IslamicFinance.de

Since the Government of Indonesia issued the Sharia Banking Law in July 2008, the Islamic banking industry has shown a strong growth. According to data from Bank Indonesia, between 2008 and 2012, Islamic bank assets tripled, increasing by an average of 31.5% annually. But despite their growth, Sharia-compliant financial service providers accounted for only 4.5% of total banking sector assets. Policy discussions around Islamic bank development in Indonesia have largely taken place in the context of increasing financial access, especially to micro, small, and medium enterprises, or MSMEs. Bank officers are the key to stimulate demand for Sharia-compliant financing since they are the main source of education on Islamic products. Empowering Islamic financial service providers to reach more clients is not only good for business, but it is also smart policy.

Bank Islam Malaysia Bhd (BIMB) expects its 'Dream-of-a-Lifetime' campaign, starting today to Sept 30, 2013, to increase the customers' uptake of the Al-Awfar Savings and Investment account. Just as in the previous campaign, the latest promotional initiative also offers Al-Awfar customers the opportunity to win cash prizes of up to RM1 million. To be eligible for the draw, the account holders needed to maintain a minimum balance of RM1,000 in their accounts until Dec 31, 2013. Each RM1,000 deposited will entitle the customers one entry for the prize draw. BIMB said the campaign will be opened to all existing as well as new account holders. To date, the bank has secured approximately RM1.54 billion in deposits through Al-Awfar of which 90 per cent are in Al-Awfar Savings Account.

The Finance Ministry has set up a committee to investigate the past work of former president of Islamic Bank of Thailand, Thanin Angsuwarangsi. Finance Permanent Secretary Areepong Bhoocha-oom said that the investigation will focus on employees’ petitions, which must be clarified though Thanin already resigned. Thanin's resignation after only six months in office followed employees' pressure. Over 1,400 employees signed the petition to the board, saying that a number of the president's decisions caused damage to the bank.

Most of the conventional banks in Bangladesh are increasingly becoming interested in starting Islamic banking to get more deposits. Bangladesh Bank (BB) is not, however, allowing banks to convert into Islamic banking or even open such branches because of not having a central sharia council to regulate this particular brand of banking. NCC Bank and Southeast Bank have applied to the central bank for permission to convert into full-fledged Islamic banking. Several other banks have sought permission to open Islamic banking branches. The central bank decided not to allow it until formation of a central sharia council. The norms of the Islamic banks in Bangladesh vary as each bank is following sharia rules according to their choice since sharia laws vary from country to country.

Thanin Angsuwarangsi has tendered his resignation as the president of Islamic Bank of Thailand, only after six months in office. The bank’s board of directors announced that his resignation has been approved. Thanin’s decision followed employees’ pressure. Over 1,400 employees signed the petition to the board, saying that a number of the president’s decisions caused damage to the bank. Among the allegations, Thanin was alleged of ordering bank executives to cancel a lending and loan disbursement procedure, which affected borrowers financially and resulted in higher non-performing loans. The employees pointed out that the bank’s NPLs rose from Bt24 billion in November 2012 to over Bt38 billion in April 2013.

The Seminar on Strategies for the Development of Islamic Capital Markets was held on June 27 in Hong Kong to promote discussions, understanding and experience-sharing in the area of Islamic capital markets. The event was organised by the Islamic Financial Services Board (IFSB) and hosted by the Hong Kong Monetary Authority (HKMA). In the one-day seminar, speakers with experience and expertise in the Islamic finance field discussed the latest developments of the global Islamic capital markets and examined the prospects and opportunities, with particular focus on Sukuk and Islamic collective investment schemes. The seminar was attended by more than 80 delegates including representatives from regulatory authorities, policy-makers, financial institutions, market professionals and legal practitioners from Hong Kong and different parts of the world including the Middle East, Asia, Africa and Europe.

Bank Negara Malaysia (BNM) has extended the deadline for the negotiations among BIMB Holdings Bhd, Dubai Financial Group LLC and Lembaga Tabung Haji (LTH) over the Bank Islam Malaysia Bhd stake to July 31. Following the extensión of the deadline, a formal approval shall be sought for the proposed acquisition as mutually agreed among the parties. BIMB already owns 51% in Bank Islam. A 30.5% stake is with the Dubai Financial Group (DFG) while 18.5% is held by Lembaga Tabung Haji (LTH). BIMB is seeking to purchase LTH's stake in Bank Islam. LTH also owns a 51.5% stake in BIMB. BIMB may have to fork out RM2.7bil to own 100% of its unlisted banking unit Bank Islam.

