IslamicFinance.de

Malaysia's Prime Minister Najib Razak said that he backed the idea of creating a large stand-alone Islamic bank, in order to develop a global footprint for Islamic finance and position it as an alternative to conventional banking. A proposed merger between Malaysia's CIMB Group Holdings Bhd and two smaller peers would create a sharia-compliant bank with the financial clout and regional scope that has so far been absent in the industry. Such consolidation would be positive for Malaysia's banking sector, although the government will not press for a deal and will leave the decision entirely up to the shareholders, Razak said.

Bank Islam Brunei Darussalam (BIBD) is helping to arrange a benchmark-sized Islamic syndicated loan which it hopes to close later this year for a petrochemical project in the oil-rich sultanate. Currency and tenor are being finalised for the deal, said Javed Ahmad, BIBD's managing director. The new syndicated loan could open a much wider pipeline of deals in Brunei, which might be denominated in both local and foreign currencies, Ahmad said. Besides, in the medium term BIBD will consider establishing a regional footprint across Asia to enhance its growth prospects, with Malaysia and Indonesia offering the greatest opportunities, Ahmad said.

Turkey’s government has moved to expand Islamic banking by inviting public banks into the sector. Earlier this month, the largest state-run bank, Ziraat, received approval to establish an Islamic unit with $300 million in capital. Ziraat has nine months to establish the new bank. But a key question remains unanswered: Where will the capital come from? If Ziraat’s interest-based earnings are considered illicit, how is it going to establish the capital of an interest-free bank? To resolve the conundrum, the Treasury is reportedly planning to provide the required capital although it also operates on the basis of interest. Meanwhile, the government has already submitted a bill to parliament to clear legal hurdles in Vakifbank and Halkbank’s path to Islamic banking.

Nigeria's Jaiz Bank Plc has financed an executive aircraft as part of its programmes to venture into the aviation sub sector. The aircraft, which has been delivered to the customer, Aviation Resource Service Limited, was financed under the bank’s Ijarah wa iqtina. Under this model, the bank and the Aviation Resource Service Limited are co-owners of the aircraft based on a partnership arrangement whereby ownership is gradually transferred to the customer as it pays down. The general manager of Aviation Resource Service Limited, Tanko Yakubu, said that the company was a little bit skeptical at the initial stage of their discussion with Jaiz Bank but were proven wrong.

Iranian banks gave 1,463 trillion rials (some $45.7 billion based on the exchange rate of US dollar at the free market) worth of loans in the first half of the current Iranian calendar year. However, a great portion of the bank's loans are bad loans. Iran's Melli Bank, Parsian Bank and Tejarat Bank have the highest amount of bad loans in Iran. Of the total 870 trillion rials (about $28 billion) in bad loans, Melli Bank's share is 130 trillion rials (about $4.2 billion), Parsian and Tejarat banks' shares is 110 trillion rials each (about $3.5 billion).

BIMB Holdings Bhd (BHB), which owns Bank Islam Bhd, is still keen to acquire a stake or even have a management control in Bank Syariah Indonesia as part of its expansion plan. Its group managing director and chief executive officer Johan Abdullah said the talks were still at a preliminary stage, and there was still no material development. Due to the regulatory uncertainty in Indonesia, Johan said that the group would engage the Indonesian authorities before making any decision to acquire a stake in the bank. At the firm's EGM, shareholders gave their nod to the proposed dividend reinvestment plan (DRP) that would provide shareholders with the option to elect to reinvest in whole or in part of their cash dividend with the new ordinary shares of RM1 each in BHB.

Maybank Islamic Bhd will provide RM20 million of seed capital to a Waqf Fund which will be invested into investment portfolios, to include fixed income, equities, balanced fund and real estate. The local financial institution said that majlis Agama Islam Wilayah Persekutuan (MAIWP) will be the trustee of the Waqf fund while the bank will be the project manager. Profits or capital yield from the investment portfolio will be used to fund programmes related to development of educational and health care infrastructures, as well as to develop young entrepreneurs. Maybank Islamic Chief Executive Officer, Muzaffar Hisham said Waqf was one of the potential investments which can be developed to fund various economic activities for the benefit of the community.

Kuwait Finance House (KFH) said its net profit fell 10.2 per cent in the third quarter to September. It fell to 35.5 million Kuwaiti dinars in the third quarter compared to 39.2 million in the same quarter last year. Total assets jumped to 17.1 billion dinars in the third quarter as against 14.7 billion dinars in the same period last year. The company’s financing income, which contributed to 76 per cent of its revenues, jumped the most by 35 per cent to 185 million dinars. However, investment income fell by 66 per cent to 24 million dinars. Total deposits reached 10.9 billion Kuwaiti dinars, up 7.5 per cent compared to December 2013. Chairman Hamad Al-Marzouq said that the achieved results come amid major changes taking place in the bank.

Ahmet Beyaz, the chief executive of Turkey’s government-besieged Bank Asya, says his bank is the victim of a political campaign waged by Turkey’s powerful president Recep Tayyip Erdogan. Beyaz and his executive vice-president Feyzullah Egriboyun claim the repeated attacks on the bank clearly constitute a crime under Turkey’s strict banking legislation. The Turkish president has denied any orchestrated campaign against Bank Asya. He went on to say "this bank has already failed", without naming Bank Asya. Such claims are wrong, Beyaz says, insisting Bank Asya is among the three strongest banks in Turkey, boasting a capital adequacy ratio at about 20%. Bank Asya supporters argue that the Erdogan attacks on Bank Asya pose a systemic risk to the wider Turkish banking system.

