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Dubai’s Noor Bank has picked seven banks to arrange investor meetings ahead of a potential Tier 1 dollar-denominated sukuk issue. Joint global coordinators include: Citi, Standard Chartered, Dubai Islamic Bank, Emirates NBD Capital, First Gulf Bank, Noor Bank and Sharjah Islamic Bank. Dubai’s government owns 48% of Noor Bank, which starts to hold meetings with fixed income investors in the Middle East, Asia and Europe.

Abu Dhabi Islamic Bank said on Sunday its shareholders have approved the decision to pay more than 24 per cent, or Dh0.2427, per share for the year. The annual general assembly also approved the financial statements for the year to December 2015. The bank posted an 11 per cent increase in net profit in 2015. The bank recorded a net profit of Dh1.943 billion compared with Dh1.75 billion in the same period in the previous year.

Noor Bank reported a net operating profit of Dh561 million for the year 2015, up 40 per cent compared to 2014. The bank attributed increase in profitability to a 73 per cent surge in fee and commission income and a 35 per cent rise in net income from financing. Bank’s total assets increased 36 per cent to Dh39 billion in 2015 compared to Dh29 billion in 2014. While customer financing grew by 29 per cent during 2015 customer deposits were up 35 per cent to Dh32.1 billion last year.

Dubai’s Awqaf and Minors Affairs Foundation (AMAF) has continued to spread its reach to a greater number of people with its initiatives and beneficiaries doubling last year. AMAF recorded a growth of 19 per cent last year, with its revenue reaching Dh172 million, up from Dh144 million in 2014. Tayeb Abdul Rahman Al Rais, secretary-general of AMAF, said there are currently 26 projects and initiatives that help orphans and ensure their well-being in a sustainable way.

Regulators of financial markets in the Gulf Cooperation Council (GCC) are urged to develop the infrastructure and regulatory framework in order to boost the sukuk market in the region, according to Zamir Iqbal, a World Bank expert. The sukuk market in the GCC presents ample opportunities, especially as governments are likely to resort to it for capital given the plunge in their revenues from lower oil prices, the lead financial sector specialist at the World Bank said. Iqbal added that the overall debt and capital market in the region needs to be strengthened with laws governing elements such as investor protection, and how to handle disputes and insolvency, among others.

Islamic banks in the UAE have proved that they are better equipped to deal with a difficult operating environment than their conventional peers, with all leading institutions reporting strong growth in assets, profits and asset quality in 2015. Dubai Islamic Bank (DIB), the largest Islamic bank in the UAE by total assets, reported a group net profit of Dh3.83 billion, up 37 per cent compared Dh2.8 billion in 2014. Total income increased to Dh7.54 billion, up 21 per cent compared with Dh6.23 billion for 2014. Net revenue increased to Dh6.48 billion, up 19 per cent compared with Dh5.43 billion for the year 2014. Meanwhile, Abu Dhabi Islamic Bank’s (ADIB) full-year net profit stood at Dh1.93 billion in 2015, growing 10.5 per cent on the previous year.

Islamic banks in the UAE delivered strong shareholder returns last year as they reported strong earnings and better asset quality. Dubai Islamic Bank’s (DIB) earnings per share increased to Dh0.81 in 2015 from Dh0.61 in 2014, return on assets increased by 40 basis points to 2.80 per cent in 2015 from 2.4 per cent in 2014. Return on equity increased by 190 basis points to 19.8 per cent in 2015 from 17.9 per cent in 2014. For the year, the DIB board has recommended distribution of a cash dividend of 45 per cent. Abu Dhabi Islamic Bank’s (ADIB) maintained strong liquidity position while simultaneously continuing to manage its cost of funding.

There have been many surveys done by academic and business institutions on the skills gap in Islamic banking in recent years, and they all come to the same conclusion: that unless this gap is bridged, the impressive average annual growth of 15 per cent achieved by the Islamic banking industry in recent years will be undermined. More Islamic financial institutions, individually and collectively, need to engage in formalised training. Next, clear and easily understood standards need to be adopted that help to define products which Islamic banks and other institutions offer. Apart from the positive impact this would have on the regulation of the industry, this would also help to demystify what the sector offers to the general public.

The fourth-quarter results of leading Saudi banks show a number of these institutions are facing a squeeze on profits as both loans and deposits decline and asset quality deteriorates further. At the close of the fourth quarter, Saudi Hollandi Bank reported a 2.3 per cent fall in fourth-quarter net profit on higher staffing costs and provisions for bad loans. Saudi British Bank (SABB), an affiliate of HSBC Holdings, posted a 3.1 per cent drop in fourth-quarter net profit and Riyad Bank posted a 19.7 per cent fall in fourth-quarter net profit, in line with analysts’ forecasts as Samba Financial Group reported flat net profit for the fourth quarter. The notable exception was Al Rajhi Bank which reported a 28.2 per cent rise in its fourth-quarter net profit.

Arcapita has partnered with Morningstar Senior Living for senior living communities based in Colorado worth $85 million. The current portfolio for Arcapita consists of three projects for assisted living and care communities and provides a total of 196 units and 243 licensed beds in the Denver and Colorado Springs, Colorado. The focus on the state is to attract customers who are in the company’s target age demographic. The target age group for senior living facilities in Colorado is projected to grow by almost twice the national average over the next five years, stated Martin Tan, Arcapita’s chief investment officer.

