IslamicFinance.de

Warba Bank has announced the re-launching Qard Hasan (“Free Profit loan”) in Kuwait after increasing its amount to KD 5,000 with flexible repayment period up to 18 months to all Kuwaiti Nationals as per the credit terms and conditions for individuals. Two years ago, Warba was the first bank in Kuwait to launch Qard Hasan initiative, not bearing any profits in line with the rules of Islamic Sharia. This initiative aims at supporting national customers working in the government sector, any of its associated institutions or the private sector. The customer will have the choice of either opening a Warba Bank salary account or investment saving account at no charges.

Sharjah Islamic Bank achieved a net profit of Dh106.9 million for the first quarter 2015 compared to Dh110 million for the same period last year. While total assets reaching Dh27.4 billion, total assets grew by 5.3 per cent to reach Dh27.4 billion at the end of the first quarter 2015 compared to Dh26.0 billion at year end 2014. Liquid assets reached Dh5.7 billion comprising 20.7 per cent of total assets. Net customer receivables amounted to Dh16 billion growing by 10.5 per cent or Dh1.5 billion compared to year end 2014. Investment securities increased by 27.6 per cent to reach Dh2 billion compared to Dh1.6 billion at the end of 2014. Sharjah Islamic Bank was successful in attracting more deposits during the first-quarter of the year.

The Capital Markets Authority (CMA) is planning to allow in foreign investors from June 15. Mohammad Al Jadaan, chairman of CMA, expects a lot of benefits from the entry of foreign players into its stock markets. It is expected that the level of studies, research and evaluation done on the market in general and on the listed companies in particular would be higher which would provide more accurate information and more fair assessments, he said. This would also help to raise the level of the research and studies on the Saudi capital market, he added. The CMA is expected to publish the rules for foreign institutions on May 4, while rules will be effective June 1, and the QFIs will be allowed to invest in listed shares starting from June 15.

With the easing of economic sanctions against Iran, the country is expected to unleash its enormous potential of Islamic finance and enter the global stage with new Shariah-compliant products at a size that could threaten the dominance of Malaysia and Saudi Arabia in the sector. Iranian banks represent the world’s largest financial system based on Shariah law. However, due to the sanctions, the country has so far only marginally participated in the global Islamic finance sector and thus did not benefit from the rapid global growth of Islamic finance in the recent past. The entire banking system in Iran is Shariah-compliant, and there are no conventional banks to compete with.

Noor Bank has successfully priced its inaugural five-year $500 million Sukuk today. With the final pricing of 2.788 per cent for the issue, it becomes the lowest ever pricing paid by any Sukuk issuer in the UAE till date. The final pricing came at the back end of global roadshows undertaken across Asia, Middle East and Europe. This pricing of 130 bps over five-year mid-swaps is at the tight end of the final price guidance and compares to initial profit thoughts of 140 bps area. The senior unsecured issuance rated ‘A-’ (EXP) received an overwhelming investor interest from various geographies including the Middle East (54 per cent), Europe (29 per cent) and Asia (17 per cent) wherein more than 45 per cent of the issuance was allocated to European and Asian investors.

Saudi Electricity Co (SEC), the Gulf's largest utility firm, has reported its net loss for the first quarter more than doubled. It lost 1.94 billion riyals ($517.4 million) during the three months to March 31, compared to a loss of 913 million riyals during the corresponding period of 2014. The utility cited the costs of implementing an order from the electricity regulator on power usage by top manufacturers, as well as other expenses, for the decline in earnings. It did not elaborate. During the first quarter, the firm paid 545 million riyals to employees in bonuses as part of a scheme to celebrate the Saudi royal succession. Besides, SEC's results are highly seasonal because of the big swing between power demand in winter and in summer.

