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INTERVIEW: Gulf banking consolidation 'long overdue' - Investcorp's co-CEO

According to the co-chief executive of Bahrain’s Investcorp, Rishi Kapoor, consolidation in the financial services industry in the region is long overdue. Consolidation in banking would build the scale required to increase investments in financial technology, as payment solutions are increasingly enabled by fintech. The banking sector in the Gulf Arab region is seen as overcrowded, an M&A deal among banks is currently either in the pipeline or has taken place within the past few months. Investcorp’s co-chief also expects more M&A in the region’s disorganised retail sector, particularly in Saudi Arabia. As for the sectors that offer attractive investment opportunities within the Gulf region, Kapoor favours the sectors related to privatisation, social infrastructure and domestic consumption.

Government decides to issue fresh #Sukuk worth Rs 200 billion

Pakistan's Federal Government has decided to issue fresh Sukuk worth Rs 200 billion, in addition to earlier Sukuk of Rs 200 billion through the same consortium of Islamic banks aimed at reducing circular debt. The consortium comprising Meezan Bank Limited, Faysal Bank Limited, Bank Islami Pakistan Limited, Dubai Islamic Bank Pakistan, MCD Islamic Bank Limited and Al Baraka Bank Pakistan Limited have already submitted their term sheets to the Finance Division. The syndicate of Islamic Banks had also forwarded a tentative term sheet for Rs 100-200 billion which specifies that the facility is subject to availability of suitable assets. The energy sector's circular debt is around Rs 1.5 trillion. According to Minister for Power, Omer Ayub, the government would bring down circular debt to Rs 250 billion by December this year.

OPINION-Strategic Compassion: The power of Islamic finance in the service of global good

The practitioners of Islamic finance are increasingly framing their practices as ethical, socially responsible and conducive to humanity’s wellbeing. Tools like the obligatory zakat and charitable donations generate between $200 billion to $1 trillion annually. According to the World Bank, zakat can alleviate poverty in 20 of the 39 OIC countries. In Indonesia, Baznas—a national institution mandated to collect, distribute and manage zakat— has benefited around 6.8 million people. Baznas is also believed to be the first zakat organization to have formally committed to supporting the United Nations’ Sustainable Development Goals (SDGs). In 2018, in neighboring Malaysia, the International Federation of the Red Cross and Red Crescent Societies (IFRC) pioneered a zakat-financing instrument with a local zakat authority to support Kenya’s Drought Assistance Programme. Green-gram seeds were bought with the zakat monies and distributed to 175,000 households. In six months, the crops produced and sold a yield worth $20 million.

Bank Islam continues to focus on affordable housing segment

Bank Islam Malaysia expects its home financing business model will continue to help the bank to grow and boost its assets. Malaysia’s oldest Islamic lender has been growing organically over the years, despite the crowded market. Bank Islam CEO Mohd Muazzam Mohamed said the bank is already adopting the right model to support this affordable segment. He added that the Islamic bank will continue with its current business model which is in line with the governments’ directive. Bank Islam has already allocated RM300 million to be utilised until 2021 as part of its digitalisation directive. Mohd Muazzam said the bank aims to increase its financing for small and medium enterprises (SMEs) by RM200 million in 2019. The bank also plans to increase its investment fund to RM800 million under its Al-Awfar product, which has been refreshed since its establishment in 2009.

Emirates Islamic Bank's net profit surges 97% to Dh411 million

Emirates Islamic reported a net profit of Dh411 million for the first quarter of 2019, an increase of 97% year-on-year and 54% quarter-on-quarter. Emirates Islamic CEO Salah Mohammed Amin said the bank recorded its highest ever quarterly net profit since its inception in 2004. The strong set of results was supported by balance sheet growth, higher funded income, growth in fee income and lower cost of risk. The bank’s total income for the first quarter increased by 12% to Dh663 million. The total assets at Dh60.6 billion, increased by 4% from end 2018. Impaired financing ratio is at 8.6% with a strong coverage ratio of 111%.

FBNQuest Trustees to Host Islamic Estate Planning Clinic

FBNQuest Trustees is set to host an Islamic Estate Planning Clinic, on the 28th of April, 2019 in Abuja, Nigeria. This forum aims to educate Muslims about the importance of Estate Planning in line with Islamic laws. The Islamic Estate Planning Clinic will be hosted by Mr. Adekunle Awojobi, Managing Director FBNQuest Trustees and facilitated by the renowned Islamic financial Scholar, Dr. Bashir Umar, Imam at Al- Furqan Mosque in Kano. The session will address topics on Islamic Trust (Waqaf), Islamic Will (Wasiyyah), Zakat, Hibah, Takaful, and Sukuk; underscoring the importance of an Islamic plan to Muslims, as highlighted from the Qur’an and its interpretations in the Sunnah and Hadith. FBNQuest Trustees will also share insights on managing conventional Estate Plans, which is targeted at ensuring the preservation of legacies.

