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Bank Islam Malaysia Bhd, is revising its base financing rate (BFR) to 6.85 per cent per annum from 6.6 per cent per annum effective tomorrow. Bank Islam in a statement today said the revision is in line with Bank Negara Malaysia’s recent move to increase the overnight policy rate (OPR) by 25 basis points to 3.25 per cent. The last revision in Bank Islam’s BFR was on May 16, 2011, when the rate was revised from 6.3 per cent to 6.6 per cent.
A Chittagong court yesterday placed Mohammad Solaiman, director of Shahjalal Islami Bank Ltd, on a five-day remand in a case filed for misappropriating Tk 140 crore. Solaiman was on remand for seven days once before. Referring to an investigation of the bank, Farman R Chowdhury, managing director of the bank, said Solaiman had influenced the bank to lend Tk 140 crore to SK Steel and gave false assurances about the loan and Solaiman's company Paradise Corporation took over Tk 18 crore as bribe from SK Steel for this. On April 13, the case was filed accusing Solaiman and others.
Turkish lender Turkiye Finans Katilim Bankasi has raised 800 million ringgit ($252.21 million; Dh922.5 million) from an Islamic bond in Malaysia, its first issuance from a 3 billion ringgit programme announced last month. The issuance by Turkiye Finans, in which Saudi Arabia’s National Commercial Bank is the largest shareholder, is the first ringgit-sukuk done in Malaysia by a Turkish issuer. Proceeds from the five-year sukuk will fund general corporate purposes and working capital requirements, according to HSBC Amanah Malaysia Bhd. HSBC Amanah and Standard Chartered Saadiq Bhd are jointly advising the Turkish bank.
Islamic finance is a trillion-dollar industry with many financial institutions, corporations and governments keen to embrace it as a profit-making alternative to mainstream financial dealings. The book "Heaven’s Bankers: Inside the Hidden World of Islamic Finance" by Harris Irfan asks the reader to consider whether the Islamic world can bring something of benefit to the Western world, and vice versa. Irfan’s intentions might be noble, but I suspect that here in the West he faces a real struggle. The big banks and companies hit by the financial crisis are determined to recover and some are increasingly wary of Islamic banking for all kinds of reasons.
Looking back at Islamic finance in the UK over the last eight years is rather like looking at a roller coaster, with peaks of excitement and troughs of depression. On the one hand, in 2006 Gordon Brown MP, announced the ambition for Britain to be the global gateway to Islamic finance and trade. However, the excitement of these early developments was followed by a trough. The UK is already the world’s pre-eminent centre for international conventional finance. It also has a very strong position in international Islamic finance. These developments pose an important competitive challenge to Islamic finance centres such as Kuala Lumpur, Bahrain and Dubai. Each has a very strong domestic Islamic finance market, and a significant level of international reach, but lacks the overall scale and credibility of London.
The UAE is emerging as a serious player in the Islamic banking market with total Islamic banking assets growing to about $95 billion (Dh348.9 billion) in 2013 compared to $83 billion in 2012, according to a report by Dubai Chamber of Commerce and Industry based on a recent study by Ernst and Young. The report shows that the compound annual growth rate (CAGR) for Islamic banking assets in the UAE is expected to be about 17 per cent over the period 2013-2018. The Dubai Chamber report, however, points out that many Islamic retail banks suffer from lower profitability than the conventional banks, mainly due to higher expenses attributed to complex products, lengthy process steps and more interfaces.
Commercial Bank of Kuwait ( CBK ) was granted permission by the Central Bank of Kuwait to issue KWD 120 million (USD 425 million) in Basel III-compliant bonds, which could complicate the process of CBK converting into an Islamic bank. CBK has had to write off loans that have significantly impacted its profitability and may be the reason the bank needs to issue capital-raising bonds. However, issuing capital raising bonds may complicate the conversion process since Basel requirements place limitations on the call provisions included in bonds issued to raise capital. The bank will continue to have an interest-bearing liability for five years, which is much longer than the typical period for a conventional bank that has converted to an Islamic bank.
Capital Intelligence (CI) has announced that it has affirmed the Financial Strength Rating (FSR) of Kuwait Finance House (KFH) of 'BBB+'. The rating is supported by KFH's dominance of the Islamic banking sector in Kuwait, as well as its large overall market share in both deposits and loans, and by the significantly improved equity base following the June 2013 rights issue. The rating is constrained by a less than satisfactory asset quality in terms of headline non-performing facility ratio and reserve coverage, and by poor profitability at the net level. Looking ahead, the growing international component of both revenues and balance sheet is likely to eventually become a supporting factor.
A study commissioned by Qatar Foundation on foreign labour recruitment to Qatar has called on the authorities to fix a minimum wage for all occupations in the construction sector and ensure timely payment of salaries. The report, titled “Migrant Labour Recruitment to Qatar”, was commissioned as part of the Qatar Foundation Migrant Worker Welfare Initiative. An assigned minimum wage for all occupations in the construction sector in Qatar, regardless of nationality, would help to prevent the exploitation of workers from particular countries, said the report. Moreover, cost of food should not be linked to wages.
