IslamicFinance.de

The two Islamic banks in Kenya posted growth in their profits last year as the faith-based banking concept becomes entrenched in the country's financial sector. Gulf African Bank and First Community Bank were able to break even in a fairly short time — Gulf African in two years and First Community in three years. Last year, Gulf African registered 154 per cent after-tax profit growth to Sh242 million. First Community Bank, on its part, recorded 239 per cent growth in profit-after-tax to Sh241.3 million last year. According to the Central Bank, by December 31, 2010, the two Islamic finance banks collectively commanded 0.9 per cent of the banking sector net loans and advances of $115 million (Sh9.7 billion) and deposits of $171 million (14.5 billion).

Shareholders in Kuwait Finance House (KFH) have agreed to a 20 percent capital hike, The plans to increase its capital are part of the bank's five-year strategic plan. New shares will be issued at 100 fils ($0.35) per share plus a premium of 400 fils. KFH shares are now trading at 780 fils, down 1.27 percent on the Kuwait bourse. According to Al Watan newspaper, a capital increase could boost KFH's paid-up capital to 348.5 million dinars ($1.24 billion) from 290.4 million dinars.

Omani Islamic banks are expected to follow a comprehensive marketing approach to promote themselves as an alternative for traditional Banks. In other words, Islamic banks need to apply Sharia-compliant recent banking applications. At the meantime, they should consider the risks of financing goods and assets according to Murabaha and Musharakah basics. Islamic banks in Oman will only succeed in introducing and marketing their services/products by satisfying clients’ requirements through saving and financing means. Thus, they should start to conduct studies as well as R&D for Islamic products. Moreover, flexibility is an effective factor to successful banking processes.

Gatehouse Bank announced its expansion in South East Asia following the acquisition of the law firm SJ Berwin's offices in London, in collaboration with a flourishing Malaysian Sovereign Wealth fund in September 2012. Richard Thomas OBE, will relinquish his current responsibilities as Chief Executive Officer and will take over a new role with the Bank to spearhead this SE Asia business expansion and operations. Mr Fahed Boodai, Chairman has been appointed as interim Chief Executive Officer.

Dubai Islamic Bank (DIB) has repaid the Dh3,752,543,000 deposit, in full and well ahead of contractual maturity which it received from the Ministry of Finance in 2008. In March 2013, Dubai Islamic Bank announced the successful pricing of a US$1 billion Tier 1 Capital-eligible issuance, with a perpetual (non-call 6) maturity which will provide a significant boost to the current Tier 1 Capital ratio. For the 12 months ended December 31, 2012, DIB group reported a net profit of Dh1.19 billion, compared to Dh1.05 billion in 2011, an increase of 13 per cent while the bank continues to boast one of the best liquidity ratios (88.7% as December 2012) in the market.

Abu Dhabi Islamic Bank (ADIB) is providing Dhs600m financing facility to Manazel Real Estate to fund the Abu Dhabi-based company's financial obligations and capital expenditure. The financing agreement was signed by Mr. Mohamed M. Al Qubaisi, Chairman of Manazel Real Estate PJSC and Mr. Arif Usmani, Global Head of Wholesale Banking in ADIB. Manazel Real Estate PJSC, a real estate developer in Abu Dhabi, recognizes and appreciates ADIB's support to real estate developers in Abu Dhabi along with other sectors and local businesses, which contributes to the growth and development of Abu Dhabi.

Islamic finance activity has been growing 14 percent per year, with Islamic finance assets exceeding $1.1 trillion in cumulative value in 2011.Such growth has pushed more educational institutions into creating degree programs in Islamic finance. In 2005, the International Islamic University Malaysia created an Islamic banking institute that offers students Master of Science and doctoral degrees in the subject, among other universities. The classes are aimed at both familiarizing students with the history of Islamic banking products, and encouraging them to think about developing more contemporary services.

The African Banker Awards Committee has introduced a new category this year to recognise Islamic banking. The category, titled 'Best Islamic Finance Initiative' will go to the financial institution that has excelled in Islamic finance, in compliance with Shariah regulations and succeeded in providing ethical, reliable and affordable Islamic financial services. Sukuk, Takaful, Islamic project finance deals, Islamic commercial banking, and Islamic business banking are included in the list of eligible initiatives.Submission of entries from Banks and other financial institutions will close 25 March. The 2013 Awards ceremony will take place 29 May, 2013 in Morocco.

Iraqi Islamic Bank (IIB) has completed the required capital increase set by the Central Bank of Iraq to a fully paid IQD 152 billion ($130 million). In line with its expansion policy, the Iraqi Islamic Bank will be opening its new north branch in northern of Iraq Erbil in April, taking the branch network to a total of 17. IIB was the first private Islamic Bank in Iraq, opening its doors in 1992.

Capital Intelligence has affirmed Qatar International Islamic Bank's (QIIB) Financial Strength Rating (FSR) at 'A-', on 'Stable' Outlook - reflecting the Bank's good capital adequacy, very strong liquidity and good loan asset quality. Ratings remain constrained by single name concentration risks in both financing and investment portfolios and by high exposure to real estate. Moreover, the Bank's relatively small balance sheet and market share remain rating constraining factors. The Bank's Long and Short-Term Foreign Currency (FC) Ratings are also affirmed at 'A-' and 'A2', respectively, on 'Stable' Outlook.

