IslamicFinance.de

The Board of Directors of Dubai Islamic Bank approved to increase the foreign ownership limit (FOL) from the current level of 15% to 25%. The decision was taken to address the huge demand for DIB shares by large foreign institutional investors. Although a highly liquid scrip on the exchange with approximately 60% free float, the foreign ownership cap was restricting the large global institutional investors keen to participate in the organisation’s success. With the MSCI upgrade taking effect next year, the decision to raise the cap has opened doors for numerous global investors to take advantage of their emerging market allocations and invest in one of the top picks on the exchange. With the Board approval for FOL increase in place, the bank will now proceed to follow the required regulatory process to formalise this decision in due course.

Islamic International Rating Agency ( IIRA ) has reaffirmed its Shari'a Quality Rating of AA (SQR) assigned to Jordan Islamic Bank ( JIB ). This rating indicates JIB 's conformance to very high standards of Shari'a compliance in all aspects of Shari'a quality analysis. The bank has traditionally been supervised by an eminent Shari'a Supervisory Board. Moreover, the bank's Board of Directors has an adequate representation of independent directors, while recommended Board committees are also in place. Transparency of financial reporting by the bank with regards to investment accounts and corporate governance disclosures are generally in line with the recommended best practices by IFSB. However, diversification of Islamic financing structures in the portfolio is recommended by Shari'a scholars.

Resolutions to oust Michael Toxvaerd and Mohammed Al Sarhan from European Islamic Investment Bank's board have failed. The resolutions to remove them from the board were both defeated by 421,334,039 votes to 13,225,000 in a poll at a general meeting. A resolution authorising the company to buyback shares which would be cancelled and not held in treasury was defeated by 381,011,459 votes to 53,847,580. At 9:47am, European Islamic Investment Bank PLC share price was 0p at 3.25p.

Jaiz Bank Plc Shareholders' Fund grew by 53 percent to N10.1 billion in 2012 from about N6.45 billion in the previous year, according to its 2012 financial statement. Also, its depositors’ funds stood at N3.29 billion while total investment in the period under review amounted to N1.96 billion. Gross earnings during the period stood at N79.560 million. However, the bank recorded an operating loss of N1.07 billion in 2012. Its total assets climbed to N14.1 billion, from N5 billion in January 2012. The bank's Chairman, Board of Directors, Alhaji Umaru Mutallab said that necessary steps had been taken to ensure the bank obtained a national license aiming to establish its presence in all states of the federation within the next five to six years. The strategies for realising the set targets will include aggressive deposit drive, investment in the real sector of the economy and also in agriculture.

Recent reports show that people in Qatar are saving less than they did earlier, and nearly half of them feel they don’t have enough for the future. There are several saving options offered by different banks in Qatar. Ahli Bank offers cash prizes for its MyHassad Savings account holders with a certain minimum balance. Besides, the bank offers Time Deposit, an investment product with fixed maturity and a fixed interest rate. Barwa Bank's saving option is the Barwa Bank Fixed Deposit with minimum QAR 15,000. Commercial Bank of Qatar has several saving products, like In Time Deposits, Young Saver Account and the Laddering Deposit Account. Doha Bank, HSBC, Qatar Islamic Bank, Qatar National Bank and Standard Chartered Bank contribute to the wide range of saving options offered by banks in Qatar.

Indonesia's central bank estimates growth of Islamic banking assets will slow next year due to rising pressure from trade deficits and a depreciation in the rupiah. The country's authorities now plan to introduce an array of policies to develop the sector, ranging from regulating foreign exchange markets, introducing Islamic repurchase agreements as well as education and promotion initiatives. The central bank said a tighter policy in finance-to-deposit ratio, similar to the loan-to-deposit (LDR) ratio used for conventional banks, and developing a sharia-compliant lender of last resort (LOLR) would be needed to support the stability of the financial system.

