IslamicFinance.de

A report in one of the dailies suggesting that Islamic banking contributed to the collapse of Chase Bank is based on unfounded information. The facts as emphasised by Central Bank of Kenya Governor Patrick Njoroge are clear; that the underlying reason for the closure of the bank was under-reported insider lending by the directors and irresponsible use of social media, which accelerated the massive liquidity problems. Chase Bank is not the first bank to collapse and several others, which had no dealing with Islamic banking, have gone under. It is therefore insensitive to blame the collapse of Chase Bank on the Islamic banking system, which has proved to be an alternative and viable finance system.

Honda Atlas Cars (Pakistan) Limited and BankIslami Pakistan Limited have joined hands to offer their customers with valuable Honda products coupled with Shariah compliant Auto financing solutions. Yasser Abbas, Section Auto Ijarah BankIslami and Nadeem Azam, General Manager Sales & Marketing Honda signed the agreement. Maqsood Rehmani Vice President, M. Afzal Senior Manager Sales & Marketing and Shahzad Wahla Deputy Manager Sales & Marketing from HACPL and Syed Jibran Ali Unit Head Auto Ijarah, Hafiz Shabir HSM Central Region and Rizwan Haider TL Retail Central from BankIslami were also present on the occasion.

In a statement to Dubai Financial Market, it was reported that Ajman Bank’s AGM has approved and ratified a proposal from the board of directors to increase the bank’s capital base. Under the proposal, Ajman Bank’s authorized capital will become AED 2.1 billion and the paid up capital will increase from AED 1.05 billion to AED 1.55 billion.

Bank Muamalat Malaysia Bhd sees a listing of the bank as an alternative for its shareholders, but is of the view that the market is not conducive for such an exercise currently. Bank Muamalat is 70% owned by DRB-Hicom Bhd and the rest is held by Khazanah Nasional Bhd. A potential listing of Bank Muamalat could be an option if DRB-Hicom fails to find a suitable suitor to acquire a stake in the bank. DRB-Hicom is required to pare down its stake in Bank Mualamat to 40% but this has been delayed for a few years because it was unable to agree on the terms with potential buyers.

Bank Muamalat Malaysia Bhd targets to sell about 320kg of Muamalat Gold-i (MGi) valued at about RM56mil for the financial year ending March 31, 2017 (FY17). Chief operating officer (Business), Mashitah Osman, said MGi was the bank’s latest initiative to boost its wealth management segment. Physical gold bars are available in five, 10, 20, 50 and 100gm. Without any publicity, the bank has sold over 80kg worth RM14mil since it was opened to the public two-and-a half months ago, Osman said. Meanwhile, vice-president/head wealth management departmen, Nur Ain Ramli, said the bank expected the gold business to contribute about 60% of the total fee income for the wealth management segment for FY17.

Malayan Banking Bhd (Maybank) and Singapore-based RB Capital inked a S$260mil (RM751mil) Islamic financing deal, one of the biggest Islamic deals in Singapore. The landmark deal involved a 442-room mid-tier Holiday Inn Express Singapore Clarke Quay as the underlying security. The bank is continuously looking at growing its Islamic banking business in the region, especially in Singapore and Indonesia, which each currently accounts for about 5.0% of Maybank Islamic’s revenue. Maybank Group’s Islamic banking business in 2015 surged 20.4% in total income compared to the year before.

Maybank Islamic Bhd is confident its Islamic banking business in Singapore will contribute further to revenue in the future. Group head, Islamic banking, and chief executive officer Datuk Muzaffar Hisham said this was in view of the ongoing support from the Monetary Authority of Singapore (MAS) in promoting Islamic banking. Muzaffar said in less than three years, Islamic banking in Singapore had contributed about 5% to its revenue. It is reported that Singapore's central bank will continue to strengthen Islamic finance owing to its cross-border growth. The report said that since MAS established its sukuk facility in 2009, there had been eight sukuk issuances totalling S$600 million (RM1.7 billion).

Al Rajhi Bank Malaysia (ARBM) has received approval from Bank Negara Malaysia (BNM) for the appointment of Steve Chen Thien Yin as its new chief executive officer (CEO). As CEO, Chen is responsible for the overall operations of ARBM’s business to maximize company growth as well as to take on the responsibility in developing strategies to drive the Islamic banking and finance business of ARBM. Prior to joining ARBM, he was the chief operating officer (COO) for Corporate and Structured Finance at one of Malaysia’s largest local banks, Hong Leong Bank Berhad. Chen has held senior positions in various international foreign banks including J.P. Morgan, Royal Bank of Scotland, and Standard Chartered Bank.

Dubai-based lender Emirates Islamic is laying off 200 staff to cut costs, according to a report. An un-named source confirmed that the bank was downsizing its workforce. However, Emirates Islamic declined to deny or confirm the report. Several banks in the United Arab Emirates have trimmed local operations as they look to reduce costs. Barclays is reducing its Dubai workforce by 150 people and closing its offices in Emaar Square. Earlier this year, the National Bank of Ras Al Khaimah also revealed that it will cut expatriate staff as it seeks to reduce its headcount by up to 250. The overall banking industry across the GCC is slowing because of low oil prices.

Gatehouse Bank plc has announced its entry into the residential property finance market. With a focus on greater London, Gatehouse will offer Shariah-compliant financing solutions for clients seeking to acquire or refinance residential properties. This new product was developed following strong client demand for residential property finance solutions. Gatehouse will offer clients bespoke property finance products, from simple single residential investment finance to more complex company structures including property portfolio and short lease finance. Abdulaziz AlDuweesh, Chief Investment Officer of Gatehouse sees significant opportunities to grow Gatehouse's presence in this market.

