IslamicFinance.de

Bahrain's Salam Bank will launch Islamic insurance products and Visa credit card services in Algeria this year. Salam Bank CEO Hideur Nasser said the lender would open 10 more branches in the country as the market for Islamic products was growing. He added that Islamic banking made up only 15.5% of the private sector in Algeria. The government wants to develop the sector, as the country looks for more ways to offset the sharp fall in oil prices and its energy revenues. For this, technical expertise and new legislation is needed in a country where powerful elites have resisted changes. Nasser said the legal framework had to be amended and sukuk could not be sold under current laws despite great appetite for them.

Al Baraka Bank Syria was granted a BBB investment grade rating by the International Islamic Rating Agency (IIRA). The bank was also assigned a sufficient credit capacity, with a rating of (71-75) as a total credit score. It also earned a strong credit rating, with a rating of 76-80 for the Asset Quality Management. The Bank’s corporate governance was assessed in the range of 66-70, and the Shari’a governance within the range (71-75). Mohammed Abdullah Halabi, CEO of Al Baraka Bank Syria said this result confirmed the accuracy of the strategy adopted by the Bank and the high quality performance of the management team.

Emirates REIT has issued the first sukuk by a real estate investment trust (REIT) in the MENA region. It's also the first REIT from the region to have a credit rating (BB+). REITs have not traditionally issued sharia-compliant bonds, and have instead preferred to tap conventional debt markets for their financing needs. The only previous issuance of this type was in Malaysia in 2014, when KLCC REIT sold $930 million of Islamic bonds. This new issuance was hosted by The Irish Stock Exchange and relied on underlying wakala and murabaha contracts. The entire timeline of the deal was less than two months. This was to ensure Emirates Reit didn’t miss the favourable issuance window. Standard Chartered Bank acted as sole global coordinator, ratings advisor and joint lead manager of the sukuk issuance.

The African Export-Import Bank (Afreximbank) has raised around $260 million via three Islamic finance facilities to support small- and medium-sized businesses in the region. The Egypt-based bank obtained a $100 million financing from the Islamic Corporation for the Development of the Private Sector (ICD). It also signed two financing agreements with the International Islamic Trade Finance Corporation (ITFC) worth $100 million and 50 million euros ($59.8 million) to help finance exports among African countries. Both ICD and ITFC are part of the Saudi-based Islamic Development Bank group of companies.

The Grand Mufti of Egypt has explicitly prohibited trading in Bitcoin, explaining that it is forbidden in Islamic Sharia for the risks it holds, and its been used to fund terrorists. A Fatwa has been issued that the virtual currency should not be used to make financial transactions because it has no monetary cover by the Central Bank of Egypt (CBE). Mufti Allam remarked that Bitcoins undermine the legal system, as companies can evade taxes and not disclose their profits due to the fact that Bitcoins are untraceable. Furthermore, companies turn their attention to crypto currencies as it allows them to launder money or finance terrorist activities and engage in other fraudulent behaviors. The Mufti concluded that Bitcoin does not have a physical form and leads to fraud, therefore prohibited its use as it leads to more corruption.

Turkish authorities have issued detention warrants for 68 shareholders of Bank Asya. The police operation targeted the network of the cleric accused for orchestrating last year’s failed coup attempt. The targeted shareholders all had voting rights to determine the bank’s administrative board. So far 49 of the 68 suspects had been detained. Bank Asya was founded by followers of the U.S.-based cleric Fethullah Gulen and was seized by the state in 2015. According to the Turkish government, Gulen masterminded the 2016 attempted coup, in which more than 240 people were killed by rogue soldiers. Gulen has denied the charges and condemned the coup. Since the abortive putsch, more than 50,000 people, including civil servants and security personnel, have been jailed pending trial and some 150,000 suspended or dismissed from their jobs.

