IslamicFinance.de

Generous government salaries and free healthcare, funded by vast natural gas reserves in a country with only about 300,000 citizens, do not always translate into healthy bank balances for ordinary Qataris. Instead, they can come under intense social pressure to live way beyond their means, spending lavishly on everything from the latest smart phones and designer fashions to family weddings. Now their problems are deepening as diving global energy prices mean even the Qatari welfare state is becoming less generous. Many are borrowing enormous sums from local banks to finance lifestyles they cannot afford, according to a study by Qatar University.

The region's thriving asset management sector saw a further addition towards the end of last year with the launch of Abu Dhabi Global Market (ADGM). The new financial centre is likely to mark a bold step for the emirate's plans to attract new firms and develop the local asset management sector. As the UAE's richest emirate, Abu Dhabi is already home to a large number of wealthy investors and a thriving financial services community. Despite the close proximity of northern neighbour Dubai's highly successful DIFC, industry participants have welcomed the addition of the ADGM to the region. Abu Dhabi is home to the region's largest sovereign wealth fund (SWF) in the Abu Dhabi Investment Authority, and a number of other multi-billion dollar funds also call the emirate home.

The First Investor (TFI), the investment banking arm of Qatar’s Barwa Bank, is looking for investments in Turkey, in sectors ranging from real estate to food, its acting chief executive Yousef Al Obaidan said. TFI has not specified a budget for Turkey, although its existing holdings in the Gulf region average around $100-$150 million per investment, Al Obaidan said. Individual investments in Turkey could exceed that, he said. The bank, which is also involved in private equity and asset management, is particularly interested in Turkey’s real estate, healthcare, education and food and beverage industries, Al Obaidan said. TFI is already active in Turkey, where Kiler, a REIT, mandated it in December for the sale of the Istanbul Sapphire shopping center and residence.

Sukuk is already this year proving the format of choice for issuers in the Middle East. And no wonder — Islamic notes have a captive and asset-starved investor base, which tends to ensure strong secondary performance. It is an ideal product for times of stress such as those brought about by plummeting oil prices. Andy Cairns, head of origination and distribution at National Bank of Abu Dhabi explained that Islamic accounts are buy and hold so there is less secondary liquidity in Sukuk than in conventional bonds. Consequently it is a product that frequently underperforms in strong markets but outperforms in tougher times. Sukuk offers issuers access to an underserved pool of Islamic investors.

Bahrain-based Ithmaar Bank reported an increase in total income and operating income from its core retail banking operations during 2015 but this improved performance was impacted by recognition of certain investment related impairment provisions. Net income before provisions for impairment and overseas taxation increased 169.2 percent including a 18 percent increase in Operating Income. Overall, the Bank recorded a net loss of $46.4 million in 2015. This compares to a net loss of $8.8 million in 2014. This was mainly due to significant impairment provisions of $95 million in 2015, compared to provisions of $26.1 million in 2014.

Ali Ibrahim Al-Abdulghani, Chief Executive Officer, of Qatar Islamic Insurance, was awarded the Takaful CEO of the year award in a ceremony held last week during the 10th International Takaful Summit 2016 at Jumeirah Carlton Tower, London. This award was presented to him in recognition of his leadership that witnessed the Company grow steadily to the benefit of both shareholders and policyholders alike adding credibility to the Takaful model worldwide as viable alternative to the conventional insurance. Speaking at the occasion, he invited Takaful industry leaders to cooperate in establishing a ReTakaful syndicate at Lloyds of London.

Kuwait International Bank (KIB) in 1973 started out as a specialised bank in real estate under the name of Kuwait Real Estate Bank. KIB later helped with the constructional evolution of the country and has since expanded to other areas of the economy. In 2007, KIB converted into a fully-fledged bank operating under Islamic sharia provisions and changed its name. KIB sees the drop in oil prices as an opportunity to expedite the implementation of fiscal reform, in order to mitigate pressures on government budget and diversify the sources of income. Doing so will push forward the wheel of economic development and maintain a sustainable economy in the long run.