LGT Venture Philanthropy is proud to launch its second call for applications for the Smiling World Accelerator Program(SWAP) 2013 in Indonesia.

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LGT Venture Philanthropy, dengan dukungan GEPI mengumumkan pembukaan pendaftaran kedua untuk Smiling World Accelerator Program (SWAP) 2013.

SWAP merupakan program khusus selama 9-24 bulan bagi para pengusaha di bidang kesehatan, pendidikan, energi yang berkelanjutan dan diperbaharui, pertanian, serta Teknologi Informasi dan Komunikasi, yang melayani atau bermanfaat bagi orang yang kurang mampu dan yang sedang berjuang kearah level pertumbuhan dan dampak positif yang lebih tinggi.

SWAP menyediakan bantuan dana sesuai kebutuhan (sampai dengan USD 50,000 per organisasi), mentor bisnis di lapangan dan juga akses ke berbagai jaringan internasional.

LGT Venture Philanthropy telah memilih dan membantu 6 organisasi yang masih dalam tahap permulaan dengan rata-rata investasi masing-masing sebesar USD 35’000, dan memberikan dukungan berupa bimbingan teknis melalui satu konsultan bisnis tetapnya di lapangan.

The sixth China Hui Merchants Fair will be held in September as part of the China-Arab States Expo in Wuzhong, Ningxia Hui Autonomous Region. The Hui people are a predominant Muslim ethnic group in China, who usually speak Chinese and prefer traditional Islamic dress. During the fair, many activities will be held including the annual meeting of Hui merchants, a Halal Industry development forum, a contest between Halal food suppliers and an international Muslim food culture week. The Hui Merchants Fair aims to promote economic and cultural cooperation and exchange between China and Arab States. Ultimately, Wuzhong hopes to be the production base for Halal food in China.

Sukuk sales in 2013 will pick up speed to beat last year’s record because of the relative resilience of Islamic debt to surging global bond yields, said HSBC Holdings plc and Deutsche Bank AG, the top two underwriters. Issuance will reach US$55 billion to US$60 billion (RM191.88 billion), from US$46.5 billion in 2012. The prospect of the Federal Reserve tapering its monetary stimulus has pushed the average yield on global sukuk up 68 basis points this month to 4.06% on Monday. That compares to an 110 basis point increase to 6.17% for emerging-market debt. The Shariah market has many “buy-and-hold” investors, reducing price swings. The high borrowing costs in the conventional markets contributed heavily to the current growth of Shariah-compliant sales.

At least three Islamic insurers are considering disposing their general takaful business ahead of the Islamic Financial Services Act 2013 (IFSA), which comes into force next month. Among companies that are mulling the sale of their general takaful business are HSBC Amanah Takaful (Malaysia) Sdn Bhd, Prudential BSN Takaful Bhd and Hong Leong MSIG Takaful. The IFSA, which has been enacted but pending implementation, requires existing composite licence of insurers to be separated into two capitalised legal entities, namely life insurance or family takaful and general insurance. It has been reported that the minimum capital for each company will be RM100 million. However, most bank-backed takaful companies' are not willing to pump the additional capital to set up a separate general takaful unit since the non-life segment is a small contributor to their overall business.

The global family of takaful market is projected to grow by over 160% in the next five years to hit US$5 billion (RM16.02 billion), World Takaful Conference CEO David McLean said recently. Though the bottom line profitability on the general takaful front is facing stiff competition, at a global level, the growth in family takaful continues to outweigh the growth observed in both general takaful and conventional life insurance. The contributions from Malaysia make up around 56% of the total global family takaful contributions. Recent reports indicate that the Malaysian takaful industry is expected to grow by 20% per annum for the next two years as consumer acceptance grows and regulatory changes provide a stronger and more stable infrastructure for the Shariah-compliant insurance industry.

RHB Islamic Bank has agreed to offer Lembaga Pengarah Amanah Kebajikan Masjid Negeri Sarawak with a RM300 million Istisna’/Ijarah Term Financing Facility. RHB said the facility, with a financing tenure of 10 years, is intended for the construction of Baitul Makmur II, an 18-storey office/commercial building located in Kuching, Sarawak. Upon completion, Baitul Makmur II will house several Sarawak state ministries. This deal would represent one of RHB Islamic Bank’s single largest financing loans to Sarawak state-related group of companies.

