IslamicFinance.de

Operating income continues to be stable at Ithmaar Bank at BD36.8 million, despite a significant compression of margins in overseas subsidiary due to a 300 basis points cut in benchmark profit rates. However, a net loss of BD2.8m was announced for the first six months of the year, compared with a profit of BD583,000 in the same period last year. According to Bank chairman Prince Amr Al Faisal, the bank continues to focus on cost control after total expenses were reduced by about 4.5 per cent in the first 6 months of the year. Murabaha and other financings increased by 1.6pc to BD1.19 billion in the first half as compared to BD1.17bn a year ago. Liquid assets, comprising cash, balances and commodity placements with banks, financial and other institutions, now represent about 13pc of the balance sheet. The bank continues on its board-approved retail business focus with the objective of becoming the region's premier Islamic retail bank.

Jaiz Bank is now targeting a national license from the Central Bank of Nigeria (CBN) after having grown its capital base from N5 billion when it started operations last year to about N10 billion. The capital increase will enable the bank to apply for National Banking license from the CBN and thus position it to operate in all the States of the Federation. Besides, Jaiz bank has joined other commercial banks in the country in the processing of foreign exchange transactions. The bank will commence bidding for its BDC customers from all branches by the first week of September 2013. Moreover, it also commenced over the counter transactions of PTA and BTA sales at all its 10 branches.

PT Bank Muamalat Indonesia posted Rp372.20 billion (US36.1 million) in net profits for the first half of 2013, a 51.27 percent increase from the same period of last year. Bank Muamalat’s net earnings as of June 2013 reached Rp 1.25 trillion, compared to Rp 868.33 billion in June 2012. Margins for murabaha totaled Rp 925.23 billion, or an increase of 47.22 percent from the 2012 figure. Muamalats earnings from musharakah, or partnerships, reached Rp 746.65 billion, higher than the Rp 461.64 billion in June 2012. As of the first semester of 2013, Bank Muamalat managed Rp 47.92 trillion in assets, or up 46.59 percent from the same period in 2012. Meanwhile, PT Bank Ekonomi Raharja (BAEK) on the other hand reported a fall in net profits to Rp 105.33 billion, down 23.34 percent from last year’s Rp 137.4 billion. Bank Ekonomi Raharja recorded Rp 26.59 trillion in assets as of June 30 2013.

Abu Dhabi Islamic Bank plans to branch out in North Africa as the UAE-based lender seeks to reach a larger population. The bank applied for licenses in Algeria and Libya and is considering new operations in Tunisia and Morocco. Chief executive Tirad Mahmoud said the bank is seeking to expand in nations with a critical mass in terms of population and economic activity. Abu Dhabi Islamic Bank has also moved into countries including Saudi Arabia, Egypt and Sudan, Mahmoud said. The bank wants to be better placed to serve companies, such as Dubai-based mall operator Majid al-Futtaim, which operate across the Middle East and North Africa. Banks that comply with Islam’s ban on interest have become increasing popular after the revolts implemented Islamists into power in some North African countries.

The board of directors of El Wifack Leasing company wants to transform itself into a Universal Islamic bank and has submitted an application to the Central Bank of Tunisia (BCT) in order to get the approval. The transformation of the company comes by virtue of the decision taken during its meeting last March 28.

Le conseil d’administration de la société « El Wifack Leasing » a déposé auprès de la Banque centrale de Tunisie (BCT) une demande d’agrément pour la transformation de la société en Banque islamique universelle. Dans un communiqué publié sur le site du Conseil du marché financier (CMF), la même source souligne que l’instruction du dossier d’agrément demeure encore au stade initial et que le conseil d’administration de la société El Wifack Leasing ne peut s’exprimer jusque là sur les issues potentielles que peut prendre cette demande. A défaut d’obtention de l’agrément, la société continuera à développer son activité et lancera sa deuxième tranche d’augmentation de capital, a avancé El Wifack Leasing.

Standard & Poor’s Ratings Services has lowered its long- and short-term counterparty credit ratings on Bahrain-based Al Baraka Banking Group (ABG) to 'BB+/B' from 'BBB-/A-3'. The outlook is negative. The rating action follows S&P's review of the wider implications of deteriorated sovereign creditworthiness in the past 12 months in some countries in the Middle East and North Africa (MENA) , where ABG operates, especially Egypt and Jordan. The ratings agency lowered its assessment of ABG's risk position to "adequate" from "strong," owing to its operations in high-risk MENA countries. The ratings remain supported by ABG's strong business position, and its average funding and adequate liquidity position. The negative outlook reflects S&P's view that ABG’s capitalization could deteriorate to levels deemed as weak if, for instance, Egypt defaults and further economic stress materializes in Jordan.

