denominated sukuk in 2014, according to Chief Executive Derya Gürerk. The lender, majority owned by Saudi Arabia’s National Commercial Bank, issued a $500 million sukuk earlier this year. The move reflects Turkey’s growing Islamic finance industry as the government promotes a wider range of Islamic finance products. The country now has 50 banks, four of which are Islamic: Al Baraka Turk, Bank Asya, Türkiye Finans and Kuveyt Türk, 62 percent owned by Kuwait Finance House. These banks have seen their assets grow six-fold over the last decade as their combined branch network has more than tripled.

Islamic International Rating Agency has upgraded the national scale ratings of Kuveyt Turk Participation Bank (Kuwait Finance House–Turkey) on both the short-term and long-term scale to AA-/A-1+ from A+/A-1 previously. Ratings on the international scale have been reaffirmed with local currency ratings at BBB/A-3 and foreign currency assessment at BBB-/A-3. Outlook on the ratings is ‘Stable’. According to IIRA, a significant ratings driver is the fact that the bank stands to benefit from strategic and financial support if needed, both implied and explicit. Additionally, the board and management of the bank have remained stable, with several of the key personnel having been associated with the bank for a number of years.

Prime Minister David Cameron of the United Kingdom has announced that the U.K. will become the first non-Muslim country to issue a Sukuk, with a £200 million issue planned for early 2014. Cameron also announced plans for a new Islamic index on the London Stock Exchange. These initiatives are all part of a grand plan by the U.K. government to turn London into a global capital of Islamic finance. At the same time, the World Bank Global Islamic Finance Center in Istanbul is the result of the collaboration between the Turkish government, Turkish private-sector entities and the Bank Group, aiming to create a “center of excellence” for the development of Islamic finance. However, there is a need to strengthen its legal foundations and develop robust regulatory and supervisory frameworks globally.

David Cameron, the British prime minister, announced plans to issue sovereign sukuk as early as next year at the ninth annual World Islamic Economic Forum in London on October 29th. The convention marks the first time the event has been held outside the Muslim world. That is a testament to the rising global clout of Islamic finance. The Gulf states have been at the forefront of the boom, other countries like Turkey are emulating the Gulf model. However, the prospects in the wider Middle East, e.g. Egypt and Lybia, are less clear. Despite Islamic finance’s being the toast of the town in the City of London this week, the struggle to make it work in the heart of the Muslim world continues.

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

London's Shariah-compliant start-up Cobalt Underwriting has now written its first risk, via its agreement with capacity provider XL Group, to cover the deal to acquire a high-profile property portfolio. It has underwritten a property acquired by PARC Property Holding, advised by Amiri Capital, to acquire Park Crescent West. Cobalt CEO Richard Bishop believes the agreement serves to demonstrate that insurance should have a place at the forefront of the government's plans to promote Islamic finance in London. Furthermore, he reminded Islamic business leaders that insurance capacity that meets their needs is available in London.

Dear Readers,

Venture Capital has often been regarded as the ideal tool for Islamic finance, particpating in profits and losses of innnovative companies.

Now a major assessment has been done by Cambridge Associates in terms of performance, comparing it to the wider stock market. Result: No outperformance. Considering the lack of liqudity it seems to be much less attractive to professional investors than thought.

See: http://www.cambridgeassociates.com/pdf/Venture%20Capital%20Index.pdf

The lack of success also is induced by lack of transparency and fee models taking away the eventual outperformance. This is for the US market of course. Experiences in less advanced markets could be better or even much worse.

It still has other benefits, as diversifying risk, promoting overall growth and eventuall fostering social benefits.

In order to protect the investor, proper disclosures must be integrated to grow this industry in a healty manner. Further the focus on impact investing will ensure that value is created and risk better managed. What impact investing means could be read here:

See: http://www.thegiin.org/cgi-bin/iowa/home/index.html

Kuwait Turkish Participation Bank Inc has been granted a licence by the Qatar Financial Centre ( QFC ) Authority, with effect from September 15 2013, to establish a branch in the QFC . The bank expects to open its QFC branch in about two months. It is licenced to undertake deposit taking; providing and arranging Islamic credit facilities dealing in Islamic investments and managing Islamic investments. The bank is a Turkish Islamic bank with 62 percent owned by Kuwait Finance House, Kuwait, 9 percent by PIFSS, Kuwait, 9 percent by Islamic Development Bank, Saudi Arabia, and 18 percent by Turkish Awqaf. It is the first and only Turkish bank to have a presence in Qatar.

Abu Dhabi Islamic Bank (ADIB) has arranged a £20 million (Dh118.02 million) structured Islamic financing transaction to fund the development of Westbourne House, a prime 1980s commercial property in central London, combining office and retail space. ADIB’s financing package for Westbourne House was specifically tailored to meet the investors’ aims of acquiring, refurbishing and reselling high-value luxury properties to overseas buyers. The deal marks ADIB’s debut in London’s real estate market at a time when the British government is promoting the city as a centre for Islamic finance.