Islamic banking way forward says Falak consulting report

Following last week’s World Islamic Banking Conference (WIBC) in Manama, Bahrain, a report published today by Falak Consulting’s Research Department (FCRD) has highlighted that Islamic Banking could be the more economically viable and sustainable model of financing going forward.

Islamic banking way forward says Falak consulting report

Islamic banking way forward says Falak consulting report

The report looks at the financial crisis of 2009 where conventional banks witnessed far greater levels of exposure in comparison to their Islamic banking counterparts and recognizes the overall potential Islamic banking and finance is able to offer the existing market.

With discussions at this year’s WIBC event highlighting similar themes including looking at “Business in the Middle East and the Role of Islamic Finance”, or “New Strategic Approaches to Revitalize Global Growth”, the potential for Islamic banking is certainly there.

The FCRD report highlights recent statistics which indicate that Islamic banking is currently the fastest growing segment in the international financial system with an estimated asset size of $1.1 trillion in 2011, representing 80.9 per cent of Islamic Finance assets and 1 per cent of total banking assets worldwide. Building on the same, the report goes on to establish a risk and return framework for “a healthy and transparent growth of the Islamic financial architecture” in the region.

Commenting in light of the WIBC event and the published FCRD report, Suhail Ghazi Algosaibi, Co-Founder and Chairman of Falak Consulting, said, “The 2009 financial crisis has taught us a number of things, the first being that conventional banks and current models are not invincible.

It has also opened our eyes to the need to consider other options of banking that are safer, sustainable and viable, which at this point Islamic banking could potentially offer. As a result, we are now witnessing a growing number of global conventional banks exploring this potential as well as increased discussions around the future and way forward for Islamic Finance and Banking, as seen last week at the 20th WIBC event in Bahrain.”

At present there are a number of global retail banks introducing Islamic banking options including Lloyd’s Bank, HSBC, Standard Chartered and the Islamic Bank of Britain. In Bahrain alone, there are over 26 Islamic banks currently in operation making up a total of $26.2 billion in assets, as of August 2013, according to the Central Bank of Bahrain.

http://www.cpifinancial.net/news/post/24663/islamic-banking-way-forward-says-falak-consulting-report

More action urged to boost Islamic banking

MANAMA: While Islamic banking will keep on growing, it needs more concerted action at the inter-governmental and industry level, Standard Chartered Saadiq Malaysia chief executive and global head of consumer banking Wasim Saifi said.

More action urged to boost Islamic banking

More action urged to boost Islamic banking

Talking to the GDN on the sidelines of the WIBC 2013, which concluded at the Gulf Hotel’s Gulf Convention Centre yesterday, Mr Saifi said increased competition has resulted in a widening of the Islamic product offering, bringing it within the scope of larger numbers of Muslims.

“As the Islamic banking proposition became more attractive, Muslims converted from conventional banking at a rapid pace, spurring the industry to make products offered even more sophisticated,” he said.

“Whether in terms of access, technology, products or services, they expect nothing less than they have been getting from conventional banks, and Islamic banks are responding,” he added.

He said what helped the growth along was the fact that to bank in a Sharia-compliant way, Muslims no longer needed to sacrifice the convenience, products and services they had been used to.

The increasing regulatory support, with governments in many markets like Bahrain actively encouraging the development of a healthy Islamic banking ecosystem, also helped.

The next big step for the global Islamic banking industry will be to close the gap with conventional banking when it comes to the range of products and services on offer, he said.

“Islamic wealth management is clearly lagging behind, with Sharia-compliant funds comprising less than 0.25 per cent of total assets under management.

“It is a classic chicken-and-egg story,” Mr Saifi added.

“To attract wealthy Muslim clients, you need a competitive range of products and services, but to get this, you need scale.”

However, he feels, with the strong growth in Islamic assets, and Islamic banking providers putting increased pressure on fund managers to respond, there is a good chance Islamic wealth management will catch up within the next few years.

For all the industry’s recent growth, Islamic banking still represents a fraction of total banking assets globally, and the great majority of Muslims (roughly only one in every eight Muslims with a bank account, banks Islamic) still bank conventionally.

Penetration remains low in some of the world’s largest Muslim countries.

According to Mr Saifi, the most obvious reason for this is a simple lack of awareness of what Sharia banking has to offer.

“Regulatory barriers also persist in some countries,” he said.

“While different markets will develop at different speeds, support from governments and regulators will help keep up the pace of change.

“Opening markets to international Islamic banks will help, too,” he added.

International providers tend to accelerate development in individual markets with their ability to migrate best practice, product sophistication and banking expertise between geographies.

“At Standard Chartered, for example, we work with regulators in a number of countries to help develop their framework for Islamic banking, using our experience from other markets.