Moody's Investors Service has today downgraded to Baa3/Prime-3 from Baa2/Prime-2 the deposit, issuer and senior unsecured debt ratings of three Bahraini Banks: BBK B.S.C., National Bank of Bahrain BSC, and Bahrain Development Bank B.S.C. Concurrently, Moody's downgraded the baseline credit assessments (BCAs) of BBK and National Bank of Bahrain to ba1 from baa3. These actions follow Moody's downgrade of Bahrain's government bond ratings to Baa3 from Baa2 on 16 April 2015 and reflect (1) the government's reduced capacity of support, and (2) the challenges in view of weaker economic growth. The negative outlooks assigned to the Baa3 long-term ratings of the three banks are aligned with the negative outlook on the government's Baa3 bond rating.

Career women in the GCC are ambitious and want to lead in their organizations, with over 50 percent of those surveyed aiming at senior or board level position within the next seven years, according to a breakthrough report conducted by the Pearl Initiative. The report, titled ‘Women’s Careers in the GCC – The CEO Agenda’, follows a GCC-wide research program on women in senior management. Its findings and recommendations are consistent with the Women Empowerment Principles. While the report acknowledges the significant progress that has been made in the region for working women, it highlights several key areas of concern.

Bahrain-based Tadhamon Capital BSC has announced its successful exit from Paris Gardens - its first investment in a Central London student accommodation property. The sale of the property saw investors of Tadhamon Capital achieve more than 70 per cent return on their invested capital within a 30 month period. Since completion in the summer of 2013, the property has generated a stable net income of 8 per cent to investors. The sale of the property generated an IRR in excess of 25 per cent. Simultaneously, Tadhamon Capital has entered into a JV agreement for the development of a new, high-quality student accommodation, located at the centre of Kingston-Upon-Thames (South London).

Dubai's drive to develop its Islamic finance sector is fuelling growth of sharia-compliant banking but the benefits are unevenly distributed, with some lenders struggling to compete against burgeoning competition. Several initiatives announced by Dubai could have a big impact on the Islamic banking sector but have not yet materialised. One such initiative is a central sharia board of Islamic scholars that would oversee the sector. This could reduce costs for banks and increase the confidence of customers. Another project still in the planning stage is the world's first fully sharia-compliant export-import bank, which could spur the growth of Islamic trade financing.

At least 21 million children in the Middle East and North Africa are either not attending school or are at risk of dropping out, according to a report by the United Nations Children’s Fund (UNICEF) and the UN Educational, Scientific and Cultural Organisation (UNESCO). The organisation said there had been “impressive” progress in raising school enrolment in the region during the past decade, with a 40 percent reduction in the number of out-of-school children. However, a combination of poverty, discrimination, poor quality learning and conflict had caused progress to slow in recent years. There were now one-in-four children and young adolescents out of school or at risk of dropping out.

Middle East buyers took up only 2% of the 30 year sovereign Sukuk issued by Malaysia (the 10 year issuance allocation consisted of 24% Middle East buyers). This low take up by Middle East can be read a few ways: 1. Sukuk primary subscribers remain hold to maturity investors, and a 30-year note was too long for Middle East buyers to commit to. 2. The drop in price of oil is hurting and Gulf investors are planning only up to a ten year horizon. 3. With the issuance being oversubscribed and attracting interest of over US$9 billion, Malaysia decided to be give Gulf investors only the shorter term ten year issuance. 3. CIMB and Standard Chartered did a great job of marketing to Asian buyers, whilst HSBC did a less stellar job in the Middle East market.

Dubai Islamic Bank said its first quarter profit rose 34 per cent as the biggest Islamic bank in the UAE by assets shrugged off a sharp drop in the price of oil and continued to gain market share in Sharia-compliant financial services. Net income rose to Dh850 million in the first three months of 2015 from Dh637m in the same period last year. Revenue increased 20 per cent to Dh1.56 billion from Dh1.3bn in the same time frame. Chief executive Adnan Chilwan said that he expects 15 to 20 per cent growth in loans this year. He said this year that loan growth would continue to come from corporations and individuals.

