IslamicFinance.de

Bank Muamalat Indonesia was appointed as the National Zakat Collector Agency through its affiliation called Baitulmaal Muamalat (BMM). Bank Muamalat has distributed assistance fund to 4,500 orphans across Indonesia, which amounts to Rp1.35 billion (US$100,000) worth of zakat collected by BMM. The fund is distributed through a number of programs, namely community empowerment programs, like Orphan Kafala and educational programs, like the Islamic Solidarity School (ISS). The fund is also distributed through the B-Smart program that provides scholarships for accomplished students, and the Fi Sabilillah program that provides scholarships for orphans finishing their undergraduate studies.

Indonesian corporate sukuk sales are expected to reach a full-year record as $92 billion of state-backed development projects buoy issuance. Bank Muamalat Indonesia and Adira Dinamika Multi Finance were among issuers of Rp 1.5 trillion ($154 million) of securities. The government is seeking to reduce fuel subsidies to set aside more funds for roads, railways and power stations to spur growth. Finance companies have accounted for 72 percent of sales this year, while state-owned construction company Hutama Karya and electricity producer Perusahaan Listrik Negara may sell Islamic bonds in 2013. The sectors with the biggest potential to actively tap into the sukuk market will be those involved in infrastructure-related projects and utilities.

Bank Muamalat Indonesia reported a 42.3 percent increase in net profit to Rp389.4 billion (RM121.48 million) last year from Rp273.6 billion (RM85.35 million) in the previous year. The net profit before tax reached Rp521.8 billion (RM162.78 million) or an increase of 40.4 percent from Rp371.7 billion (RM115.96 million) in 2011. The increase in net profit of the bank was attributable to a 38.1 percent rise in assets to Rp44.9 trillion (RM14 billion) in 2012. Its non performing financing remains at 1.81 percent. In 2012 , Bank Muamalat issued sharia bonds valued at Rp800 billion (RM249,57 million).

Indonesia, the country with the world’s largest Muslim population, is developing its Islamic finance industry. It’s speeding up government approvals and fixing a fragmented regulatory system as part of an effort to reach more unbanked Muslims and increase the portion of Islamic assets in the banking system to 15 percent by 2017, from 4.3 percent. Currently, Indonesia ranks fifth in the amount of outstanding Islamic bonds, the number of Indonesians using Islamic financial products increased 36 percent over the past year. However, that’s still only 13.4 million people in a country of 208 million Muslims, which shows Indonesia's growth potential regarding Islamic finance.

Islamic banking and loans without interest are the key to Indonesia's growth in the field of Islamic finance. A good example of such loans is the story of 50-year-old widow Nur Hanifah, who took out a Shariah-compliant loan from Bank Muamalat Indonesia in order to help finance a store on the ground floor of a shophouse. She does not pay interest but instead she must give the bank a certain percentage of her profit plus part of the principal each month. The percentage usually is about 40%. Hanifah explains that even when times are bad, she does not have any financial worries because then she does not have to pay anything compared to times when she has good profit.

Indonesia plans to let Shariah-compliant banks hedge against exchange-rate movements. This way, the growth in Islamic financial assets will be stimulated and the gap with Malaysia’s industry will be narrowed. The instruments, available in Malaysia since 2006, have been approved by the Bank Indonesia, the National Shariah Board and the Indonesia Institute of Accountants. As a result of hedging, Bank Muamalat Indonesia will be able to hold more global bonds and issue more dollar loans.

The upturn in the global Sukuk market that has been forseen for the past few years doesn't seem to happen – but for all the wrong reasons. Nowadays corporates and banks are issuing because they need the money.
Citi, Emirates NBD Capital, HSBC, NBAD, RBS and Standard Chartered have all been secured in to advise on the five-year Reg S, dollar-denominated transaction, which could be priced at 350bps over midprice swaps. Fitch has given an A+ anticipated rating and Moody’s has given an A3 with negative outlook.
Bank Muamalat Indonesia is also planning to launch $140m worth of Sukuk in the first half of 2012 with both an Indonesian rupiah subordinated Sukuk and a $50m dollar-denominated senior tranche.

PT Bank Muamalat Indonesia stated that it will offer $50 million of dollar-denominated Shariah-compliant bonds in the fourth quarter of this year.
The bank also wants to raise funds by selling $800 billion rupiah of subordinated debt next year to boost capital.

It appears that top shareholders of Indonesia's PT Bank Muamalat is trying to sell at least a 51 percent stake in the unlisted Islamic lender, in a deal that may be valued at about $300 million. Bank Muamalat confirmed the sale process. Bloomberg states that the deal may value the bank at $600 million.
Although Chinese Banking Corp had also looked at the bank in the first round, it seems that they are no longer interested.

Ellina Badri reported in The Edge Daily about the memorandum of understanding between Bank Islam Malaysia Bhd and Bank Muamalat Indonesia Bhd for the distribution of Islamic trust products.

Islamic trusts involve investments made following syariah principles and asset distribution according to Islamic rules of succession. The range of Islamic trust products include will-writing and estate administration services, and waqf, or a gift of property for religious or charitable purposes.