IslamicFinance.de

The Bahrain Institute of Banking and Finance (BIBF) is working with UK-based developer Cogneum on a Shariah governance software platform. The cloud-based platform is meant to allow Islamic banks and financial institutions to streamline their internal Shariah governance processes, facilitate the integration of Maqasid al Shariah and the UN SDGs in their workflow. The software will help reduce charitable write-offs by Islamic banks due to Shariah non-compliance issues. The partners will initially target the platform for retail Islamic banks. BIBF director Mujtaba Khalid said the Shariah governance framework of the software solution will be based on AAOIFI Standards but can also be customized as per the banks’ Shariah governance manual. He added that the platform can also help organisations in the areas of green bonds, sukuk and sustainability risk reporting.

The Republic of South Africa is working on a rand-denominated sukuk for the financial year 2020/2021. Details regarding the size, tenor and structure of the Shariah-compliant notes will be made in due course. The government may also consider issuing a second sovereign U.S. dollar sukuk in the long term. South Africa issued its first-ever international sovereign sukuk in 2014. The deal consisted of a $500 million 5.75-year note, offering a profit rate of 3.90%.

Bahrain's Al Salam Bank has sold a portfolio of seven multifamily assets in the United States for $182.5 million. Al Salam acquired the real estate assets in North Carolina and Texas in 2016. The bank said the sale price exceeds the original underwriting for the portfolio. Al Salam Bank’s head of private banking Ali Habib Qassim said the exit comes at an opportune time ahead of the uncertainty of the current COVID-19 crisis.

Indonesia’s National Sharia Economy and Finance Committee (KNEKS) will suspend non-urgent programs this year after its budget was slashed by a third as the government allocates resources to fight COVID-19. The committee will conduct a series of webinars focused on the impact of COVID-19 on the Islamic economy. KNEKS will also engage Indonesians to participate more in Islamic social finance by promoting Shariah-compliant fintechs such as LinkAja Syariah. Indonesia’s government has set aside 405.1 trillion rupiah ($24.65 billion) out of the state budget as a support and stimulus package to help the economy. It has re-allocated and re-focused 95.5 trillion rupiah from ministries and other government institutions as part of efforts to fund the package.

The COVID-19 pandemic has been an unexpected catalyst for digitalisation and this global crisis now may well be a boon to businesses promoting digital financial inclusivity. Approximately 40% of startups will not survive if the COVID-19 crisis continues after May 2020, according to a recent news report. Malaysia is now a nucleus for Islamic digital economic activity comprising of digital products and services catering to the Islamic crowd. The country has developed world-class regulation, driving new initiatives to accredit halal certifiers worldwide, granting the first Islamic fintech crowdfunding license and launching a new certification scheme for Muslim friendly hospitality. Islamic Fintech and Islamic Digital Economy encourage financial inclusivity by increasing awareness and providing access to SMEs through digital financial instruments.

BIMB Investment launched a robo-intelligence investing platform focused on sustainable and Shariah-ESG assets. BEST Invest will give investors access to a suite of BIMB Investment’s Shariah-ESG unit trust funds across asset classes including global equities, Asia Pacific equities, sukuk, and money market. BIMB Investment became an official signatory of the United Nations-supported Principles for Responsible Investment (UNPRI) in July last year. At the time, the company’s CEO said it had integrated more than 250 ESG metrics in its investment process since 2015. The new robo-advisor will allow users to either start investing for themselves or enable the system to identify and select the best investment methods. Investments start at 10 ringgit with a zero sales charge.

Rizq, a UK-based Islamic digital challenger bank is preparing for its launch this summer. Akmal Saleem, the fintech’s co-founder and CEO is positioning Rizq from the Muslim lifestyle perspective, so the new bank wants to solve mainstream banking issues for Muslims in the West. According to Saleem, Muslims in the UK still use conventional current accounts because they do not see a true alternative. Established in late February, Rizq will be both an app and web-based digital challenger bank. The company has applied for a license from the Financial Conduct Authority (FCA) and the registration is on track for acceptance by May 29. The digital challenger will offer a current account first and a premium account at a later stage. The company is working with a major card provider and will offer a debit card for both accounts.