“StanChart Saadiq has ambitious long-term plans in the Islamic finance sector in Southeast Asia, Middle East, South Asia and Africa,” he said.

“We will continue to further drive business momentum across our footprint, working with existing and new markets to build and strengthen the bank’s Islamic banking services and products under the Saadiq franchise,” he added.

http://www.gulf-daily-news.com/NewsDetails.aspx?storyid=366270

Bahrain tops in developed Islamic finance sector

Bahrain has the second most developed Islamic finance sector, after Malaysia, with total assets worth $47 billion, said a recent analysis.

Bahrain tops in developed Islamic finance sector

Bahrain tops in developed Islamic finance sector

The analysis was based on the ICD-Thomson Reuters Islamic Finance Development Indicator (IFDI), a numerical measure representing the overall health and growth of the Islamic finance industry worldwide.

The indicator measured five key components – quantitative development, governance, social responsibility, knowledge and awareness – which are adjusted for the relative size of each country.

Bahrain had the second most developed Islamic finance knowledge landscape, with 23 institutions offering degrees and courses in Islamic finance, said the report.

In terms of research, the kingdom had 17 research papers on Islamic finance published in the last three years, of which 12 were peer reviewed.

Bahrain also performed well in terms of governance, with a comprehensive regulatory framework covering all aspects of the Islamic finance industry. This was supplemented with strong sharia governance, with the largest number of Islamic finance scholars based in the kingdom, said the analysis.

The Islamic finance industry in Bahrain also performed well in corporate governance and corporate social responsibility disclosures. In terms of awareness, Bahrain had five seminars and five conferences related to Islamic finance last year and 551 news articles on the subject.

Russell Haworth, managing director, Mena, Thomson Reuters, said: “This indicator will provide companies with much needed unbiased and reliable multi-dimensional analysis regarding the development of the Islamic finance industry. The development of Islamic finance infrastructure will be a key driver for the establishment of the Islamic finance industry.”

Dr Sayd Farook, global head of Islamic Capital Markets for Thomson Reuters, said: “The IFDI provides equal importance to all aspects of the industry when assessing its depth and development. Our initial research indicates that Bahrain is one of the leaders in the Islamic finance industry, identifying their development in each category.”

“This research will enable policy makers and practitioner to compare themselves with their peers and prioritise areas that require development to ensure they retain their leadership position,” he said.

The IFDI, which was officially launched at the Global Islamic Economy Summit in Dubai last week, aims to expand the scope of Thomson Reuters’ Islamic finance content, research and news analysis and to develop an unbiased multi-dimensional barometer for the development of the Islamic finance industry. – TradeArabia News Service.

http://www.tradearabia.com/news/BANK_247611.html

Bahrain is identified as second most developed Islamic finance country in the world

Thomson Reuters has announced further findings from its collaboration with the Islamic Corporation for the Development of the Private Sector (ICD), the private sector development arm of the Islamic Development Bank (IDB), on the eve of the World Islamic Banking Conference in Bahrain.

Bahrain is identified as second most developed Islamic finance country in the world

Bahrain is identified as second most developed Islamic finance country in the world

The ICD-Thomson Reuters Islamic Finance Development Indicator (IFDI) measures five key components – quantitative development, governance, social responsibility, knowledge and awareness – which are adjusted for the relative size of each country. Based on this analysis, the IFDI has found that Bahrain is the second most developed Islamic finance sector, after Malaysia, with total Islamic finance assets of $47 billion. The UAE coming in as the third most developed Islamic finance country.

Bahrain had the second most developed Islamic finance knowledge landscape, with 23 institutions offering degrees and courses in Islamic finance. In terms of research, the Kingdom had 17 research papers on Islamic finance published in the last three years, of which 12 were peer reviewed. Bahrain also performed well in terms of governance, with a comprehensive regulatory framework covering all aspects of the Islamic finance industry. This was supplemented with strong Sharia governance, with the largest number of Islamic finance scholars (53) based in the Kingdom.

The Islamic finance industry in Bahrain also performed well in corporate governance and corporate social responsibility disclosures. In terms of awareness, Bahrain had five seminars and five conferences related to Islamic finance in 2012, and 551 news articles on the subject.

Russell Haworth, Managing Director, Middle East & North Africa, Thomson Reuters, said, “This indicator, the first of its kind for the Islamic Economy, will provide companies with much needed unbiased and reliable multi-dimensional analysis regarding the development of the Islamic finance industry. The development of Islamic finance infrastructure will be a key driver for the establishment of the Islamic finance industry.”

