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#Qatar banks face liquidity challenge over Arab diplomatic feud

Qatari banks may need more cash injections from the state because of the risk of investor withdrawals. Banks have been feeling the fallout of the feud with Saudi Arabia, the United Arab Emirates, Bahrain and Egypt, which cut diplomatic and transport ties with Qatar on June 5 and imposed economic sanctions. They accuse Qatar of financing Islamist militant groups and allying with their regional adversary Iran. Because of the sanctions, several Qatar banks have seen an outflow of deposits. Fitch Ratings estimates that the majority of deposits in Qatar from other Gulf Cooperation Council countries are Saudi and United Arab Emirates' deposits, and that they are being withdrawn as they mature. Analysts expect funding challenges for the Qatari banks, considering the government would still intend to continue their project plans for FIFA 2022.

DIEDC opens nominations for 5th Islamic Economy Award

The Dubai Islamic Economy Development Centre (DIEDC) announced the commencement of nominations for the fifth edition of the Islamic Economy Award (IEA). The award is a joint initiative of DIEDC and Dubai Chamber of Commerce and Industry under the directives of Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum. The eight key categories of the Islamic Economy Award 2017 are: Money and Finance, Food and Health, Media, Hospitality and Tourism, Waqf and Endowments, SME Development, Islamic Economy Knowledge Infrastructure and Islamic Arts. In addition to the eight main categories, the Lifetime Achievement Award recognizes a notable individual, whose work over several decades, has inspired others and had a major positive impact on the Islamic economy.

Alinma Bank's CEO on Growth Strategy, #Sukuk Issuance

In this interview Abdulmohsen Al-Fares, CEO of Alinma Bank, discusses the growth in the company's balance sheet, credit growth, their Sukuk issuance and competition from other banks. Alinma Bank has maintained its growth pace and Al-Fares is optimistic about the upcoming Saudi Arabian government sukuk. It is an opportunity not only for companies and banks, but also for the secondary markets. Timing and size of the sukuk has not been decided yet. In his opinion, competition from other banks will not affect Alinma Bank, as they will compete only in very small segments, not in retail. He added that the stand-off with Qatar would not have a negative impact on the Saudi economy, as the kingdom's economy is strong and the economic relationship with Qatar is small in size.

Bosna Bank International, Una-Sana Canton sign deal to back business

The government of Bosnia's Una-Sana Canton said it has signed a deal with Bosna Bank International (BBI) to fund business entities in the area. Under the deal BBI will provide financing to businesses in the canton under favourable conditions at a subsidized rate of 2.3%. BBI has secured 12.49 million marka ($7.4 million/6.4 million euro) for the project. The maximum amount that can be approved per business is 1 million marka, with a repayment period of three to seven years depending on the size of the loan.

Kuwait Finance House studying #merger with Ahli United Bank

Kuwait Finance House (KFH) is looking to merge with Bahrain's Ahli United Bank. The Gulf's banking sector is in consolidation as three years of low oil prices squeeze deposits and push up bad loans. KFH Chief Executive Mazin Al-Nahedh said the merger was currently only under study and there has been no agreement so far. In other regional bank mergers, First Abu Dhabi Bank was recently created in the United Arab Emirates after a tie-up between two Abu Dhabi lenders, while mergers are under way in Qatar and Saudi Arabia. KFH said in the statement that it was looking at a range of alternatives to boost its profitability, adding that such decisions require approval from regulators, including the central bank.

Yeow joins Alkhair International Islamic Bank as CEO

Alkhair International Islamic Bank (AKIIB) has appointed Yeow Tiang Hui as its chief executive officer effective Aug 1.
AKIIB said in a statement that he succeeded Datuk Adissadikin Ali, who left the bank last year to head RHB Islamic Bank. Yeow has worked at several multinational banks, including managing the multinational portfolio at Deutsche Bank and being vice-president of Citibank/Citicorp’s venture capital outfit and its head of commercial banking. From 2007 to 2016 he served as head of corporate banking at Kuwait Finance House in Malaysia.

#Kenya should see #Sukuk as the next frontier of finance

Ongoing development of Islamic finance in Kenya is expected to innovate the financial services sector. One area that will see a hive of activity in the local market will be the introduction of sukuk. The Kenyan government is now preparing to issue the first Sovereign Sukuk with the aim of diversifying sources of funding at competitive rates. Usually, Sukuk derives its financing structure from the nature of the underlying assets available to the originator, regulatory and tax considerations as well as perspectives expressed by the Shariah scholars. However, what may be declared as Shariah-compliant by a team of scholars could be rendered invalid and non-Shariah-compliant by a team of other scholars. This informs the need to have one central Shariah body that regulates the industry to minimise confusion from multiple non-structured Shariah opinions.