Financial inclusion of low-income groups a must for economic growth

Jameel Ahmad, Deputy Governor of State Bank of Pakistan believes that the newly adopted National Financial Inclusion Strategy (NFIS) will contribute significantly to the economic growth. He said the central bank and Pakistan's government have a firm resolve to reach the under-served groups. The NFIS would focus on the enhanced targets including Small-Medium Enterprises (SMEs), agriculture, housing and Islamic finance on an extended time-line to 2023. By 2023 the NFIS aims to enhance the usage of Digital Payments to 65 million active digital transaction accounts, to increase deposit to 55% of the GDP, to promote SME Finance to 700,000 enterprises, to increase Agricultural Finance disbursements to Rs.1.8 trillion, and serve 6 million farmers through digitalized solutions and to enhance share of Islamic Banking to 25% of the banking industry.

Bank Alfalah & Ghandhara Industries signed a MoU for Promoting Isuzu D Max Variants

Pakistan’s Bank Alfalah Islamic has recently signed a Memorandum of Understanding (MoU) with Ghandhara Industries Limited (GIL). Under this MoU, Bank Alfalah Islamic and Ghandhara Industries Limited have agreed on a joint campaign to promote “Isuzu D-Max Pickup variants” through Bank Alfalah Islamic’s Auto Finance product. The signing ceremony took place at Bank Alfalah Head Office, Islamic Banking Division in Karachi. The memorandum has been signed by Dr. Muhammad Imran, Group Head Bank Alfalah Islamic Banking Division and Mr. Muhammad Kuli Khan Khattak, DCEO Ghandhara Industries Limited.

Insurance Sector Projected to Witness Majors Mergers in GCC Soon

Mergers and acquisitions will inevitably happen in the UAE's overcrowded insurance and Takaful industry. According to Vasilis Katsipis, general manager at AM Best, there are several reasons that hamper local insurers and Takaful firms from consolidation. Individuals holding larger stakes in the companies are willing to sell at a much higher price which is not attractive for the buyers. Also, it is not a high priority for the owners either in terms of liquidating assets or in terms of spending time. Katsipis noted that if it is purely for financial reasons, then the market will see some activity in terms of consolidation in the next two years. According to Safder Jaffer, managing director of Milliman, the lack of long-term view of profitability by shareholders, low interest rate environment and lack of expertise continue to be a main challenge for takaful companies.

ICD invests $230M in various sectors in #Egypt

Ayman el Segeny, CEO of the Islamic Corporation for the Development of the Private Sector (ICD) met Sahar Nasr, Egyptian Minister of Investment and International Cooperation. Segeny said that ICD's investment in Egypt reached $230 million, of which $75 million were invested in the food industry and $75 million in the renewable energy in Benban Power Station. Futhermore, Segeny noted that ICD participated in financing petroleum Services Company by $20 million. Both sides discussed activating the memorandum of understanding (MoU) between the organization and the Investment Ministry on the cooperation to develop Egypt's infrastructure. Nasr said that there are vast opportunities for investment in Egypt especially in the Suez Canal Development corridor, the New Administrative Capital and New Alamein.

Growing demand to support Islamic #insurance premium growth

According to ratings agency Moody’s, the Takaful industry is expected to experience improved premium growth this year supported by growing demand from key regions such as the Gulf Cooperation Council (GCC), Southeast Asia and Africa. Mohammed Ali Londe, AVP-Analyst at Moody’s, said that in the GCC region the compulsory motor and medical cover will support demand, as will economic activity linked to planned sporting and cultural events, such as 2020 Expo in the UAE and the 2022 Fifa World Cup in Qatar. Experts speaking at the 14th World Takaful & Insurtech Conference in Dubai said despite the slow pace of growth in premiums, the industry has huge potential for expansion.

Dubai Islamic Bank confirms #merger and #acquisition prospects

Dubai Islamic Bank is looking at acquisitions among other options as part of its expansion strategy. A potential acquisition of Noor Bank by DIB would create a lender with AED 275 billion in assets if completed. The Investment Corporation of Dubai (ICD) is the biggest shareholder in DIB with a 28.4% stake, and it also owns 22.9% of Noor Bank. The Middle East’s financial industry is witnessing a wave of consolidation as banks seek ways to improve competitiveness and boost capital. Abu Dhabi is in the process of merging Abu Dhabi Commercial Bank (ADCB), Union National Bank (UNB) and Al Hilal Bank after the consolidation of First Gulf Bank and National Bank of Abu Dhabi to create First Abu Dhabi Bank (FAB) in 2017.