The CMA Board has issued its resolution approving Bank Albilad’s request to increase its capital from SAR 5,000,000,000 to SAR 6,000,000,000 through issuing one bonus share for every 5 existing shares owned by the shareholders. Such increase will be paid by transferring an amount of SAR 468,000,000 from the “Retained Earnings” account and SAR 532,000,000 from the “Statutory Reserve” account to the Bank’s capital. Consequently, the Bank’s outstanding shares are increased from 500,000,000 to 600,000,000. The bonus shares eligibility is limited to the shareholders who are registered in the shareholders registry at the close of trading on the day of the extraordinary general assembly.

Qatar's largest sharia-compliant bank Masraf Al Rayan is expected to post annual profit growth of between 8 and 10 percent in 2016, Chairman Hussain Ali al-Abdulla said at the bank's annual general meeting. Masraf Al Rayan reported last month a 3.6 percent rise in full-year net profit in 2015 to 2.07 billion riyals, although its fourth-quarter earnings dipped slightly. Abdulla said the bank had no plans to issue sukuk, or sharia-compliant bonds, this year as there was no need for additional liquidity. Falling liquidity is expected to be one of the main issues facing banks in the Gulf region in 2016, as governments remove cash on deposit to help replace lost revenue from lower hydrocarbon prices.

GFH Financial Group (GFH) has announced its full year financial results for 2015 with a consolidated profit of US$ 29 million before provisions of US$17 million, and a net profit of US$ 12.0 million, signaling sustained profitability for the Group. Total consolidated income for 2015 was US$85 million, as compared to US$90 million in 2014. Net profit for 2015 was US$ 12 million compared to net profit of US$ 27.3 million for 2014. Commercial banking income attributed to US$57.8 million and investment banking income attributed to US$20.1 million, while real estate has contributed US$5.6 million. The Group reported a loss of US$ 5.95 million for the last quarter of 2015 compared to a profit of US$ 4.2 million for the last quarter of 2014.

Iran’s leading financial conglomerate and senior members of Iranian government bodies met over 150 international investors in Muscat, Oman today to discuss inward investment opportunities across a range of Iran’s sectors and industries. The roadshow was hosted by Sina Financial & Investing Holding Co, Iran’s leading financial holding company. The agenda focused on opportunities created by the re-opening of the Iranian economy to foreign participation, as well as an in-depth discussion of Iran’s capital markets. The roadshow concluded with a business-to-business networking between Iranian and international delegates.

Qatar's largest sharia-compliant bank Masraf Al Rayan is expected to post annual profit growth of between 8 and 10 percent in 2016, Chairman Hussain Ali al-Abdulla said at the bank's annual general meeting. Masraf Al Rayan reported last month a 3.6 percent rise in full-year net profit in 2015 to 2.07 billion riyals, although its fourth-quarter earnings dipped slightly. Abdulla said the bank had no plans to issue sukuk this year as there was no need for additional liquidity. Falling liquidity is expected to be one of the main issues facing banks in the Gulf region in 2016, as governments remove cash on deposit to help replace lost revenue from lower hydrocarbon prices.

Bahraini authorities will discuss with the U.S. Treasury the international banks’ reluctance to deal with Banks in Bahrain and the Gulf because of tight U.S. regulation, Bahrain’s central bank governor Rasheed Mohammed al-Maraj said. The fact that many international banks have curtailed their correspondent services with regional and local banks has affected a wide sector of the population, especially the expatriates, he added. According to Maraj, officials in Bahrain, had met U.S. Treasury officials last November and scheduled another meeting on the issue in April. The U.S. regulations imposed on Bahrain, one of the Gulf’s financial centers, are part of a tougher regime introduced since the financial crisis, include scrutiny of potential tax avoidance and anti-money laundering rules.

