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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%.

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.

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.

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.

Islamic GCC Bond Sales Fall by 32 Percent Due to Oil Price Hike

According to Moody’s Investors Service, the GCC region's sukuk issuance fell by 32% to reach $16.7 billion in the first half of 2018. This contributed to a reduction in the Gulf’s overall share of the global sukuk issuance to less than a third (30%) compared with 39% a year earlier. The GCC also dragged down total global issuance which fell by 12% to reach $55 billion in the first six months of the year. Recovery in the oil price has reduced pressure on Gulf government’s budget deficits and helped lower their borrowing requirements. While Islamic bonds have fallen out of favour in the Gulf, their appeal remains strong in Malaysia. The South-East Asian country increased its issuance by 9% in the first half of the year to reach $22.4 billion, making it the world’s leading Sukuk issuer.

ADIB's Riad Sees Strong Uptick in #Sukuk Activity in Second Half

In this interview Amir Riad, head of corporate finance at Abu Dhabi Islamic Bank (ADIB) talks about the UAE's economy and the lender's sukuk business. Riad sees a positive traction as the oil price is stabilising and the capital markets are deepening. ADIB has just announced the issuance of a new tier 1 sukuk, which replaces the bank's issuance in 2012. He expects a strong sukuk activity in the second half for the whole GCC region.

#Saudi Arabia sells 4 billion riyals of domestic #sukuk

Saudi Arabia's finance ministry sold 4.0 billion riyals ($1.1 billion) of domestic Islamic bonds in its monthly auction. The issuance is actually a re-opening of the issue originally made in July. The ministry sold 2.25 billion riyals of five-year sukuk, 500 million riyals of seven-year and 1.25 billion riyals of 10-year, bringing the total issue size to 7.465 billion riyals.

Hill International to Provide Project Management for Bank Aljazira Project, Supporting #Saudi Arabia National Vision 2030

Hill International has received a three-year contract from Bank Aljazira to provide project management services for Aljazira’s Regional Management Office Building in Riyadh. The project will be one of Riyadh’s landmarks, reflecting Bank Aljazira’s image and its alignment with the Saudi Arabia National Vision 2030. The project location is planned to be north of the Capital, in the center of new major developments for the next 20 years. Hill International provides program management, project management, construction management and other consulting services to clients in a variety of market sectors. According to Engineering News-Record magazine, Hill International is the eighth-largest construction management firm in the United States.

AUB in push for #merger with KFH

Bahrain’s largest lender Ahli United Bank (AUB) has announced that two investment banks are evaluating a potential merger with Kuwait Finance House (KFH). HSBC and Credit Suisse are currently undertaking necessary valuations studies to assist AUB and to arrive at a fair share exchange ratio. If a merger proceeds, the total assets of the two banks would be $90.57 billion, making it the sixth largest bank in the Gulf. The major shareholders in the two lenders are Kuwait state-owned entities. The Public Institution for Social Security owns 18.59% of AUB, while KFH's largest shareholder is the Kuwaiti sovereign wealth fund, the Kuwait Investment Authority (KIA).

ADGM’s aviation finance structure utilized in #sukuk issuance

Abu Dhabi Global Market (ADGM) has facilitated the transaction of a 12 year Sukuk issued by Natixis and Noor Bank. It is the first instance where an ADGM structure has been used specifically to hold aircraft assets for issuing Sharia compliant bonds. The transaction follows the successful completion of the first aviation sale and leaseback transactions arranged by Natixis in ADGM in late 2016 and the registration of three international aviation leasing companies earlier this year. ADGM aims to position Abu Dhabi as an international aviation finance hub to deliver bespoke solutions for both Islamic and Conventional transactions.

#Qatari Islamic banks grow despite regional rift — IFSB data

Assets and revenues at Qatar's Islamic banks have grown over the past year, but an increase in problem loans and a drop in foreign currency lending underscore the impact of a diplomatic rift in the region. Qatar Islamic Bank, Masraf Al Rayan, Qatar International Islamic Bank and Barwa Bank held a combined 358.6 billion riyals (US$96 billion) in assets in the first quarter of this year, an 8.8% increase from a year earlier. Most of that increase was due to their holdings of Islamic bonds, which stood at 65.1 billion riyals in the first quarter, a 37.7% rise from a year ago. Capital adequacy and profitability measures were mostly unchanged, but foreign exchange financing decreased by 7%.

#UAE Startup Launches First-Ever Sharia-Compliant Islamic #Crypto Exchange

UAE-based Adab Solutions has announced the launch of the First Islamic Crypto Exchange (FICE). An in-house Sharia Advisory Board (SAB) made up of independent international Sharia experts will be in place to ensure that the exchange is in compliance with Sharia law. In April 2018, Mufti Muhammad Abu Bakar declared that bitcoin is Sharia-compliant, and as such can be used by Muslims. The move potentially opens the cryptocurrency space to a global market of over 1.8 billion Muslims. Adab Solutions is preparing to launch the project ICO in September and tokens will be used as utility keys to access the exchange platform’s services. All commissions within the FICE will be paid exclusively in Adab tokens.

