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In this interview, Al Hilal Bank CEO Alex Coelho gives his regional and global assessment of market threats and opportunities. Coelho still lectures at New York University and those theoretical discussions help feed into the practical decisions he makes in his day job. He’s bullish about recent stock market volatility and doesn’t seem overly concerned at the possibility of the US economy overheating. Now he is more concerned by geopolitical rather than economic upsets. Coelho refuses to predict the future price of oil and sees no correlation between oil prices and their activity as a bank. He says this is due to government focus on diversifying output. He thinks Dubai’s Expo 2020 will have a positive effect on the UAE economy, as such events have high impact in economies that are in growth mode, such as the UAE and GCC.

MBSB Bank, the result of a merger between Malaysia Building Society and Asian Finance Bank, starts afresh as a full-fledged Islamic bank. According to group CEO Datuk Seri Ahmad Zaini Othman, the bank intends to differentiate itself in the area of transactional banking, as well as in digital capabilities. One of the key targets in MBSB Bank’s three-year business plan is to have fee-based income account for at least 25% of its total income by the end of 2020. The bank hopes that its approach towards customers will also set it apart from other lenders. MBSB Bank is starting out with total assets of RM43.7 billion, making it the second largest standalone Islamic bank after Bank Islam Malaysia (RM57.7 billion). Personal financing constitutes the biggest portion of the bank's gross financing and is extended mainly to civil servants. MBSB plans to make a stronger push in the industrial hire purchase segment, which involves SME financing. Zaini plans to offer a lot more products and services for SMEs, especially in the area of current accounts.

For the first time in #Pakistani history, three perfectly healthy and viable banks are simultaneously up for sale. They are Bank Alfalah (BAFL), Meezan Bank (MEBL), and Faysal Bank (FABL). The Gulf Arab investors who initially put up the capital to create these banks have held their positions profitably for decades and are now looking for a suitable exit opportunity. The potential foreign acquirers of these banks would be the most interesting ones, since they are likely to be large foreign financial institutions, extending their presence into the Pakistani market. The most interested potential acquirers, however, are the domestic players, only some of whom have a history of previously owning and operating financial institutions.

According to ratings agency Moody’s, Islamic banks across the GCC are expected to outperform their conventional peers in the year ahead. Credit fundamentals have improved due to better underwriting practices and higher profitability. Along with their strengthening franchise, GCC Islamic banks have achieved sustainable improvements in their credit risk profiles. Their cost of risk is expected to stabilise at current levels driven by improvements in asset quality and risk management practices. Whereas these banks had to incur high provisioning charges on their loans and investments in the past, these charges have fallen to levels below those of conventional peers. New investments in distribution channels and technology could add to the costs. GCC Islamic banks are still making considerable investments in building their branch network and technology because they are younger and are more focused on reaching retail customers.

The General Council for Islamic Banks and Financial Institutions (CIBAFI) has warned of uneven impact from a decline in correspondent banking, reinforcing concerns that small lenders will be most affected from "de-risking" by international lenders. Heightened money laundering enforcement has pushed global banks to cut their relationships in some regions, a policy known as "de-risking". Islamic banks in Africa and South Asia were among those most severely affected, with banks in the Gulf and Europe relatively unscathed. A recent CIBAFI survey of 103 Islamic banks found around a third of respondents experienced a significant decline in correspondent banking. Products most affected included trade finance and international wire transfers. CIBAFI said the practical impact of de-risking might be confined to certain regions and lenders, but it had been severe enough to raise wider concerns.

The Securities and Exchange Commission of Pakistan (SECP) has notified seven more Sharia standards of the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI). The general public is kindly asked to give their feedback for the adoption of these standards and bring harmonisation and standardisation in the business practices of Islamic financial institutions.

#Nigeria’s Jaiz Bank recorded significant growths in key performance indicators in 2017, making an average of a double of previous profit on every unit of transaction. The pre-tax profit-margin doubled from 5.5% in 2016 to 11% in 2017. Gross earnings rose by 40% from N6.18 billion in 2016 to N8.10 billion in 2017. Gross profit grew by 34% to N6.705 billion in 2017 as against N5.003 billion in 2016. Jaiz Bank had recorded another milestone on February 9, 2017 as the first non-interest financial institution to be listed on the Nigerian Stock Exchange (NSE). Jaiz Bank Managing Director Hassan Usman attributed the impressive performance of the bank to the support from the board, management and staff of the bank. He assured that Jaiz Bank would provide a new future of wide-ranging financial services to all Nigerians.

