IslamicFinance.de

According to the Global Islamic Fintech Report, P2P crowdfunding and challenger banking are the top expected growth sectors for Islamic fintech in 2020. The report is produced by London-based digital finance firm Elipses in collaboration with the UK Islamic Fintech Panel. The report finds that peer-to-peer and crowdfunding, the largest area to date, is set to remain so, with challenger banking seen as a significant growth area. The three other expected top growth sectors for next year are blockchain/crypto, robo-advisory/personal finance management, and lending. In terms of regions, 39% of respondents picked Southeast Asia as the one presenting the biggest growth opportunity for Islamic fintechs. The Middle East is the second biggest expected growth region, as chosen by 31% of respondents, followed by 16% who picked the UK.

The overall macroeconomic conditions, geopolitical tensions and the threat of trade wars have all contributed to a slowdown in economic and banking growth. The Islamic finance industry is no exception. As the industry reaches maturity in established Islamic finance markets in Malaysia and GCC, experts have predicted that growth would be mostly driven by emerging and frontier Islamic finance markets. Despite this, these markets have not demonstrated the level of growth that was expected, and a number of structural challenges continue to persist, such as standardization, awareness and access to information and expertise. To address these challenges, the industry must come together to create a global ecosystem for Islamic finance.

On November 27 the Islamic Development Bank (IDB) raised 1 billion euros in green sukuk. The 5-year sukuk was raised under IDB’s $25 billion sukuk programme and was priced at a profit rate of 0.037%. Proceeds from the issue will be channeled to climate change and green projects in IDB's 57-member countries. These include projects for renewable energy, clean transportation, energy efficiency, pollution prevention and control, environmentally sustainable management of natural living resources and land use and sustainable water and wastewater management. The joint lead managers and joint bookrunners for the sukuk were Citi, First Abu Dhabi Bank, HSBC, Landesbank Baden-Württemberg, Natixis, Société Générale, Warba Bank, and Standard Chartered Bank.

Dubai Islamic Bank (DIB) has proposed the acquisition of Noor Bank through a strategic investment via a share swap. Noor Investment Group and Emirates Investment Authority will become strategic investors in DIB. The share swap ratio is 1 new DIB share for every 5.49 shares of Noor Bank through the issuance of 651,159,198 new DIB shares in aggregate. UAE’s largest standalone Islamic bank will convene a general assembly on December 17 to seek shareholder approval for the proposal. Dubai Islamic Bank was designated by the UAE central bank in 2018 as systematically important. It is the only standalone and full-fledged Islamic bank out of four financial institutions the regulator considers "too big to fail".

The United Arab Emirates' largest standalone Islamic bank plans to acquire Shariah-compliant Noor Bank. The board of Dubai Islamic Bank (DIB) will meet on November 25 to discuss the acquisition. DIB said that assets post-acquisition will reach nearly 275 billion dirhams ($75 billion). UAE's oldest Islamic bank currently has operations in Kenya, Pakistan and Indonesia and holds a stake in Bank of Khartoum. Dubai Islamic Bank was designated by the UAE central bank in 2018 as systematically important. The bank posted 0.08% increase in net profit to 1.262 billion dirhams ($343.6 million) for the three months ending September 30 compared to the same quarter a year ago.

The first day of the 14th IFSB Summit 2019 remarked the consensus between thought leaders, market players, and regulators. This year's summit is themed "Islamic Finance for Sustainable Development for the Technological Innovation" and speakers agreed that Islamic finance can play transformative roles in the global sustainable development agenda. Furthermore, the technological development can enhance the financial inclusion in the Islamic finance development. From a regulatory point of view, speakers mentioned that regulators have to take the control over the risks arising from the technological development in sustaining the Islamic finance development with an efficient risk management.

UAE’s largest standalone Islamic bank has just closed a $750 million sukuk. Dubai Islamic Bank’s 5-year $750 million sukuk sold with a a profit rate of 2.95% and is the bank’s second $750 million sukuk this year. The first was an additional Tier 1 perpetual non-call 6-year sukuk with a profit rate of 6.25% per annum. The bank's lates sukuk attracted orders in excess of $2 billion, representing an oversubscription rate of 2.7 times. Bank ABC, Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank, HSBC, Maybank, Sharjah Islamic Bank, Standard Chartered Bank and Warba Bank acted as Joint Lead Managers and Bookrunners on this transaction. The Islamic Corporation for the Development of the Private Sector acted as a Joint Lead Manager and Kuwait International Bank acted as a Co-manager.

