IslamicFinance.de

Banks in the six-nation Gulf Cooperation Council can thank turbulence in the world’s bond markets for spurring Islamic lending to the highest in three years. Loans that comply with Islam’s ban on interest in the GCC have risen 22% this year to $11.9bn, the most since 2012. At the same time sales of Islamic bonds dropped 41% to $6.9bn. The increase in lending will be welcome for banks in the region, where oil’s more than 50% decline in the past 12 months threatens to curtail government spending and clip economic growth. Investors are demanding higher yields amid market swings, prompting companies including Dubai-based construction contractor Drake & Scull International to delay sales.

Saudi Fransi Capital announces the successful closing of the SAR 1.0 billion five year Sukuk offering on behalf of Abdullah Al Othaim Real Estate Investment and Development Company "OREIDCO". The Sukuk (senior secured) has been issued through OREIDCO Sukuk Limited, by way of a private placement in the Kingdom of Saudi Arabia. OREIDCO Sukuk has attracted strong interest from the investors community in the Kingdom, with demand originating from government-owned funds, banks, asset managers, corporates and insurance companies. It was priced at 6-month SAIBOR + 1.7%. OREIDCO plans to use the Sukuk proceeds for meeting its requirements for capital investment and for general corporate purposes.

Bahrain-based International Investment Bank (IIB) has appointed Subhi F. Benkhadra as its new CEO. Benkhadra, previously the CEO of Abu Dhabi-based Baniyas Investment & Development Company, replaces acting CEO Fareed Bader, who continues in the role of executive committee member at the bank. Benkhadra is described as an experienced financial leader with a wealth of experience in traditional and Islamic investment banking in the UK and the Middle East. Benkhadra graduated from the University of Bath in 1987 with a BSc in environmental engineering and holds a MBA in finance from City University Business School.

Iranians are likely to become major buyers of Dubai property again if sanctions against the Islamic Republic are lifted, providing a much-needed fillip to the emirate's real estate sector. Dubai property prices have fallen slightly this year, ending a sustained rebound from 2008-9 crash after tougher regulations to deter speculators, a slump in oil prices and weakening confidence in the global economy dampened sentiment. In 2010, Iranians were the fourth largest foreign buyers of Dubai property, behind India, Britain and Pakistan, and accounted for 12 percent of real estate transactions.

Bahrain based International Investment Bank announces the appointment of Mr. Subhi F. Benkhadra as the new Chief Executive Officer. Mr. Benkhadra, previously the Chief Executive Officer of Abu Dhabi based Baniyas Investment & Development Company, replaces Mr. Fareed Bader, the acting Chief Executive Officer who continues in the role of Executive Committee Member at the bank. Mr. Benkhadra graduated from the University of Bath in 1987 with a BSc in Environmental Engineering and holds a MBA in Finance from City University Business School. He is also a former member of the Board of Directors of the Arab Bankers' Association in London.

In 2015, the Bank trained and invested in 50 Kuwaiti young people where they received academic and practical training on part-time basis at all branches of the Bank. The graduates were exposed to various banking transactions and business. The Training Program focused on the core banking knowledge and skills of new graduate Kuwaiti people. Warba Bank has hired 25 of the trainees in full-time jobs and assigned them to work across various branches. Their appointment gives an added - value to the recruitment policy adopted by Warba in line with the instructions from the various regulatory authorities for enhancing the banking sector with Kuwaiti national qualified labour.

Fitch Ratings has revised the Outlooks on Al Rajhi Bank (ARB), National Commercial Bank (NCB), Riyad Bank (RB) and SAMBA Financial Group (SAMBA) to Negative from Stable. The revision of the banks' Outlooks to Negative reflects that their Long-term Issuer Default Ratings (IDR) are at the Support Rating Floor (SRF) for Saudi domestic systemically important banks (D-SIB) of 'A+'. This would be revised down to 'A' in the event of a one-notch downgrade of the Saudi sovereign. The Saudi banks' Support Ratings (SRs) and SRFs reflect the extremely high probability of support from the Saudi authorities, if required. Upward potential for the ratings is limited in light of a weakening sovereign and operating environment.

The Qatar Central bank (QCB) has extended the deadline set for the insurance, reinsurance and Takaful companies to implement its new regulations. As per original schedule, the institutions were supposed to comply to the new regulations from the end of May. After realising that the insurance companies needed more time to reposition themselves to implement the new regulations, the central bank has extended the deadline to November 30. The proposed regulations restrict the companies and insurance practitioners from getting involved in cross-border activities. Besides, the QCB regulation requires the insurance companies to simplify their procedures and finance agreements and to be transparent in relation to their pricing and features of products and services.

Beehive, UAE’s online marketplace for peer-to-peer (P2P) finance, has been certified as a Sharia-compliant P2P finance platform by the Shariyah Review Bureau (SRB). The SRB review was conducted over a period of several weeks in June and July 2015 during which SRB’s Sharia scholars reviewed all operational processes, documentation, and relationship management on Beehive’s Islamic platform. As the first online marketplace for P2P finance in the UAE, Beehive has channelled over AED 15 million ($4m) worth of finance to more than 32 small and medium-sized enterprises (SMEs) since its launch in November 2014. Finance requests on Beehive are processed under a ‘Commodity Murabaha’ structure, using the ‘DMCC Tradeflow’ platform.

Moody's Investors Service will hold its first Banking and Islamic Finance Workshop in Bahrain on Wednesday 2nd of September. The workshop will focus on Bahrain's banking sector amid low oil prices and global headwinds. It ill kick-off with a presentation from Jean-Francois Tremblay, Associate Managing Director, Financial Institutions Group, surrounding key global developments within credit markets. The workshop will also provide Moody's assessment of the local operating environment and the creditworthiness of banks in Bahrain and the rest of the region. In addition, the workshop will also discuss the latest developments in the Islamic Finance sector as well as growths trends and liquidity management challenges.

