IslamicFinance.de

The Chartered Institute for Securities & Investment (CISI) has announced a significant increase in the number of Islamic Finance qualifications taken in the Arabian Peninsula over the last 12 months. CISI recorded 111 of its Islamic Finance Qualification exams taken between August 2014 and August 2015, compared to 82 taken in the same period in 2013 -2014. The UAE was the country which saw the biggest increase in people undertaking the exams, with a 35 per cent increase from August 2014 to August 2015. As Dubai invests in the Islamic finance industry, this will accelerate the sector’s development in the rest of the region.

European Islamic Investment Bank plc (EIIB-Rasmala) has announced the expansion of its real estate business. Simultaneously, the Group has also announced the acquisition of a commercial office building for GBP 11.8 million ($17.9 million, AED 65.9 million), located on the Doxford International Business Park. The real estate division will focus on identifying high quality, income generating opportunities in the UK, Europe and the United States. The primary focus will be on the UK. The Group expects to invest approximately $1.5 billion in a broad mix of real estate transactions over the next three years, with $750 million being allocated for investments in the UK.

The Dubai Center for Islamic Banking and Finance (DCIBF) released an extensive report entitled ‘Takaful: Global Challenges to Growth Performance and Governance’ during the 2015 Global Islamic Economic Summit in Dubai. There are still critical gaps that need to be addressed by industry practitioners and experts in cooperation with government. The report reveals that the GCC region currently dominates the Takaful business, with Southeast Asia and Africa as the next biggest markets. The report notes that the future rate of growth of Takaful sales is being inhibited by the relative under-development of insurance distribution channels in several emerging markets into which Takaful is being launched.

Kuwait Finance House (KFH) participated as a primary dealer for short-term Sukuk issued by the International Islamic Liquidity Management IILM worth $1.85 billion. KFH is considered as the most active dealer in the market in terms of acquisition and volume traded. AbdulWahab Al-Roshoud, Acting Chief Treasury Officer at KFH, said that the average trading of IILM's previous three issuances in the secondary market surpassed 50 per cent of their volume which is considered high in comparison with the rest of Sukuk, indicating that this reflects the market’s strength and its contributions in increasing the liquidity. KFH forecasts that several local and global banks will participate in IILM’s upcoming Sukuk.

Standard & Poor's Ratings Services said that it lowered its long-term counterparty credit and insurer financial strength ratings on United Arab Emirates-based Takaful Re Ltd. (TRL) to 'BBB-' from 'BBB'. the ratings agency subsequently withdrew the ratings on TRL at its request. At the time of the withdrawal, the outlook was stable. The downgrade reflects the deterioration of TRL's business risk profile, mostly due to challenges within the Islamic insurance sector that have been exacerbated by the company's lack of scale, S&P said. The stable outlook at the time of withdrawal reflected S&P's view that TRL's risk-based capital would remain at extremely strong levels. This is supported by TRL's excess level of capital relative to its low level of premium income.

The Global Islamic Economy Summit, set for the 5-6 October, will heavily stress the importance of financial inclusion to the future of Islamic finance. Financial inclusion is an interesting subject because it has primarily been seen only from the perspective that Islamic finance is able to promote inclusiveness by offering a Shari’ah-compliant offering to people whose exclusion is driven by their reluctance or unwillingness to engage with the conventional financial sector. An infographic from the World Bank in 2013 highlighted the size of the unbanked population estimating it at 2.5 billion people (34 per cent of the global population). That means that while Muslims make up 22 per cent of the world’s population, they account for 46 per cent of the world’s unbanked.

The World Islamic Banking Conference (WIBC) continues to live up to its reputation after officially announcing today that its 22nd annual edition will provide industry leaders with an opportunity to critically assess Islamic finance’s 40-year history. This coming December, regulators, CEOs, scholars and other leaders from the Middle East, East Asia, Africa and Europe will assess and reflect upon the achievements, challenges and opportunities in the rapidly growing Islamic finance industry, currently amounting to $2 trillion. Some of the industry’s preeminent leaders will address the core question of how the current system can converge with its original proposition.

