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The consolidated financial results of Faisal Islamic Bank of Egypt showed a 53.6% year-on-year (YoY) drop in its net profits to EGP 483.53 million in the first quarter (Q1) of 2020 from EGP 1.043 billion. Meanwhile, the bank’s revenues fell to EGP 2.63 billion in the January-March period, compared to EGP 3.22 billion in the corresponding period a year earlier. It is worth mentioning that in 2019, Faisal Islamic Bank of Egypt reported consolidated net profit of EGP 2.78 billion, up from EGP 2.56 billion in 2018, including minority shareholders’ rights.

Launched in 2017 with the aim to diversify funding, the Saudi finance ministry had planned to raise US$31.5 billion of Sukuk in 2019. A new ‘primary dealer’ scheme for local-currency government sukuk was launched in 2018, under which five local banks buy the sukuk directly from the government and then make a market by quoting two-way prices to other investors. Additionally, Saudi regulators introduced a number of incentives in 2019 for corporate sukuk issuers and investors to encourage further issuances. Lower regulator fees and zero tax/zakat on investments in domestic sovereign sukuk also promise a more active and liquid secondary market.

Since the issuance of the first modern sukuk in 1996, cumulative issuance of sukuk has crossed the US$ 1 trillion mark. As of the end of 2018, outstanding sukuk were valued at US$ 469.7 billion across 2,887 sukuk. The Saudi and Malaysian governments were the largest issuers in 2018, at US$ 17.1 billion and US$ 13.9 billion. Malaysia maintained its lead position in terms of issuances, boosted by the return of short-term murabaha sukuk from Bank Negara Malaysia. The central bank resumed sukuk issuances after a three-year hiatus. It issued US$16.1 billion in shortterm sukuk during the second half of 2018.

Private investment firm, Siraj Holding, has officially acquired Al Hilal Takaful, the Islamic insurance business and operations of Al Hilal Bank. The transaction, which was initially expected to be complete in the first quarter of 2020, was given the green light by shareholders, the Securities and Commodities Authority (SCA) and the Insurance Authority. The firm plans to rebrand and align with the new leadership and group operating model following the completion of regulatory formalities. A new group of board members was appointed as part of the acquisition, while the operations of the company will be led by Thomas Joe as chief executive officer.

Sarwa Capital finalise une opération évaluée à 152,2 millions $. Ce sera la deuxième émission de ce type de produits financiers sur le marché financier égyptien après celle de Talaat Mostafa Holdings en avril 2020. Sarwa Capital est aussi en train de mener des discussions avec de potentiels arrangeurs et garants de l'opération. Pour l'heure, seules deux entreprises financières égyptiennes sont habilitées à émettre des sukuk. Il s'agit de Sarwa Capital et EFG Hermes. Celle-ci est cotée sur la Bourse du Caire.

A new UK-based Shariah-compliant crowdfunding platform providing business financing to small and medium sized enterprises (SMEs) launched at the end of June. Qardus is an appointed representative of Share In Ltd. According to founder Hassan Daher, Qardus is a peer-to-peer platform for everyone, whether Muslim or non-Muslim, open to investors seeking to generate superior returns as well as having a social impact. Qardus connects SMEs and investors. The platform offers the unsecured financing for a period of up to two years in the form of commodity murabahah. The minimum investment size is £100 and investors can expect over 10% return per annum but capital is at risk. Looking ahead, Qardus plans to offer more than peer-to-peer lending. It will look to raise £1.5 million by the end of this year and may consider VC funding or equity crowdfunding.

In Malaysia Islamic finance has demonstrated its resiliency in this difficult time with continuing issuances of green and sustainable sukuk, a trend that will continue over the short-to-medium term. To this end, Malaysia’s Employees Provident Fund (EPF) is enhancing its focus on integrating different ESG initiatives into its investment strategy. EPF conducts negative screening and excludes those stocks that it considers unethical. It engages very closely with the investee companies, regulators and asset managers, and has a rating tool to assess the quality of ESG adoption. Banks in Malaysia are also pushing various ESG initiatives. This comes as Bank Negara Malaysia, is coming up with a taxonomy that defines a green loan and ensures that banks indicate whether certain loans are green and, if so, how green they are.

Al Baraka Islamic Bank has launched a promotional campaign to provide property financing to the beneficiaries of the Housing Ministry’s Mazaya programme. Under the campaign, profit rates will be calculated at competitive rates, there will be no down payments, and zero banking fees. The bank will also cover the fees of life insurance for the beneficiaries and will provide fire insurance for the property. Also, there will be instant prizes for the executed deals. The financing is up to BD120,000 with maximum duration of 25 years.

The Islamic Development Bank Group in partnership with the UAE Ministry of Economy conducted a live webinar entitled "IsDB Group Private Sector Action Response to COVID-19". The webinar discussed the future outlook to overcome the COVID-19 pandemic. In addition, the webinar highlighted the IsDB Group’s US$2.3 billion Strategic Preparedness and Response Programme. During the webinar, 3 online initiatives were launched: Digital Country Presentations, Startups Virtual Pitch Competition and the MADE IN…..SERIES, which is a digital platform for SMEs who want to showcase and present their local products, project and services to an international audience.

ADIB has launched a series of special offers exclusively to healthcare professionals as a tribute for their efforts during the COVID-19 pandemic. These offers include reductions and discounts on ADIB products: special reduction on the profit rate of personal and auto finance; AED500 reduction in fees for ADIB covered cards or a voucher from Amazon or Noon when applying for cards; fixed profit rates on home finance starting from 2.99% per annum on home finance; 20% fee reduction on all wealth management products; Smartaccount welcome pack and no minimum balance requirement for Smartbanking; an iPad with every Life and Savings Takaful plan, if an AED 1,000 monthly contribution is made. ADIB was among the first UAE financial institutions to launch relief measures for customers during COVID-19, including the postponement of monthly installment payments and the reduction of certain fees.

