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Saudi Arabia is seeing a faster adoption of technology at a time when the coronavirus pandemic has weighed heavy on the private sector. The FSD programme, which was launched three years ago, has achieved 90% of its targets and the coronavirus pandemic has led to a surge in the fintech sector, said Faisal al Sharif, director general of the Financial Sector Development (FSD) program. The FSD’s targets for Saudi Arabian Monetary Authority (SAMA) issuing fintech licences was three by end of 2020 but today there are eight such licences. Similarly, the target for cashless transactions was 28% e-transactions by end of this year, but today they make up almost 37% of the total.

GFH Financial Group announced that it has acquired an additional 21.8% stake in Global Banking Corporation. The deal gives GFH a majority stake of 50.4% in the Bahrain-based investment bank following Central Bank of Bahrain approval to acquire up to a 60% shareholding. Established in 2007, GB Corp targets high-net-worth individuals and institutional and government clients across the GCC countries. As of December 2019, GB Corp reported total assets of $125 million and assets under management of approximately $500 million.

Kuwait-based Alafco Aviation Lease and Finance is to delay delivery of its aircraft order from Airbus as a result of the impact of the global Covid-19 pandemic on the aviation industry. Although the number of aircraft impacted is unclear, reports suggest Airbus currently has 43 A320neo and ten A321neo jets on order to be delivered. Future pre-delivery payments between the company and Airbus will be realigned, along with a new delivery schedule, which will result in rescheduling the upcoming pre-delivery payments for this year and the upcoming three years to year 2024 and onward. Earlier this month it was revealed that Alafco had ended a $336 million legal dispute with US aerospace giant Boeing over a cancelled order.

Private investment firm, Siraj Holding, has officially acquired Al Hilal Takaful, the Islamic insurance business and operations of Al Hilal Bank. The transaction, which was initially expected to be complete in the first quarter of 2020, was given the green light by shareholders, the Securities and Commodities Authority (SCA) and the Insurance Authority. The firm plans to rebrand and align with the new leadership and group operating model following the completion of regulatory formalities. A new group of board members was appointed as part of the acquisition, while the operations of the company will be led by Thomas Joe as chief executive officer.

Administrators of NMC Health have started selling off assets of the troubled Middle Eastern hospital operator as they seek funds to pay back creditors. Administrators are planning to start a sale process for NMC’s lucrative fertility business as soon as June or July. They are considering eventually selling most of the company’s assets, potentially including the flagship hospital business, which is the biggest private health-care provider in the Middle East.

NMC Health is at the centre of a multi-billion dollar fraud investigation, but its chief financial officer (CFO) Suresh Krishnamoorthy has left the UAE and returned to India. Krishnamoorthy stepped down as CFO in 2017 when Prasanth Manghat took over as the NMC CEO, but was reinstated in February this year when the company's financial troubles came to light. Abu Dhabi Commercial Bank (ADCB), which has $981 million worth of exposure in the healthcare provider, successfully applied to UK courts to have the company placed into administration and NMC has subsequently been removed from the London Stock Exchange.

According to Knight Frank, Middle East investors are set to increase commercial real estate investment in London this year. Investors from the region are forecast to spend £4.1 billion ($5.3 billion) in the UK capital this year, up by £100 million compared to 2019. China remains by far the biggest potential investor in London, with £12.7 billion of capital ready to buy assets in 2020, followed by Singapore. Knight Frank’s annual London Report reveals that in 2019 London investment activity fell 15% to £13.9 billion, down from £16.8 billion in 2018, as Brexit uncertainty and a shortage of available assets constrained the number of deals.

NMC Health's biggest creditors have set up a coordinating committee, taking a major step toward restructuring the $6.6 billion debt of the hospital operator. The company asked Abu Dhabi Commercial Bank (ADCB) to chair a coordinating committee of debtholders. Deloitte and Clifford Chance have been appointed to advise the committee while Lazard will work with its chair. Abu Dhabi Islamic Bank, Dubai Islamic Bank, Barclays and Standard Chartered will join Abu Dhabi Commercial Bank to form an initial steering group that will lead talks with NMC. NMC is being run by administrators Alvarez & Marsal after succumbing to creditor demands. NMC Health was suspended in February amid allegations of fraud. It has revealed more than $4 billion of undisclosed borrowings, pushing its total debt to $6.6 billion.

