Financial Institutions

Dubai Islamic Bank plans African #expansion after planting #Kenyan roots

Dubai Islamic Bank (DIB) has plans to solidify its foundations in the East African Islamic banking sector. Chairman Mohammed Ibrahim Al Shaibani confirmed confirmed the information last weeek. DIB was granted permission to enter the market by the Central Bank of Kenya in May 2017. The regulator used the new entry to highlight Kenya’s growing status as a regional finance hub. Until the DIB entry, Kenya had only two full-fledged Islamic institutions: Gulf African Bank and First Community Bank. The country also has one takaful Islamic insurance firm, a Shari’ah-compliant mutual fund and two cooperatives. Kenya's treasury ministry recently unveiled new plans to make mainstream Islamic finance a major part of the country's growth strategy. Finance minister Henry Rotich said in March that the government would propose alterations to financial law and issue new regulations to facilitate Shari’ah finance.

KFH is planning #expansion in #China

Kuwait Finance House (KFH) is considering expanding into China and Egypt as the region’s banking sector nears saturation. According to bank's CEO, Mazin Saad al-Nahedh, there are opportunities for a Kuwaiti bank to operate in China. He added that the bank was looking at options to buy a license to operate in Egypt as well. KFH is cautiously optimistic about its operations in Turkey. Its subsidiary Kuveyt Turk contributes 22% to the group’s bottom line as of the end of June. The bank expects credit growth of no less than 20% to 25% over the next three to four years as long as base rates remain where they are. As KFH continues its restructuring and sale of non-core assets, the bank is studying offers for its stake in Aref Investment Group, which it aims to sell by the end of the year. KFH is also planning to buy Bahrain’s Ahli United Bank, but hasn't started negotiations yet.

Gatehouse Bank appoints ex-Shawbrook director

Gatehouse Bank has appointed former Shawbrook Bank director Tim Blease as its new chief operating officer (COO). Tim Blease’s previous roles include new business strategy and innovation director at Shawbrook and head of retail credit risk at Metro Bank. The bank has also appointed Sharron Harvey as its executive vice-president head of HR. Sharron has previously worked for Habib Bank Zurich and has 20 years of HR experience, mainly in the financial sector. Both Tim and Sharron will report to Charles Haresnape, CEO of Gatehouse Bank. The appointments come after Gatehouse revealed a number of changes to its board last week.

Jaiz Bank grows capital base to N15bn within 5 years

#Nigeria's Jaiz Bank has grown its capital base in five years from the initial N5 billion to over N15 billion. The bank disclosed that it is growing at an annual rate of 30% which makes it one of the strong players in Nigeria’s banking industry. CEO Hassan Usman said the management of the Bank grew Deposit Base from Zero to over N60 billion, and Asset Base increased from zero% to N40 billion. He added that the bank plans to grow its network through opening of additional new branches across the country. Jaiz Bank currently has a staff of 500 and has concluded plans to open new branches in Jos, Nassarawa, and Minna, as well as additional branches in Lagos. Commenting on the plan by the Debt Management Office (DMO) to float Sukuk, Usman described the move as a welcome development which is expected to go a long way in boosting the operations of the bank.

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.

Dubai Islamic Bank eyes regional market after #Kenya launch

Dubai Islamic Bank (DIB) has signalled intention to enter the budding East African Islamic market. DIB chairman, Mohammed Ibrahim Al Shaibani, said that the lender would expand and consolidate its reach in East Africa after solidifying its Kenya base. The Central Bank of Kenya (CBK) in May opened the door for Dubai Islamic Bank to enter the local market after more than a year of waiting. DIB intends to exclusively offer Shariah-compliant banking services in the country. Kenya has recently unveiled a package of initiatives aimed at developing a policy framework for Islamic finance in the country. Authorities intend to make Kenya a hub for Islamic finance in Africa with ongoing reforms expected to drive the growth of Islamic-finance operations.

Hong Leong Islamic Bank appoints Jasani Abdullah as CEO

Hong Leong Islamic Bank (HLISB) has appointed Jasani Abdullah as chief executive office. HLISB said Jasani has been acting CEO since December 2016. He has been in the financial industry for more than 30 years and his contribution towards the Islamic banking sector is very much valued. Jasani has been with HLISB since 2007 when he first joined as the head of shariah and product development. Jasani graduated with a Diploma in Public Administration from MARA Institute of Technology Malaysia, Bachelor in Business Administration from Ohio University, USA and has a Post Graduate Diploma in Islamic Banking and Finance from International Islamic University Malaysia.

#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.

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.

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.

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.

Shahjalal Bank director wants to sell holdings violating rules

Mohammed Younus, a director of Shahjalal Islami Bank, gave a newspaper advertisement to sell his holding in the bank violating securities laws. Directors of listed companies must give announcement on the Dhaka Stock Exchange (DSE) website if they want to sell their shares, but Younus did not make any such announcement. The board of the bank felt embarrassment about the issue as the director has not informed it about his planned sale of shares. The bank's executive director Subhankar Saha said this type of advertisement was undesirable. The current market price of 2 percent shares of Shahjalal Islami Bank is about Tk 26 crore.

#Pakistan sets rules for banks wanting to be fully sharia compliant

Pakistan's central bank has issued guidelines for banks that want to be fully-fledged sharia compliant, setting a three-year time frame for applicants to complete the process. The rules aim to accelerate the growth of Islamic banking in the country. Eligible applicants must have existing Islamic finance operations and the conversion process must start within six months of approval. After the conversion of conventional branches, the applicant can then apply for a fully-fledged Islamic banking license. Such conversions are rare in Islamic finance but are seen as a way to increase the scale of the bank and widen its reach into under-served rural areas. Islamic banking in Pakistan currently includes five fully-fledged Islamic banks and 16 conventional banks offering Islamic financial products. As of March, they held assets worth 1.9 trillion rupees ($17.9 billion), a 16% increase from a year earlier and 11.7% of total banking assets. However, their capitalization and profitability ratios remain below the industry average.

ANALYSIS: Can GCC Islamic banks escape the oil-price cycle?

More and more stakeholders concede that the Shari’ah-authorized way of banking has hit a glass ceiling. They acknowledge that Islamic banking and financial services have largely failed to innovate at the speed they were expected to. It is also admitted that Islamic finance is caught in an oil-price cycle, definitely in the Gulf and wider Middle East region. Global rating agency, Standard & Poor’s, estimates that Islamic banks in the GCC are expected to face a tough year ahead. According to S&P Head of Islamic Finance, Mohamed Damak, GCC Islamic banks’ asset quality indicators will deteriorate in the second half of this year and in 2018. Very few Islamic banks have set aside significant amounts of profit-equalization reserves. As for oil price, both Islamic and conventional banks are affected and must adopt a new strategy that is not highly dependent of energy prices. For that a diversification of the economy is needed, which doesn’t seem to be happening anytime soon.

World’s Largest Islamic Bank Successfully Completes Ripple #Blockchain Trial

Saudi Arabia’s largest bank recently completed its first cross-border transfer using Ripple technology. Having Al Rajhi Bank on board is a major validation for the blockchain service provider. Money was transferred between Al Rajhi Bank offices across Saudi Arabia and Jordan. The transfer took mere seconds to complete and reduced fees to a bare minimum. Completing this trial will help Saudi Arabia digitize the customer banking experience even further. More specifically, digitizing the banking experience will allow for faster and cheaper transactions. Al Rajhi Bank runs over 200 remittance centers across the country. The whole Kingdom of Saudi Arabia may soon see mass adoption of Ripple’s ecosystem.

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.

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