The Sharia Supervisory Board of Meethaq conducted its first meeting of 2013 under the chairmanship of Shaikh Dr Ali Qaradaghi. The board inducted two new members — Abdulqader Thomas and Dr Saeed al Muharrami. The two experts in the field of Islamic banking will serve as non-Shari’a members and assist the Shari’a voting members, providing insights on various Islamic banking issues. The board reviewed Meethaq activities during 2012 and discussed the strategy for the coming period.

Dell discovered that Quest Software had supplied software maintenance to Melli Bank, subsidiary of Bank Melli in Iran. The maintenance occurred before Dell’s buyout of Quest. In a letter to the SEC, Dell disclosed Quest’s small but potentially worrisome banking engagement. It said that the company’s Form 10-K contained information about the business transaction worth US$169.90. Although not much, any dollar amount flowing to a technology company from a bank with ties to Iran could have raised some serious red flags. It's unclear what type of e-discovery software Dell used to uncover the business transaction.

Bank Syariah Mandiri is targeting its profit to increase 50 percent this year as it seeks to boost its branches across Indonesia. Yuslam Fauzi, president director of BSM, said that the lender aims to reach profit of Rp 1.2 trillion ($123.7 million) this year from Rp 800 billion last year. He added that the bank's assets also increased to Rp 55 trillion. However, shares of Bank Mandiri fell 0.5 percent to Rp 9,550 on the Indonesia Stock Exchange on Friday.

President of the Republic, Field Marshal Omer Al Bashir inaugurated Tuesday evening the Riyadh Centre of Faisal Islamic Bank in Khartoum. It includes the Electronic Branch, Banking Branch and Faisal Cultural Centre and is located in the Riyadh neighborhood of Khartoum. A speaker at the ceremony pledged going ahead with enhancing the work of the Bank to contribute to sustaining Sudan's economic growth through using modern technologies in transactions. Besides, the President of the Republic and the Governor of Khartoum State were honoured during the ceremony.

The lack of Sudanese banks in South Sudan is an impediment to trade between the two countries which could potentially reach a volume of $2 billion annually, according to the general manager of Sudan’s Export Development Bank (EDB) Mohammed Rashid Mohammed Salem. Therefore, he called for the swift signing of cooperation protocols between the central banks in Khartoum and Juba which would allow for a Sudanese banking presence in South Sudan. The Sudanese banker emphasised the readiness of the EDB to contribute to the development of trade and exports to South Sudan in order to support the banking system there.

Islamic banks in Malaysia and Indonesia are opening new branches in rural areas as they target the newly rich in Southeast Asia’s largest Muslim nations. HSBC Amanah Malaysia Bhd added 22 outlets in the last three years, bringing the total to 26 across the country. PT BRI Syariah, a unit of PT Bank Rakyat Indonesia, will set up 94 branches in 2013 to meet demand in smaller cities. The bank predicts its shariah-compliant savings will increase 73 per cent to a record 19 trillion rupiah (US$1.9 billion). Besides, increasing savings may help spur demand for sukuk as banks look to invest their funds and boost returns.

Islamic banking assets with commercial banks in the GCC grew by 14 percent in 2012, conventional banking assets grew by only 8.1 percent -- indicating the relative resilience and potential of the industry. Qatar was reportedly the fastest growing market where Islamic banking assets are expected to have grown by more than 23 percent during 2012. The outlook for the Islamic banking industry in the GCC is positive. However, Islamic banks remain technologically disadvantaged as software systems are primarily designed for conventional banking. Global Islamic banking assets with commercial banks are now at $ 1.55 trillion at end of 2012 and projected to exceed $ 2 trillion by 2015.

Islamic International Rating Agency (IIRA) has assigned a national scale rating of A+/A-1 (QR) (A plus/A-one) to Qatar International Islamic Bank (QIIB). On the international scale, IIRA has assigned a foreign currency and local currency rating of A-/A-1 (A minus/ A-one). Outlook on the rating is 'Stable'. The fiduciary score has been assessed in the range of '70-75', reflecting strong fiduciary standards wherein rights of fund providers are adequately defined and protected. The fiduciary score captures the role of the management of the institution as Mudarib, the entity's governance practices and compliance with Shariah principles adopted by the bank.

Morocco's central bank has started talks with a body of Islamic scholars on establishing a central sharia board to oversee the country's fledgling Islamic finance industry. The board, composed of scholars and financial experts, would rule on whether instruments and activities complied with sharia principles. Moreover, the government plans to submit to parliament a bill regulating Islamic banks, which will be called participative banks under the legislation. Parliament's vote is expected by the last week of April.

According to the executive president of Oman's central bank, Hamood Sangour al Zadjali, the country has no plans to allow foreign Islamic lenders to set up operations in the sultanate. Opportunity will be given to local banks first to see how the market develops. He mentioned that they will observe the market for two to three years and then decide whether to add more banks or not. Currently, two Islamic banks and six Islamic banking windows are operating in Oman.