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IslamicFinance.de congratulates KuveytTürk Germany for obtaining full banking license

Kuveyt Türk Participation Bank has been licensed by the Federal Financial Supervisory Authority (BaFin) to offer banking services in Germany. Thus, the first bank based on an interest-free Islamic business model is licensed in Germany.

Kuveyt Türk has obtained its license from the Federal Financial Supervisory Authority (BaFin) to provide fully-fledged banking services in Germany according to the interest-free Islamic banking principles. Kuveyt Türk is the first Islamic bank that has been fully licensed to operate its deposit and loan business in Germany. With this license, Kuveyt Türk is the pioneer that introduces the Islamic banking model in Germany.

KT Bank AG with headquarters in Frankfurt am Main and as a 100 percent subsidiary of Kuveyt Türk Participation Bank, will start to offer its reliable, high-quality, fast and user-friendly services from July 01, 2015 onwards. KT Bank AG will provide its private and commercial clients with products and services according to interest-free Islamic banking principles.

“KT Bank AG is an ethical, innovative and socially responsible bank”

Working Paper: Why does financial sector growth crowd out real economic growth?

As Islamic finance emphasizes the connection between real economy and financial activity this BIS Working Paper is very interesting and supportive for the understanding:

Abstract:
"In this paper we examine the negative relationship between the rate of growth of the financial sector and the rate of growth of total factor productivity. We begin by showing that by disproportionately benefiting high collateral/low productivity projects, an exogenous increase in finance reduces total factor productivity growth. Then, in a model with skilled workers and endogenous financial sector growth, we establish the possibility of multiple equilibria. In the equilibrium where skilled labour works in finance, the financial sector grows more quickly at the expense of the real economy. We go on to show that consistent with this theory, financial growth disproportionately harms financially dependent and R&D-intensive industries."

Book of the Day: Proposals For A Democratic Economy

New Left Project’s new e-book, "Alternatives to Capitalism: Proposals for a Democratic Economy" is now available for download. In it, the leading radical thinkers Robin Hahnel and Erik Olin Wright take on the crucial but all-too neglected question: what kind of society should we be fighting for instead of capitalism? Hahnel favours ‘participatory economics’. Wright advocates ‘real utopian socialism’. Alternatives to Capitalism puts these practical proposals through their paces in an in-depth, frank and extremely instructive debate about the central question of our time.

World Social Forum concludes in Tunisia

The 13th World Social Forum (WSF) came to a close after discussing a range of political, social and cultural issues, notably the phenomenon of terrorism and its impacts on democracy. The attendees delivered a message of peace and solidarity from Tunisia's National Bardo Museum, the site of a recent deadly attack. The four-day gathering was held under the slogan of "Together to pursue the revolution of rights and dignity." It gathered representatives of over 5,000 national and multi-national NGOs, including worker, peasant and feminist movements, from 121 countries.

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.

MOVES-Islamic bank BLME's CEO to resign effective June 11 - statement

Britain's Bank of London and The Middle East (BLME) said on Sunday its chief executive Humphrey Percy would step down effective June 11. Percy, who has served as CEO since August 2006, will also step down as a board member of the bank, BLME said in a statement. No reason for his departure was given in the statement, which quoted him as looking forward to the new challenges. An announcement on his successor as chief executive of BLME will be made in due course, the statement added.

Gatehouse Bank and Threadneedle Investments to explore strategic investment opportunities

Gatehouse Bank plc ("Gatehouse") and Threadneedle Investments ("Threadneedle") have outlined their plans to explore the development of a range of diverse investment products aimed at the growing market segment of Islamic investors. This comes shortly after the announcement of Threadneedle's acquisition of a 2% strategic equity stake in Gatehouse. An important part of Threadneedle'sinvestment in Gatehouse is the desire of both parties to work together, sharing their respective global fund structuring knowledge and Shariah-compliant origination track record. This partnership recognises the growing potential for investment products targeting the Shariah-compliant financial sector.

UPDATE 1-HSBC's Islamic banking unit raises 705 mln ringgit in Malaysia sukuk sale -IFR

The Malaysian Islamic banking arm of HSBC Holdings has raised 750 million ringgit ($205 million) from the sale of 5-year Islamic bonds at a yield of 4.24 percent. The sale is the third tranche of the lender's overall 3 billion ringgit sukuk programme, sold using an agency-based structure known as 'wakala'. HSBC Amanah Malaysia Bhd pulled in strong demand, with the final book exceeding 1.38 billion ringgit at a bid-to-cover ratio of 1.84 times. Final pricing came at the low end of guidance, which started at 4.22-4.28 percent. As orders poured in, the guidance was tightened to 4.22-4.25 percent within a few hours after books were opened.

SUKUK PIPELINE - Issue plans around the world

The Thomson Reuters Global Sukuk Index is at 117.36419 points, down from 117.49811 at the end of last month but up from 115.79726 at the end of last year. The Thomson Reuters Investment Grade Sukuk Index is at 116.08405 against 115.48693 at the end of February and 113.69014 at end-2014. Some of the sukuk in the pipeline are: Indonesian flag carrier Garuda Indonesia plans to issue $500 million worth of sukuk in May to refinance $350 million in loans maturing in June. Besides, Turkey's Capital Markets Board approved the issuance of 2.05 billion ringgit ($554 million) of sukuk by Turkiye Finans Katilim Bankasi.

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.