#Qatari Banks May Reveal Merger Plan as Soon as This Week

Barwa Bank and International Bank of Qatar (IBQ) may announce plans to merge as early as this week. Combining Barwa and IBQ would partially salvage a proposed three-way merger with Masraf Al Rayan that was abandoned in June after 18 months of talks. That consolidation would have created the country’s largest Shariah-compliant bank and the Middle East’s third-biggest Islamic lender with more than 178 billion riyals ($49 billion) of assets. The smaller merger will create a lender with about 82 billion riyals in assets, the sixth-largest in the country. Each bank was valued around $1.8 billion in two separate share sales in 2014.

Abu Dhabi Islamic Bank gets nod for $270m rights issue

Shareholders of Abu Dhabi Islamic Bank (ADIB) have approved proposal for a rights issue of AED1 billion ($270 million) by offering 464 million new shares. Shareholders also approved the issuance of a $750 million sukuk and the repayment of its $1 billion sukuk issued in 2012. Khamis Buharoon, ADIB vice chairman and acting CEO, said the bank will continue to focus on expanding its retail business, providing market-leading digital banking services, while capturing opportunities across corporate, transaction and correspondent banking. ADIB reported a 3% increase in net profit for the first half of 2018, which reached AED 1.16 billion.

#Bahrain's GFH Financial Group pays off $200m #sukuk

GFH Financial Group has paid the entire amount of its $200 million sukuk, which was originally drawn in 2007. The facility has now been settled with a recent payment of an outstanding amount of $34 million. With this repayment, GFH said it frees up further assets pledged under the sukuk for potential disposal or exit. In 2008, GFH had financing liabilities in excess of $1 billion compared to $125 million today. According to Chairman Jassim Al Seddiqi, with its prudent approach to managing liabilities, strong cash generation and levels of liquidity, GFH continues to be better placed than ever to deliver value and further build its business lines.

#Qatari issuers raise $19.97bn, lead GCC bonds and #sukuk market in H1

According to a recent report by Kuwait Financial Centre, Qatari issuers led the GCC aggregate bonds and sukuk market in the first half of this year, raising a total of $19.97bn. The report stated that the aggregate primary issuance of bonds and sukuk by GCC entities, including central banks’ local issuances, GCC sovereign and corporate issuances, totalled $95.25bn in H1, 2018, which represents a 9.64% increase on H1, 2017. Qatar raised $12bn and Kuwait was the only GCC sovereign entity not tapping the international bond markets in H1, 2018. Conventional issuances raised $50.17bn, or 80.19%, of the total amount raised in GCC bonds and sukuk market during H1, 2018. Sukuk raised $12.39bn, 30.84% lower compared to $17.93bn raised in H1, 2017 and represented a share of 19.81% of the market in H1 2018.

Abu Dhabi Investment Council increases Al Hilal Bank's capital

Abu Dhabi Investment Council has increased the share capital Al Hilal Bank by AED 400 million. Al Hilal Bank's CEO Alex Coelho said this move will allow the lender to meet the growing demand for Islamic finance by investing in areas with the greatest prospects. The Central Bank of the UAE (CBUAE) raised this year’s economic growth forecast to 2.7% from its previous projection of 2.5% while non-oil GDP growth is forecast to increase to 3.9% this year from 3.4% in 2017.

Gulf grapples with ‘silent’ economic crisis

After years of strong economic growth, most of the economies of the six-member Gulf Cooperation Council (GCC) began to slow back in 2014. Major layoffs started soon after 2015, with major and minor employers shedding jobs. The cuts continued in 2016 and 2017, too. Most of those made redundant were non-natives and this has had an impact on the real estate sector. Dubai’s DAMAC announced this month that its second-quarter 2018 profits were down 46% year-on-year, while fellow developer Nakheel saw its profits dip 3.8% in the first six months of this year. Retail and tourism also felt the pinch, as the number of shoppers has dropped off. In Dubai there is a general fear in the emirate on speaking out about the economy, leading many to dub this the "silent crisis".

ADIB’s Shareholders approve ADIB’s capital proposal to support growth

Shareholders of Abu Dhabi Islamic Bank (ADIB) have approved proposal for a rights issue of AED 1 billion to raise the Paid and Issued Share Capital through a tradeable rights issue of 464 million new shares. Shareholders also approved the issuance of USD 750 million (AED 2.75 billion) perpetual Tier 1 sukuk, and the repayment of its USD 1 billion (AED 3.67 billion) sukuk issued in 2012. The capital plan has been developed to support the bank’s continued growth and its objectives in achieving its strategy while meeting regulatory requirements.

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