Bahrain-based Ibdar Bank has announced the appointment of Mr. Janaka Mendis as Chief Financial Officer (CFO) of the Bank. Mr. Mendis shall provide leadership in attaining the established financial goals of the Bank through managing and operating all financial-related functions. He oversees the Bank's finance, financial strategy, and operational activities, ensuring that Ibdar is well positioned, both financially and strategically, to achieve its transformation agenda. Prior to joining Ibdar, Mr. Mendismost recently spent seven years at Al Salam Bank Bahrain. For four of these years, he served as the institution's Chief Operating Officer after holding other executive roles.

Bahrain’s GFH Financial Group has distributed dividends of $53 million to its funds’ investors, from investments in Bahrain, the UAE, US and India. In line with it's new strategy, GFH has spent the last 18 months investing in projects intended to provide steady cash yields for investors, the company said. For example, Diversified US Residential Portfolio (DURP) – an investment in US residential assets – distributed dividends of $1.3 million to investors. The portfolio comprises two multiple-dwelling residential properties, one in Houston, the other in Atlanta, with 1,300 apartments in total and 95 percent occupancy. Earlier this month, the group reported net profit of $13.6 million in the first six months of 2015.

Banks in the six-nation Gulf Cooperation Council can thank turbulence in the world’s bond markets for spurring Islamic lending to the highest in three years. Loans that comply with Islam’s ban on interest in the GCC have risen 22 per cent this year to $11.9 billion, the most since 2012. At the same time sales of sukuk dropped 41 per cent to $6.9 billion. The increase in lending will be welcome for banks in the region, where oil’s more than 50 per cent decline in the past 12 months threatens to curtail government spending and clip economic growth. Volatility in US Treasury yields is averaging the highest since 2011 after several global developments, including Greece and China.

Moody's Investors Service has affirmed Masraf Al Rayan's (MAR) A2/Prime-1 issuer ratings and baa3 baseline credit assessment (BCA) and adjusted BCA. At the same time, Moody's changed the outlook on the bank's long term issuer ratings to positive from stable. The change in the outlook to positive from stable reflects the ongoing improvements in MAR's business and geographic diversification, including the growth and transition to profitability of its recently acquired subsidiary Al Rayan Bank PLC based in UK. Further underpinning Moody's view on the outlook is Qatar's considerable economic strength, with robust growth prospects driven by the significant wealth and resources of the country, despite lower oil prices.

Meethaq has upgraded its core banking system, resulting in a host of Islamic banking services covering ATM/CDM, debit card and mobile banking for Meethaq customers. Meethaq now functions with the new iMal core banking system. The implementation of the system is the result from the partnership between the bank and Path Solutions. iMAL is a Shari’ah-compliant core banking system certified by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI). It is an integrated, modular Islamic banking suite with full functionality, including retail, corporate, investment, trade finance, and treasury modules.

For several years, bonds from the six-nation Gulf Cooperation Council appeared almost immune to global instability, handily outperforming debt from other emerging markets. Unlike most of the world, GCC governments enjoyed big budget surpluses. But as oil hits new six-year lows, most of those surpluses have vanished. Economists expect all GCC states to post fiscal deficits this year, and half of them to post current account deficits. So investors are starting to re-examine their assumptions about the Gulf, and during the last two weeks of global market turmoil, GCC bonds have not escaped a general emerging markets sell-off.

More full-fledged Islamic banks are needed and the Islamic banking services of conventional banks should be converted into full subsidiaries if Oman were to fully embrace the Islamic finance concept in its entirety, says Dr Jamil El Jaroudi, CEO at Bank Nizwa. It would also eliminate potential regulatory arbitrage between conventional banking and Islamic banking that could harm or raise doubt on the Sharia aspects, he added. The Islamic windows' cost of doing business and relying on their parent banks’ infrastructure resulted in a disadvantage for the business of fully-fledged banks. Nonetheless, the windows have yet to reach their critical sizes to be able to justify conversion into standalone banks.

National Commercial Bank (NCB), Saudi Arabia's largest lender, is selling SR2 billion ($533 million) of capital-boosting sukuk, two banking sources with knowledge of the matter said on Sunday. The offer, which enhances the bank's Tier 1 - or core - capital and is compliant with Basel III banking regulations, is the third such transaction by NCB since June, and is part of a plan to raise as much as 7 billion riyals of capital before the end of 2015, one of the sources said. NCB didn't immediately respond to a request for comment.

Kuwait International Bank K.S.C. has successfully closed a debut syndicated Murabaha financing facility. The Facility was signed on 24 August 2015. Bahrain-based Bank ABC and Bank ABC Islamic acted as the Initial Mandated Lead Arrangers and Coordinating Banks for the Facility. The Facility was initially launched for US$100 million, and following strong interest from the market KIB decided to utilise the significant oversubscription to increase the Facility size to US$320 million. The Facility carries a tenor of 3 years and will be used by KIB for general funding purposes.

Saudi Arabia's National Commercial Bank (NCB) is selling a 2 billion riyal ($533.3 million) sukuk as part of its plans to raise capital. The offer, which enhances the bank's Tier 1 - or core - capital and is compliant with Basel III banking regulations, is the third such transaction by NCB since June, and is part of a plan to raise as much as 7 billion riyals of capital before the end of 2015. In the same way as the previous two issues, the latest sukuk is structured with a perpetual tenor but with a clause in the documentation which allows the bank to redeem the Islamic bond after a certain date. NCB Capital is acting as sole arranger. The transaction will be privately placed with one or more government-owned investment funds.