Dana #sukuk: why the market is overreacting

The sukuk issued by Sharjah-based Dana Gas and recently denounced as non-shariah compliant will not damage confidence in the Islamic debt markets, as some have claimed. The gas provider's announcement in June that $700 million worth of its bonds are not compliant with shariah law in the United Arab Emirates (UAE) perplexed the market. The firm’s chief investment officer, Mohieddine Kronfol, said that the impact of this restructuring will be insignificant to the wider industry in the long-term. He added that Dana Gas is owed around $1 billion from Iraq and Egypt, Dana Gas is only one issuer in a global sukuk market with over 90 issuers. In his opinion, the media and public attention spent on Dana Gas is out of proportion with what has transpired so far.

#Fintech and Islamic #Crowdfunding

The Islamic Financial Services Board (IFSB) in its annual report highlighted developments in the Islamic Finance Fintech space. To identify relevant crowdfunding platforms with a focus on equity- and loan-based platforms located in the Muslim world, the database of Crowdsurfer was consulted. It lists in 32 of the 57 member states of the Organisation of Islamic Cooperation (OIC) a total of 108 crowdfunding platforms. After some corrections, the Crowdsurfer database identifies 14 equity-based and 13 commercial loan-based crowdfunding platforms with an active status. The number of platforms in OIC member states that explicitly refer to Islamic finance or Shariah and offer investors financial returns is very small. There are two more Islam-oriented active platforms of this type outside the OIC: Ethis Crowd (Singapore) for real estate, and KapitalBoost (Singapore) for SME financing.

Dana Gas describes UK court decisions on #sukuk as favourable

Dana Gas described decisions by the High Court of Justice in London as favourable, as the company seeks to restructure $700 million of outstanding sukuk. On July 5 the High Court upheld an injunction blocking holders of the bonds from enforcing claims related to the securities against Dana. The court ordered Dana to cancel an injunction in a court in Sharjah and to seek a stay of proceedings there. The company remains keen to engage with sukuk holders and reach an agreement on a consensual basis, which is not prevented by the injunctions in place.

AfDB, Islamic bank sign agreement to fund energy, SMEs

The African Development Bank (AfDB) and the Islamic Development Bank (IDB) have signed an agreement to support projects in energy, agriculture and SME sectors on the continent. Both parties agreed to jointly pool together $2 billion over the next three years to finance projects in agriculture and food security, renewable energy, small and medium enterprises (SMEs). They also agreed to contribute $1 billion each over three years for joint activities focusing on these priority areas. CEO of AfDB, Akinwumi Adesina, reaffirmed the bank’s commitment and interest to build a stronger partnership with the Islamic Development Bank.

#Malaysia in bid to lift Islamic finance

The Malaysian Institute of Accountants (MIA) announced that Malaysia could become the first country to incorporate the International Financial Reporting Standards (IFRS) in Islamic finance. MIA president Datuk Mohammad Faiz Azmi said the accounting body was looking into the prospect. He added that MIA will come out with a book on how to apply the IFRS in Islamic finance, as many countries have not adopted it yet. The book will be launched later this month with the help of the regulators and banks. According to MIA, Malaysia adopted the IFRS in 2012, in keeping pace with global trends. The IFRS brings transparency, accountability and efficiency to financial markets. Faiz said MIA’s role was assisting Malaysian Accounting Standards Board (MASB) to prepare the market for IFRS. For that, MIA carries out various workshops and courses.

Amendment of Islamic financing bill pushed

The Mindanao Development Authority (MINDA) is currently pushing to fast track the institutionalization of the Islamic Financing Mechanism. MINDA assistant secretary Romeo Montenegro said they are proposing the amendment in order to have specific mechanisms for full implementation of the Islamic Finance Mechanism. He added the bill in the Senate is already in the committee level and are already waiting for the same version to be filed in the House of Representatives. Montenegro said they wish to have the Islamic Financing Mechanism to pilot at Marawi to help with the reconstruction efforts in the area. It is also targeted to be a channel for the Middle Eastern countries willing to shell out financial support for the victims of the Marawi siege.

Africa is Islamic banking’s new frontier

Several African countries are vying to become regional hubs for Islamic finance. Kenya has three Islamic banks, as well as an Islamic insurance company. A further five conventional banks offer sharia-compliant products through dedicated Islamic 'windows'. Kenya also hopes to issue a sovereign sukuk to raise funds for infrastructure and help foster an Islamic capital market. Nigeria, which has one Islamic bank, plans to do the same. South Africa, Senegal, Côte d’Ivoire and Togo have already issued sovereign sukuk. In north Africa Islamic finance has long been held back by a fear that it means introducing sharia law through the back door. South of the Sahara the problems are more structural. According to Thorsten Beck of City University in London, Islamic banks’ sources of funds are mainly short-term, making it hard for them to offer long-term financing. Khaled Al-Aboodi of the Islamic Development Bank says regulators don’t yet know how to deal with the sector. In Kenya Islamic transactions still face double taxation, which makes it hard to compete.

