IslamicFinance.de

The Central Bank of Bahrain (CBB) has announced plans to close down Future Bank, a joint venture between two Iranian lenders – Bank Saderat and Bank Melli – and Bahrain’s Ahli United Bank, said a report. The CBB said it intends to submit a petition to the competent court for compulsory liquidation of the Bahrain-based retail bank, reported the Gulf Daily News, our sister publication.

Standard & Poor's Ratings Services has revised its outlook on Bahrain-based Al Baraka Banking Group (ABG) to stable from negative. At the same time, it affirmed the 'BB+' long-term and 'B' short-term counterparty credit ratings on the bank. The outlook revision reflects the agency's expectations that ABG's capitalisation will improve in the next quarters, which would allow it to maintain a Standard & Poor's risk-adjusted capital (RAC) ratio above five per cent. It also reflects the lower pressure in the operating environments - namely Egypt and Jordan - of some of ABG's major subsidiaries. S&P views funding as average and liquidity as adequate. Although ABG has no access to its central bank's funding mechanisms, all subsidiaries are self-funded and would have access to funding mechanisms provided by their domestic authorities in case of need.

Saudi Binladin Group has begun marketing a 364-day sukuk issue to local investors in the kingdom which could raise up to one billion riyals ($265 million) for the construction firm. The transaction is being managed by BNP Paribas' Saudi unit and the investment banking arm of Gulf International Bank. Funds from the deal will be used to finance costs related to its work at the King Abdulaziz International Airport in Jeddah. The last time Binladin Group was in the bond market was in July 2013, when it sold a 1bn riyal 364-day sukuk, which carried a profit rate of 2.5 per cent. That transaction was arranged by the same two banks appointed for the current issue.

Ithmaar Bank, a Bahrain-based Islamic retail bank, has reported a net profit of $7.62 million for the first quarter of 2015, a 261 per cent increase over the $2.11m net profit reported for the same period last year. Net profit attributable to equity holders of the bank for the first quarter of 2015 was $2.64m, a 426pc increase over the $0.5m profit reported for the same period last year. The bank's operating income has increased by almost 46pc to $83.34m for the first quarter of 2015, from $57.13m for the same period last year. This increase is mainly due to overall revenue growth, with net income, before provisions for impairment and overseas taxation, for the period increasing 292pc to $34.4m.

Kazakhstan's parliament approved new Islamic finance laws yesterday, moving a step closer to launching the oil-producing nation's first sovereign Islamic bond - possibly early next year. The lower house of the legislature passed a bill introducing new definitions, such as Islamic insurance, Islamic leasing and "murabaha", an acceptable form of credit sale under Sharia. The Finance Ministry is expected to propose a new draft law on sukuk very soon. Kazakhstan's first Islamic bond was a 240 million Malaysian ringgit ($73m), five-year sukuk issued by state-owned Development Bank of Kazakhstan in 2012.

Liquidity Management Centre (LMC) has announced 18 per cent increase in the net profit at $4.22 million for last year when compared with $3.57m for 2013. This resulted in a return on capital equivalent to approximately 8pc while the average one-year interbank rate remains below 0.75pc. Total operating income was $10.11m as against $10.57m for 2013. Net profit for the fourth quarter was $847,000 versus $784,000 for the same period in 2013. Portfolio-based activities saw a growth of approximately 13pc while the bank's balance-sheet continues to see significant improvement in terms of asset quality and liquidity. Shareholders' equity grew by 7.18pc from $62.96m as of 2013-end to $67.48m as of December-end last year.

Bahrain-based Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) standards will be made available online through Thomson Reuters' range of digital information platforms, including Zawya Islamic. AAOIFI Sharia standards are approved and developed under the guidance of its Sharia Board. The standards represent the broadest consensus of rules that govern the Islamic finance industry and cover Sharia, accounting, auditing, governance and ethics. By making the standards available online, accessibility to the standards will be greatly improved which in turn promotes their wider adoption.

A new takaful model is being implemented by the Central Bank of Bahrain (CBB) this month onwards and is expected to attract new entrants to the market and foster competition. The objective of modifying the existing takaful rules is to facilitate a faster growth of the business in Bahrain while protecting the interest of all stakeholders, vis-ˆ-vis participants, shareholders and operator, CBB executive director for financial institutions supervision Abdul Rahman Al Baker said. The new CBB rules on client money aim at enhancing the regulatory framework in relation to appointed representatives and insurance brokers. Since their release in October last year, the market response has been quite positive, he added.

Bahrain-based General Council for Islamic Banks and Financial Institutions (CIBAFI) and the Islamic Development Bank (IDB) are planning a joint meeting in Bahrain next month aimed at discussing issues of internationalisation of Islamic financial services. The roundtable meeting of the directors of operations and investment of Islamic banks, themed 'Internationalisation Strategies of Islamic Financial Institutions', will be held on February 23 and 24. Through the meeting, the council expects to increase awareness and information sharing about the CIBAFI Strategic Plan 2015-2018.

Africa is not only ready for Islamic finance but also is aiming to take its stand in the global Islamic finance arena, according to Abdelilah Belatik, secretary-general of Bahrain-based General Council for Islamic Banks and Financial Institutions (CIBAFI). Human capital development remains one of the main pillars in establishing sound Islamic financial services practices in Africa, especially with the recent regulatory development, he said. CIBAFI has completed a 'Certified Islamic Banker' training for 48 top level executives from 10 banks in Mauritania. The professional development training programme was co-organised by CIBAFI and the Islamic Development Bank (IDB).

