United Arab Emirates

UAE Islamic insurers consider mergers as tighter rules bite

Several Islamic insurers in the United Arab Emirates are seeking guidance from the UAE Insurance Authority on the possibility of mergers and acquisitions in the sector, Ibrahim Al Zaabi, director-general of the authority, has said. Talks are at an early stage, he said on the sidelines of an Islamic insurance event, without naming any of the companies. The comments signal that tough new regulations, combined with financial losses and stiff competition are pushing some of the providers in one of the Gulf’s largest takaful markets to consider consolidation. Zaabi also said a committee to oversee Islamic insurance would be established in the UAE by the end of this year to help standardise the sector.

Russia seeks UAE investments to boost its economy

Russia is trying to increase its cooperation with the UAE, especially in Islamic finance, as the country is seeking to strengthen its trade ties with the UAE and other Gulf countries, according to Igor Egorov, the Chairman of the Russian Business Council. Egorov said the country has brought in new regulations to attract Islamic financial institutions from the Middle East and Asia as demand for financing grows in Russia. He added that the trade figures between Russia and the UAE stand at $2 billion and are set to grow in the coming days. Moreover, the Eurasian Economic Union provides opportunity for UAE companies to invest.

Credit insurance: Al Hilal, Euler Hermes sign distribution deal

Al Hilal Takaful, the insurance subsidiary of Al Hilal Bank, signed a distribution agreement in Abu Dhabi with Euler Hermes, a trade credit insurance company. The collaboration is expected to position Al Hilal to deliver better credit insurance solutions, and secure a stronger position in the takaful market. It will also allow Euler Hermes to enhance its presence in Abu Dhabi. The partnership allows Al Hilal Bank’s Abu Dhabi customers access to a range of trade credit insurance solutions for business-to-business trade receivables offered by Euler Hermes.

NBAD global sukuk issuance at $3.9b in first quarter

National Bank of Abu Dhabi managed around $3.9 billion (Dh14.3 billion) of international Sukuk issuance in the first quarter of 2015, representing about 69 per cent of the global market by value. In the first three months of 2015, NBAD worked on four major deals. In addition to acting as a bookrunner on the UKEF-backed Sukuk closed by Emirates Airlines, the Bank also acted as Joint Bookrunner on International Sukuk issuances by Dubai Islamic Bank, Islamic Development Bank and the Government of Ras Al Khaimah.

UAE, Bahrain to Expand Islamic Cash Products

The only two central banks in the Gulf with products that allow Islamic lenders to make short-term investments are expanding their offerings as demand for cash-management tools rises. Bahrain’s central bank started a seven-day Islamic deposit facility last month, and the United Arab Emirates broadened the range of collateral Shariah-compliant lenders can use for overnight lending effective 1 April. Bahrain’s one-week facility is based on a wakalah contract, where the regulator invests cash on behalf of the lender. In the UAE, the central bank has expanded the list of eligible collateral for its Shariah-compliant overnight facility to include assets other than the regulator’s Islamic certificates of deposit.

IIRA Assigns Fiduciary Ratings to Dubai Islamic Bank

Islamic International Rating Agency ( IIRA ) has assigned ratings of 'A/A1' (Single A / A One) to Dubai Islamic Bank ( DIB ) on the international scale. On the national scale, ratings have been assessed at AA-(ae)/A1+(ae) (Double AMinus / A One Plus). Outlook on the assigned ratings is 'Stable'. Ratings are supported by DIB 's strong franchise and retail market presence, ensuring steady access to cost effective funding. The recent tier-1 capital issue in early 2015 has reinforced capital adequacy ratio to 18.5%. The fiduciary score has been assessed in the range of '76-80', which indicates strong fiduciary standards, wherein rights of various stakeholders are well defined and protected.