Malaysian Islamic banks are boosting their trade financing market share with various measures. Maybank Islamic CEO Mohamed Rafique Merican said the bank intended to grow its trade facilities in line with growing demand for Islamic finance in Malaysia. Mohamed Rafique was speaking to reporters after a forum on "Islamic Trade Finance: Revitalising Trade and Unlocking New Potential". He said a lot more could be done to boost Islamic trade facilities, which stood at 1.5% out of US$50 billion. RHB Islamic Bank CEO Datuk Adissadikin Ali said Islamic banks would need to collaborate with the financial technology players to provide e-commerce trade financing. He added that RHB Islamic Bank was developing an e-commerce trade financing platform to enable companies to boost their working capital and the platform was likely to be implemented next year.

Iranian owners of a Bahraini bank complained about Bahrain to an international arbitration court in the Netherlands. Bahrain responded with documents proving that $7 billion was smuggled through suspicious accounts with the consent and knowledge of the bank’s management. Future Bank was closed in 2015, but documents prove Iran’s secret assistance in evading international sanctions and smuggling billions of dollars over more than a decade. Bahraini officials criticized Future Bank for allowing the cleric Isa Qassim to make cash deposits totaling millions of dollars over several years, and directing some of the money to a charity linked to terrorism. Audits revealed then that in hundreds of cases, bank transfers were accompanied by specific instructions to avoid references to Iran or Iranian banking codes.

Agrobank has appointed Syed Alwi Mohamed Sultan as its new president and CEO. The appointment has received approval from Bank Negara Malaysia and the Ministry of Finance. Previously, he had held several senior management positions with various banks such as Bank Muamalat Malaysia, BNP Paribas, Standard Chartered Saadiq, The Islamic Bank of Asia and HL Bank Singapore. Syed Alwi has a bachelor’s degree in Accounting and a first-class master of business administration in Islamic finance from the International Islamic University of Malaysia. Agrobank became a full-fledged Islamic bank in 2015. It provides Shariah-compliant banking products and funding to cater for the halal food industry and agriculture-related activities.

Qatar’s central bank hopes the planned merger between three local Islamic banks can proceed this year. Masraf Al Rayan, Barwa Bank and International Bank of Qatar have been discussing a merger, though they missed the target date to complete the proposed deal. Saudi Arabia, the United Arab Emirates, Bahrain and Egypt cut diplomatic and transport ties with Qatar last June. Qatar accused them of trying to sabotage its financial markets and manipulate its currency. Sheikh Abdullah said that since the embargo started, the central bank had been meeting regularly with executives of banks to ensure daily control of liquidity levels and financial transfers. He added that Qatar plans to issue roughly the same amount of riyal debt in 2018 as it did in 2017, when it issued 47.5 billion riyals ($12.3 billion). That included 18.5 billion riyals of bonds and 15.4 billion riyals of sukuk.

Malaysia Building Society Bhd (MBSB) has rebranded its recently acquired Asian Finance Bank Bhd (AFB) as MBSB Bank. MBSB Bank's CEO Datuk Seri Ahmad Zaini Othman said the bank would provide Shariah-compliant products and services, such as consumer banking, business banking and trade financing. He added that the bank would also focus on developing its financial technology capabilities to attract more customers. The lender has already embarked on several digitisation initiatives, including big data projects started in June 2017. MBSB Bank plans to launch its fintech capabilities for wealth management and trade facilities by the third quarter of this year, and to have Internet banking facilities ready by end-2018. MBSB finalised its acquisition of AFB in February for RM644.95 million with the latter becoming a wholly owned subsidiary of MBSB. With the transfer of all MBSB’s Shariah-compliant assets and liabilities to AFB, MBSB Bank is the second-largest full-fledged Islamic bank in the country.

HADA Bank has received a $500,000 investment from DE Asset Management as they look to secure a long-term business partnership. DE Asset Management is looking to develop and launch its own cryptocurrency fund through Hada DBank. The $500,000 investment was made by DE through Hada DBank’s current token presale. Hada DBank determines to fuse blockchain technology with Islamic Banking Module. Blockchain technology will ensure security and transparency, while Islamic Banking module will ensure ethical banking and investment.

