IslamicFinance.de

Turkey’s large infrastructure investments may boost the country’s Islamic finance sector. Turkey’s mega projects like bridges, airports, and Kanal Istanbul are compatible with the Islamic financing structure, according to ?brahim Turhan, chairman of Turkey’s stock exchange Borsa Istanbul. Moreover, the private sector’s sukuk export needs are believed to increase due to the large infrastructure investments on the agenda. Bank Asya is planning to export at least 125 million Turkish Liras of additional sukuk before the year ended, while Albaraka Türk is mulling exporting over $200 million worth of sukuk within the last quarter or at the beginning of next year. Non-interest financial tools are accorded a great importance in Turkey’s bid to make Istanbul a global financial center as well.

Turkish Islamic lender Bank Asya plans to issue at least 125 million lira ($62 million) of lira-denominated sukuk by the end of the year, according to deputy general manager Feyzullah Egriboyun. Bank Asya applied to the Capital Markets Board to issue sukuk worth up to 1 billion lira in July.

Bahraini lender Al Baraka Bank's Turkish unit plans to issue more than $200 million of sukuk, in the last quarter of this year or early 2014, according to executive vice president Ayhan Keser. Keser said the timing would depend on market conditions and the maturity of the sukuk was likely to be 5 years.

Ethical investment which has similarities with Islamic based investments has reached US$32 trillion (RM105.6 trillion) in size in the US and the European Unión, according to Nicholas Kaiser, a global investment manager specialising in the issues of ethical and Islamic investment. Though the number of very wealthy Islamic investors in the US were scarce compared to investors in conventional funds, he said his Amana funds are doing very well in the US. The funds attracted American citizens from all backgrounds and Muslim investors are only a small number of the investors in the Amana fund, he added. Nevertheless, it appears that while Amana’s success is the result of the discipline of its Islamic investment nature, investing in Islamic stocks does not necessarily bring profit to the investors.

The British government is seeking to renew sanctions against Iran's Bank Mellat regardless of a court ruling branding the ban as unlawful. Britain's Treasury is now attempting to intervene in the European Union Council's appeal against a decision by the EU General Court in January to quash sanctions imposed against the Iranian bank. This comes after reports that Bank Mellat intends to make a legal claim of 500 million pounds against the UK government for loss of business caused by US-engineered illegal sanctions on Tehran between 2009 and 2013. Earlier on June, Britain’s Supreme Court also overturned a ruling against Bank Mellat over its alleged links to Tehran's nuclear energy program, saying the British government was wrong to have imposed sanctions on the bank.

On 4 June 2013, Rüdiger von Hülst and Matthias Grund of the Berlin and Frankfurt offices of international law firm K&L Gates hosted a roundtable in relation to the future role of Islamic finance in the German economy. Represented at the roundtable were representatives from the investment management, banking, legal, academic and diplomatic communities. One of the general findings was that there has been an increasing depth and breadth of experience in the UK from which Germany could benefit. However, current activity in Islamic finance in Germany is still nascent. There are several possible areas for the expansion of Islamic finance in Germany, such as investments in the healthcare sector and municipal owned real estate. Islamic finance would offer various advantages like diversification of financing sources, or attracting foreign direct investments. For more information on the roundtable, please see the attachment.

The founders of Bosna Bank International (BBI), the first bank in Bosnia and Herzegovina to do business based on Islamic principles, are to inject an additional 15 million euros to its capital stock to ensure business growth, according to the bank's director Amer Bukvic. The Islamic Development Bank (IDB), the Dubai Islamic Bank and the Abu Dhabi Islamic Bank had decided to inject fresh capital into BBI to the amount of 30 million convertible marks (EUR 15.3m). The fresh capital will be used to reinforce the bank's position in the medium-sized banking segment on the Bosnian banking market. BBI's assets will amount to 500 million convertible marks (EUR 255.7m) after the capital increase. Moreover, Bukvic announced that the bank would be releasing loans to the value of 300 million convertible marks (EUR 153.4m).