Dubai Islamic Bank makes offer for remaining Tamweel shares

Dubai Islamic Bank (DIB) has offered 1.25 dirhams per share in cash to buy the remaining shares in its mortgage unit Tamweel. The offer will be open for one month until it expires on April 30. DIB currently holds 86.5 percent of Tamweel and is in the process of buying the remaining 13.5 percent. It took a 57.33 percent stake in 2010, a move that rescued the mortgage lender, which was struggling during a crash of Dubai's property market. The bank's board in January 2013 approved plans to fully acquire Tamweel.

Dentons advise Ajman Bank on $155 million Islamic financing

Dentons has advised Ajman Bank on $155 million Islamic financing facilities made available by a syndicate of banks. The facilities comprise of a dual commodity Murabaha and Wakala arrangement with a two year lifespan. Noor Bank acted as the arranger and bookrunner for the deal, and along with Emirates Islamic Bank, First Gulf Bank, United Arab Bank and Warba Bank which participated in the facilities. This transaction follows on from the $200 million Shari’ah-compliant syndicated facility to Ajman Bank that Dentons worked on in December 2014.

RAK orderbook down from previous sukuk as airline crash impacts Emirates sukuk

This is Ras Al Khaimah's first sukuk issuance since October 2013, when the UAE emirate of Ras Al Khaimah sukuk was priced at 3.297% (MS+175bps) with a total of USD500m which garnered orders over USD5bn, which represents much stronger demand than the currently launched 10y sukuk. Also launching this week was the Emirates airlines sukuk which is to fund the orders for A380-800, as Emirates seeks USD107.5bn worth of aircrafts from Boeing and Airbus. This is the first time for UK Export Finance (UKEF) to guarantee a sukuk.

Will a sukuk be good for Ras Al Khaimah property?

Ras Al Khaimah is planning to open books on a 10-year, US dollar-denominated sukuk – a sign of the local economy’s continued development. A document from lead arrangers Al Hilal Bank, Citigroup, J.P.Morgan and National Bank of Abu Dhabi outlines meetings have been arranged for investors, with the final one set for next Monday in London. It is thought that the emirate is planning a benchmark size offer, which could be upwards of $500 million (£337.4 million). Two years ago figures showed that property values in Ras Al Khaimah grew by 16%. With this ongoing investment, the strength of a sukuk, and with more people moving to the area to live as well as for vacations, investors could be set to see greater rates of returns over the next few years.

UAE residents to Islamic banks: Why no new products?

In EY’s World Islamic Banking Competitiveness report, EY monitored 55,884 Islamic banking customer sentiments in the UAE on social media as part of a wider study. According to the study, UAE banking clients were most satisfied with customer service. Customer feelings were mixed with respect to branch experience, online banking and phone banking. The study of social media comments has revealed an improvement opportunity for Shariah-compliant banks with respect to products and services, which were ranked the lowest in terms of customer satisfaction.

KPMG and Hawkamah launch first Audit Committee Institute (ACI) in the UAE

Global audit services firm KPMG has exclusively partnered with Hawkamah, the Institute for corporate governance, to establish the first Audit Committee Institute (ACI) in the UAE. The Audit Committee Institute (ACI) will provide information, resources and knowledge sharing opportunities, to help audit committee members, directors and senior management enhance the effectiveness, integrity and oversight of the financial reporting process in the UAE and the MENA region. The ACI will be open to audit committee members of private, public, and UAE government institutions.

KFH leads USD 500mln Sukuk issuance for Sharjah Islamic Bank

The Kuwait Finance House (KFH) through its subsidiary 'KFH Investment' has successfully managed to lead a USD 500 million issuance for Sharjah Islamic Bank (SIB) to finance expansion and growth plans. The Sukuk issue is 5 years Wakala/Mudharabah Sukuk deal which has received an over subscription almost 7 times the targeted size. The issue has attracted a USD 3.6 billion order books by 120 various accounts or investors. Geographical distribution shows that 63 percent of orders came from the GCC and the Middle East, 23 percent from Asia and 14 percent from Europe.KFH has acted as a Joint Lead Manager and Bookrunner.

