IslamicFinance.de

Bahrain-based Al Baraka Banking Group plans to set up an Islamic bank in Morocco next year with a capital of USD 50 million, CEO Adnan Ahmed Yousif said. Last month, Morocco's parliament gave final approval to an Islamic finance bill that allows foreign banks and local lenders to set up Islamic banks in the North African country. Yousif declined to name the potential partners, but said the new bank would be established in 2015 with a plan to open 10 branches in the first year of operations. He said Al Baraka expected to record growth of 12% in assets, of 11% in deposits and of 10% in income during 2015.

BMI Bank, a subsidiary of Bahrain's Al Salam Bank (ASBB), has announced that Jamal Al-Hazeem, director and CEO of the bank had stepped down. Al-Hazeem who took on the helm of BMI Bank in 2010 as CEO, cited personal reasons for his resignation and called the decision to step down as CEO of the Bank as "mutual and amicable". He will continue to stay on as a director on the board at BMI Bank which is currently finalising the operational aspects of its merger with Al Salam Bank as it converts its business to a Sharia compliant one.

The 2015 outlook for GCC banks is stable, but it is negative for those in the rest of the MENA region, says Moody's Investors Service. The stable outlook for GCC banks is driven by strong operating conditions coupled with expansionary fiscal policies and continued infrastructure spending, which remain supportive of credit growth. However, declining oil prices if prolonged at these levels will reduce fiscal surpluses, affect economic confidence and moderate growth expectations. The negative outlook for the rest of the MENA region reflects more subdued credit growth and unsettled domestic environments, which translate into high credit risks. In addition the high exposure to low-rated government securities links non-GCC banks' credit profiles to their respective sovereigns.

Islamic banks in Gulf Cooperation Council (GCC) nations need to expand abroad to maintain their pace of growth in the future, according to Al-Baraka Banking Group, which operates in 15 countries from the Middle East to Asia. Expansion of market share for Shariah-compliant lenders within the six-member GCC may be limited as conventional banks constrain the pace of growth. Thus, lenders need to consider consolidating, and to target corporate business deals to gain market share. A point of maturity has been reached in some markets and this is why Islamic finance needs to reach out to a new market segment and continue to identify new innovations to help it grow further.

Jaiz Bank Plc has introduced some specific small and medium enterprise (SME) products to empower small-scale businesses and teeming customers in the grassroots. Unveiling its corporate products and services at the on-going 35th Kano International Trade Fair at the weekend, Jaiz Branch Manager, Mallam Mansur Imam pointed out that besides its conventional products like savings account (Mudaraba), lease and acquisition finance (Ijara-Wa-Iqtina) and corporate and trade financing (Murabaha), the SME was uniquely conceived to finance market driven products and encourage growth of local enterprise.

Bahrain-based Ibdar Bank successfully concludes the structuring of a 12-year agreement expiring in 2026 for acquiring four brand new Bombardier Q400 Next Gen aircrafts and leasing them to the Ethiopian Airlines. The agreement that was structured under a joint venture with Dubai-based operating lessor Palma Holding, includes options for an additional four Q400 NextGen aircraft, which Ibdar Bank intends to exercise in the near future. Valued at USD 100 million, Ibdar Bank contributed as investor with USD 22 million, while an amount of USD 78 million was secured through a funding agreement with Canada’s Export Credit Agency “EDC”.

Islamic banking is growing faster than its conventional counterpart but is focused in a few core markets and risks missing an opportunity to build a global footprint, the EY consultancy said in a report. Islamic banks across six core markets of Qatar, Indonesia, Saudi Arabia, Malaysia, the United Arab Emirates and Turkey held $625 billion at the end of 2013 or 80 percent of the global Islamic finance market, the report said. Beyond these markets, the industry is expected to make some gains in Egypt, Pakistan and North African countries such as Tunisia, Algeria and Morocco. However, in the absence of regulatory reforms and strong sovereign support, the pace of growth is likely to be moderate.

Islamic lender Kuveyt Turk has launched a $250 million dual-currency murabaha loan into general syndication. The sharia-compliant loan, which can be denominated in dollars or euros, is split into a one-year tranche and a two- tranche paying an interest margin of 80 basis points (bps) and 100 bps, respectively over three month Libor/Euribor. Arab Banking Corporation, Abu Dhabi Commercial Bank, Barwa Bank, Emirates NBD, Noor Bank and Qatar Islamic Bank are mandated lead arrangers and bookrunners on the deal. The loan will be used for general corporate purposes and is due to close by the end of the year.

Global law firm White & Case LLP has advised Abu Dhabi Islamic Bank (ADIB), as sole bookrunner and initial mandated lead arranger, and a group of other lenders on a US$420 million Islamic financing provided to Zakher Marine International Inc. The financing, which was two times oversubscribed, also included Abu Dhabi Commercial Bank, Al-Hilal Bank, MashreqBank, Ajman Bank, Arab Bank, National Bank of Fujairah and Noor Bank. The facility arranged by ADIB will fund Zakher Marine's new shipbuilding programme that includes 15 vessels and three self-elevating accommodation barges.

European Islamic Investment Bank PLC Friday said it has cancelled its tender offer for up to GBP20 million as it is still in talks with regulators and is yet to receive their full approval, though it intends to launch a new tender offer with the same terms as soon as permission is received. As a result, acceptances of the tender offer are no longer valid and do not bind shareholders; shareholders who have already accepted the tender offer are now free to trade their shares if they so wish. European Islamic Investment Bank said it is confident of being in a position to complete a new tender offer before its next annual general meeting, when the authority it has to undertake the tender offer expires.

