Wednesday, April 22, 2015

First quarter Islamic banking figures looking good


Wednesday, 22nd April 2015

S&P 500 Shariah
Dow Jones Islamic World
FTSE Shariah All World
Russell - IdealRatings Islamic Global
1,844.93
3,001.31
2,119.89
1,947.30
-0.72 ( -0.04%)
9.67 ( 0.32%)
5.13 ( 0.24%)
19.16 ( 0.99%)

HIGHLIGHTS: Indonesia planning centralized Islamic financial center and Islamic repos – Al Yusr Islamic Banking approves new products – Warba Bank launches Islamic retail commodity trading platform



Daily Cover


GLOBAL: With the market well into the second quarter, financial results for the first quarter of 2015 are rolling in; and based on the statements reviewed by IFN thus far, it seems that the Islamic banking industry is maintaining its strong growth momentum this year.

Apart from Islamic banking giant Al Rajhi Bank which saw net profit for the first three months closing in 10.9% lower than the corresponding period last year (a consistent declining pattern for almost two years), other Saudi banks are on an upward trajectory. Banque Saudi Fransi in the same period managed to push its net earnings up by 22.66% to SAR1.05 billion (US$279.79 million), while Riyad Bank realized an 8.62% growth in net profit to SAR1.17 billion (US$311.88 million). Saudi British Bank and Samba Financial Group confirmed that their net profits were up 3.21% and 3.06% to SAR190.16 billion (US$50.68 billion) and SAR1.28 billion (US$341.12 million) respectively. Other first quarter gainers include Barwa Bank (41.5%), Boubyan Bank (30%), Kuwait Finance House (14.6%), Dubai Islamic Bank (34%) and Warba Bank (148%) among others. And despite the only two fully-fledged Islamic banks in Oman (Alizz Islamic Bank and Bank Nizwa) registering losses for the first q uarter (a given considering their relative youth), the banks are nonetheless seeing impressive growth in revenues, total assets and branch expansion which are likely to boost financial performance this year.

The positive trend for the past quarter builds the case for another stellar year in the Islamic banking space. Breaking the US$10 billion benchmark in combined profits in 2013, the Shariah banking profit pool is anticipated to hit US$37 billion by 2019 – a threefold expansion. While conventional banking remains a dominant component of most banking markets, the healthy double-digit growth of the Shariah banking segment will see Islamic banking forming a bigger minority, if not majority, in several countries over the next few years.

Saudi Arabia, where 48.9% of its banking system is considered Shariah compliant, will likely have Islamic banking command the majority share in five years at 70%, according to EY; while some quarters have projected for Brunei to develop its Shariah banking segment to at least hold a 50% market share by 2020. Whereas Malaysia, where Islamic banking is expanding about twice as fast as its conventional peer, seems steadfast in achieving its 2020 goal of having 40% of its banking assets Shariah compliant, almost double from its current 20.7% figure; and Kuwait, which according to EY is seeing Islamic banks (44.6% market share) growing more than three times above its conventional counterparts, could also see Islamic players holding a bigger share.

While we are only about a third through the second quarter, it seems that we are off to a good start to what is looking like another year of promising growth for the Islamic banking industry.



Pakistan: An IFN Correspondent Report


Another good year for Islamic banking in Pakistan
Islamic finance has witnessed tremendous growth in the last four decades and currently has expanded across the globe having an asset base of around US$2 trillion. The industry has also got access to the new markets including various new destinations such as the European region, Korea, Australia, Brazil, Malta, Argentina, China and many more. Having established itself as a viable alternative during the last financial crisis, standard-setting bodies are increasingly looking to promote Islamic finance globally.


Case Study


London Central Portfolio’s second Shariah compliant fund: LCA II
This week IFN takes a look at one of the promising funds from the UK. Recently launched, the London Central Apartments II (LCA II) is London Central Portfolio (LCP)’s second Shariah compliant offering. Speaking to LCP, NABILAH ANNUAR gets up close and personal with the new fund.





