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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.

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.

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.

#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.

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'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.

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.

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.

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.

Executives working on a three-way bank merger in Qatar expect to finish valuing the deal in the coming weeks. Shareholders at Masraf Al Rayan, Barwa Bank and International Bank of Qatar are committed to pushing ahead with the deal despite the current embargo by some of Qatar's Arab neighbours. A shake-up has long been mooted in the Qatari banking sector given that 18 local and international commercial banks serve a population of 2.6 million. The more than two-week travel and diplomatic boycott could further dent bank performance if the dispute drags on. In December, Reuters reported that the trio had begun merger talks which would create the Gulf state's second-largest bank. The new bank, which would be run in compliance with Islamic banking principles, would have assets worth around 160 billion riyals ($43.6 billion).

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.

The Istanbul Chief Public Prosecutor’s Office issued detention warrants for 78 senior executives of Bank Asya, which was confiscated by the Turkish government. Bank Asya was associated with the failed coup attempt on July 15, 2016 due to its links to the Gülen movement. Forty-seven of the 78 bank executives have been detained so far on suspicion of membership in an armed terrorist organization and financing a terrorist organization.
Immediately after the putsch, the Justice and Development Party (AKP) government along with President Recep Tayyip Erdogan pinned the blame on the Gülen movement. According to a report by the state-run Anadolu news agency, 154,694 individuals have been detained and 50,136 have been jailed due to alleged Gülen links.

According to Fitch Ratings, Islamic banking products in Morocco could expand their deposit bases by 5 to 10%. Fitch notes that the ability to grow the deposit base is positive for Morocco’s economic development because deposits represent about 70% of banking sector funding. The experts also noted that banking penetration is already high in Morocco, with 70% of adults holding a bank account. Therefore, participation banking is unlikely to take a significant market share from the well-established conventional banks. Growth rates in the Moroccan banking sector have been volatile in recent years, reflecting unsteady economic trends. Deposit growth has outstripped loan growth, but credit demand is set to accelerate. The ability to offer participation banking services could broaden the pool of potential depositors in the country, mitigating the competitive pressure.

Maybank Islamic was named the Islamic Bank of the Year 2017 in Asia-Pacific by The Banker. The bank also received recognition in the country awards category for Malaysia. The Banker noted that Tier 1 capital and total Shariah-compliant assets enjoyed notable growth, climbing by 12% and 16%, respectively. Maybank Islamic’s return on equity for the year was 15.4%, while its cost-to-income ratio was a respectable 36% and non-performing financing were just 0.8%. The bank’s steady growth pace in Singapore and Indonesia also contributed to its recognition as the best in Asia-Pacific. Maybank Islamic's CEO Datuk Mohamed Rafique Merican attributed the bank’s achievements to its employees and sound risk management practices. He said the bank intends to further enhance its global brand visibility, while also deepening its existing regional presence.

Bank Islam Brunei Darussalam aims to raise as much as $500 million in an initial public offering (IPO) and the bank will be listed on the Malaysian bourse. JPMorgan and Malayan Banking (Maybank) are set to be joint global coordinators for the initial public offering of $200 million-$500 million this year. The IPO is expected to raise around $300 million but the final amount will depend on the size of the greenshoe option. Brunei is one of the world's richest countries on a per capital basis. The country does not have a stock exchange although its central bank last year announced draft rules to form one.

Maybank Islamic has announced the appointment of lawyer Zainal Abidin as its chairman. Zainal has been a director of Maybank Islamic since 2010 and previously served as chairman of Maybank Trustees. Prior to that, Zainal was a director of Malayan Banking (Maybank) from July 2009 to April 2014. Zainal, 63, is a practising corporate and commercial lawyer. As the founder and senior partner, Zainal established the firm Zainal Abidin in 1987.

Lembaga Tabung Haji (TH) has confirmed its support of deputy CEO Datuk Badlisyah Abdul Ghani to lead Bank Islam Malaysia following the retirement of the bank’s group managing director, Datuk Seri Zukri Samat. TH has a 52.5% stake in BIMB Holdings which wholly owns Bank Islam. Bank Islam’s board had already put forward its choice, Khairul Kamarudin, to Bank Negara and the decision now lies with the central bank. TH CEO Datuk Seri Johan Abdullah confirmed recommending Badlisyah to be appointed to lead Bank Islam. He added that the choice of leadership and succession is subject to nomination of the board of directors and approval by Bank Negara Malaysia. He said TH was never at odds with the board of directors.

The Islamic Corporation for the Development of the Private Sector (ICD) and Arab Gambian Islamic Bank (Agib) have entered into a Joint Strategic Collaboration to finance the private sector in The Gambia. The financing agreement for the amount of USD5 million was signed by the CEO of ICD, Khaled Al Aboodi and Muhammed Jah, Chairman of Agib Bank. The collaboration will focus on developing the private sector, supporting the local economy and promoting Islamic Banking in the country. CEO of Agib Bank, Nuha Marenah, assured ICD of Agib Bank’s resolve to contribute to the socio-economic development of The Gambia. He also said Agib Bank has the capacity, both in terms of technology and human resources to manage the line of financing to the total satisfaction of all stakeholders.

The Central Bank of Iran has released the names of 40 registered banks and credit institutions active in the country, which include the names of five foreign banks. The only five foreign lenders licensed to operate in Iran are the Hamburg-based Iranian-European Bank, Standard Chartered, Iran-Venezuela Bi-National Bank, Islamic Cooperation Investment Bank and Future Bank. The Iranian-European Bank has a German license, but is owned by the Iranian state. Standard Chartered is a British multinational banking company headquartered in London. It operates a network of more than 1,200 branches across more than 70 countries. Iran-Venezuela Bank a joint venture between Banco Industrial de Venezuela and the Export Development Bank of Iran. However, Iran is planning to sell some of its shares in IVBB, as the two countries currently have no commercial relations. The Islamic Cooperation Investment Bank is an Iraqi private lender, which currently has 11 branches in Iran. Future Bank is a fully commercial lender approved by the Central Bank of Bahrain, its branch in Iran is located in the Kish Free Trade Zone.

Alizz Islamic Bank has expressed interest in the possibility of strategic merger with United Finance subject to conducting due diligence. No legally binding commitment has been made and the transaction remains subject to approval by the regulators and other stakeholders.