Warba Bank ‘signs’ financial deal with #Turkey’s Ziraat Bank – Islamic banking sector growth eyed

#Kuwait’s Warba Bank announced a new Shari’ah-compliant, joint, multi-currency financial deal of $236 million with the Ziraat Participation Bank of Turkey. Warba Bank acted as the Lead Arranger and Subscription Manager of the deal, which was initially launched at $160 million. Due to oversubscription, the deal was increased so as to reach $ 236 million, with an increase of 52%. The Murabaha-based financing deal includes both US Dollars and Euros. It will be employed mainly in SME financing and income diversification at Ziraat Bank. Shaheen Hamad Al-Ghanem, Warba Bank’s CEO said the Bank was proud to be entrusted and to contribute to the financing of the agricultural sector, which is one of the pillars of the rise of the Turkish economy. This is the second participation of Warba Bank in arranging a financing transaction for the Ziraat Participation Bank of Turkey. In 2016, it contributed to a $155 million multi-currency co-financing transaction for the Turkish bank.

IDB promotes connectivity for sustainable development

The Islamic Development Bank (IDB) Group organized an event on "Promoting Connectivity for Sustainable Development". The event was chaired by Hani Salem Sonbol, CEO of the International Islamic Trade Finance Corporation (ITFC) and the keynote speech was delivered by Aja Fatoumatta Jallow Tambajang, vice president of Gambia. The event provided an in-depth analysis of the IDB Group strategic objectives in financing infrastructure investments. The event was also an opportunity to bring together experts and exchange ideas on growth and connectivity among member countries. Sonbol stated that the IDB Group adopted a 10-year Strategy and one of its objectives is "Connectivity for Growth". The objective is to promote cooperation among member countries, both in terms of private sector and public-sector cooperation to enhance trade, investment, knowledge, and capacity development.

External Shariah #audit in Islamic banks

The external Shariah audit is the latest development in the area of Shariah governance of the global Islamic banking industry. Traditionally, Islamic banks appoint a Shariah supervisory board with the mandate to oversee Shariah compliance. An additional layer of assurance by an independent party will provide greater assurance to the Islamic banks' stakeholders. Several central banks are already using the external Shariah audit in their governance system, for example the Central Bank of Kuwait or the central banks of Oman and Pakistan. Several other jurisdictions, including Bahrain, are also likely to do the same. The Accounting and Auditing Organisation for Islamic Institutions (AAOIFI) recently issued an Exposure Draft specifically on external Shariah audit. Availability of human resource can be a challenge in implementing external Shariah audit. This can be overcome by taking initiatives to train both the professional accountants and Shariah experts to conduct an external Shariah audit.

E-auction: Why we selected only Jaiz bank – Customs

The Nigeria Customs Service announced that only Jazz Bank was able participate in the first bidding of its e-auction exercise. Joseph Attah, the Customs National Public Relations Officer (PRO), said that Jazz Bank was the only one out of the 23 customs duty collecting banks that accessed the e-auction platform. The PRO said that all the 23 Customs duty collecting banks were carried along and the process was subjected to user acceptability test. Throughout the testing period, no bank indicated any problem with the platform. However, upon launch only Jaiz Bank was discovered to be ready and active on the platform. Attah noted that the first 48 hours bidding period produced 43 winners. Items uploaded were 130 vehicles, 43 people placed their bids and won vehicles.

The future of Islamic finance in #Spain

In Spain the Muslim population exceeds two million being higher than that of Qatar or Bahrain and similar to the population of Kuwait. However, there are no Shari'ah compliant services or assets under management. Europe advances in this type of financing. The United Kingdom was the first non-Muslim country that held in 2014 an emission of sovereign Sukuk bonds amounting to 200 million pounds. In 2015 Kuwait Finance House (KFH) opened a subsidiary in Germany, Habib Bank Zurich will operate in the UK at the end of 2017. There is a clear tendency that Islamic banks are expanding their activities in Western countries and continue introducing their products in these markets. In Spain there is an excellent opportunity to implement Islamic finance as currently there is no market operator offering Shari'ah compliant products or services.

Collaboration Between DIFC And DIEDC Set To Launch Islamic #FinTech

Dubai International Financial Centre (DIFC) signed a Memorandum of Understanding (MoU) with Dubai Islamic Economy Development Centre (DIEDC). Earlier this year, DIFC launched FinTech Hive, a 12-week accelerator programme which allows tech start-ups to test and develop FinTech related business ideas. As part of the agreement, the programme will include institutions such as Emirates Islamic Bank, Dubai Islamic Bank, and Abu Dhabi Islamic Bank, to mentor participants in the field of Islamic finance technology. Arif Amiri, CEO of DIFC said this MoU was an important step for FinTech, for the Islamic economy and for FinTech Hive. For his part, Abdulla Mohammed Al Awar, CEO of DIEDC, said FinTech Hive at DIFC will go a long way towards developing segments like mobile banking and payment systems, as well as SME financing.

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