Fitch Ratings says tougher operating conditions in Kuwait and the region will translate into slower growth for Islamic banks during the year, albeit in line with industry trends. The Islamic Banks Dashboard published today covers Kuwait's Islamic banking sector comprising five banks (out of 10 domestic banks) which hold a total market share of 39% (by assets). Fitch believes that Islamic financing growth will moderate in 2016 due to a sharper-than-expected fall in oil prices and the resulting impact on the economy and business environment. The sector is, however, expected to remain profitable despite weaker operating income and higher impairment charges.

A Saudi billionaire has donated two-thirds of his wealth to charity. Forbes Magazine estimates the wealth of Saudi business tycoon Shaikh Suleiman bin Abdulaziz Al Rajhi at $7.7 billion. Al Rajhi has worked as a porter, cleaner, cook, café servant and office boy in a bank. Forbes magazine has ranked him as the Arab world's fifth richest man. He is the founder of Al-Rajhi Bank, the largest Islamic bank in the world, and one of the largest companies in Saudi Arabia.

Qatar Islamic Bank (QIB) could use future sukuk issues to back a potential acquisition, its chairman Sheikh Jassim bin Hamad al-Thani said, after shareholders approved increasing the amount it could raise from issuing Islamic bonds. The Gulf state's largest sharia-compliant lender won approval at its annual general meeting to double its sukuk programme to $3 billion, as well as retaining the mandate to issue 3 billion riyals ($824 million) to enhance core capital. QIB was fine with its capital reserves at present, its chairman said as the bank had a total capital adequacy ratio of 14.1 percent at the end of December, above a minimum requirement of 12.5 percent.

Bahrain-based Al Baraka Banking Group B.S.C (ABG) announced that its total operating income reached one billion dollars in 2015 for the first time since the start of the Group activities 12 years ago due to continued growth in income-generated business at all the Group units, while the net income for the year reached US$ 286 million in 2015, an increase of 4% on the net income achieved in 2014. Similarly, balance sheet items witnessed moderate increases as total assets increased by 5%, total finance and investments by 4%, customer accounts by 2% while total equity increased by 1% as at the end of December 2015 in comparison with the end of December 2014.

Fuel subsidy reforms by Gulf Arab states will help reduce pressure on budgets, but are not enough to offset deficits resulting from low oil prices, ratings agency Moody's said. Savings from increased fuel prices in the six Gulf nations will average 0.5 per cent of gross domestic product (GDP), around $7 billion, this year against an estimated deficit of 12.4 per cent of GDP, it indicated. Moody's forecast that the price of oil will average $33 a barrel in 2016, way below its price of around $110 a barrel before it began to decline in mid-2014. It estimated the price to be $38 a barrel next year. Moody's expects GCC states to take other fiscal measures such as raising corporate taxes and introducing value-added taxes in the face of a long period of low oil revenues.

RAWABI Vallianz Offshore Services (RVOS), an equally-owned joint venture between Rawabi Holding and Vallianz Holdings Limited, has appointed Alinma Investment Co., Saudi Fransi Capital, Saudi Hollandi Capital and GIB Capital LLC as Joint Lead Managers and Book-Runners for its first issuance of a SR1 billion Shariah - compliant sukuk. The sukuk were sold through a private placement to sophisticated investors in full and are to be used to partially finance the marine assets of RVOS over a period of five years. Rawabi Holding provides a range of products and services in the fields of oil and gas, petrochemicals, engineering and construction, power and manufacturing in the Kingdom of Saudi Arabia and the Middle East. Vallianz Holdings Limited is a provider of offshore support vessels and integrated marine solutions to the oil and gas industry.

As part of World Economic Forum’s journey through the Middle East, ‘The Silk Road: Past, Present, Future’ team spoke to six of the region’s most influential businesswomen for their tips on getting to the top. Dr Raja Easa al Gurg is the Managing Director of Easa Saleh Al Gurg Group. She says obstacles are always a stepping stone to success. Shaikha Al-Bahar is the Deputy Group CEO of the National Bank of Kuwait. Dedication and professionalism, passion, hard working 24/7 and innovation are key in climbing the ladder to the top, according to her. Maha al Ghunaim, Vice Chair and Group CEO of Global Investment House, says we need to remove that phobia about women getting involved with numbers, which comes from education.