Dubai Investments announced the establishment of a new Islamic bank called Arkan Bank. It will be the first home-grown, wholesale Islamic Bank operating from Dubai International Financal Centre. It will have an initial paid-up capital of $100 million and another $200 million will be raised after 12 months of its establishment through listing on Nasdaq. CEO Khalid Bin Kalban said Dubai Investments will initially hold a 25% in the bank and would aim to retain a stake of that size. He added that Arkan Bank's core business lines would be corporate banking, asset management and awqaf, investment banking and treasury. Arkan Bank initially plans to focus on the GCC region and subsequently build scale to become the top-tier Islamic wholesale bank in the region.

Saudi Arabia's Al Rajhi Bank has opened 133 female-only branches and a car showroom for women to help them access car loans. Women have been allowed to attend mixed sporting events and will be able to drive from June. Al Rajhi Bank is a major provider of vehicle loans and has operated car showrooms since 2008. They were only for men until the bank opened its first women-only one late last year. Al Rajhi CEO Steve Bertamini said families usually have a large automobile already, so the cars for women tend to be smaller vehicles for commuting. He added that the bank would provide extended hours for women within existing car showrooms and increase the number of female bank branches in 2018. Women's increased economic activity will help the bank's loan growth outperform the 4% expected for the sector in 2018.

Bank Rakyat has recently launched its second edition of the Islamic Banker Programme which aims to produce future leaders for the banking industry. The programme recently received recognition from the 26th World HRD Congress 2018 by winning three top awards: Innovation in Recruitment, Best Apprenticeship and Usage of Digital Media in Recruitment. Throughout the training period, each trainee will be assigned to a mentor from the senior management team. Initially, each trainee will go through a two-month training program before they undergo job rotation across the key business units within the Bank for 10 months. Then, they will be placed in a particular sector based on their respective strengths and interests for a year. At the end, their performance will be assessed before being offered permanent placement at Bank Rakyat. At the end of the two year internship, participants will also be awarded with the Chartered Professional in Islamic Finance (CPIF) certificate from the Chartered Institute of Islamic Finance Professionals (CIIF).

Dubai Investments announced the establishment of a new Islamic bank called Arkan Bank. It will be the first home-grown, wholesale Islamic Bank operating from Dubai International Financal Centre. It will have an initial paid-up capital of $100 million and another $100 million will be raised after 12 months of its establishment through listing on Nasdaq. CEO Khalid Bin Kalban said Dubai Investments will initially hold a 25% in the bank and would aim to retain a stake of that size. He added that Arkan Bank's core business lines would be corporate banking, asset management and awqaf, investment banking and treasury. Arkan Bank initially plans to focus on the GCC region and subsequently build scale to become the top-tier Islamic wholesale bank in the region.

Dubai Investments will lead a consortium of investors to launch Arkan Bank. Arkan Bank is now applying to the Dubai Financial Services Authority for approval for a licence to operate as an Islamic financial institution. It plans to offer sharia-compliant banking services and investment products to serve ultra-high-net-worth individuals, corporates, and institutional clients. The bank has an initial paid-up-capital of $100 million and will have an authorised share capital of $500 million. Arkan Bank chairman Khalid Bin Kalban said the bank would initially focus on the GCC region and subsequently build scale to become the top-tier Islamic wholesale bank. The bank plans to list its shares on NASDAQ Dubai within 12 months of its establishment.

The Dubai Islamic Economy Development Centre (DIEDC) signed a Memorandum of Understanding (MoU) with The State Bank for Foreign Economic Affairs of Turkmenistan (TFEB) to exchange knowledge, experience and best practices in Islamic economy. The MoU was signed by Sultan Bin Saeed Al Mansouri, UAE Minister of Economy and chairman of DIEDC, and Rahimberdy J. Jepbarov, chairman of TFEB. The centre aims to organise workshops and training courses and share professional research. In addition, the two parties have set up a joint committee to oversee the collaboration. Al Mansouri said this partnership between DIEDC and TFEB would strengthen synergies between the two countries. He further highlighted sukuk as an effective tool to finance projects in infrastructure, education and health care, as well as in other vital sectors of the economy.

Oragroup received €40 million from the Islamic Corporation for the Development of the Private Sector (ICD). The funds which will be dispatched to various subsidiaries of the group such as Orabank Togo, will mainly be used to support small and medium enterprises (SMEs). According to Binta Touré Ndoye, Managing Director of Oragroup, this financing will help the region by creating jobs, accelerating industrialization and local processing, creating value, redistributing wealth, fighting poverty and contributing to the emergence of the middle class.