Today's IFN Alerts


UAE: Noor Bank tightens price guidance for its benchmark-size Sukuk offering

INDONESIA: Indonesia's Sukuk auction exceeds target; receives IDR4.73 trillion (US$361.43 million) in incoming bids

KUWAIT: Warba Bank launches new commodity trading platform for Islamic retail clients

INDONESIA: Indonesia to create centralized Islamic financial center inspired by Malaysia's experience; also exploring Islamic repos

OMAN: Al Yusr Islamic Banking approves new products at inaugural supervisory board meeting

MALAYSIA: RHB Capital restructuring proactive given changing regulatory environment, says RAM

PAKISTAN: Pakistan relaxes rules on real estate investment trusts in a bid to boost the market

INDONESIA: Standard Chartered to maintain 45% stake in Bank Permata

MALAYSIA: Impian Bebas secures syndicated Islamic term financing worth RM1.08 billion (US$296.92 million)

KUWAIT: Warba Bank designs new three-year strategy to capitalize on growth momentum

MALAYSIA: Malaysia's global Sukuk gains definitive 'A3' rating from Moody's



















REDmoney events


IFN Qatar Forum 2015
3rd May 2015 (Doha)

IFN Asia Forum 2015
25th-26th May 2015 (Kuala Lumpur)

IFN Europe Forum 2015
10th June 2015 (Luxembourg)

IFN Issuers Forum 2015
13th September 2015 (Dubai)

13th September 2015 (Dubai)

IFN Kuwait Forum 2015
5th October 2015 (Kuwait City)

IFN Egypt Forum 2015
27th October 2015 (Cairo)

IFN Turkey Forum 2015
17th November 2015 (Istanbul)

IFN Saudi Arabia Forum 2015
30th November 2015 (Riyadh)


REDmoney training


Funds Transfer Pricing
26th - 28th April 2015 (Dubai)

Structuring Sukuk & Islamic Capital Market Products
26th - 28th April 2015 (Muscat)

Legal & Documentation Issues in Islamic Structured Finance
26th - 27th April 2015 (Dubai)

Structuring Islamic Trade Finance Solutions
26th - 28th April 2015 (Riyadh)

Structuring Wealth Management & Private Banking Products
27th - 29th April 2015 (Kuala Lumpur)

Managing Counterparty Credit Risk, Basel III and Recent Regulatory Issues
29th - 30th April 2015 (Dubai)

Bank Asset & Liability Management Simulation
4th - 6th May 2015 (Kuala Lumpur)

Managing Counterparty Credit Risk, Basel III and Recent Regulatory Issues
7th - 8th May 2015 (Kuala Lumpur)

Islamic Treasury & Risk Management Products
10th - 12th May 2015 (Dubai)

Sharia’a Compliance & Audit for Islamic Banks
10th - 11th May 2015 (Dubai)

Structuring Islamic Trade Finance Solutions
27th - 29th May 2015 (Kuala Lumpur)

Islamic Financial Products: Current Trends, Regulation & Practices
27th - 28th May 2015 (Kuala Lumpur)

Understanding & Applying Structured Products
3rd - 5th June 2015 (Kuala Lumpur)

Advanced Sukuk & Islamic Securitization
7th - 9th June 2015 (Riyadh)

Funds Transfer Pricing
8th - 10th June 2015 (Istanbul)

Asset Liability Management
9th - 11th June 2015 (Kuala Lumpur)

International Best Practices & Regional Standards in Regulation, Corporate Governance, AML, Sanctions & Compliance
10th - 11th June 2015 (Dubai)

Fixed Income Products & Bond Markets
11th - 12th June 2015 (Istanbul)

Accounting & Reporting for Islamic Financial Products
14th - 15th June 2015 (Dubai)

Funds Transfer Pricing
6th - 8th July 2015 (Hong Kong)

Managing Counterparty Credit Risk, Basel III and Recent Regulatory Issues
9th - 10th July 2015 (Hong Kong)

Understanding Islamic Contracts: Structuring & Legal Issues
17th - 19th August 2015 (Dubai)

Advanced Sukuk & Islamic Securitization
24th - 26th August 2015 (Istanbul)

Undertaking Effective Litigation & Recovery in Islamic Finance Facilities
7th - 8th September 2015 (Kuala Lumpur)

Islamic Finance Qualification
5th - 7th October 2015 (Kuala Lumpur)

Funds Transfer Pricing
5th - 7th October 2015 (Kuala Lumpur)

Trading Book Market Risk Management for Financial Institutions
8th - 9th October 2015 (Kuala Lumpur)

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