Standard Chartered confirms departure of Islamic banking head

Afaq Khan, CEO of Standard Chartered Saadiq, has decided to leave the Bank and plans to take a career break, according to a statement by the bank. Afaq Khan joined Standard Chartered in 2003 and is a well-known and well-respected figure in the Islamic finance industry. Khan is the second senior figure to leave Standard Chartered Saadiq in the last six months. At the end of October last year, Wasim Saifi resigned as Global Head of Islamic Banking for Consumer Banking. Saifi had rejoined Standard Chartered in the role in January 2011. The bank said a successor to Afaq Khan will be announced in due course.

HSBC's Islamic banking unit plans sukuk sale in Malaysia

The Malaysian Islamic banking section of HSBC Holdings has tapped the Islamic bonds (sukuk) market last Friday, as part of a S$1.1 billion sukuk programme. According to Reuters, the bank planned to raise up to 500 million ringgit worth of sukuk, using an agency-based structure known as 'wakala'.
The transaction ist he first issuance of sukuk by HSBC Amanah Malaysia Berhad since October and September 2012. HSBC Amanah has appointed HSBC as lead arranger with Hong Leong Islamic Bank and Maybank Investment Bank as joint lead managers for the sale.

Arab Investment Bank and IDB unit launch leasing firm

An Islamic leasing firm will be launched by Egypt's Arab Investment Bank and the private sector arm of the Islamic Development Bank an in aim to provide sharia-compliant financing to small businesses. Enmaa Leasing Company for this purpose will have authorized capital of $20 million, according to a joint statement said. The ICD is discussing to debut sovereign Islamic bonds (sukuk) with Nigeria and Ivory Coast.

SBP: Islamic Finance industry reaches $ 1.8tr in 40 years

In an opening ceremony Finance Minister Ishaq Dar expressed his pleasure to the State Bank of Pakistan which has been supportive to such initiatives like the Centre of Excellence in Islamic Finance Education (CEIFE) which strengthens the efforts to increase Islamic banking and finance.
The Islamic finance industry had reached US$ 1.8 trillion in the last 40 years according to SBP Governor Ashraf Mahmood Wathra. According to experts, the Shariah compliant assets globally are expected to grow up to 20% annually and financial assets will probably reach US$5 trillion by 2020. Pakistan, by the end of 2018, would have reached an overall share of Islamic Banking of 15%, currently 10%.

Jadwa, Apicorp buy majority stake in SMI

Jadwa Investment has announced the acquisition of a majority stake in Saudi Mechanical Industries (SMI) by the Jadwa Mechanical Opportunities Fund along with Arab Petroleum Investments Corporation (Apicorp). The investment in SMI marks Jadwa’s eighth private equity deal. In 2014, Jadwa completed two major Tadawul listings with Abdulmohsen Al Hokair Group and Al Hammadi Company for Development and Investment, and a full exit via a trade sale with Gulf United Foods Company. Jadwa also announced in September 2014 the full acquisition of Global Environmental Management Services.

Sound Corporate Governance continues to rank high on the agenda of Saudi companies, as outlined by the recent sponsorship agreement between Ma'aden and the GCC Board Directors Institute.

Saudi mining and metals company Ma'aden has partnered again with the GCC Board Directors Institute ("BDI") in committing to high corporate governance standards, with the official signature of a sponsorship agreement in Riyadh. The signature of this new agreement also embeds a training platform for Ma'aden employees to access in order to always be well-informed of the latest best practices, be local or international, as well as networking opportunities with other board members across the Gulf. This month, BDI also inaugurated new half-day Focused Sessions for its members.

Islamic banking assets to exceed $778 billion

According to EY's "World Islamic Banking Competitiveness Report 2014-15: Participation Banking 2.0", Islamic banking assets with commercial banks in international markets were set to exceed $778 bilion in 2014. Global Islamic banking assets witnessed a compound annual growth rate (CAGR) of around 17 per cent from 2009 to 2013. The report, prepared by EY's Global Islamic Banking Centre, said that approximately 95 per cent of international Islamic banking assets of commercial banks are based out of nine core markets, five of which are in the GCC (Saudi Arabia, UAE, Qatar, Kuwait and Bahrain).

UK’s only Shari’ah-compliant fund investing in Prime London Residential Property, to close shortly

London Central Portfolio (LCP) announces today that they will be closing their latest GBP 100 million quoted property fund on April 17th. London Central Apartments II (LCA II) is the only regulated vehicle exclusively targeting Prime Central London’s (PCL’s) Private Rented Sector. It will acquire one and two bedroom units as these are the most highly demanded and offer the highest returns. The properties will be renovated and interior designed to maximise capital uplift and rental returns. It is a five year fund, projecting an IRR of 12 per cent p.a. and shares are to be quoted on the Channel Islands Securities Exchange Authority.

Int'l Islamic economic conf. opens in Doha

The 10th International Conference on Islamic Economics and Finance (ICIEF), themed "Institutional Aspects of Economic, Monetary and Financial Reforms," opened at Qatar National Convention Center on Monday. The agenda topics include, inter alia; Shariah solutions for liquidity problems in Islamic banks, especially after Basel III; the need for a central Shariah board in each central bank: the pros and the cons; evaluating the role of fiqh academies for the development of the Islamic financial industry, and whether the industry is influenced by their decisions and research; and 'taqlid' and 'ijtihad' - challenges facing fatwa issuance in Islamic finance.

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