For the third year running, DP World is the top stock in the S&P/Hawkamah Pan Arab ESG Index. The index is the first of its kind in the Arab world and ranks the transparency and disclosure of regional listed companies based on Environmental, Social and Corporate Governance (ESG) metrics. The participants are derived from the top 150 Pan Arab companies, by total market capitalisation, listed on stock markets of Bahrain, Egypt, Jordan, Lebanon, Kuwait, Morocco, Oman, Qatar, Saudi Arabic, Tunisia and the UAE. The index is reconstituted once a year in December and the names of the top 10 companies are announced. It gathers information in the public domain, mainly from Annual Report and Accounts, to assess the leading company.

A new Sharia benchmark for the use of gold in financial transactions could be ready as early as the first quarter of 2016. This follows the World Gold Council and Amanie Advisors, a specialist consultancy, opening up submissions from industry participants on what the standard should be. Submissions need to be made by December 31. The ‘Standard will provide guidance from a Sharia perspective on the usage of gold in financial and investment transactions for Islamic financial institutions and participants,’ the WGC states on its website. ‘The Standard also aims to increase transparency and harmonisation regarding the use of gold in various market practices.’

The history of family-owned businesses in the Gulf countries spans more than 100 years during which time the required entrepreneurial and managerial experiences have been passed on from one generation to another. These families contributed to the development of sectors such as trade, banking and construction, and resulting in the collection of taxes that helped stabilise financial conditions and support state budgets in the pre-oil era.
When oil revenues started flowing in, the Gulf nations encouraged family businesses to expand into many areas. They even contributed to the emergence of new business groups through the awarding of contracts to implement projects, especially infrastructure-related ones vital for development needs.
This approach contributed to a qualitative development of these companies, some of whom went on to enter partnerships with global players and gained in administrative and technical expertise to implement large projects and enter overseas markets.

Currently, there is $65.9b of outstanding in labelled green bonds, with transport and energy remaining the dominant themes. Countries such as the UAE and Malaysia have shown the willingness to issue green sukuks, and advisers such as Climate Bonds Initiative hope to have at least one [issued] in 2016, the chief executive officer of the advisory firm told Gulf News.
“Dewa (Dubai Electricity and Water Authority) has said that they are considering issuing a green sukuk for clean energy,” said Sean Kidney, chief executive officer of Climate Bonds Initiative. The firm has a sukuk advisory group in the UAE, trying to promote issuance.

In a joint press conference with the World Islamic Banking Conference, Ernest & Young highlighted part of its World Islamic Banking Competitiveness Report 2015-2016 in Manama. “The growth of the Islamic banking industry in the GCC, specifically in Saudi Arabia, in the past few years can be attributed to the increased public sector spending on the back of oil revenues. It will be interesting to see how banks are affected as governments draw their reserves from the banking sector to narrow the gap on budget deficits due to the drop in the global oil price,” said Muzammil Kasbati, Director, Global Islamic Banking Centre at Ernest & Young.
According to the statement, the GCC Islamic banking profit pool crossed $12 billion, with expectations that the sector will continue to grow amid regional economic uncertainty. Further, the statement says that nine core markets are currently the growth engines for the global Islamic finance industry. Ernest & Young identified a group of 40 banks across these nine core markets that are “systemically important” to the future progress of the industry.

Noor Bank is all set to launch a Sharia-compliant and Sustainable Equity Index-linked investment, targeted at the bank’s high-net worth and priority banking customers, the bank’s treasurer Damian White said. Under the new index, the bank will offer its clients a basket of 20 chosen Sharia-compliant European equities screened for sustainability measures. The 100 per cent capital protected investment offers a fixed coupon for the first two years and the uncapped index performance at maturity at the end of three years. The format of the investment is through an Islamic structured deposit.

Oman’s first issue of sovereign Islamic bonds has received strong orders ahead of its final pricing on Tuesday. The 200 million rial (Dh1.9 billion, $520 million), five-year sukuk issue with an ijara format drew 22 orders totalling 336 million rials during the subscription period, which ran from Oct. 8 to 22, Mohammed Hussain Jawad, adviser at the finance ministry and head of the committee handling the issue, said. Results of the sale and allocations will be announced on November 3. Jawad also said the ministry planned a second sukuk issue next year, but he did not elaborate on the size or timing.

From Takaful Emarat’s perspective, a number of factors in the Mena region have contributed to a relatively weak culture of financial planning and saving among our citizens and expatriate populations. However, education programmes addressing the importance of financial planning in the region are required to highlight the need for both citizens and expatriates to plan and save in order to generate income post-retirement, provide for family education and ensure comprehensive life and health cover is in place, for example. This situation is changing with the growing popularity of takaful as a means to plan for unexpected financial or medical emergencies.

Family businesses in the GCC have made significant progress in putting corporate governance structures in place but are lagging when it comes to strict implementation — something that could eventually challenge their very existence, a study by the Gulf Family Business Council (GFBC) and McKinsey & Company has revealed. The study, which surveyed the largest GCC family-owned businesses, showed that only 33 per cent of GCC-based family businesses have fully implemented governance systems. The study recommends that the ‘rules of the game’ should be clearly stated to the next generation as early as possible to allow for effective succession planning and transition of leadership.

Abu Dhabi Islamic Bank (Adib) said on Monday it has raised Dh504 million in its rights issue, which was nearly three times oversubscribed, with Dh1.46 billion in subscriptions received. Following the close of the subscription period on September 10, all 168 million shares were fully subscribed, the bank said in a statement. The rights, which were traded on the Abu Dhabi Securities Exchange, offered investors Adib shares at a price of Dh3 per share, and are part of the bank’s plan to raise capital to support growth.