Bahrain

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.

Interview with Ahmed Abdul Rahim, Chief Executive Officer of Ithmaar Bank

In this interview, Ahmed Abdul Rahim talks about Ithmaar Bank’s recent performance, the global Islamic banking industry and the increasing use of technology in banking. Ithmaar Bank is now entirely focused on retail banking and is considered one of the biggest Islamic retail banks in Bahrain. The waiting period at the branches has been reduced and the customer is provided various delivery channels for services like call center, Internet banking, EasyPay and mobile banking. EasyPay is the first-of-its-kind mobile-payment service in Bahrain. The service enables customers to shop simply by tapping their mobile phones at the checkout counters of participating merchants. As a pioneering Islamic retail bank, Ithmaar ensures that all its products and services are compliant with Islamic Sharia rules and that business is conducted accordingly.

The rise of Islamic fintech, global opportunities for #Bahrain

At the moment Islamic fintech is more of an aspiration than a reality. As the fintech industry and the demand for ethical investments grows exponentially, we are witnessing a want for the convergence of two. Seeing this space in the Middle Eastern banking industry, the Kingdom of Bahrain has entered a partnership with fintech incubator Singapore Fintech Consortium (SFC) and asset management and advisory firm Trucial Investment Partners. This partnership stands to initiate, nurture and sustain Bahrain’s fintech ecosystem while pulling from the experience of global industry leaders. Likewise, Bahrain has also recently opened a consultation led by the Central Bank of Bahrain (CBB), with the aim of establishing a regulatory sandbox for fintech. It enables businesses to take advantage of the concentration of Islamic financial institutions and the consultation focuses on crowdfunding, including Shari’ah-compliant crowdfunding.

IIRA maintains ratings of #Bahrain Islamic Bank

Islamic International Rating Agency (IIRA) has reaffirmed ratings of Bahrain Islamic Bank (BIsB) at BBB/A2 on the national scale and BBB-/A3 on the international scale. IIRA added that the bank’s rating outlook is constrained by the macroeconomic environment and tougher industry conditions for banks in the Gulf. Given the presence of external, regional concerns, the outlook on international scale ratings is assessed as Negative. Impairment in recent financings remains minimal, indicating improvement in the bank's business underwriting capability. However, overall asset quality concerns remain notable. IIRA has assigned BIsB a Fiduciary Score of 71-75, which signifies that the rights of various stakeholders are adequately protected.

KFH Said in Talks for #Bahrain Ahli United Bank, Kuwait Unit

Kuwait Finance House is in talks to buy Bahrain’s Ahli United Bank in a deal that would create one of the Middle East’s largest Islamic lenders with $85 billion of assets. However, there is no guarantee that a deal will take place and final agreements haven’t been reached yet. Lower oil prices are forcing Gulf lenders to consolidate for scale. Abu Dhabi lenders National Bank of Abu Dhabi and First Gulf Bank recently merged to create a regional powerhouse with $175 billion of assets. Qatar’s Masraf Al Rayan is planning to combine with unlisted Barwa Bank and International Bank of Qatar to create the country’s largest Islamic lender. Ahli United in Bahrain declined to comment. KFH shares have lost 0.6% so far this year, giving the lender a market value of $9.3 billion. Ahli United shares have jumped 16% so far this year, giving it a $5.57 billion market capitalization.

$100m fund launched in #Bahrain to help #SMEs growth

A $100 million fund has been launched in Bahrain to invest in the country's small and medium-sized enterprises (SMEs). The initiative has been unveiled by the Islamic Corporation for the Development of the Private Sector (ICD) in partnership with Ibdar Bank and Labour Fund Tamkeen. The Bahrain SME Fund is a Shariah compliant mezzanine private equity fund which will target SMEs with high growth potential in consumer, industrial, ICT, education and healthcare sectors. Khalid Al Aboudi, CEO of the ICD, said that SME support is at the centre of ICD’s strategy as they seek to facilitate further prosperity in Islamic countries. Ahmed Al-Rayes, CIO of Ibdar Bank, added that the creation of this fund is aligned with the Bank’s mission to support Bahrain’s economic diversification through private sector growth.

ICD, Tamkeen & Ibdar launch $100million #Bahrain #SME #fund

The Islamic Corporation for the Development of the Private Sector (ICD) in partnership with Ibdar Bank and Labour Fund Tamkeen has announced the launch of the Bahrain SME fund. The Bahrain SME Fund is a Shariah compliant mezzanine private equity Fund which will invest in Bahrain’s Small and Medium Enterprises (SME’s). The Fund will target SME’s with high growth potential in consumer, industrial, ICT, education and healthcare sectors, as well as sectors experiencing dynamic change. The Fund will add immense value to Bahrain as a tool for SME growth and development where 90% of Bahrain enterprises are SMEs and their contribution accounts for about 30% of the Kingdom’s GDP.

