MALAYSIA: Bank Negara Malaysia in talks to make Islamic finance certification a mandatory requirement for Shariah advisors

Thursday, 9th July 2015

S&P 500 Shariah Dow Jones Islamic World FTSE Shariah All World Russell - IdealRatings Islamic Global 1,789.02 2,853.41 1,988.93 1,857.85 ▼ -29.41 (-1.62%) ▼ -33.66 (-1.17%) ▼ -22.28 (-1.11%) ▼ -43.24 (-2.27%)

HIGHLIGHTS: NASDAQ Dubai plans Islamic repos and retail Sukuk channel – Malaysia mulls compulsory certification for Shariah advisors – Bank of Zambia developing regulatory framework for Islamic banks

This week's poll question: What is the biggest concern with Islamic finance today?

Strong earnings for Qatari banks despite deposit pressures Daily Cover QATAR: Qatari banks are expected to rely more on longer and costlier market funding to support growth over the next 12-18 months as weaker oil prices could see a shrinking in the deposit base, according to analysts. “Qatari banks will face deposit pressures as lower oil prices reduce the flow of funds from the government and government-related entities – the largest depositors in the system,” explained Khalid Howladar, a senior credit officer and the global head of Islamic finance at Moody’s. “However, Qatari authorities remain willing and able to provide support to the banks in case of need,” he reassured. While increasing dependence on market funding and escalating deposit pressures as well as the impact of an undiversified economy as reflected in loan book concentrations are causes for concern, Moody’s in its latest report on Qatar, however, expressed confidence that the banking fraternity will maintain robust financial metrics for at least another year. This includes solid earnings and capital buffers of both conventional and Islamic banks. The latest financial results from Qatari Islamic banks seem to support projections. For the first quarter of the year, all Shariah banks in Qatar (except Qatar First Bank as its first quarter results are not available) realized higher year-on-year profits: Leading the pack was Masraf Al Rayan (15.1% growth) at QAR518.73 million (US$142.31 million) followed by Qatar Islamic Bank (12.6%) at QAR412.37 million (US$113.13 million), Qatar International Islamic Bank (4.01%) at QAR212.32 million (US$58.25 million) and Barwa Bank (3.88%) at QAR208.82 million (US$57.29 million). The strong operating environment supported by an effective regulatory infrastructure and a significant number of high quality government-related financing will continue to boost banking asset quality, according to Moody’s. “We expect that system non-performing loans will remain at around 1.5-2% of gross loans over the next 12-18 months,” confirmed Nitish Bhojnagarwala, Moody’s assistant vice-president and author of the report. A continued expansion is also anticipated for banks’ balance sheet, lending strength to the domestic economic landscape and foreign expansion. The rating agency, however, predicts a slight decline in capitalization levels with tangible common equity to risk-weighted assets ratio in the 15-17% range over the next 12-18 months. Tanzania: An IFN Correspondent Report National Bank of Commerce launches new Islamic finance product Islamic banking within the National Bank of Commerce (NBC) was established in May 2010 following a study and identifying the need to have alternative banking solutions for customers who wanted Shariah compliant banking products. Today's IFN Alerts GLOBAL: Bank of Tokyo-Mitsubishi UFJ to become first Japanese bank to offer Islamic financing through a Middle Eastern branch UAE: NASDAQ Dubai plans Islamic repos and retail Sukuk platform ZAMBIA: Bank of Zambia developing Islamic finance regulatory framework to facilitate Islamic banking operations in the future MALAYSIA: Bank Negara Malaysia in talks to make Islamic finance certification a mandatory requirement for Shariah advisors PAKISTAN: Economic Coordination Committee extends repayment period of PIAC Sukuk certificates by five years GLOBAL: Gulf Finance House confirms possibility of Kuwait delisting and Saudi listing SRI LANKA: Amana Bank partners with Digital Commerce Lanka on online installment scheme US: Azzad Asset Management’s Muslim clients to give almost US$3.7 million in Zakat QATAR: Qatar Islamic Bank carries out bank-wide training on operational risks MALAYSIA: Perbadanan Insurans Deposit Malaysia to hold campaign on financial protection and management MALAYSIA: UMW Holdings maintains top Sukuk ratings TURKEY: Turkiye Finans shows full support for IFN Turkey Forum 2015 as lead partner GLOBAL: IFN Asia Forum breaks 1,000-delegate mark yet again – dates for next year confirmed SAUDI ARABIA: Islamic Corporation for the Development of the Private Sector chief to deliver keynote address at the IFN Saudi Arabia Forum MALAYSIA: Industry leaders address Islamic finance investment opportunities at IFN Asia Investors Day Forum 2015 SAUDI ARABIA: Saudi British Bank supports IFN Saudi Forum 2015 as lead partner

IFN Issuers Forum 2015 13th September 2015 (Dubai) Africa Islamic Finance Forum 2015 17th & 18th September 2015 (Abidjan, Cote d’Ivoire) IFN Kuwait Forum 2015 5th October 2015 (Kuwait City) IFN Turkey Forum 2015 17th November 2015 (Istanbul) IFN Saudi Arabia Forum 2015 30th November 2015 (Jeddah) Understanding Islamic Contracts: Structuring & Legal Issues 17th - 19th August 2015 (Dubai) Islamic Financial Services Act (IFSA) 2013 & Islamic Banking Products 18th & 25th August 2015 (Kuala Lumpur) Shariah Audit & Governance for Islamic Banking 20th - 21st August 2015 (Kuala Lumpur) Islamic Finance Qualification 23rd - 25th 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) Sharia’a Compliance & Audit for Islamic Banks 8th - 9th September 2015 (Dubai) Funds Transfer Pricing 5th - 7th October 2015 (Kuala Lumpur) Trading Book Market Risk Management for Financial Institutions 8th - 9th October 2015 (Kuala Lumpur)