The Islamic Bank of Britain (IBB) has opted to integrate Salesforce.com with its core banking systems in a bid to avoid costly and time-consuming upgrades that it would have faced if it had decided to roll-out on-premise solutions, such as Oracle Siebel or Microsoft Dynamics. Even though Salesforce is slightly more expensive over a three year Return on Investment (ROI) period, COO Mohamed Gamil believes that the benefits of a public cloud platform far outweigh the extra investment required. The Bank has just completed its third major project using the Salesforce platform, where it is now looking to bring on board as many systems as it can, so as to make application processes for online customers as seamless as posible. IBB went live with a new on-boarding application in January 2012, where it is now also integrated with the bank’s Misys platform using IFrame, so that existing customers can also take advantage of applying for new current accounts online using the Salesforce tools.

New rules to rein in credit card debt in Turkey will force the country's banks to set aside more funds to cover non-performing loans, cutting 2 billion lira ($1.03 billion) off their annual profits. The rules obliging credit card holders to repay more of their debts each month were announced weeks after Prime Minister Tayyip Erdogan urged Turks not to use credit cards, accusing banks of locking people into poverty with excessive fees. The measures announced on Friday by Turkey's banking watchdog, the BDDK, will make it harder for consumers to pile up more credit card debt than they can afford. The government also wants to boost personal savings and reduce household spending on imported consumer goods that have bloated Turkey's current account deficit. The effect in the medium-term is that many consumers with existing debts will struggle to make the higher repayments.

Iran's Bank Mellat is claiming GBP500 million ($782 million) from the U.K. Treasury after a London court ruled against a British decision to sanction the bank. In June, the U.K.'s highest court ruled against sanctions that had been imposed on Bank Mellat as a result of its alleged links to Tehran's nuclear program. The London ruling follows a similar decision in favor of Bank Mellat at a European Union court. But it won't lead to an end to restrictions against the bank for now because EU sanctions remain in place on Mellat. The U.K. sanctioned Mellat in 2009, banning its operations in the country and freezing its assets after it was accused of facilitating Iran's nuclear program. The measure was expanded to the rest of the European Union the following year.

Kuwait Finance House (KFH) in collaboration with Kuveyt Turk (KFH Turkey) has launched a new Turkish real estate financing service. This service provides KFH customers with an end-to-end solution to their Turkish real estate requirements, tailored to their specific needs. It will support them searching for properties in Turkey, providing assistance on negotiation of an acquisition price, competitive Islamic real estate financing and offering post-sales services, should investors need to manage the properties in their absence. A specialized section has been established by KFH in Kuwait City, in order to support customers purchasing real estate in Turkey. This office acts as a contact point and provides customers with the relevant administrative services related to Turkish real estate, like document gathering and handling, information distribution and logistics handling.

Fitch Ratings has assigned Salam III Limited's USD100m insurance-linked Sukuk programme an expected rating of 'BBB-(EXP)'. Fitch has also assigned a rating of 'BBB-(EXP)' to the proposed first USD20m tranche under the programme. ATLANTICLUX Lebensversicherung S.A. (ATL) acts as ultimate obligor in the programme, which is sponsored by ATL's parent company FWU AG. The Sukuk programme's rating is the same as ATL's Long-term Issuer Default Rating (IDR). Each tranche of the Salam III Sukuk programme will have its final payment date five years after its issuance. The first tranche of USD20m is currently planned to be issued in September 2013. Proceeds from the programme will be used to finance upfront acquisition costs of new business. The Sukuk programme has no material impact on ATL's credit fundamentals such as financial leverage or capitalisation.

Foot Anstey LLP, a South West law firm, is winning valuable contracts from the Middle East by specialising in Islamic finance. The firm, which has five offices across the South West región, is one of very few firms in the UK to be able to arrange finance deals in accordance with Islamic law. The Islamic finance team at Foot Anstey has recently advised Islamic banks and Middle Eastern investors on a range of high value and complex transactions. They have created structures to allow conventional and Islamic financiers to work together. Foot Anstey has already advised several Middle Eastern investors on Islamic finance deals. Although most of its business has been in the Middle East, where there is still potential growth, the firm is now looking to expand into South East Asia as well.