The Zakat Fund paid JD200,000 to release 386 women who were imprisoned after failing to paying back their loans in 2017. The release came as part of the fund's programme “Sahm Al Gharimat”, funds allocated for indebted women, which aims to release women who cannot pay for their freedom, the fund’s director general, Abed Smeirat, told a newspaper in Jordan.
According to Islamic law, or Sharia, Zakat is one of the five pillars of Islam, a tax that requires paying 2.5 % of what a Muslim owns in cash money, gold, silver, cattle, farms and rentable assets, in alms. People who are burdened with debt that has been obtained for reasonable purposes are one of the eight categories of groups entitled to receive Zakat money, which is, in principle, managed by the state and is the only type of tax Muslim citizens are required to pay.

The 7th Global Islamic Microfinance Forum successfully concluded in Istanbul between 24–28 November, 2017. The first two days of the conference focused on topics like Islamic microfinance financial technology, financial inclusion, Micro Takaful, Waqf and Zakat as Supportive Elements for Islamic Microfinance. In the next two days, Islamic Agriculture and Rural Finance, the role of Islamic finance in the rural development and micro takaful came under discussion. While addressing the inaugural ceremony, Khaled Al-Aboodi, CEO of the Islamic Corporation for the Development of the Private Sector (ICD), said that Islamic microfinance was a core element of Islamic financial industry. Dr Amjad Saqib, Founder of Akhuwat Pakistan welcomed the guests and participants. He further announced that the next time such an event would be organised would be in London next year in October.

Halk Real Estate Investment Trust (REIT) has issued Turkey's first sukuk with a nominal value of TL 100 million ($26.12 million) through Halkinvest. The return of the 87-day lease certificate will be realized at 13.25% at the end of the maturity period. Halk REIT General Manager Feyzullah Yetgin said that the widespread use of real estate-based financial products would make a great contribution to the real potential of the sector. Halkinvest General Manager Serdar Sürer said that the lease certificate issuance transaction executed on behalf of Halk REIT was their 60th capital market issuance transaction this year. He also said that they would continue to add value to their business partners with products based on the real economy.

The sale of Zitouna Bank, which was launched on December 5 by state holding company Al Karama, could be quickly scuttled by the investment banks and other groups which had been hoping to get involved in this major operation.

In the Middle East and North Africa (MENA), the financial technology sector is coming of age. According to the State of Fintech report, fintech startups in the region have raised over $100 million over the past decade and investment is predicted to double by 2020. Disclosed investment in fintech had jumped 100% to over $35 million by October 2017. The number of fintech startups also increased from 46 in 2013 to 105 in 2015. It is estimated that it will more than double again to 250 by 2020. Despite the ubiquity of smartphones and internet connectivity, 86% of the adult population in the region is unbanked, while three in four GCC bank customers are ready to switch banks for a better digital experience. According to Abdulaziz Fahad Al Jouf, CEO of PayTabs, fintech could become as great a force in the Middle East as oil. In this environment, the region’s financial institutions are compelled to keep pace with the rapidly evolving fintech industry.

According to the General Council for Islamic Banks and Financial Institutions (CIBAFI), Turkey should raise public awareness of Islamic finance to boost the sector's market share. CIBAFI's secretary general, Abdelilah Belatik, called Turkey's target of raising Islamic banks’ share to 20% by 2023 ambitious but achievable. The council’s annual gathering to discuss Islamic finance will be held in Turkey next April. Belatik said that countries like Turkey and Indonesia and regions such as Central Asia and Africa are important as they have a great growth potential in the Islamic finance sector. Belatik said they work with countries which lack the infrastructure and regulation for Islamic finance to show them its role in the economy. He also underlined Islamic finance's significance for financial stability.