Abu Dhabi Islamic Bank PJSC (ADIB)’s Egyptian unit sees demand for Shariah-compliant finance picking up, expecting to complete deals for about 5 billion pounds ($699 million) in the next year. The institution is working to provide syndicated financing for as much as five infrastructure projects in electricity, oil and gas, Nevine Loutfy, the only woman chief executive officer of a Shariah lender in the Middle East, said. ADIB Egypt was one of six lenders, including state-owned Banque Misr SAE that arranged a $110 million Islamic facility for East Delta Electricity Co. in February 2013, the nation’s first Islamic loan, she said. ADIB Egypt expects 2014 to be its second profitable year in a row, Loutfy said.
Malaysia-based International Islamic Liquidity Management Corp (IILM) has reissued $860 million of its three-month Islamic bond. The three-month sukuk, rated A-1 by Standard and Poor's, was priced at a yield of 0.52 percent. The issuance was fully subscribed by nine banks acting as primary dealers, including Abu Dhabi Islamic Bank, CIMB and Maybank. IILM last went to the market in May to re-issue $490 million worth of three-month paper, designed to meet a shortage of highly liquid, investment-grade financial instruments which Islamic banks can trade to manage their short-term funding needs. Shareholders of the IILM are the central banks of Indonesia, Kuwait, Luxembourg, Malaysia, Mauritius, Nigeria, Qatar, Turkey and the United Arab Emirates, as well as the Jeddah-based Islamic Development Bank.
Qatar Islamic Bank (QIB), Noor Bank and Warba Bank, the mandated lead arrangers, announced the successful closure of a $155m Shariah-compliant receivable backed syndicated financing facility for a UAE-based Jafza entity. The facility is a transaction that enabled the obligor to securitise its future receivables guaranteed by multinational oil and gas companies. Noor Bank acted as lead arranger and bookrunner for the facility besides its role as the account bank, documentation bank, Shariah-coordinator, as well as investment and security agent. The facility was designed to refinance existing debt and finance the company’s future capital expenditure.
The Commission Bancaire of the Bank of Algeria decided on July 3, 2014 to put Al Salam Bank Algeria under temporary administration, due to differences between certain shareholders of Al Salam Bank Algeria, who were also the founders of the Bank.
The chairman of the Board of Directors of Jaiz Bank Plc, Umaru Mutallab, has charged the Central Bank of Nigeria (CBN), and other regulatory authorities in the banking sector to urgently consider developing Sharia-compliant liquidity management instruments for non-interest Islamic banks to invest in. Moreover, the process needed to be expedited to create a level playing field for all the participants in the financial service sub-sector including micro, small and medium enterprises (MSMEs) that so badly needed non-interest loans for their businesses, he added. Meanwhile a communiqué issued by Maidah Foundation, a network of Nigerian Muslim women entrepreneurs, prayed the federal government to strengthen the role of Islamic organisations in the creation of funds for the Nigerian entrepreneurs.
Malaysia's largest Islamic bank, Bank Islam Malaysia Bhd, is revising its base financing rate (BFR)to 6.85% per annum from 6.6% per annum effective Friday. Bank Islam in a statement on Thursday said the revision is in line with Bank Negara Malaysia's recent move to increase the overnight policy rate (OPR) by 25 basis points to 3.25%. The last revision in Bank Islam's BFR was on May 16, 2011, when the rate was revised from 6.3 % to 6.6%.
The 9th Durham Islamic Finance Summer School 2014 will take place on 1st-5th September 2014 at the Durham Centre for Islamic Economics and Finance, Durham University Business School, Durham University, UK. The Durham Islamic Finance Summer School is an essential learning and training programme in the field for current and aspiring Islamic finance professionals and academics. Registration form is attached together with further information.
Egypt’s minister of industry, commerce and small and medium enterprises, Mounir Fakhry Abdel-Nour has said the World Bank has approved a $300m interest-free loan to fund Egyptian micro and small enterprises (MSEs). The Egyptian government plans to cooperate with the World Bank in building infrastructure for small and medium enterprises, particularly in the impoverished Upper Egyptian governorates, Abdel-Nour said during his meeting with a delegation from the World Bank.
FALCOM Financial Services and SEDCO Capital signed a strategic partnership agreement, according to which SEDCO Capital will manage the investment portfolio of FALCOM Arab Markets registered at the Capital Market Authority. Yazan Abdeen, Fund Manager at SEDCO Capital, will manage FALCOM Arab Markets Fund. Yazan has an experience of more than 12 years in analyzing and evaluating companies in the Middle East and offering professional services to clients through managing equity funds in Middle East markets. Established in 2005, FALCOM Financial Services has a paid capital exceeding one billion SAR.
Qatar CSR network has launched The Qatar CSR Report 2013, entitled "The Initiative", in partnership with Qatar University and participation of the Ministry of Economy and Commerce. The Report is available in both Arabic and English. The Ministry of Economy and Commerce intends to launch a Qatari CSR index that takes into account similar international experiments based on relevant UN standards. The Ministry also seeks to form a CSR network that covers Qatari companies in general and companies registered in the Qatari stock exchange in particular, in order to promote the exchange of ideas and help these companies work closely to meet CSR standards.