Saudi Arabia’s mortgage lender Amlak International for Real Estate Finance starts trading shares on the Tadawul stock exchange. The company is floating 27.18 million shares, or 30 per cent of its total, with an indicative price range set at 15-17 Saudi riyals (Dh14.7-Dh16.6) per share. Proceeds of the offer are being used to repay selling shareholders. Amlak International was set up in 2007 and is a non-bank lender, mainly of property loans. Shares in Amlak International's IPO will be allocated on a pro-rata basis to individuals who subscribed to the offer, depending on the size of their request.

FinTech has spurred the evolution of the Islamic finance industry over the last year. It helps to address the need for simplification and innovation in the sector. It also provides a great opportunity for the sector to streamline services and attract new segments, with the key being digital-savvy millennials. Dubai and Dubai International Financial Centre (DIFC) are key players in the Islamic finance sector. DIFC and Dubai Financial Market have launched the first Dubai Sustainable Finance Working Group to create a sustainable financial hub in the region in line with the UAE Sustainable Development Goals 2030. They are encouraging the use of green financial instruments and responsible investing.

More than 10% of the world's nearly three thousand billionaires made a philanthropic commitment in support of COVID-19 response and relief efforts between January and May. According to the Billionaire Census 2020, billionaires who have donated were more likely to be in the tech industry and were more likely to be under the age of 50, to be self-made and to be wealthier. The share of women was larger among COVID-19 donors and those women were more likely to be self-made. The seventh edition of the annual study also found that the number of billionaires globally rose 8.5% in 2019, to 2,825, while their combined wealth grew 10.3%, to $9.4 trillion.

FinTech has spurred the evolution of the Islamic finance industry over the last year. It helps to address the need for simplification and innovation in the sector. It also provides a great opportunity for the sector to streamline services and attract new segments, with the key being digital-savvy millennials. Dubai and Dubai International Financial Centre (DIFC) are key players in the Islamic finance sector. DIFC and Dubai Financial Market have launched the first Dubai Sustainable Finance Working Group to create a sustainable financial hub in the region in line with the UAE Sustainable Development Goals 2030. They are encouraging the use of green financial instruments and responsible investing.

The Islamic Development Bank Group (IsDB) set aside $2.3 billion for its Strategic Preparedness and Response Programme for its member countries to tackle the economic fallout of the corona pandemic. OIC member states may partake in Digital Country Presentations, a new global gateway that offers investors, governments, and institutions an overview of upcoming trade and investment opportunities. SMEs can open a virtual 'stall' on Made in Series, an open platform that enables smaller businesses to present products, projects, and services to a global audience. Earlier this month, the IsDB issued its first-ever sustainability sukuk for social projects. According to Group President Dr. Bandar Hajjar, the latest sukuk placement allows the IsDB to tackle the aftermath of the pandemic with strong interventions in affected countries and sectors.

According to S&P Global Ratings, total sukuk issuance volume for the full year 2020 will be lower than in 2019. Central banks have already taken measures to boost banks' liquidity in core Islamic finance countries, so they are unlikely to issue sukuk this year. They want banks' increased liquidity to reach corporates, thereby minimizing the risk of a long-lasting economic downturn. The difficult economic environment has led to higher financing needs for sovereigns, but most of them are turning to conventional markets due to the complexity of issuing sukuk. The number of defaults among sukuk issuers with low credit quality will likely increase, which will serve to test the robustness of legal documents for sukuk.

Value added tax ("VAT") was pioneered by the European Union, but is gradually spreading worldwide. Saudi Arabia recently tripled its rate of VAT. While VAT in Saudi Arabia is only a couple of years old, the Saudi VAT law follows widespread international precedent by also exempting financial services. Accordingly, all financial institutions will suffer a hit to their profit and loss account. All purchases of goods and services which are subject to VAT increase in cost by 9.5%. This may lead to an increase in bad debts in the Saudi banking sector. Islamic financial services are not expected to suffer more (or less) than conventional financial services.

Sukuk issuance volume is expected to total around $100bn for 2020, about 40% lower than in 2019. The issuance volume fell 27% in the first six months of this year. S&P Global Ratings noted the number of defaults among sukuk issuers with low credit quality will likely increase, which will serve to test the robustness of legal documents for sukuk. Also, some sukuk may be issued to tackle social issues as economies recover, rather than solely to serve investors' financial interests.

According to Fitch Ratings, Islamic financing and deposits accounted for 27% of total sector financing and deposits at end-2019. Growth in Islamic financing slowed significantly in 2019. Asset-quality metrics deteriorated in 2019, particularly due to pressures in the real estate and contracting sectors, but also in entertainment, hospitality, and retail and wholesale trade. The operating profit/risk-weighted assets ratio also deteriorated due to increased financing impairment charges. Capital ratios have increased over the past four years, while core capital ratios remain below those of conventional banks but the difference has narrowed.

Barwa Bank held yesterday its Ordinary General Assembly and approved all the agenda of the meeting. The annual general meeting was presided over by the Bank's Chairman and Managing Director Sheikh Mohammed bin Hamad bin Jassim Al Thani. It was held via video conferencing. The focus of the meeting was on completing the full merger process with International Bank of Qatar, in addition to statistics and financial results for the year 2019 as well as the Bank's future plans. The merger took place in a record time that did not exceed 11 months. Barwa Bank recorded remarkable growth, as its total revenue increased by 43% to reach QR3.3bn, while total assets reached QR77bn, supported by financing assets that exceeded QR51bn.