The International Islamic Liquidity Management Corporation (IILM) has issued three short-term A-1 rated sukuk for a total amount of USD1.06 billion. The auction drew more than USD1.85 billion in demand. With over 60 orders from diversified investors, the Islamic Primary Dealers got allocations across all tenors of up to 90% of the total issuances. The USD300 million 1-month sukuk were offered at 1.15%, while the USD460 million 3-month and USD300 million 6-month series were offered at 1.55% and 1.73%, respectively. With today’s auction, the IILM successfully crossed the 100th mark in sukuk issued since 2013, which amounts to a cumulative issuances of over USD53 billion.

An official of Indonesia’s National Committee for Islamic Economy and Finance (KNEKS) says that Islamic finance instruments and domestic retail sukuk are more sustainable financial support alternatives for COVID-hit MSMEs than loans from multilaterals. Indonesia’s government last week announced a 405.1 trillion rupiah ($24.65 billion) financial package to support households and businesses affected by the coronavirus pandemic. The potential of zakat in Indonesia is valued at around 286 trillion rupiah a year, according to the national zakat body BAZNAS. But actual collection is a far cry, at around only 9.5 trillion rupiah ($577.3 million) in 2019. On the possibility of a domestic retail sukuk, there are ongoing discussions on the instrument’s structure and mechanisms.

The Islamic Financial Services Board (IFSB) is organising an online workshop on Financial Inclusion and Islamic Finance based on the IFSB’s recent Standard, Technical Note 3 (TN-3) on 21 April 2020 at 4.30pm (Malaysian Time). This is part of the workshop series that is aimed to create flexibility and enhance the participants understanding of the IFSB standards and guiding principles. TN-3 underscores the importance of financial inclusion, due to its intricate connection with economic growth, shared prosperity and poverty reduction. The IFSB invites all of its member organisations and market players to participate in this e-workshop on Financial Inclusion and Islamic Finance.
For more information on this and other FIS e-workshop series please visit https://www.ifsb.org/event_detail.php?e_id=427

Maybank Islamic’s move into branch banking in the Middle East aims to attract Gulf investors to Southeast Asia. The Malaysian bank opened its first overseas branch at Dubai International Financial Centre (DIFC) in February. Maybank Islamic deputy CEO Nor Shahrizan Sulaiman said the new Dubai branch would serve as a the bank’s gateway not just to the UAE but to the wider GCC. The bank pursues further growth in Singapore and Indonesia, which it sees as home markets outside of Malaysia. The international business expansion is not new, as it has always been one of the focus areas of Maybank Islamic from early on. Maybank Islamic was granted a full Islamic banking licence from the Dubai Financial Services Authority last July, allowing it to open the DIFC branch. It replaces Maybank Islamic’s office in Bahrain, which has closed down.

The spread of the corona virus will pressure Qatari banks' asset quality and funding volatility could recur. As Fitch does not expect any changes in the Qatari authorities' ability to provide timely support all Qatari banks have a Stable outlook. The consequences of the coronavirus and lower hydrocarbon revenues will weaken government capital spending, which will in turn affect the operating environment. Fitch now forecasts Qatar's real GDP growth at minus 2% in 2020, after an estimated 0.6% positive growth in 2019. Qatari banks have adequate capital buffers but an increase in problem loans could erode these buffers quickly.

A new charitable foundation is being set up in the UK that aims to become a £1 billion waqf fund combining commercial and social investments. Sultan Choudhury, Executive Chairperson of the new One Endowment Trust (OET) said that the vision of the trust is to present Islam in a positive way through contribution to UK civil society. OET’s first investment is a £1.75 million 21 residential apartments with planning for four more in Creative Lofts in the Yorshire town of Huddersfield. The returns generated from OET’s portfolio of assets will cover the Trust’s costs and also be reinvested in designated social projects with partners. OET expects to begin investing in social projects particularly in the area of social care in 2022.