Banks should not be afraid to go further and faster in their adoption of cloud computing, according to Mohamed Gamil, chief operating officer at Islamic Bank of Britain. IBB currently has a deal with US cloud computing company Salesforce.com. Gamil said that the adoption of the cloud means that he is free to experiment with new ideas without spending millions of pounds up front. Islamic Bank of Britain originally turned to cloud computing for customer relationship management. It then decided to move sales management, customer on-boarding for current accounts and savings into the cloud. Finally in July 2013, Islamic mortgage alternatives were added to the cloud. The cloud idea is especially interesting for small banks which have to compete with the big players that spend hundreds of millions of pounds on IT every year.

Saudi investment firm Sedco Capital plans to register its Islamic funds in Switzerland and distribute them through tie-ups with global private Banks. This is part of efforts to diversify its client base outside Saudi Arabia. Sedco Capital has incorporated environmental, social and governance (ESG) principles into two of the equity funds, widening their appeal to include ethically minded investors in general. The firm hopes this will allow its funds to be marketed to investors beyond traditional Islamic areas in the Middle East and southeast Asia. The firm aims to be able to source two-thirds of its assets under management from outside Saudi Arabia in four to five years. One fund is to be signed by October and the second one by December.Sedco Capital's two ESG funds, launched in May last year, have $230 million in assets and are managed by Stockholm-based Informed Portfolio Management.

Turkish Prime Minister Tayyip Erdogan urged Turks not to use credit cards, accusing banks of locking people into poverty with excessive fees. He said banks were growing rich on high commissions and urged people to live within their means. Erdogan and members of his government have accused speculators and a "high-interest-rate lobby" of stoking volatility in financial markets to make a quick profit at the expense of the Turkish economy. The comments opened a new front in the verbal attacks Erdogan has periodically made against the financial community, which is betting the country's central bank will raise borrowing costs next week to steady the ailing lira currency. In fact, the central bank may raise rates next week to stem a slide in the Turkish currency which would make the lira and lira-denominated assets such as Turkish government bonds more attractive to foreign investors, as well as pushing up commercial banks' lending rates.

The Islamic Bank of Britain has launched a pair of new home finance deals. The IBB will now offer a 2-year fixed rental rate Home Purchase Plan at 3.79% and a discounted variable rental rate HPP at 3.59%. Both plans are available to consumers with a deposit of 35%. According to Imran Pasha, head of sales and service at IBB, this is the first time IBB has offered home finance to consumers with a 35% deposit. The launch will benefit home buyers with a larger deposit, existing homeowners looking at re-financing deals or those seeking to release some equity from their property.

Turkish Islamic lender Bank Asya said on Monday it had applied to the Capital Markets Board to issue sukuk worth up to 1 billion lira ($520 million). The bank said in a statement to the Istanbul stock exchange it had mandated its brokerage arm for the issue.

Iranian Bank Mellat appealed against a decision upholding measures taken by the Treasury to restrict its access to the UK financial market. The Treasury had directed that all persons operating in the UK financial sector were prohibited from having any commercial dealings with the Appellant or its UK subsidiaries. The Appellant argued the Treasury had failed to give adequate reasons for its decision. The High Court and Court of Appeal both dismissed the appeal, however the Supreme Court allowed it. One of the central issues raised was that the lower courts found that the justification for the order was not a problem specific to the Appellant, but a problem with Iranian banks in general. However, the order made no attempt to impose restrictions on other Iranian banks. In that regard, the measure was arbitrary, irrational and disproportionate. The order was also found to be invalid on various procedural grounds.

Three million muslims live in Britain, and more and more of them are demanding financial products compatible with their faith. British business leaders are eager to cash in on this expanding revenue stream.David Slater and his colleagues of London and Partners, backed by the British government, are now pushing for London to become the global hub for Islamic finance and they’ll be pressing their case at the 9th World Islamic Economic Fórum which will be hosted by London in October. The U.K. already has the largest Islamic banking sector outside the Middle East and Asia. Britain has also changed its commercial and taxation laws to accommodate sharia-compliant finance. More sukuk have been issued on the London Stock Exchange than any other bourse, worth more than $34 billion.