The Islamic Development Bank (IDB) announced it had formed a $500-million fund for scientific research. President Bandar Hajjar said the fund would find solutions to economic adversity using scientific innovations. He was speaking at the 33rd Ministerial Session of the Standing Committee for Economic and Commercial Cooperation (COMCEC) in Istanbul. Hajjar added that the bank had received 100 million Saudi riyals ($26.6 million) as contribution. He also added that to address the issue of youth unemployment a five-year program has been launched to improve cooperation between universities, research centers, non-governmental organizations and government departments.

An Istanbul court has declared bankruptcy of Bank Asya, affiliated with the Fetullah Terrorist Organization (FETO). Bank Asya’s banking license was cancelled on July 22, 2016 by Turkey’s Banking Regulation and Supervision Agency (BDDK). The agency had ruled for complete takeover of all shares of Bank Asya by the state-run Insurance Fund in May 2015. FETO and its U.S.-based leader Fetullah Gulen orchestrated the defeated coup attempt of July 15, 2016, which left 250 people martyred and nearly 2,200 injured.

Even though its Tunis Financial Harbour (TFH) mega-project has barely got off the ground, Bahrain's Gulf Finance House (GFH) is already looking to acquire adjacent land.

Ashraf Ahmed Mustafa El-Ghamrawy, CEO of Al Baraka Bank Egypt said that the bank’s activity was not impacted by the detention of the Saudi businessman Saleh Kamel. Kamel is the chairman and founder of the Dallah al Baraka Group (DBHC) which owns Al Baraka Bank Egypt. The anti-corruption committee set up by Saudi King Salman bin Abdul Aziz has recently detained a number of Saudi princes, ministers and businessmen for corruption charges. According to El-Ghamrawy, what happens with Kamel in Saudi Arabia will have no effect on the bank’s performance in Egypt. He also notified the Egyptian Stock Exchange that Kamel is not a member of the board of directors. Therefore, there is no impact on the bank.

In Algeria, three public lending institutions will start offering Islamic finance services before the end of the year. They are the Banque de l’agriculture et du développement Rural (BADR), the Caisse Nationale d’Epargne et de Prévoyance (CNEP) and the Banque de Développement Local (BDL). Currently, in Algeria only Al Baraka Bank and Salam Bank are allowed to offer participative finance products to their clients. They are in fact competing in this sector with private lenders that offer both traditional and Islamic banking services. Boualem Djebbar, president of Algerian banks and financial institutions’ association, said a democratization of Islamic finance by 2018 should be expected in the country.

Starting from October 2, Turkey will issue gold-backed bonds and sukuk to attract into the economy gold savings held by households. According to the Turkish treasury, the maturity of the bond and sukuk will be 728 days, with a 6-month interest of 1.20%, index-linked to gold prices.

Algeria plans to issue its first sukuk next year as it seeks new funding sources after a fall in energy earnings. Prime Minister Ahmed Ouyahia said the government would introduce Islamic financial services at two state banks before the end of this year and four others in 2018. The North African country had rejected sharia-based financing options after a war with Islamist movements that killed about 200,00 people in the 1990s. But financial difficulties have prompted the government to speed up implementation of reforms. Algerian firms rely heavily on state spending, which in turn depends on the hydrocarbons sector. The government also aims to modernise the stock market, which is now smaller than those in neighbouring Morocco and Tunisia.

Algeria’s Prime Minister, Ahmed Ouyahia, announced that Islamic banking is to be approved in two public government banks before the end of this year and will be approved in four other banks in 2018. According to Ouyahia, this funding was inevitable because of the country's difficult economic and financial situation, and it will be limited in time because it will continue till no later than 2022. Algeria has about 29 banking institutions, seven of them are government-owned public banks, and more than 20 foreign banks from the Gulf countries, others are French and one is British. The Algerian government has applied Islamic banking in a limited way through the Zakat Fund of The Ministry of Religious Affairs and Wakfs, that was launched in 2003. The country has been facing an economic crisis for three years due to the fall in oil prices. Its foreign exchange earnings fell from 60 billion dollars in 2014 to 27.5 billion dollars at the end of last year.