Saudi Arabia's Riyad Bank is planning to issue an international Tier 2 U.S. dollar sukuk under a new programme. Funds raised from the first issuance under the new programme will diversify the bank's sources of finance, strengthen its capital base, support the expansion of its credit business and other activities. Riyad Bank has mandated J.P. Morgan, Riyad Capital, Standard Chartered Bank, First Abu Dhabi Bank and HSBC as joint lead managers for the upcoming sukuk. Fitch rated the sukuk programme BBB+(EXP)'/'F2(EXP).

Indonesian Islamic peer-to-peer lender Ammana Fintek Syariah is keen on entering international markets and is starting its expansion with neighbouring Malaysia. Ammana is also eyeing Brunei and Dubai as part of its international expansion. The Shariah-compliant fintech is in the process of applying to become a member of the international Islamic finance standards body the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI). Ammana Fintek Syariah was established in July 2017 and disbursed 17.6 billion rupiah ($1.29 million) in financing in 2019.

Qatar First Bank has acquired a property in Seattle, Washington, USA, for $117 million as it seeks to overturn its 2018 loss of 482 million riyals ($132.38 million). The four-building corporate campus property is fully rented by telco T-Mobile and software company Mindtree. QFB in 2019 exited its investments in several assets including Turkey-based English Home, Kuwait Energy, and Future Industries Holding. It said in October its strategy was to monetise its private equity portfolio and reinvest in more secure assets across politically stable jurisdictions. The bank made a loss of 303.64 million riyals for the nine-month period through Sep 30, 2019. QFB held 2.87 billion riyals in assets at the end of September last year.

Bangko Sentral Ng Pilipinas has approved preliminary regulations for Islamic banks and Islamic banking units. The preliminary policy initiatives of the central bank came after the Islamic banking law was signed by President Duterte on August 22 and became effective on September 15. The preliminary regulations are to jumpstart the implementation of the law. Banks must establish their own Shariah advisory boards to ensure Shariah compliance for their institutions. The Philippines has been accelerating the growth of its Islamic economy sectors in the last couple of years to attract foreign investments and to provide its approximately 10 million domestic Muslim population with an Islamic banking option.

Wahed Invest announced the assignment of Shariyah Review Bureau to manage its Sharia compliance affairs. Wahed is seeking to expand geographically from its historical focus on clients in the US and now has offices strategically located in USA, UK, India, Dubai, Kazakhstan and Malaysia. Currently, Wahed serves thousands of clients from over 100 countries and with its geographical expansion and service diversification is expected to enhance its market share. Shariyah Review Bureau provides comprehensive Sharia advisory solutions from setting-up Sharia Boards to providing product consulting to Sharia review implementation and Sharia audit planning.

The International Islamic Liquidity Management Corporation (IILM) has announced on monday that Dr. Umar Aimhanosi Oseni is their new CEO. (IILM) is an international consortium that issues short-term Shariah-compliant financial instruments to facilitate cross-border liquidity management for institutions that offer Islamic financial services.

Indonesian fintech Akulaku will launch its Shariah-compliant platform in the first half of 2021. The Jakarta-based company is a leading online multifinance provider in Indonesia and now it wants to enter the Islamic sector with Akulaku Syariah to tap into local demand. Akulaku in January raised $100 million from investors including Alibaba’s financial services arm Ant Financial. Akulaku disbursed around 4 trillion rupiah ($285.34 million) in loans during January-October this year and announced on Dec 12 that it wants to raise offshore financing to help it reach its target of 6 trillion rupiah next year. Akulaku started in 2014 with virtual credit cards and moved into providing services for a range of virtual payments, from phone and mobile top-ups to utilities bills. It now also offers P2P lending, financing, and e-commerce in Indonesia, and also has a presence in the Philippines, Vietnam, and Malaysia.