A number of initiatives are demonstrating the rising momentum of Islamic finance in China. Chinese brokerage Southwest Securities forged a partnership with Qatar International Islamic Bank to pave the way for Islamic finance transactions in the country. The Qatari bank confirmed with IFN that it will leverage on this MoU to develop an Islamic finance framework for China. Chinese banking giant, the Industrial and Commercial Bank of China (ICBC), through its leasing arm entered into a collaborative agreement with the Islamic Corporation for the Development of the Private Sector (ICD), which is targeted to focus on multiple lines to develop Islamic capabilities and opportunities.

The decision to allow new licences came at a meeting of Qatar’s Supreme Council for Economic Affairs and Investment on 9 September. The council reviewed developments in both energy and investment before turning to the proposal by Qatar Central Bank (QCB) to grant licenses to open branches for GCC banks in Qatar. The council approved the proposal, with licenses set to be granted according to QCB requirements. Qatar currently licences 11 domestic banks and seven foreign banks. Among the foreign banks, Mashreq is the only GCC-based institution to have a Qatari banking licence. Bahrain’s Ithmaar Bank has a representative office in Qatar but not a full licence.

Chief Executive of Al Baraka Banking Group Adnan Ahmed Yousif has revealed that the bank has completed the procedures for obtaining the necessary licenses to operate in the Moroccan market. It already has operations in Libya, Tunisia and Algeria. He added that the bank has also obtained the necessary approvals for the opening of 20 new branches, and plans to open 25 branches by 2020. Al Baraka is also planning to establish a software company in partnership with European investors and Indians with capital of $15 million under the name Al Baraka Banking Software. The Islamic bank also plans to expand into India and Indonesia. It already has a representative office in Indonesia but sold out of an investment company in India.

Middle East Payment Services (MEPS) - a consortium of local and regional banks that serves as a payment services provider in the Middle East - has signed a partnership agreement with Cihan Bank for Islamic Investment and Finance. This step corresponds with the Bank’s goals to expand the range of banking products and services it offers in Iraq by adding new services in the electronic payment field. By virtue of the agreement, MEPS will provide various services comprising call centers and operating MasterCard point-of-sale (POS) devices. In addition, MEPS will issue the Bank’s payment cards at all its branches across Iraq, as Cihan Bank strives to provide all types of MasterCard including debit, credit and prepaid cards.

The World Bank Group’s Global Islamic Finance Development Center (GIFDC) has announced the launch of its Annual Symposium on Islamic Economics and Finance. The symposium is organised by GIFDC in partnership with Borsa ?stanbul, Islamic Development Bank (IDB), Islamic Research and Training Institute (IRTI), and Guidance Financial Group. The inaugural symposium, “Islamic Finance: A Catalyst for Shared Prosperity,” will be held on September 8-9, 2015 in Istanbul, Turkey. The organisers hope that the symposium will contribute toward a better understanding of the role Islamic finance can play in promoting inclusive growth, reducing inequality, and accelerating poverty reduction.

Islamic art and fashion are quickly becoming burgeoning industries within the diverse landscape of the Islamic economy, and are dominating a key market share in the global lifestyle sector. In 2014, Islamic, or modest, fashion sector expenditure reached $230 billion, constituting 11 per cent of the global fashion market. It is projected to grow a further six per cent to reach $327 billion by 2020, according to the upcoming State of the Global Islamic Economy (SGIE) report, to be published in conjunction with the Global Islamic Economy Summit (GIES). It will take place on 5 and 6 October 2015 at Madinat Jumeirah, Dubai, UAE.