The Islamic Bank of Britain (IBB) has completed its first finance deal in Scotland for Al-Meezan, a non-profit, non-political organisation based in Glasgow. The deal for commercial property finance, valued at £400,000, has enabled Al-Meezan to complete renovation and extension work at its premises. It also includes refinancing of the credit for the initial building works, making Al Meezan's finances fully Sharia compliant. IBB 's commercial property finance is tailored to the needs of the customer, and is in line with Scottish law. In this case, the product uses the Islamic finance principles of Musharaka with Ijara. IBB expects continued interest in its offering, particularly in Scotland where there is a growing interest in Islamic and ethical finance.

There are big opportunities to promote Islamic finance in Tunisia which can be the global hub of Islamic finance for French speaking countries, said Muhammad Zubair Mughal, Chief Executive Officer, AlHuda Centre of Islamic Banking and Economics (CIBE) in an international conference on “Finance and Enterprise” in Tunisia. He also said no Islamic financial institution was effected by the global financial crisis. He added that Tunisia has a good recognition in Islamic financial industry having 2 full-fledged Islamic banks, takaful companies, universities with Islamic finance program, sukuk laws and some other similar institutions which indicate the best future of Islamic finance in Tunisia. Realizing the need of Islamic microfinance, he further said that Islamic microfinance is missing component of Islamic finance in Tunisia while socioeconomic development and poverty reduction can be done in better way through Islamic microfinance.

The Pakistani Islamic Banking Industry (IBI) is in a nascent stage compared to the rest of the world, but has shown constant growth in the past years. Islamic Banks (IB) hold a lion-share of 64 percent in the IBIs total assets. In terms of share, IBs contribute only 30 percent to the IBIs total advances, the rest being provided by the Islamic Banking Divisions (IBDs), i.e. conventional banks offering Islamic banking. IBDs are more efficient in recovering their loans with their infection ratio clocking in at just 1 percent of their advances. Conversely, full-fledged Islamic banks have an infection ratio of 8 percent. With the growing competition in the Islamic banking industry, the Islamic banks must rethink their asset deployment strategy, which is currently more inclined towards Investments. SME and agriculture sectors which are untapped thus far could be the potential avenues to hit.

Kuveyt Turk is planning to sign its murabaha facility next week. The syndicated loan will consist of two tranches — a one year deal paying 205bp all-in and a two year note paying 250bp all-in.

The Islamic Financial Services Board (IFSB) has published new guidelines on capital adequacy for Islamic banks and risk management of takaful. The introduction of Basel III standards, which will be phased in over the coming years, has led to the new guidance. Revised guidelines detail the criteria for using sukuk as Tier 1 and Tier 2 regulatory capital, a practice that has been in operation this year in financial institutions in the United Arab Emirates and Turkey. Guidelines for takaful firms outline issues faced by Islamic insurers, including the risk that their products become non-compliant with sharia principles, and lays out best practice when it comes to supervising funds and disclosing information.

Malaysia's BIMB Holdings will issue a RM1.7 billion ringgit Islamic bond to help raise the US$884 million (RM2.835 billion) it needs to buy the remaining 49% stake of Bank Islam. The 10-year sukuk will be sold to Tabung Haji, BIMB's biggest stakeholder, in a private placement. The bond is made available for the six months to May 27, 2014. IMB's plans were initially rejected by the central bank due to a proposal to secure the sukuk with shares of the company. BIMB in August announced plans to acquire the stake it does not own in Bank Islam held by Dubai Group and Tabung Haji.

Pakistan's Ministry of Finance has set up a committee to explore areas to promote Islamic banking in the nation, including studying converting conventional banks into sharia-compliant ones. Regulators in Pakistan are rolling out a range of initiatives, such as a media awareness campaign, to expand Islamic banks' share of the total banking sector to 15 percent by 2017. The committee will submit recommendations on 10 areas by December 2014, including legal obstacles to converting banks into Islamic ones and changes required to remove those obstacles. Other tasks for the committee include formulating a comprehensive policy framework and timeframes for the industry's progression. The commitee comprises scholars and regulators as well as bankers.