ADIB to see wealth management portfolio grow

Abu Dhabi Islamic Bank (ADIB) is expected to see an increase in its wealth management portfolio, with more high net worth individuals set to start banking at ADIB, according to Daffer Luqman, the bank’s global head of liabilities and wealth management. Luqman said he did not see an impact of falling oil prices on their portfolio of high- and ultra-high net worth individuals. He added that the global financial crisis in 2008 has resulted in more people, including those with high net worth, to look into long-term savings as their financial situation is prone to change.

Mohammed meets scholars attending Islamic Economic Forum

His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, received an elite group of professors and scholars in the presence of Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, Deputy Ruler of Dubai. The scholars are attending the Islamic Economic FIQH Forum, which kicked off earlier today at the Dubai World Trade Centre. The event will conclude on Tuesday. Sheikh Mohammed and the scholars exchanged views on the importance of Islamic economy in banking, trade and financial transactions.The forum will focus on instilling Islamic jurisprudence in these transactions. It will issue resolutions on the Islamic economy.

Ras Al Khaimah to meet investors for sukuk

The emirate of Ras Al-Khaimah has hired four banks to arrange fixed income investor meetings starting on Thursday for a potential US dollar-denominated sukuk offer, a document from lead arrangers showed. Ras Al-Khaimah has picked Al Hilal Bank, Citigroup, JP Morgan and National Bank of Abu Dhabi to arrange investor meetings in Asia, the Middle East and Europe, the document showed. Investor meetings will start in Singapore on Thursday, before moving to Kuala Lumpur on Friday, the UAE on Sunday and London on Monday.

Abu Dhabi Islamic Bank shortlisted to buy Citi's Egypt Operations

Abu Dhabi Islamic Bank said Sunday it has been shortlisted as a buyer for Citigroup 's Egypt retail business in what is set to be a heated battle to tap into one of the world's fastest growing economies. Mashreq and Emirates NBD are also reportedly bidding to buy Citi 's Egypt consumer banking network. Whoever wins this will have an advantage because Citibank has a good portfolio of clients, they have more than 100,000 credit cards, Tirad Al Mahmoud, ADIB's chief executive, said. Citi , which has also dropped its retail banking businesses in Turkey, Romania, Greece and Pakistan, has said it sees potential in other booming economies such as in Sub-Saharan Africa.

UPDATE 1-Mubadala GE Capital plans benchmark-size bond as soon as April -sources

Mubadala GE Capital is considering a return to the bond market as early as April as it seeks cash to fuel its lending business. The joint venture between the Abu Dhabi state-owned fund and General Electric provides commercial lending, equipment leasing, distribution and vendor finance solutions among other services. Rated Baa2/A by Moody's and Fitch respectively, Mubadala GE Capital has yet to appoint banks to arrange the bond, which will be of benchmark size. It is likely to pick arrangers from the group of banks which lent $750 million to the company in December 2013. The sukuk will probably be part of a regular programme.

UAE green bonds may bloom

Despite the green bond issuance market increasing more than threefold to US$36bn last year on 2013, according to the Climate Bond Initiative (CBI), the UAE is still uncharted territory. However, the race is on to release the world’s first green sukuk, and this country is looking like a strong contender for the first issuer of a green sukuk. Instead of hitting the conventional bond buyers, a green sukuk can attract conventional bond investors to those diversifying their portfolios. All it would take is one issuer to come out in the region to show the demand.

UAE set to be the first to offer green-energy sukuk

The UAE is expected to issue the world’s first Sharia-compliant bond aimed at financing green energy projects this year, possibly as early as next month. Green bond issuance reached US$36.6 billion globally last year, more than triple the previous year’s total. $100bn of green bond issuance is expected this year. The London-based Climate Bonds Initiative (CBI) has helped to create international standards for this type of ethically responsible financial security, from which capital raised is used for projects such as solar and wind schemes as well as developing energy efficiency initiatives such as LED lighting.

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