The National Bank of Kazakhstan, the central bank and financial services regulator, has taken up membership in Bahrain-based Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI). The signing ceremony to commemorate the membership was held on December 2 at WIBC 2014. The agreement was signed by National Bank of Kazakhstan deputy governor Nurlan Kussainov and AAOIFI secretary-general Dr Hamed Hassan Merah. Dr Merah said the membership would allow AAOIFI to work more closely with the National Bank of Kazakhstan and the finance industry in the country to support continuing development of Islamic finance.

The Islamic International Rating Agency (IIRA) has reaffirmed the ratings of Bahrain-based ABC Islamic Bank at A+/A-1 on the national scale (long-term and short-term respectively), and A-/A-2 on the international scale with a 'Stable' outlook. The ratings agency said the overall fiduciary score of the bank has been assessed to be in the range of '76'“80' and indicates a well developed governance structure and strong fiduciary capacity, wherein rights of various stakeholders are well-protected. As the bank's business prospects continue to improve, enhancement in earnings is likely to be sustainable, the IIRA said. The bank's balance sheet has remained strong, sustained by sound capitalisation related indicators, it added.

For the second year in a row, Bahrain has been named the GCC's leading Islamic finance market and second out of 92 countries worldwide. This is according to the Islamic Corporation for the Development of the Private Sector-Thomson Reuters Islamic Finance Development Indicator (IFDI). As well as being highly-ranked in terms of the kingdom's commitment to research and training and local awareness of the industry, Bahrain was also ranked as having the best governance in Islamic finance in the world. The report praises the well-established regulatory framework covering all sectors, and high levels of disclosure. The IFDI is a measure of five key components to evaluate Islamic finance in 92 countries - quantitative development, governance, corporate social responsibility, knowledge and awareness.

The launch of "Murabaha" through equities programme by the Bahrain Bourse (BHB) has moved closer to implementation with the exchange appointing Dr Shaikh Osama Mohammed Bahar as its Sharia adviser. His scope of work will include the review and approval of all Sharia-compliant securities, funds, and other investment instruments. The role will also include the review of all Sharia-based products to ensure compliance with underlying Sharia principles. In addition, he will be responsible for the issuance of Sharia statements (fatwa) with regards to Sharia-compliant securities listed on the bourse, and supervising its operations to ensure their compliance with underlying Sharia principles. BHB's strategy aims at enhancing market liquidity, and providing a wider range of products and solutions.

Bahrain-based Islamic investment bank, Gulf Finance House (GFH), has repaid $25 million to debt holders marking total debt principal payments of $33m so far this year. In a statement to the Bahrain Bourse, the bank said this represents more than 15pc of its total outstanding facilities. The repayments highlight its ongoing commitment to meeting obligations to debt holders in line with the restructuring terms concluded in 2012 and the subsequent business plan, GFH said. The bank's outstanding facilities today stand at $169m, representing a leverage ratio of close to 0.28.

Tamkeen and BMI Bank have announced an extension of their partnership providing Sharia-compliant financing to local enterprises. This marks the fourth contribution of BD10 million by BMI Bank, expanding its portfolio to a total of BD40m whilst the total value of the scheme is BD302m. Initially launched in November 2010, the joint scheme offers small and medium enterprises (SMEs) including startups, a suite of financial products at a competitive cost. Enterprises are eligible to receive financing ranging from BD10,000 to BD500,000. All corporations with valid commercial registrations in the kingdom can apply to benefit from the scheme, which also features repayment options of up to 10 years with a grace period up to two years according to finance procedures.

The Islamic Corporation for the Development of the Private Sector (ICD) hopes to advise on the mandate for Pakistan's $1 billion Islamic bond. ICD and Karachi-based Burj Bank, 33.9 per cent owned by ICD, have applied to be advisers on the sovereign deal, meeting Pakistan's finance ministry earlier this week. A ministry statement also said that it would review the applications starting next week. The ICD has further initiatives in the pipeline. Among others, ICD signed separate agreements to help develop Islamic leasing businesses in Malaysia and Uzbekistan, as well as extending $5 million in financing to support SME lending in the former soviet state.

Kuwait's Capital Markets Authority (CMA) has rejected an appeal by Bahrain-based Gulf Finance House (GFH) against the regulator's decision to monitor its Kuwait-listed shares. The CMA decided to monitor the stock after it was traded in high volumes ahead of a company disclosure last year. GFH, which said the events were unrelated, appealed last month. However, the CMA commissioner board has maintained its previous decision in this respect after reviewing the details of the subject. In recent months, Kuwait's regulator has been clamping down on what it sees as unusual market activity.

Khaleeji Commercial Bank (KHCB) has launched an investment account based on the Sharia principle of Mudharabah. The Call Mudharabah Account combines a current account with the concept of profit sharing of the Mudharabah Investment Account. The Call Mudharabah Account is open to companies as well as individuals who are residents of Bahrain and the GCC for a minimum BD10,000 deposit. Linked to a current account, one can make a host of transactions such as redemptions and increments, withdrawals and debits, as well as use ATM facilities and acquire 24-hour online access on the KHCB e-banking system.

Bahrain-based Gulf International Bank (GIB) has announced the successful completion of a senior unsecured two billion Saudi riyal ($533 million) five-year floating rate notes issuance. The notes were issued at a spread of 72.5 basis points above three-month Saudi Arabia Interbank Offered Rate (SAIBOR). The order book was more than 1.7 times oversubscribed, reaching more than 3.4bn riyals from investors. The joint lead managers and book runners for the offering were GIB Capital, NCB Capital Company, Samba Capital and Investment Management Company and Saudi Fransi Capital. The primary shareholder in GIB is the Public Investment Fund of Saudi Arabia.