The Islamic Financial Services Board (IFSB) Innovation Forum was inaugurated in Jakarta to showcase innovative Islamic finance products and services with a strong impact on financial inclusion, economic growth and sustainable development. The forum took place on 12 November 2019 along with the 14th IFSB Summit at the Jakarta Convention Center, Jakarta, Indonesia. The IFSB Innovation Forum is a new biennial event to enhance knowledge about latest technological developments. It provides a platform for regulators, policy makers, Islamic Financial Institutions, start-ups and FinTechs, academic and research institutions, financial services providers, legal practitioners, Shariah advisors and other stakeholders to cultivate innovative thinking and dialogue.

The Islamic Financial Services Board (IFSB) announced the dissemination of country-level data on financial soundness and growth of the Islamic banking systems for Q2 of 2019. This 14th dissemination completes the availability of quarterly data from Q4 of 2013 to Q2 of 2019. This PISIFIs project currently compiles data from Afghanistan, Bahrain, Bangladesh, Brunei, Egypt, Indonesia, Iran, Jordan, Kazakhstan, Kuwait, Lebanon, Libya, Malaysia, Nigeria, Oman, Pakistan, Palestine, Qatar, Saudi Arabia, Sudan, Turkey, the United Arab Emirates and the United Kingdom. The PSIFIs Database (full set of data with metadata) is available on the PSIFIs portal at the IFSB website http://psifi.ifsb.org.

Indonesia raised 8 trillion rupiah ($561.01 million) in a biweekly Islamic bond auction on Tuesday. According to the financing and risk management office at the finance ministry, the sukuk issuance matched the indicative target. The weighted average yields of project-based sukuk sold on Tuesday were lower compared with yields of comparable sukuk at the previous auction on Aug. 6. Total incoming bids were 21.4 trillion rupiah. ($1 = 14,260.0000 rupiah)

Noor Bank has launched a 3.2 million dirhams ($871,000) waqf fund with Ajman University to benefit Islamic banking and finance studies. The current pledge of 3.2 million dirhams will benefit one professorship and four scholarships. Noor Bank’s head of Shariah Dr Adnan Aziz said that four scholarships will remain on offer every year, as long as the fund remains intact and continues to generate returns. The waqf amount will be held in perpetuity but the returns on investment will be used to benefit the scholarships. The basic criteria of the scholarships is a combination of academic excellence and financial needs of students registered on a course at the College of Business Administration at Ajman University. The scholarships are available for both undergraduate and postgraduate students.

Islamic International Rating Agency (IIRA) has reaffirmed the international scale credit ratings assigned to Al Baraka Banking Group (ABG) at BBB+ / A3 . IIRA also reaffirmed the national scale ratings of ABG at A+ (bh) / A2 (bh) with a Stable outlook. The Group’s fiduciary score has also been raised to the higher level of “81-85”, the highest among the Islamic Financial Institutions in the region. IIRA recognized the substantial contribution of the Group’s four key subsidiary banks based in Turkey, Jordan, Egypt and Algeria. Moreover, IIRA said that the Group benefits from a wide geographic diversification with most jurisdictions possessing a low economic correlation, thereby improving the overall risk metrics.

Indonesia's Shariah advisory services provider, ZICO Shariah is planning and drafting the Islamic Economic Masterplan for 2019-2024 for the world’s largest Muslim country. Led by a team of economics experts, the masterplan project included 50 Indonesian and Malaysian consultants. It focuses on 14 areas of interest including halal food, tourism, and fashion, Islamic banking and capital markets, small and medium enterprises, digital economy, and social finance. The formal launching of the final masterplan took place at a significant Islamic economy event in Bandung on 26 April 2019 and in Jakarta on 14 May 2019.