A grocery delivery app in Saudi Arabia has raised funds to expand across the Middle East as lockdown measures related to the coronavirus boost demand for online shopping. The Nana app raised $18 million from investors including venture capital fund STV and Middle East Venture Partners. Dubai-based start-up ecosystem enabler Wamda also participated in the investment round, along with Saudi Venture Capital Company (SVC), Impact46 and Watar Partners. Nana founder Sami Alhelwah said the penetration of online grocery shopping in the region is very low and the target is to expand across the region and beyond groceries into other products. Nana wants to become the Amazon of the Middle East and wants to be one of the first technology companies listed in Saudi Arabia.

Prince Alwaleed Bin Talal Al Saud has joined Bill Gates and other leading figures to announce the first round of funding to a major global initiative to end polio. Alwaleed Philanthropies’ donation of $2 million to the Global Polio Eradication Initiative (GPEI) will support the creation of action plans to expand access to polio vaccination and help reach children everywhere. Alwaleed Philanthropies has also worked with key partners such as Gavi, the Vaccine Alliance, the Bill & Melinda Gates Foundation, the Carter Center and UNICEF to tackle Guinea Worm disease, river blindness, measles and rubella, amongst other preventable and treatable diseases. The GPEI pledging event launched a fundraising push to fill the $3.27 billion funding gap. So far, $2.6 billion has been raised.

According to the Islamic Banking Index by Emirates Islamic, Islamic banking penetration in the UAE has reached its highest level for five years. The survey showed that three out of five respondents now have at least one Shari’a compliant product. The perception of Islamic banks has improved steadily from 26 percent in 2015, with significant improvements in key areas relating to technology and customer service. However, knowledge or awareness of Islamic banking terminology has not seen clear improvement since 2015. The 2019 edition of the Islamic Banking Index indicates that the sector continues to widen its appeal to an increasing number of both Muslim and non-Muslim customers.

The UK hosted its first halal startup pitch event in mid-June, when five prominent Islamic SMEs met with investors to showcase their wares. Prominent Islamic SMEs at the 'Smart Capital Startup Pitches' event included VIP halal travel firm Serendipity Tailormade, Muslim lifestyle platform Salam Planet and halal e-commerce site OneAgrix. The event was hosted by London-based venture capital firm Hambro Perks, who plans to invest this year in "two or three" of the start-ups that featured at the pitch event. Hambro Perks managing director Ali Qaiser said rapidly growing populations in emerging markets offer ripe regions for halal technology products and services. The company made its first investment when it funded British Muslim dating app MuzMatch. Qaiser expects halal tourism to take off. He also expects to see massive growth in the 'gamification' of Islamic lifestyles, such as apps to help prayer rituals and maps for Hajj pilgrimage.

According to Bloomberg Intelligence, banks in the United Arab Emirates may go through a second wave of consolidation as lenders seek to improve profitability. Bloomberg analyst Edmond Christou said the absence of common shareholders and a lack of cross-Emirate deals have so far hindered transactions. Abu Dhabi Islamic Bank and Commercial Bank International are among lenders that have under-performed in some areas and could benefit from commercially driven mergers. Most bank mergers in the UAE have so far been driven by common shareholders, making it easier for deals to be completed. Dubai Islamic Bank approved a plan this week to proceed with the acquisition of smaller rival Noor Bank, both of which are controlled by Dubai’s main holding company.