Khaled Al-Aboodi, Chief Executive Officer, Islamic Corporation for the Development of the Private Sector, said, “Today’s findings are a perfect example as to how and why the IFDI can identify the critical growth components of the Islamic Finance industry. Bahrain sits at the forefront as a leading Islamic finance hub. However, our research help the country identify areas of improvement, and monitor their progress over time to ensure that they maintain their position as a leading Islamic finance hub.”

Dr Sayd Farook, Global Head of Islamic Capital Markets for Thomson Reuters, said, “Unlike most commentaries on Islamic finance that simply focus on assets and performance, the IFDI provides equal importance to all aspects of the industry when assessing its depth and development. Our initial research indicates that Bahrain is one of the leaders in the Islamic finance industry, identifying their development in each category.

This research will enable policy makers and practitioner to compare themselves with their peers and prioritise areas that require development to ensure they retain their leadership position. Thomson Reuters is committed to leading the charge in information and analysis to support the global Islamic finance industry, with Bahrain continuing to be a key country of focus.”

The IFDI, which was officially launched at the Global Islamic Economy Summit in Dubai last week, aims to expand the scope of Thomson Reuters’ universe of Islamic finance content, research and news analysis and to develop an unbiased multi-dimensional barometer for the development of the Islamic finance industry.

http://www.cpifinancial.net/news/category/islamic-finance/post/24575/bahrain-is-identified-as-second-most-developed-islamic-finance-country-in-the-world

1,300 global Islamic finance leaders set for Bahrain talks

More than 1,300 international Islamic finance leaders are heading to Bahrain next month for the 20th anniversary special edition of the World Islamic Banking Conference.

1,300 global Islamic finance leaders set for Bahrain talks

1,300 global Islamic finance leaders set for Bahrain talks

Sheikh Saleh Kamel and Sir Howard Davies are expected to headline the most impressive line-up of speakers ever at WIBC, organizers announced.

The World Islamic Banking Conference (WIBC 2013) is scheduled to be held in Bahrain from December 3 to 5.

It is held with the support of Prince Khalifa bin Salman Al-Khalifa, Prime Minister of Bahrain and supported by the Central Bank of Bahrain.

The annual World Islamic Banking Conference (WIBC), which over the last two decades has established its pre-eminent position as the world’s largest and most influential annual gathering of global Islamic finance industry leaders, is set to gather industry pioneers, thought leaders, key regulators and leading industry players for discussions focused on transforming the industry to improve the stability, competitiveness and global growth of the international Islamic finance industry.

Confirming his participation at the event, Rasheed Mohammed Al-Maraj, governor of the Central Bank of Bahrain, said: “The global Islamic finance industry has undoubtedly undergone significant change over the past two decades, playing an ever increasing role in the international financial system.”
He added: “The industry has also grown significantly in geographic coverage, now encompassing even more new jurisdictions and emerging markets as well as the deepening and mainstreaming of its footprint in its core markets. However, in order for Islamic finance to continue to be successful as well as robust and resilient across all phases of the economic cycle, a genuine transformation is now required in order to progress to the next level of development.”

Speaking ahead of the event, David McLean, chief executive of the World Islamic Banking Conference, said: “Growing awareness of and demand for investing in accordance with Shari’ah principles on a global scale has been a major catalyst toward making Islamic financial services a flourishing industry with total assets now in excess of $1.3 trillion.”
© Arab News 2013
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http://www.zawya.com/story/1300_global_Islamic_finance_leaders_set_for_Bahrain_talks-ZAWYA20131127034708/

Bahrain set for big Islamic finance event

More than 1,300 international Islamic finance leaders will be Bahrain next week for the 20th anniversary special edition of the World Islamic Banking Conference.

Bahrain set for big Islamic finance event

Bahrain set for big Islamic finance event

The event is being held under the patronage of His Royal Highness Prime Minister Prince Khalifa bin Salman Al Khalifa from December 3 to 5 and will be supported by the Central Bank of Bahrain (CBB).

The WIBC has, during the last two decades, established its pre-eminent position as the world’s largest and most influential annual gathering of global Islamic finance industry leaders.

This year the event is set to gather industry pioneers, thought leaders, key regulators and leading players for discussions focused on transforming the sector to improve stability, competitiveness and global growth of the international Islamic finance industry.

“The global Islamic finance industry has undoubtedly undergone significant change over the past two decades, playing an ever increasing role in the international financial system,” remarked CBB Governor Rasheed Al Maraj.

“The industry has also grown significantly in geographic coverage, now encompassing even more new jurisdictions and emerging markets as well as the deepening and mainstreaming of its footprint in its core markets,” he stated.

“However, in order for Islamic finance to continue to be successful as well as robust and resilient across all phases of the economic cycle, a genuine transformation is required in order to progress to the next level of development,” he added.

The three-day event will commence with a series of pre-conference summits led by experienced and respected international industry standard-setting bodies and experts.