Moody's Investors Service upgraded to (P)A1 from (P)A2 the provisional foreign currency senior unsecured MTN rating of AHB Sukuk Company Ltd. The AHB Sukuk Company is a special-purpose vehicle established in the Cayman Islands by Al Hilal Bank. Moody's also upgraded to A1 from A2 the backed senior unsecured rating on AHB Sukuk Company Ltd.'s outstanding USD500 million senior unsecured note due 19 September 2023. The outlook on AHB Sukuk Company Ltd.'s senior unsecured note remains stable. The upgrades are driven by the issuance on 2 July 2019 by Abu Dhabi Commercial Bank (ADCB) of a guarantee covering AHB Sukuk Company Ltd.'s sukuk programme and its USD500 million senior note, and follows ADCB's acquisition of Al Hilal Bank on 1 May 2019.

Malaysian Islamic fund manager BIMB Investment has become an official signatory of the United Nations-supported Principles for Responsible Investment (UNPRI). BIMB Investment is the only bank-backed Islamic asset manager in Malaysia to be a UNPRI signatory. The UNPRI group works to understand the investment implications of environmental, social and governance (ESG) factors and supports its network in incorporating these factors into their decisions. BIMB Investment CEO Najmuddin Mohd Lutfi said that the company has integrated more than 250 ESG metrics in its investment process since 2015. The company currently manages over 1 billion Malaysian ringgit of ESG assets. At the moment there are around 2,300 signatories to the UNPRI. Other signatories from Malaysia include Xeraya Capital, Navis Capital Partners, the national retirement fund KWAP, sovereign wealth fund Khazanah, and Corston-Smith Asset Management.

Philippines’ central bank will fast-track the issuance of Islamic finance regulations in the country as soon as the Islamic banking law is approved by the president. Philippines has been accelerating the growth of its Islamic economy sectors in the last couple of years. The country’s interest in Islamic finance is two-fold: to attract Shariah-sensitive foreign investments and capital from Islamic countries, as well as to provide its approximately 10 million domestic Muslim population with an Islamic banking option. The country also hopes to increase its exports to Muslim-majority countries and has been developing its halal infrastructure to support this goal. Its national halal certification scheme was launched last year and in February the Department of Science and Technology opened the Philippine National Halal Laboratory and Science Centre.

The UAE’s status as a centre for Islamic art and design was boosted this past week as Jameel Arts Centre opened the Jameel Prize 5 exhibition. First awarded in 2009, the Jameel Prize is a collaboration between London's Victoria & Albert Museum and Art Jameel. Worth 25,000 British pounds, it awards contemporary artists and designers inspired by Islamic tradition. In addition to the two joint prize winners, Iraqi artist Mehdi Moutashar and Bangladeshi architect Marina Tabassum, the prize exhibition in Dubai is also showing works by the six finalists. They are: Iranian artist Kamrooz Aram, Jordan and Dubai-based graphic designer and architect duo naqsh collective, Iraqi-born painter Hayv Kahraman, Bahraini fashion designer Hala Kaiksow, Moroccan multimedia artist Younes Rahmoun, and Pakistani painter Wardha Shabbir.

The practitioners of Islamic finance are increasingly framing their practices as ethical, socially responsible and conducive to humanity’s wellbeing. Tools like the obligatory zakat and charitable donations generate between $200 billion to $1 trillion annually. According to the World Bank, zakat can alleviate poverty in 20 of the 39 OIC countries. In Indonesia, Baznas—a national institution mandated to collect, distribute and manage zakat— has benefited around 6.8 million people. Baznas is also believed to be the first zakat organization to have formally committed to supporting the United Nations’ Sustainable Development Goals (SDGs). In 2018, in neighboring Malaysia, the International Federation of the Red Cross and Red Crescent Societies (IFRC) pioneered a zakat-financing instrument with a local zakat authority to support Kenya’s Drought Assistance Programme. Green-gram seeds were bought with the zakat monies and distributed to 175,000 households. In six months, the crops produced and sold a yield worth $20 million.

The Islamic Research and Training Institute (IRTI) and Dar Al Sharia have signed a memorandum of understanding (MOU) for strategic collaboration. The MOU was signed by IRTI Director General, Dr. Humayon Dar, and CEO of Dar Al Sharia, Mian Muhammad Nazir. IRTI and Dar Al Sharia will jointly provide Islamic finance advisory services to Islamic financial institutions, multilateral financial institutions, sovereigns and quasi-sovereigns, corporate entities, development funds, regulators, Fintech companies, educational institutions and other clients offering Sharia-compliant products and services. Nazir said the strategic collaboration with IRTI was a landmark initiative towards the development of a sustainable platform for innovation in the Islamic finance industry.

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.