Normes Charaïques #AAOIFI

La traduction en langue française de l’ensemble des standards de l’AAOIFI a été achevée. La première édition officielle en français des Normes Charaïques pour les institutions financières islamiques sera présentée le 12 avril 2017 à l’ouverture de la 15ème conférence annuelle de l’AAOIFI à Manama, Bahrain. Cette démarche s’inscrit dans le cadre des efforts de l’AAOIFI pour la diffusion de ses Shari’ah Standards, qui sont devenus la principale compilation de jugements de Fiqh contemporain dans le domaine de Fiqh al Mouamalat au niveau mondial. Eu égard à la taille des communautés francophones dans le monde, l’AAOIFI a entrepris de faire traduire ses Shari’ah Standards en français selon une méthodologie rigoureuse pour assurer une traduction une traduction fiable comportant plusieurs niveaux de révision, d’édition et d’assurance qualité.

#Bahrain’s sovereign wealth fund is back on track

Mahmood Hashim Al Kooheji, the head of Bahrain’s sovereign wealth fund, Mumtalakat, is intent on brokering safe, considered deals that yield long-term growth. The wealth fund is taking an increased interest in the comparatively stable sectors of healthcare, education and industry. As evidence of this strategy, Mumtalakat last year took an undisclosed equity stake in Italian healthcare firm KOS Group. In October 2015, Mumtalakat took a majority stake in UAE-based GEMS Education as part of an investment group that included US private equity firm Blackstone. Al Kooheji expects another deal to be reached next year to launch GEMS schools in Bahrain. He also points out that Mumtalakat announced six new deals in 2016, a significant number for a small fund. According to Al Kooheji, Mumtalakat is now truly diversifed in the GCC, US, UK and Europe and this will continue in the future.

#Bahrain's GFH banks says it may merge with Dubai's Shuaa Capital, others

Bahrain's GFH Financial Group may merge with Dubai-based Shuaa Capital, GFH said in a statement. A web of ties between GFH and Shuaa began forming last year. In May, Abu Dhabi Financial Group (ADFG) and GFH said they were jointly setting up an Islamic bank called ADCorp with initial capital of $100 million. In November, ADFG bought a 48.36% stake in Shuaa, which has a market capitalisation of about $535 million. In December, Shuaa bought 14% of Bahrain's Khaleeji Commercial Bank for $25 million. GFH owns 47% of Khaleeji. On Sunday, Shuaa said it would acquire Integrated Capital and Integrated Securities, both controlled by ADFG. Integrated Capital owns 11.74% of GFH. ADFG officials did not respond to requests for comment about the possible merger.

Islamic finance body AAOIFI seeks to update guidance on #murabaha contracts

The Bahrain-based Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) has issued a draft standard on murabaha to update guidance on the most common financing tool used by Islamic banks. AAOIFI is conducting a wide review of its standards to encourage convergence of industry practices and increase consumer appeal. The proposed standard would supercede two earlier ones on murabaha. It would also cover new areas such as the accounting treatment on the liability side of a murabaha transaction. AAOIFI is seeking industry feedback on the draft until the end of March, aiming to make the final version effective from January 2019.

CIBAFI-IRTI meeting on March 22-23

The General Council for Islamic Banks and Financial Institutions (CIBAFI) and the Islamic Research and Training Institute (IRTI) are jointly organising the yearly meeting of the Directors of Operations and Investments of Islamic Financial Institutions (IFIs). The theme this year will be "Bringing Islamic Investment of IFIs to the Next Frontier" and is held between March 22-23 in Manama. Experts in Islamic Investments will gather to discuss the disruptive agendas of the Islamic investments and look into topics of Strategies in the Infrastructure and Project Finance; Private Banking Capabilities of IFIs; Direct Equity Investment of IFIs; Sustainability Criteria in Islamic Investment Framework among other significant topics.

#Tunisia: GFH would like to pass “Financial Port” to another investor

The Bahraini Gulf Finance House (GFH) would seek to get rid of its Tunisian project, the Tunis Financial Harbor. The project was to be one of the largest Bahraini investments in Tunisia, which would be worth 7.5 billion USD. Tunis Financial Harbor was initially designed to make Tunisia a regional financial hub, but eventually turned into a simple real estate program. GFH is currently seeking to pass the hand and to pass the project on to another investor. The cause would be the financial difficulties of the Bahraini group.