Islamic Bank of Britain (IBB) plans to change its name to Al Rayan Bank PLC, subject to formal shareholder approval. The change will be completed in December 2014. The rebrand follows IBB's acquisition, earlier in the year, by Qatar-based Masraf Al Rayan (MAR). Rebranding activity will involve the introduction of a new Al Rayan Bank logo and brand identity. It will continue to operate as a UK regulated bank, and customers' deposits will remain protected by the Financial Services Compensation Scheme. With an increased focus on corporate and real estate finance, Al Rayan Bank will develop its presence in London. Its retail banking and operational head quarters will remain in Birmingham.

Morocco's BMCE Bank is preparing to launch an Islamic subsidiary as a joint venture with a major Islamic financial institution from the Middle East. Moreover, the Moroccan parliament is discussing a bill that would regulate Islamic banks and sukuk issues; approval is expected before the end of this year. Meanwhile, Tunisia is gearing up for its first sovereign sukuk issue, and in July, regulators in Jordan introduced rules for sukuk. Banks from Kuwait, Qatar, Bahrain and the United Arab Emirates have expressed interest in entering Morocco when its Islamic finance bill comes into force. Moroccan authorities are expected to guide the foreign banks toward partnering with local banks rather than establishing fully owned Islamic subsidiaries.

National Bank, City Bank and Premier Bank have failed to comply with the central bank's directive to bring down the number of directors from the same family to a maximum of two. The central bank last week asked four private banks to cut the number down in seven days. Only First Security Islami Bank complied with the directive within the deadline, according to Bangladesh Bank. The three other banks sought one to three more months to comply with the directive, but the regulator extended the deadline till October 30, a BB official said. National Bank has five directors from a family. City Bank has nine directors from two families. Four directors of Premier Bank come from one family.

Saudi Arabia's National Commercial Bank is going ahead with an initial public offering worth $6 billion despite opposition from Muslim clerics. The IPO from Sunday, making NCB the last Saudi bank to go public, is expected to be one of the largest in the world this year. However, Abdullah al-Mutlaq, a member of the kingdom's official Council of Senior Ulemas, said that the IPO is haram, or forbidden under Islamic tenets which ban usury. On the other hand, NCB's sharia advisory council on Thursday declared the share offer to be acceptable under Islamic law. An NCB prospectus says the bank will offer 300 million shares to the public at 45 riyals ($12) each, for a value of $3.6 billion, while another 200 million shares will be allocated to the state pension agency bringing the total to $6 billion.

African markets are gradually opening to Islamic finance, buoyed by governments’ debut sales of sovereign sukuk and legislative efforts to make the sector more attractive for companies across the region. Despite the strong growth of Islamic finance in its core markets of the Middle East and south-east Asia, the industry has lagged behind in Africa, which is home to one in four of the world’s Muslims. Governments across the continent are using sukuk as a way to attract cash-rich Islamic investors, with South Africa making a $500 million (R5.6 billion) issue last month.

Guyana is currently exploring the option of fostering closer cooperation with the Islamic Development Bank, including giving active consideration to the possibility of joining that Bank. Minister of Finance, Dr. Ashni Singh recently met with the leadership of the Bank. Guyana is already a member of the Organisation of Islamic Cooperation and is home to a large and vibrant Muslim population.

The central bank has asked Islamic banks and non-banking financial institutions (NBFIs) to participate in its newly introduced Shariah-based refinancing scheme. The advice came at a meeting with the senior executives of the Islamic banks and NBFIs with Deputy Governor of the Bangladesh Bank Abul Quasem in the chair.
At the meeting, the central bank assured the Islamic banks and NBFIs that it would provide extra fund in the scheme if necessary. Five Islamic banks have already deposited Tk 3.75 billion with the BB's newly opened account for introducing the refinancing scheme exclusively for Sharia-based banks and NBFIs.

FAAIF CEO Camille Paldi says the potential for Islamic finance, sukuk, and takaful is huge in the United States. Paldi conducts two Islamic Finance, Banking, and Sukuk workshops in New Orleans and New York, USA in association with Al Huda Center of Islamic Banking and Economics and University of New Orleans. Paldi says that the USA participants were enthusiastic about learning Islamic finance concepts despite negative imagery in the media. Paldi explains that in general, educated Americans are excited to learn about new alternative financial structures and investment opportunities.

The Ziraat Bank has received regulatory approval from the banking watchdog (BDDK) to establish what would be the fifth Islamic lender in the country, a key part of the government's efforts to expand the sector. Ziraat will be allowed to set up a standalone Islamic unit with $300 million in capital, according to the regulator.

The proposed merger between CIMB Group Holdings Bhd, RHB Capital Bhd (RHBCap) and Malaysia Building Society Bhd (MBSB) would be credit negative for CIMB Islamic Bank Bhd, according to Moody’s Investors Service. Moody’s vice-president Eugene Tarzimanov noted that the merger would see CIMB Islamic Bank’s asset size triple as a result of acquiring RHB Bank’s and MBSB’s Islamic operations.

4th Global Islamic Microfinance Forum Logo Inaugurated in New York - USA
Islamic finance is the best suited system for poverty alleviation that can be utilized both by Muslims and non-Muslims as a system to cut down poverty dilemma from all over the world, it can also be utilized as an effective tool of financial inclusion as Millions of Muslims are financially excluded due to religious reasons, according to Muhammad Zubair Mughal, Chief Executive Officer, AlHuda Centre of Islamic Banking and Economics.