Property developer Sigma Capital Group has formed a 700 million pound ($1.14 billion) joint venture with Shariah-compliant Gatehouse Bank for the development of up to 6,600 new rental homes in Britain. The joint venture will initially invest 200 million pounds (approximately $326 million) in the construction of 2,000 residences in Liverpool and Salford in northwest England. Under the terms of the agreement, Gatehouse will deliver the equity element of the venture. Britain aims to address its imbalance of housing supply and demand by providing loans for the purchase of homes and by financing a 1 billion pound (about $1.6 billion) Build-to-Rent fund to encourage investment into rental housing.

Bahrain's Ibdar Bank was launched as a brand on Monday following the merger of Capivest, Elaf Bank and Capital Management House, after more than a year of negotiations between the Bahraini lenders and authorities. Ibdar hopes to leverage the combined expertise of its predecessor banks and a larger balance sheet to win business. The Islamic lender now has $300 million of paid up capital, $329 million in equity and assets of $360 million, which it hopes can help it win deals in its focus areas of capital markets, private equity and real estate. Ibdar is not leveraged and will retain Elaf Bank's licence in Malaysia to support a geographical scope that includes the Middle East, North Africa and Turkey.

London-based Gatehouse Bank plans to build 6,600 rental homes and gain from the shortage in decent housing stock. The bank hopes to gain from the big shift in the country’s housing market away from buying to renting. Gatehouse has formed a joint venture with the property developer Sigma Capital to leap into the sector. Initially they will build 2,000 new homes in Liverpool and Salford at a cost of about £200m before going on, if the venture proves a success, to build a further 4,600 properties with a further £500m investment. If successful, it would overtake Britain’s biggest stock market-quoted landlord, Grainger Trust, which has currently got 4,000 homes. Gatehouse already has a £1bn property portfolio across the UK and US.

Islamic Bank of Britain's directors responded favourably to a £24.1m offer from Qatari bank Masraf Al Rayan (MAR). The offer comes through MAR’s wholly owned subsidiary, Al Rayan (UK) Limited. MAR’s offer was first muted in October 2012 when the previous offer from IBB’s majority shareholder Qatar International Islamic Bank (QIIB) lapsed. The offer is being recommended by the independent IBB directors who consider it to be fair and reasonable. The offer from Al Rayan (UK) will provide IBB with a new parent company with plans to grow the bank and inject additional capital to fund that growth. The advisory firm Cattaneo provided financial advise to the Islamic Bank of Britain, legal advice was provided by Eversheds. MAR received legal advice from CMS Cameron Mckenna.

The Islamic Bank of Britain has launched two Sharia compliant buy-to-let products. The first of the products is a two-year fix available to those with a 25% deposit at a rate of 5.09%, fixed until 31 December 2015. The second two-year fix is available at 65% LTV at a rate of 4.69%. An administration fee on £995 applies and both products provide finance of between £30,000 and £500,000 across the UK and £750,000 in central London. The products have no early repayment charges for clearing the finance in full. The provider said the loans are available to landlords of any faith.

Private investors from Gulf Arab countries plan to establish the first full-fledged Islamic bank headquartered in the euro zone. The investors aim to launch the venture, named Eurisbank, in Luxembourg during the last quarter of 2014. With initial capital of EUR 60 million, the bank would offer retail, corporate and private banking services, and would open branches in Paris, Brussels, the Netherlands and Frankfurt. In addition to the royal family from the UAE, Eurisbank will be owned by a bank from a country in the GCC and other private investors. The founders of the bank plan to apply for a license in January and expect to obtain regulatory approvals by April.

Vision Financial Holdings Limited has shown its intention to acquire 49.11 percent or 492 million shares of Meezan Bank Limited (MEBL), subject to the approval of regulatory authorities. The terms of transaction are yet to be known; however, initial estimates suggest that the deal is likely to settle at a price of Rs47-50/share at premium of 25-30 percent at the current market price. The total size of the deal will be between $214 and $230 million. Interestingly, Noor Financials Investment Limited currently holds 49.11 percent share of Meezan Bank, which is the same proportion required by the acquirer. Therefore, probability of share transfer between the two parties is high. Meezan Bank Limited is currently trading at 136 percent premium to its book value.