In 2015, the Bank trained and invested in 50 Kuwaiti young people where they received academic and practical training on part-time basis at all branches of the Bank. The graduates were exposed to various banking transactions and business. The Training Program focused on the core banking knowledge and skills of new graduate Kuwaiti people. Warba Bank has hired 25 of the trainees in full-time jobs and assigned them to work across various branches. Their appointment gives an added - value to the recruitment policy adopted by Warba in line with the instructions from the various regulatory authorities for enhancing the banking sector with Kuwaiti national qualified labour.

Fitch Ratings has revised the Outlooks on Al Rajhi Bank (ARB), National Commercial Bank (NCB), Riyad Bank (RB) and SAMBA Financial Group (SAMBA) to Negative from Stable. The revision of the banks' Outlooks to Negative reflects that their Long-term Issuer Default Ratings (IDR) are at the Support Rating Floor (SRF) for Saudi domestic systemically important banks (D-SIB) of 'A+'. This would be revised down to 'A' in the event of a one-notch downgrade of the Saudi sovereign. The Saudi banks' Support Ratings (SRs) and SRFs reflect the extremely high probability of support from the Saudi authorities, if required. Upward potential for the ratings is limited in light of a weakening sovereign and operating environment.

Moody's Investors Service has affirmed Masraf Al Rayan's (MAR) A2/Prime-1 issuer ratings and baa3 baseline credit assessment (BCA) and adjusted BCA. At the same time, Moody's changed the outlook on the bank's long term issuer ratings to positive from stable. The change in the outlook to positive from stable reflects the ongoing improvements in MAR's business and geographic diversification, including the growth and transition to profitability of its recently acquired subsidiary Al Rayan Bank PLC based in UK. Further underpinning Moody's view on the outlook is Qatar's considerable economic strength, with robust growth prospects driven by the significant wealth and resources of the country, despite lower oil prices.

Meethaq has upgraded its core banking system, resulting in a host of Islamic banking services covering ATM/CDM, debit card and mobile banking for Meethaq customers. Meethaq now functions with the new iMal core banking system. The implementation of the system is the result from the partnership between the bank and Path Solutions. iMAL is a Shari’ah-compliant core banking system certified by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI). It is an integrated, modular Islamic banking suite with full functionality, including retail, corporate, investment, trade finance, and treasury modules.

Linklaters is expecting sovereign Sukuks to be issued by the Ivory Coast, Oman, Tunisia, Jordan and UAE and next year they’re expecting a number to be issued across the Middle East and Africa. Different considerations come into play in the Middle East. For example, oil price movements over the past year have inevitably had an impact on countries whose GDP is inextricably linked with the price of oil. Besides, there is an ever-growing demand for Sukuk products in the GCC, and this will continue to drive innovation in the Sukuk market to enable companies, from different sectors and with different assets available to underpin the Sukuk, to issue these products.

After delivering strong results in 2014, Islamic banks in the Gulf face a gradually weakening operating outlook in 2015-2016, largely due to declining oil revenues, says a report published today by Standard & Poor's Ratings Services. But as the report, titled Gulf-Based Islamic Banks Grapple With Weakening Regional Economies, also points out, Standard & Poor’s believes investor demand for Shari’ah-compliant products and supportive government actions will enable Islamic banks in the region to continue to grow and gradually increase their market share. Qatar, Saudi Arabia, and the United Arab Emirates continue to offer the strongest growth opportunities in the GCC region.

Fitch Ratings says in a new report that total new bonds and Sukuk (with a maturity of more than 18 months) from the GCC, Malaysia, Indonesia, Turkey, Singapore, Pakistan, Sri Lanka, and Taiwan (GCC+7) declined 27 per cent in 1H15 from a year ago. Bonds were down 30 per cent and Sukuk by 16 per cent. In 2Q15 Sukuk accounted for 20 per cent of total new issuance, marginally up from 18 per cent in 2Q14. The decline is driven by falling oil prices, challenging external funding conditions due to the expected Federal Reserve interest rate hike, and uncertainties over Greece during 2H15. These factors have led to increased volatility in global financial markets.