“As WIBC celebrates its 20th anniversary this year, it will be the most opportune platform for industry leaders and key regulators to not only look back at the industry’s achievements but also discuss new initiatives to further strengthen the industry foundations and set targets for the next two decades of continued growth and resilience,” remarked Al Maraj.

“As the strategic partner of this prestigious event, the CBB would like to invite industry leaders to the kingdom and be a part of this unique global gathering,” he added.

David McLean, the chief executive of the WIBC said the growing awareness of and demand for investing in accordance with Shari’ah principles on a global scale had been a major catalyst towards making Islamic financial services a flourishing industry with total assets now in excess of $1.3 trillion.

“With the evolving life cycle of the Islamic finance industry, the business models and strategies, regulatory and supervisory frameworks, and legal structures must also evolve to ensure that further progress is achieved,” he added.

The main WIBC 2013 conference, which begins on December 4, will be inaugurated by Al Maraj.

The inaugural address will be immediately followed by a special keynote address by Central Bank of Kuwait Governor Dr Mohammad Al Hashel.

This year’s WIBC features the most impressive line-up of speakers in the conference’s 20 years of history. In addition, much attention will also be on the special guest address by Bank of England former deputy governor, Financial Services Authority former chairman and Sciences Po, Paris, professor Sir Howard Davies.

The keynote session featuring Sir Howard will provide new insights on the future of banking regulation and its implications for Islamic financial institutions.-TradeArabia News Service

http://www.tradearabia.com/news/BANK_247218.html

Ithmaar Bank cuts losses, continues growth

Ithmaar Bank, the Bahrain-based Islamic retail bank announced a net loss of BHD 4.5 million for the nine-month period ended 30 September 2013, compared to a net loss of BHD 5.9 million for the same period last year.

Ithmaar Bank cuts losses, continues growth

Ithmaar Bank cuts losses, continues growth

“On behalf of the Ithmaar Bank Board of Directors, I am pleased to announce that Ithmaar Bank continues to grow its core retail banking operations and has significantly reduced its loss, both for the year-to-date and for the third quarter,” said HRH Prince Amr. “The financial results show a net loss of BHD 1.7million for the three month period ended 30 September 2013, which is 74.1percent lower than the net loss of BHD 6.5 million reported for the same period last year,” Ithmaar Bank Chairman, His Royal Highness Prince Amr Al Faisal said.

“I am also pleased to report that operating income continues to be stable, at BHD 56.7million, despite a significant compression of margins in overseas subsidiary due to 100 basis points cuts in benchmark profit rates in the past year,” said HRH Prince Amr. “This resulted in a net profit, before impairment provisions and taxation, of BHD 3.1 million for the nine month period ended 30 September 2013, compared to BHD 5.6 million in the same period last year.

The profit before impairment provisions and taxation for the three-month period ended 30 September 2013 was BHD 2.2 million compared to BHD 2.9 million in the same quarter last year. This is a significant improvement from BHD 0.8 million reported for the first six months of 2013,” he said.

“Expenses have also continued to reduce,” said HRH Prince Amr. “Total expenses for the nine-month period ended September 2013, at BHD 53.7 million, are 3.1 per cent lower than the BHD 55.4 million reported for the same period last year, this is despite the full period impact in 2013 of several new branches opened in Bahrain and by overseas subsidiary during this period in 2012,” he said.

Equity of unrestricted investment account holders recording growth of more than 16.6 per cent, from BHD 607 million as at 30 September 2012, to BHD 708 million as at 30 September 2013. Liquid assets, comprising cash, balances and commodity placements with banks, financial and other institutions, also increased and represent about 15.1 per cent of the balance sheet as at 30 September 2013, up from 13.6 per cent as at 31 December 2012, excluding investments in government securities held by an overseas subsidiary.
Ithmaar Bank Acting Chief Executive Officer Ahmed Abdul Rahim said, “We continue to invest heavily in developing our products and services while also working to be closer to our customers.

“In the three month period ended September 2013, for example, Ithmaar added three new Automated Teller Machines (ATMs) to its fast-growing retail banking network and refurbished two full-service branches. The three new ATMS, in Muharraq, Saar and Riffa are strategically located across the Island and bring the total number of ATMs to 47. As a result, with 17 branches and 47 ATMs, Ithmaar Bank now boasts one of the largest retail banking networks in the Kingdom.”

Ithmaar Bank has also re-launched its popular prize-based savings account, Thimaar, with bigger prizes and more winners. Thimaar, which offers customers a chance to win one of 3,000 prizes totalling more than $2,000,000, for every BHD 50 deposited, also provides free life cover as well as anticipated monthly profit.

http://www.cpifinancial.net/news/post/24263/ithmaar-bank-cuts-losses-continues-growth