Bank Asya’s problems – withdrawal of deposits by individual and corporate investors, the wiping out of profits, the dramatic fall in share price – have apparently nothing to do with the way the bank is run. They have everything to do with a politically-motivated vendetta against the bank by Turkey’s president, Recep Tayyip Erdogan. A year on, Bank Asya continues to operate under the leadership of a former senior member of Turkey’s respected banking supervisor, the BDDK, which has tried to remain impartial to Erdogan’s machinations. But the battle for Bank Asya remains a cloud over the Turkish banking sector. Banks that do business in Turkey should tread with caution.

Indonesia's Islamic banks say new rules acknowledging the lower risk of profit-sharing loans will help revive industry growth from the slowest pace on record. The Financial Services Authority (FSA) is introducing reserves ratios that will vary depending on banks’ risk profiles and setting more flexible guidelines for assessing the quality of syariah-compliant assets. While the rules will mean higher ratios for some lenders, the overall impact is positive as loans that use profit-sharing structures will be deemed less risky. Lenders have until 2016 to comply with the new capital-adequacy ratios that will range from eight to 14 per cent.

Bahrain's Gulf Finance House (GFH) plans to up its stake in Khaleeji Commercial Bank (KCB) to gain majority ownership, its chairman Ahmed al-Mutawa said. The investment firm will increase its stake in KCB to between 52 percent and 54 percent once it has received regulatory approval from the Bahraini authorities. GFH currently owns 47 percent of KCB. Increasing its stake to the range indicated by Mutawa would cost GFH between 2.65 million dinars and 3.72 million dinars ($7.03 million-$9.87 million). KCB and unlisted Bahraini lender Bank Al Khair dropped merger plans in March after they failed to agree terms for the tie-up.

Elvira Nabiullina, the chairman of the Central Bank of Russia, stated in the Federation Council that they are exploring the subject of Islamic banking regulation. Previously, the Association of Russian Banks (ARB) offered to issue a different license for Islamic banking. Russian banks note the rising demand for Islamic financial tools.

Bahrain’s role in expanding the global reach of sharia-compliant financing looks set to broaden further through three developments firmed up recently. In July, a joint venture was formed between the kingdom’s Economic Development Board (EDB) and the Islamic Corporation for the Development of the Private Sector (ICD), to promote the sector by offering training, software and sharia-compliant financing. Moreover, a second partnership offering training programmes and research was announced between the UK-based consultancy Islamic Finance Advisory and Assurance Services (IFAAS) and the Bahrain Institute of Banking and Finance (BIBF). Finally, the International Islamic Financial Market (IIFM) is working on a contract template for sukuk, due in early 2015.

Abu Dhabi Islamic Bank (ADIB) has signed an agreement with Zakher Marine International Inc. to arrange a US $420 million (AED 1.55 billion) financing for its new ship-building program, including 15 vessels and 3 self-elevating accommodation barges through one of its group companies (QMS Holding Ltd.). ADIB was the Sole Book-runner and initial Mandated lead Arranger. The deal was 2 times oversubscribed by banks including ADCB, Al-Hilal Bank, MashreqBank, Ajman Bank, Arab Bank, National Bank of Fujairah and Noor Bank. ADIB established a Specialized Financing Unit in 2013, through which it has structured and arranged various syndicated facilities for shipping / offshore clients.

Barwa Bank's profit reached QR641mn in the third quarter of this year, up by 43% on this time last year. The bank registered a third-quarter net profit of QR447mn in 2013, with total assets increasing to QR36.6bn, a 28% rise over the same period in 2013. Financing assets showed a 31% growth to QR22bn in the third quarter and customer deposits grew by 30% to QR22.1bn. Earnings-per-share improved to QR2.12 compared with QR1.9 for the same period last year. The bank's acting group chief executive officer, Khalid Yousef al-Subeai attributted the growth to improvment in processes and managment practises, which has led to greater efficiency and improved profitibilty.

Bank Asya closed 80 branches and cut its headcount by 1,708 people in a bid to boost profitability next year. Bank Asya has seen its profits and capital base collapse since it found itself at the centre of a power struggle between now President Tayyip Erdogan and his former ally-turned-foe Fethullah Gulen, the Islamic cleric whose sympathisers founded the bank. The bank made a 301 million lira ($133 million) net loss in the first nine months of this year after a 60 million lira profit a year earlier, while its balance sheet has shrunk.

Indonesia's regulator has issued revised Islamic banking rules covering asset quality and capital adequacy to help clarify market practices, while industry growth has now dropped to single-digits. Indonesia's financial services authority, Otoritas Jasa Keuangan (OJK), announced the move on Wednesday as part of a package of 20 new rules, which range from corporate governance to microfinance. Authorities want Islamic banks to hold at least 15 percent of the market by 2023, but the sector's growth is stalling. As of September, there were 11 full-fledged Islamic banks and 23 Islamic business units in Indonesia with combined assets of 244 trillion rupiah ($20.1 billion), representing a 7.2 percent growth year-on-year.

From 2008 to 2013, Bank Asya's assets and net revenue grew annually at 28 percent and 12 percent, respectively. Its reputation and business were soaring when, in December 2013 and without prior warning, President Erdo?an launched a powerful and concentrated attack on the bank, alleging that it was weak and insolvent. Despite losing almost half its market value during one excruciating week in September 2014 and reporting its first ever quarterly loss in 18 years of TL 301 million, Bank Asya has responded by highlighting its capital adequacy ratio of 18.3 percent. Ultimately, the solution to Bank Asya's current predicament ideally lies with President Erdo?an withdrawing his unfounded allegations.