Nigerian Jaiz Bank PLC has reiterated a firm commitment to the provision of ethical banking services to its customers. The bank has unveiled its array of value adding products and services which it said are available to all irrespective of race or religion. Key amongst the areas being financed by the bank are the Agricultural Sector, Small and Medium Scale Industries and Home Finance. Other products offered by the bank are Jaiz Home Finance, Jaiz Auto Finance, Jaiz Home Appliances Finance, Lease Finance as well as Working Capital and Asset Acquisition Finance. Jaiz Bank has branches in Abuja, Kano, Kaduna, Maiduguri and Gombe with additional 10 branches to be opened across the northern part of the country before the end of this quarter.

Wong & Partners is advising Malaysian investment company BIMB Holdings on its proposed $885 million takeover of Bank Islam. The deal is subject to shareholder and regulatory approvals, and will be financed by a $1.8 billion capital raise.
Kuala Lumpur partners Munir Abdul Aziz and Wong Sue Wan are advising BIMB Holdings on the transaction, as well as the rights issue. Kuala Lumpur partner Mark Lim will act for Bank Islam as the lead arranger on the bond issuance. Zaid Ibrahim & Co. Kuala Lumpur partner Wan Marzimin and Zul Rafique & Partners Kuala Lumpur partner Lukman Sheriff Alias are acting as counsel to Dubai Financial Group and Lembaga Tabung Haji, respectively.

Banks should not be afraid to go further and faster in their adoption of cloud computing, according to Mohamed Gamil, chief operating officer at Islamic Bank of Britain. IBB currently has a deal with US cloud computing company Salesforce.com. Gamil said that the adoption of the cloud means that he is free to experiment with new ideas without spending millions of pounds up front. Islamic Bank of Britain originally turned to cloud computing for customer relationship management. It then decided to move sales management, customer on-boarding for current accounts and savings into the cloud. Finally in July 2013, Islamic mortgage alternatives were added to the cloud. The cloud idea is especially interesting for small banks which have to compete with the big players that spend hundreds of millions of pounds on IT every year.

Bank Muamalat Malaysia has announced the rolling out of the country’s first-ever Shariah-compliant solar photovoltaic (PV) financing scheme valued between RM20 million and RM30 million within the next 2-3 years. Deputy CEO Musa Abdul Malek said that for the first year, the bank may disburse from RM10 million to RM15 million of the funds to 1,000 homeowners, who will be fitting their homes with solar PV systems, which will be grid connected and reap from the country’s solar PV Feed-in-Tariff (FiT) system. However, he said the Smart Green Mortgage Solar PV FiT Plan with its design based on the murabahah structure, is a mortgage plan that does not a have a high-end margin for the bank with a mere 1% yield. The Bank Muamalat package for solar PV is the second in the Malaysian market after Alliance Bank announced its solar financing package in June.

While Islamic banking assets have grown rapidly around the world to stand at more than USD1.3 trillion at the end of 2012, the industry has remained in its infancy in Africa. However that could be about to change. By the end of this decade it’s quite possible that banking complying with Shariah law could grow to account for up to 10 per cent of banking assets in five or six sub-Saharan African countries, including Kenya and Nigeria. Behind the buzz is real demand from African domestic consumers for the choice to bank in accordance with their faith. Governments and regulators in Africa no longer view Islamic banking as a niche industry, but actively seek to encourage its development. There’s also growing awareness of the significant liquidity pool now available in Islamic finance, particularly across the Middle East, as a source of funding for crucial infrastructure investment. Sub-Saharan Africa has a great opportunity to develop a healthy Islamic banking eco-system much faster than other regions of the world.

Dubai Dubai Islamic Bank (DIB) recorded a net profit of Dh739 million in the first half of this year, up 25 per cent from Dh592 million during the same time a year ago. Net profit for the second quarter of this year reached Dh437 million, up 31 per cent from compared to Dh334 million registered during the corresponding time last year. Net revenue for the first half of the year amounted to Dh2.1 billion, an increase of 10 per cent from Dh1.9 billion recorded during the same period in 2012. As of the end of June, the bank’s total assets reached Dh111.1 billion, customer deposits grew by 23 per cent to Dh82.4 billion. The bank’s gross investing and financing assets rose 1.4 per cent to Dh59.6 billion. During the first half of the year, the bank expanded its retail franchise to include three branches and 23 ATMs to its network. Additionally, it completed its acquisition of Tamweel, an Islamic home finance provider.