Shareholders with Bahrain-based Ithmaar Bank recently approved of the new group structure plans that will help the core retail banking business grow along with the bank’s strategic focus. The new plans were part of a proposal from the bank's board of directors and are still subject to approvals and further changes. The new structure will better allow the bank to compete with the global market. Ithmaar Bank Chairman Prince Amr Al Faisal said this new group structure will help lower the risk profile of the new banking entity and enhance shareholder value.

RAM Ratings expects investment accounts (IAs) to become an important source of new funding for Islamic banks this year as they emerge as potential game-changers in the way Islamic banks source their funds from the public. It noted that unrestricted IAs (UIAs), which are marketed to customers, are estimated to have increased more than RM14 billion in Q4’ 2015, surpassing the RM8.3 billion growth in the overall banking system’s deposits. The recent rapid growth of UIAs follows the requirement of the Islamic Financial Services Act 2013 that Islamic banks distinguish IAs from principal guaranteed deposits by end-June 2015. RAM’s assessment revealed that UIAs accounted for two-fifths of the RM47 billion of IAs in the Malaysian Islamic banking system as at end-2015.

Warba Bank's financing portfolio grew by 40 percent to KD 543.8 million at the end of 2015, compared with KD 388.2 at the end of 2014. The bank's total assets reached KD 776.1 million at the end of 2015, compared with KD 594.8 million in 2014 with a growth rate of 30 percent, Vice Chairman and CEO Al Jassar Dakheel Al-Jassar added during the bank's general assembly on Wednesday. In 2015, the bank achieved significant growth in its operating income, which rose by about KD 7.7 million and amounted to KD 26.3 million, marking a growth of 42 percent compared with KD 18.5 million in 2014, Al Jassar stated.

Standard Chartered Saadiq has announced to enhance its offering for clients looking for Shariah-compliant banking products and services. The enhanced Saadiq product suite includes Home Finance with fixed pricing for up to three years so the clients can benefit from prevailing low market rates and the Saadiq World Miles Credit Card. In order to address the needs of its business banking clients, Saadiq has also launched a new product: Saadiq Business Term Finance, a Shariah compliant solution for clients to manage their business expenditures by availing financing against their existing property.

The Islamic Corporation for the Development of the Private Sector (ICD) has announced investment of about Tk 155 crore to acquire 10 percent stakes in Bangladesh's Al-Arafah Islami Bank. Al-Arafah Islami Bank will issue around 11 crore fresh shares of Tk 10 each with Tk 4 as premium to the ICD. Khaled Al Aboodi, chief executive officer of the ICD, and Badiur Rahman, chairman of Al-Arafah Islami Bank, inked the agreement on behalf of their respective organisations. The investment is, however, subject to shareholder consent and regulatory approvals from the central bank, the Bangladesh Securities and Exchange Commission and other relevant authorities.

Qatar's Islamic lender QIIB achieved increase and growth in its various banking activities over the past year. The AGM approved the Board of Directors' proposal to distribute 40% cash dividends of the nominal value per share which is equivalent to QR4 per share. Besides, the bank is expecting approval from authorities in Morocco for its joint venture by the end of third quarter this year. The lender had signed a joint venture agreement with CIH Bank (Credit Immobilier et Hotelier), a Moroccan bank, for the establishment of a bank in Morocco in December last year. Under the agreement, QIIB will have 40% stake in the proposed bank.

The chairman of Bahrain-based First Energy Bank, Khadem al-Qubaisi, and board member Mohamed al-Husseiny have reportedly left the bank, with a new chairman to be appointed shortly, after approval by the central bank of Bahrain. Al Qubaisi was one of the most prominent executives in the United Arab Emirates until the UAE energy minister replaced him as managing director of state-owned International Petroleum Investment Co last April. Husseiny was replaced as chief executive of Aabar last year after holding that post since 2010. Unlisted First Energy Bank reported a net loss of $375.2 million for 2015.

Uganda’s Muslim leaders have condemned the “ignorance” of church leaders trying to block Islamic banking legislation in the majority-Christian nation. Earlier this year, parliament amended a finance bill to introduce Islamic insurance. However, church leaders led by Archbishop Stanley Ntagali, head of the country’s Anglican church, has urged President Yoweri Museveni to reject the legislation. Nsereko Mutumba, spokesman for the Uganda Muslim Supreme Council, said the church leaders were just ignorant of the Quran, it has nothing to do with ISIS, Boko Haram or any other group claiming to kill non-Muslims. The Bank of Uganda is currently establishing a sharia advisory board to regulate and supervise Islamic banking.

Malayan Banking Bhd (Maybank) has appointed Datuk Mohaiyani Shamsudin as chairman of Maybank Investment Bank and Datuk R Karunakaran as Chairman of Etiqa Insurance Bhd (EIB) and Etiqa Takaful Bhd (ETB). Maybank said the changes in chairmanship of its key subsidiaries followed the retirement of some directors. Mohaiyani is currently a director of Maybank. She is also the chairman of Maybank Asset Management Group Bhd and Maybank Asset Management Sdn Bhd. Karunakaran is a director of Maybank and currently sits on the boards of Maybank (Cambodia) Plc, and others. In addition, he is a director of Bursa Malaysia Bhd, IOI Corporation Bhd and Integrated Logistics Bhd.

The United States is not standing in the way of foreign banks doing business with Iran, a senior U.S. official said, but his comments appeared unlikely to satisfy frustrated businessmen and Iranian officials. Most international sanctions against Iran's economy were lifted in January after Tehran implemented a deal with world powers to curb its nuclear programme. But Washington kept some sanctions that were originally imposed over missile proliferation and alleged support of terrorism. The fear of being caught up in those remaining sanctions has deterred most foreign banks from restoring links with Iran, angering the Iranian government.