Sabana Real Estate Investment Management, as the manager of Sabana Shari'ah-compliant Real Estate Investment Trust (Sabana REIT) has announced that SGD 1.5 million in aggregate principal amount of the SGD 80.0 million 4.50 per cent Convertible Sukuk due 2017, issued by Sabana Treasury, a wholly-owned subsidiary of Sabana REIT and convertible into units of Sabana REIT have been converted and cancelled pursuant to the exercise of conversion rights by the holders thereof. Following the above conversion, an aggregate of 1,257,018 new Units have been issued at the conversion price of SGD 1.1933 per Unit, and the total Units in issue is 648,711,000. As at 21 June 2013, the aggregate principal amount of Convertible Sukuk remaining outstanding following such conversion and cancellation is SGD 72.5 million.

Asuransi Allianz Life Indonesia plans to double its takaful, market share in five years as it joins insurer Sun Life Financial Indonesia in forming partnerships with banks to tap rising Muslim wealth. Asuransi Allianz made an agreement with HSBC Holdings this year to offer its services. Sun Life will seek to boost business in rural areas via telemarketing campaigns and bank alliances. The takaful market share may climb to 7.9 percent in five years, from 3.9 percent currently. Islamic insurance assets in Indonesia, which has the world’s biggest Muslim population at 216 million, increased an average 53 percent in the last five years to Rp 11.4 trillion ($1.1 billion).

Bank Muamalat Indonesia delayed an up to $177 million initial public offering because of recent stock market declines. The sharia lender hasn’t decided on a new timetable for the IPO. Muamalat had already lowered the indicative price range on the deal to Rp 575-675 from the original Rp 625-975, to try and drum up demand. CIMB and Bahana Securities were hired to underwrite the IPO.

Fitch Ratings has affirmed HSBC Amanah Takaful (Malaysia) Sdn Bhd's (HSBCAT) Insurer Financial Strength (IFS) rating at 'A-' with Stable Outlook and has simultaneously withdrawn the rating. The rating of HSBCAT is no longer considered by Fitch to be relevant to the agency's coverage. The rating reflects HSBC group's franchise value, distribution channel and management support. HSBC Holdings Plc (AA-/Stable) has a strong ability and willingness to provide it with continuing support. The rating also incorporates HSBCAT's conservative investment mix, healthy capitalisation, and prudent management. The rating is constrained by the takaful operator's modest size, and a limited track record amid a competitive and evolving takaful operating environment. Additionally, the company is challenged to manage its expenses effectively as it builds up its business portfolio.

In India, there are only two fund houses, namely Tata MF and Taurus MF, which offer Shariah-compliant funds. Industry experts say that the major challenge in ethical funds is product awareness and its marginal market demand. These funds only cater to a particular section of society. Some experts also believe that the returns in Shariah funds are not very astonishing as compared to equity funds. Experts believe that creating awareness about these funds will help attract investors. Not only Muslims but also Hindu, Jain and other community might show interest after knowing the significance of these products, they added. The Taurus Ethical Fund was launched in 2009 and has benchmark of CNX 500 Shariah. The scheme has generated annualized returns of 20.97 percent since inception. The Tata Ethical Fund Plan A-G was launched in April 2001 and has given an annualized return of 21.36 percent. The benchmark of the fund is CNX 500 Shariah.

Malaysia's BIMB Holdings Bhd has received approval from the country's central bank to begin talks with Lembaga Tabung Haji for the latter's 18.5 percent stake in Bank Islam, the country's oldest Islamic bank. BIMB, which presently owns 51 percent of Bank Islam, is also in the process of acquiring the 30.5 percent stake held by Dubai Financial Group. If it acquires both stakes, BIMB will control 100 percent of Bank Islam. Negotiations between BIMB and Lembaga Tabung Haji will be completed by the end of the year. BIMB's chief executive officer Johan Abdullah told reporters in May that the valuation of the Dubai stake was already determined, although a complete proposal had not been filed and the amount has not been disclosed.

In the possible merger between Malaysia Building Society Bhd (MBSB) and RHB Capital Bhd (RHBCap), MBSB president and chief executive officer Datuk Ahmad Zaini Othman said MBSB is capable of taking over RHB Islamic. MBSB itself has more than RM30 billion in assets a shareholders' fund of more than RM2 billion and a market capitalisation of RM5 billion on Bursa Malaysia. One option for MBSB is therefore to take over RHB Islamic's RM4 billion assets. Employees Provident Fund (EPF) chief executive officer Datuk Shahril Ridza Ridzuan had said last month that it will let RHBCap and MBSB decide on possible merger plans. The EPF holds a 44.84 per cent stake in RHBCap and 65.5 per cent share in MBSB. Meanwhile, MBSB chairman Tan Sri Abdul Halim Ali said the board of directors is unaware of any plans, is not in talks and has not received any proposals by the shareholders to merge with RHBCap.