Shareholders of Abu Dhabi Islamic Bank (ADIB) have approved proposal for a rights issue of AED1 billion ($270 million) by offering 464 million new shares. Shareholders also approved the issuance of a $750 million sukuk and the repayment of its $1 billion sukuk issued in 2012. Khamis Buharoon, ADIB vice chairman and acting CEO, said the bank will continue to focus on expanding its retail business, providing market-leading digital banking services, while capturing opportunities across corporate, transaction and correspondent banking. ADIB reported a 3% increase in net profit for the first half of 2018, which reached AED 1.16 billion.

GFH Financial Group has paid the entire amount of its $200 million sukuk, which was originally drawn in 2007. The facility has now been settled with a recent payment of an outstanding amount of $34 million. With this repayment, GFH said it frees up further assets pledged under the sukuk for potential disposal or exit. In 2008, GFH had financing liabilities in excess of $1 billion compared to $125 million today. According to Chairman Jassim Al Seddiqi, with its prudent approach to managing liabilities, strong cash generation and levels of liquidity, GFH continues to be better placed than ever to deliver value and further build its business lines.

A jump in mortgages and a recovery in Saudi Arabia’s economy may help Al Rajhi Bank to reverse a decline in lending. According to CEO Steve Bertamini, higher government spending and faster economic growth amid higher oil prices should help the revival. Home loans have risen as much as 6% this year and there are 450,000 Saudis eligible to purchase a home under one of the government programs. Saudi Arabia’s new housing project announced in February includes an 18 billion riyal ($4.8 billion) loan-guarantee program to boost access to funding and 12.5 billion riyals to support down-payments. Al Rajhi Bank in July reported an 18% rise in second-quarter profit to 2.57 billion riyals. According to Bloomberg economists, Saudi Arabia’s economic expansion will accelerate to 1.6% this year from 0.9% in 2017.

According to the Boston Consulting Group (BCG), private wealth in the UAE saw positive growth between 2016 and 2017 of 8% and this growth is projected to remain steady over the next five years. Private wealth is expected to reach $590 billion in investable assets by 2022. The main drivers were the bull market environment in all major economies and the significant strengthening of most major currencies against the dollar. While offshore share is expected to decline over the next five years from 30% in 2017 to 24.1% in 2022, it will continue to grow to reach $140 billion in the UAE in the same period. The report also showed that personal wealth in the Middle East rose by 11% to $3.8 trillion in 2017, a significant increase compared with the rate for the previous five years.

Kuwait Finance House (KFH) is seeking to hold talks with Bahrain's Ahli United Bank (AUB) for a potential merger. This would create an Islamic lender with about $92 billion of assets, six months after negotiations broke down. KFH sent a letter inviting Ahli United to sign a memorandum of understanding and a non-disclosure agreement to start valuation studies. The deal may provide a boost to debt-laden Bahrain, as the country struggles to cope with lower oil prices. According to Joice Mathew, the head of equity research at United Securities, the integration of business could be challenging because of the geographical dispersion of their assets and combination of Islamic and conventional banking.

Saudi Arabia’s new bankruptcy law will come into effect in late August and aims to attract foreign and domestic investment in private businesses. The new law is designed to outline bankruptcy proceedings and will offer protection to creditors and embattled companies seeking to conduct their affairs without fear of asset seizure. According to lawyer Dario Najm, an associate in Ahmad bin Hezeem & Associates, the new law allows indebted corporations to maintain their operations while gradually settling their debts. Creditors and debtors will enter into agreements on debt payment schedules. When implemented, the law will be the sole regulation covering bankruptcy, effectively replacing previous rules passed in 1996.

Non-credit ratings agency Sigma Ratings found that Gulf countries outperform many Latin American and European countries in transparency and compliance. Among the most transparent banks in the region are Emirates Islamic Bank, Al Hilal Bank, the National Bank of RAK, Sharjah Islamic Bank, and the Arab Bank for Investment and Foreign Trade. According to Sigma Ratings CEO Stuart Jones, non-credit risk ratings were badly needed on factors like governance, compliance and financial crime risks. Jones added that specifically the GCC countries seem to be over-performing in the region, and there is lot of positive movement with regards to these countries.