Zakat House Director General Ibrahim Al-Saleh applauded Kuwait Finance House’s support to Zakat House to execute charitable projects that serve the community. Al-Saleh praised, during receiving a cheque with a value of KD 5,878,129 million from KFH’s Chief Executive Officer, Mazin Saad Al-Nahedh, KFH for collaborating with Zakat House which contributes to accomplish the goal of encouraging charity and the spread of meanings of brotherhood among various segments of the society. It’s worth noting that the donated value will be distributed to help the poor families in Kuwait, to support charity committees and societies working in the field of humanitarian aid and to execute pro bono projects as per the rules and regulations of Zakat House.

Bahrain-based Gulf Finance House (GFH) has won approval from the shareholders for a reduction in the group’s issued and paid-up capital. GFH board chairman Dr Ahmed Al-Mutawa said the rate of reduction approved is six shares for each 10 shares held at a nominal value of $0.265 per share, thereby resulting in elimination of $897 million of accumulated losses. In addition to this, the investors also discussed the continuation of GFH’s shares listing in London and Kuwait Stock Exchange and authorised the board of directors to adopt the necessary resolutions in this respect. The firm reported a consolidated net profit of $17 million for the year 2014.

Investors are no closer to understanding how the opening of Saudi Arabia’s stock market will work than they were in August, when the country published draft rules on the plan. Eleven weeks before the deadline that the Middle East’s largest bourse set itself to give foreigners direct access to the market, the Riyadh-based Capital Market Authority has yet to explain how it will square the new rules with existing restrictions on foreign involvement in Saudi businesses. The lack of clarity underscores the difficulty the world’s biggest oil exporter has in giving outsiders greater influence. The kingdom is seeking to attract increased investment to the $521 billion stock market without angering conservatives dedicated to preserving the nation’s Islamic roots.

According to a survey for Zurich International Life by YouGov, 71 per cent of UAE residents will receive a company bonus during 2015. However, for 39 per cent of bonus recipients, the primary use of their payment will be to settle debt, with a further 16 per cent using the bonus to pay bills, such as rent or school fees. Another 13 per cent of respondents said they will leave their bonus in the bank, 11 per cent will invest in property and 10 per cent will invest in a savings scheme, while only seven per cent will spend the majority of their bonus. Besides, only 44 per cent of expats believe they will fulfil their financial goals when they leave the UAE.

Several Islamic insurers in the United Arab Emirates are seeking guidance from the UAE Insurance Authority on the possibility of mergers and acquisitions in the sector, Ibrahim Al Zaabi, director-general of the authority, has said. Talks are at an early stage, he said on the sidelines of an Islamic insurance event, without naming any of the companies. The comments signal that tough new regulations, combined with financial losses and stiff competition are pushing some of the providers in one of the Gulf’s largest takaful markets to consider consolidation. Zaabi also said a committee to oversee Islamic insurance would be established in the UAE by the end of this year to help standardise the sector.

Qatari banks plan to borrow more than $6 billion to finance a construction boom ahead of the 2022 soccer World Cup as slumping oil prices constrain government deposits. Shareholders in Al Khaliji Commercial Bank approved a $2.5 billion bond program, and Qatar National Bank said it arranged a $3 billion loan. Qatar International Islamic Bank may issue sukuk. Government deposits at Qatar’s banks more than tripled in the five years ended February 2014 before declining 4 per cent the following year. Qatar is spending $182 billion, or 90 per cent of its 2013 gross domestic product, on roads, stadiums and other facilities by 2019 to play host to the World Cup.

Two Qatari banks and Chinese brokerage Southwest Securities signed a memorandum of understanding to establish a company handling Islamic finance deals in China, Qatar's central bank governor Sheikh Abdullah bin Saud al-Thani said on Tuesday. The banks are Qatar National Bank and Qatar International Islamic Bank. No further details of the venture were immediately available.