PM: Islamic banking players must invest in technologies

Malaysian Prime Minister Tun Dr Mahathir Mohamad said Islamic banking and finance players must be intensely invested in technologies. He said the application of smart technology has positively disrupted the industry, however, the potential disruptions to traditional Islamic finance should not be underestimated. The disruptions can swing both ways. Dr Mahathir delivered his speech at the 15th Kuala Lumpur Islamic Finance Forum 2019. He said that Malaysia had spearheaded a number of innovative developments in Islamic finance, such as the issuance of the first Sustainable and Responsible Investment Sukuk and Green Sukuk, as well as the launch of the Investment Account Platform. He believes that Islamic finance can be a catalyst for the growth of green developments globally.

Potential Noor Bank acquisition 'positive' for Dubai Islamic Bank

According to Egyptian investment bank EFG-Hermes, the potential acquisition of Noor Bank by Dubai Islamic Bank would be a positive move for the buyer. Also, there is room for more consolidation among local lenders as the UAE is overbanked, with 22 local and 38 foreign banks, most of which have "sub-optimal" market shares. EFG-Hermes expects a potential transaction to be made through a share-swap. It estimates a share-swap of 1 DIB share for 7.8 Noor Bank shares that would lead to a 1% earnings per share dilution for DIB. The merged entity would have an assets market share of 10%, as Noor Bank's assets amount to Dh51 billion or 2% market share and DIB’s assets amount to Dh224bn or 8% as of 2018.

Gassner's picture

Running to fundraise for UNICEF !

Dear friends,

After participating in the fundraising challenge for UNICEF by Cycling in the Swiss Alps, Crans-Montana, this year I changed the discipline - I do my FIRST ever participation in a running event!

Would you mind to donate - even for a first time - to UNICEF to make my feet lighter running for the cause?

English:
https://action.unicef.ch/en/vous-aidez-ainsi/collecte-de-dons/harmony-ge...

Francais:
https://action.unicef.ch/fr/vous-aidez-ainsi/collecte-de-dons/harmony-ge...

Many thanks also on behalf of the kids!

Best regards,

Michael Gassner

n/a

#Morocco to Launch Islamic Insurance (#Takaful) in 2019

Morocco will launch Takaful next year after introducing Islamic banking services in 2017. In July 2017, the Moroccan Government Council adopted a draft decree paving the way for implementation of the Takaful Law. Insurers wishing to operate in the segment will be required to offer exclusively Islamic products. Some big insurers such as French AXA and US Atlanta have already shown an interest. The Moroccan conventional insurance sector is thriving as shown by the growth of its turnover, which increased in 2017 by 10.9% to $4.1 billion. Insurance penetration increased in Morocco by one percentage point to 3.7% of GDP in 2017, against 2.1% in Tunisia and 1.7% for the MENA region.

Pope Francis Ditches Charity in Favor of Impact Investing

After decades of giving to charity, a growing number of Catholics are starting to put their philanthropic billions into profitable investments instead. The new aid model is also backed by Pope Francis. Catholic investment funds are increasingly investing in projects in emerging economies and earning a return while also doing good. Impact investing is growing in popularity among investors who want to support development goals such as clean energy, education and healthcare. According to the Global Impact Investing Network (GIIN), $228 billion was managed in impact investments worldwide in 2017, double that of 2016. An organisation spearheading the new mission is Catholic Relief Services (CRS). CRS has lent $1 million to banks in El Salvador that lend on to city authorities to spend improving and expanding their erratic water services. CRS aims to give 300,000 people reliable water access in the next three years while also earning single digit returns from the loans.

IRTI and Dar Al Sharia Sign MOU to Develop Solutions for Islamic Financial Institutions

The Islamic Research and Training Institute (IRTI) and Dar Al Sharia have signed a memorandum of understanding (MOU) for strategic collaboration. The MOU was signed by IRTI Director General, Dr. Humayon Dar, and CEO of Dar Al Sharia, Mian Muhammad Nazir. IRTI and Dar Al Sharia will jointly provide Islamic finance advisory services to Islamic financial institutions, multilateral financial institutions, sovereigns and quasi-sovereigns, corporate entities, development funds, regulators, Fintech companies, educational institutions and other clients offering Sharia-compliant products and services. Nazir said the strategic collaboration with IRTI was a landmark initiative towards the development of a sustainable platform for innovation in the Islamic finance industry.

#Egypt to get $1bln for basic goods from Islamic Bank - ministry

The International Islamic Trade Finance Corporation (ITFC) will provide Egypt with $1 billion to support the provision of basic goods. The financing is part of a $3 billion agreement with the ITFC, which is part of the Islamic Development Bank (IDB). Egypt's economy was battered after a 2011 uprising ushered in political instability that scared off tourists and foreign investors.
Earlier this week Egypt signed contracts with two global banks to hedge against fluctuating global oil prices. The investment ministry said the ITFC financing was part of a new cooperation strategy between Egypt and the IDB lasting until 2021.

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