Bahrain

The #continuing allure of #Islamic #finance

The total Islamic finance industry was estimated at around $ 1.9 trillion in assets for the year end of 2016, and it pales into insignificance compared with traditional finance. However of special interest is the growing popularity of Islamic finance from both the Muslim and non-Muslim financial institutions and investors. Islamic assets are very much concentrated in the banking sector which holds $1.5 trillion in total, with the Islamic bonds or sukuks worth $320 billion, and investment funds and insurance or so called takaful worth $56 billion and $25 billion respectively.
The majority are purchase and sale or murabaha and leasing or ijara transactions. Some major Gulf companies are turning to the sukuk market to raise funds, with Saudi Aramco and the Government of Saudi Arabia both successfully launching sukuk tranches which were heavily oversubscribed.

#Merger set to create largest #takaful firm

The entire business of Solidarity General Takaful (SGT) is proposed to be transferred to Al Ahlia Insurance Company. The Central Bank of Bahrain (CBB) received separate applications from SGT and Al Ahlia. SGT has applied to transfer its business to Al Ahlia and be dissolved under article 66 of CBB Law. SGT, a subsidiary of Solidarity Group Holding, is aiming to consolidate its position through the merger. The combined entity, which would be named Solidarity Bahrain, will have a paid-up capital of BD11.2 million and an estimated 15% market share with 10 branches, making it the largest takaful company in the country. In order to facilitate the merger, Al Ahlia shareholders approved the conversion of the insurance licence from conventional to takaful. Last year, Solidarity acquired a majority stake in Bahrain Bourse (BHB)-listed Al Ahlia Insurance Company via an open offer in a deal worth BD10.7m. Officials had said then that Al Ahlia would continue to be listed on BHB.

#Qatar# Islamic #Bank #offers #certificates of deposit after Q2 outflow – Nasdaq

The Qatar Islamic Bank aims to boost its deposit base by offering certificates of deposit in Qatari riyals and US$, after it was hit by an outflow of money due to sanctions against Qatar by its neighbouring Gulf countries. The bank said this weekend, that it was offering 1 and 2 year CDs in its 2nd series of such papers. Its first series was launched End of 2015. Saudi Arabia, the United Arab Emirates and Bahrain cut diplomatic and transport ties with Qatar beginning of June this year, accusing the country of supporting terrorism. This prompted some firms and individuals from those states to pull money out of the Qatari banks. As a result, deposits in the Qatari banks shrank 1.8 % from the previous month in June. Qatar Islamic Bank was particularly hard hit, with its customer deposits falling to US$26.6 billion at end of June, according to its financial statements.

#Bahrain sends RFP for US dollar bond and #sukuk issues

Bahrain has sent out a request for proposals to banks to arrange issues of US dollar-denominated conventional bonds and sukuk. Bahrain needs to raise external financing to plug a budget deficit caused by low oil prices, as the state struggles to build political consensus around planned austerity measures. Last month the cabinet approved a draft budget projecting a BD1.3bn (US$3.4bn) deficit for 2017 and a BD1.2bn deficit in 2018. Bahrain had a deficit of BD1.5bn in 2016. Bahrain is rated BB- by S&P with a negative outlook. The agency last month revised the outlook to negative from stable, citing Bahrain's weakening external asset and fiscal positions. Fitch followed suit, revising the country's outlook to negative but affirming its BB+ rating.

KFH will benefit overall from #merger with Ahli United Bank – Transaction to create 6th largest bank in GCC

Kuwait Finance House (KFH) disclosed that it is studying a merger with Bahrain-based Ahli United Bank. Although the merger would present significant integration challenges owing to the banks’ geographically dispersed asset bases, it would be credit positive for KFH. If successfully completed, the transaction would create the sixth-largest bank in the Gulf Cooperation Council (GCC), with approximately $85 billion in total assets as of year-end 2016. The merger is at an early stage of evaluation, with financial analysis underway. The merger would expand KFH’s banking operations, which are primarily focused in Kuwait and Turkey, and include relatively small operations in Malaysia and Bahrain. In addition to Bahrain, AUB has principal subsidiaries in the UK, Kuwait, Iraq, and Egypt, and has an associate in Oman.

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.

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