Egypt’s banking sector witnessed a jump in profits during the first half of the current fiscal year in comparison to the same period last year, and even in comparison to the first quarter of this year. The Faisal Islamic Bank of Egypt stated that its profits for the first half of the current fiscal year totalled EGP 370.8m (nearly $53m), a 30.7% increase compared to the same period last year. Bankers throughout the country expect that other institutions will also soon announce increases in their profit margins for the first half of this year, due to their subscription to government debt instruments, which have brought high returns over the last six months. The stabilisation of the country is expected to allow banks to begin lending once again at higher rates, to both individuals and companies, which would help stimulate the economy, support banks and help them achieve higher profit margins.

Islamic banking is yet to get a foothold in the country with RBI not extending the permission, but the Indian subsidiary of a Kuwait company is setting up a global support centre providing Islamic core banking solutions at Infopark, Cherthala, on Friday. Path Solutions India is a wholly owned subsidiary of Path Solutions K.S.C.C, Ku­w­ait. According to Mohammed Kateeb, group chairman and CEO of Path Solutions, the company plans to have over 30 professionals working from its global support and development centre by the end of second quarter. Path Solutions wants to utilize the local skilled resources to deliver value-added software solutions and services to its clients. The centre will be opened by Aroor MLA A.M. Arif at 5 pm. IT principal secretary P.H. Kurien and Infopark CEO Hrishikesh Nair will attend the function among others.

Maybank Islamic Bhd, the Islamic banking arm of Malayan Banking Bhd (Maybank), aims to expand to all Asean member countries that Maybank has a presence in. According to its CEO Muzaffar Hisham, the bank intends to continue its regional expansion to other Asean nations after focusing on Singapore and Indonesia as part of its internationalisation initiative. Muzaffar said the bank has invested a lot of time and effort in the expansion opportunities, which were in line with the aspiration of Bank Negara Malaysia to internationalise Islamic finance. The bank grew by an average of 25% per year, held 30% market share locally and contributed 30% to the loans portfolio of Maybank domestically. Up to the first quarter of this year, Maybank Islamic has 4 million depositors with a deposit value of RM70 billion.

HH Sheikh Hamdan Bin Mohammed bin Rashid Al Maktoum has launched the Dubai Center for Islamic Banking and Finance as a new step in support of the efforts towards establishing Dubai as the world's capital for Islamic economy. The centre is a collaboration between the Hamdan Bin Mohammed e-University and the emirate's initiative: 'Dubai: Capital of Islamic Economy'. The new centre will provide support to the initiative through three academic programs on human resources development, scientific research and community service. In the area of Human Capital Development, the Centre offers programs and courses. On the research front, The Centre conducts and facilitates research to advance the professional and theoretical foundation for Islamic Banking and Finance.The Center will also play a role in widening access to Islamic banking and finance education to the wider community.

New regulations introduced by the Qatar Central Bank (QCB) in mid-June will curb local banks’ investment options, potentially making sovereign bonds more appealing at the expense of some private sector options. Under the new regulations, with which lenders must comply within six months, equities and bonds can account for up to 25% of a bank’s capital and reserves, although debt issued by the government and national banks are exempt from the limit. The cap had been previously set at 30%. The new regulations also limit the amount banks can place with individual companies and unlisted securities, establishing a maximum of 5% of capital and reserves for foreign investments and 10% domestically. The cap for total foreign equities is set at 15%. These new rules will apply to both conventional and Islamic lenders.

Banc ABC’s Head of co-operate Services, Zulfikar Chando has pointed out that Islamic banking would fuel investment and spending which will in turn support national economic development. The demand for this service with no interest rates shows the need to implement it and make it accesible, he added. BancABC also announced that for the upcoming annual pilgrimage to Mecca later this year in October, the bank has prepared special Visa cards at all their branches to ease the preparation of flight, accommodation and other details of the Holy trip. The service ensures ease and safety while travelling to any destination world wide, Zulfikar Chando explained that clients can choose between prepaid BancABC VISA cash card and BancABC Visa travel money, specifically made for travelling.

Turkish Prime Minister Tayyip Erdogan urged Turks not to use credit cards, accusing banks of locking people into poverty with excessive fees. He said banks were growing rich on high commissions and urged people to live within their means. Erdogan and members of his government have accused speculators and a "high-interest-rate lobby" of stoking volatility in financial markets to make a quick profit at the expense of the Turkish economy. The comments opened a new front in the verbal attacks Erdogan has periodically made against the financial community, which is betting the country's central bank will raise borrowing costs next week to steady the ailing lira currency. In fact, the central bank may raise rates next week to stem a slide in the Turkish currency which would make the lira and lira-denominated assets such as Turkish government bonds more attractive to foreign investors, as well as pushing up commercial banks' lending rates.