Launching AAOIFI in 850 Days #report and Shari'ah #standards e-learning platform

Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) has launched a comprehensive report on "AAOIFI in 850 Days". The report provides concise details, including infographs, illustrations, and statistical figures, covering AAOIFI's developments in activities over the period from September 2014 to end of December 2016. Dr. Hamed Merah, AAOIFI's Secretary General, said that AAOIFI embarks on efforts to enhance transparency as key to effective communication. Meanwhile, AAOIFI's statute was amended, and a set of 7 by-laws, policies and procedures, charters were developed. These include launching of AAOFI's Shari'ah standards translation projects (for Russian, French, and Urdu languages), and publication of AAOIFI's standards in paper and digital formats including a mobile app for smart phones. The section on strategic relationships cover AAOIFI's ties with stakeholders, specifically development of ties with institutional members. The report highlighted AAOIFI's keenness to further solidify its relationship with central banks and regulatory and supervisory authorities.

Gulf Finance House distances itself from finance harbor plan

Bahrain's Gulf Finance House (GFH) is distancing itself from its major Tunisian property project, Tunis Financial Harbour (TFH). GFH's local subsidiary, Tunis Bay Project Co is to drop out of the residential golf course project.

#GCC #VAT a test for Islamic Finance- Fitch

According to Fitch Ratings, the plan to introduce Value Added Tax (VAT) in Gulf Cooperation Council (GCC) member states could be a key test for the region's Islamic finance industry. Saudi Arabia and Bahrain approved the implementation of VAT in the GCC, however, local implementation laws must still be agreed in each country. This paves the way for the introduction of an expected 5% VAT rate as early as the beginning of 2018. Without tax neutrality or equality rules, the introduction of VAT would put Islamic finance transactions at a disadvantage to conventional transactions. A VAT charge adds to the instalment payments in a murabaha, while a conventional transaction would not have VAT for the sale of the asset added to the interest payments. Numerous countries with VAT have provided for some form of tax neutrality or equality for Islamic finance transactions, including Malaysia, Indonesia, Turkey and Pakistan.

#Bahrain’s Nogaholding approaches banks for debut #bond programme

Nogaholding, the investment arm of Bahrain’s National Oil and Gas Authority (NOGA), has approached banks with the aim of setting up an international bond programme. The bond programme could be either for conventional bonds or for sukuk, but since Nogaholding’s latest U.S. dollar fund-raising exercise was an Islamic loan, a sukuk programme seemed more likely. A spokeswoman for Nogaholding declined to comment. In March last year, the company raised a $570 million murabaha facility with a five-year maturity. The 2016 loan backed projects such as the Bahrain LNG Import Terminal, a modernisation programme for Bahrain Petroleum, and expansion of facilities at the Bahrain National Gas Expansion.

#CBB #plans to #shut #down #Future #Bank

The Central Bank of Bahrain (CBB) has announced plans to close down Future Bank, a joint venture between two Iranian lenders – Bank Saderat and Bank Melli – and Bahrain’s Ahli United Bank, said a report. The CBB said it intends to submit a petition to the competent court for compulsory liquidation of the Bahrain-based retail bank, reported the Gulf Daily News, our sister publication.

#Kuwait's #central #bank #fine-tunes governance of #Islamic banks

Kuwait's central bank has issued new governance rules for Islamic banks, including requirements for external sharia audits, as regulators seek more transparency and accountability in the sector. Regulatory scrutiny over Islamic banks has been building as they now hold around a quarter of total banking assets in the Gulf, while in Kuwait that figure stands at around 40 %. Kuwait's central bank said the rules published this week aim to increase customer confidence in Islamic banking by strengthening both internal and external oversight. This follows similar steps by Bahrain which proposed new requirements in September for its Islamic banks, including external sharia audits. The central bank directive, which must be fully implemented by January 2018, provides guidance covering independence of sharia boards as well as fit and proper criteria for scholars.

#Bahran's Bank Alkhair sells its stake in #Pakistan's Burj Bank

Bahrain-based Bank Alkhair has obtained approval from the State Bank of Pakistan to sell its stake in Pakistan’s Burj Bank to Al Baraka Pakistan Limited (ABPL). This transaction follows the announcement on 5 September 2016 about the merger of Pakistan’s Burj Bank and ABPL, creating an institution with assets totaling more than $1.1 billion. Ayman Sejiny, Group CEO of Bank Alkhair said the bank was pleased to sell its stake in Pakistan’s Burj Bank to Al Baraka Pakistan Limited. Bank Alkhair has completed several landmark transactions since its inception, including the establishment of t’azur, a regional Takaful company and the acquisition of Bahrain Financing Company, the oldest foreign exchange and remittance houses in the GCC.

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