ADIB partners with UAE Ministry of Social Affairs to promote financial education

| Monday, December 29, 2014
ADIB will support the "Tejuri" initiative, which is being implemented by the ministry’s Department of Family Development, by taking its message of saving and responsible financial management to schools and colleges. The banks will also offer cash prizes to encourage children to open long-term savings accounts.
The agreement was signed by H.E. Naji Al Hai Mubarak, Acting Undersecretary of the Ministry of Social Affairs, and Nawal Al Bayari, Business Head at ADIB's Retail Segment.
H.E. Naji Al Hai Mubarak, Acting Undersecretary of the Ministry of Social Affairs, said: “We strongly believe in the importance of strengthening the cooperation between the governmental and the private sector, enabling us to provide the best services to our nation. We are pleased to sign this agreement with ADIB, which will help younger members of society to improve their financial awareness. The Ministry of Social Affairs and ADIB are completely aligned in our aim to educate and instil the habits of saving and responsible spending.”
Nawal Al Bayari, Business Head at ADIB's Retail Segment, added: “As a leading bank, ADIB has an obligation to help communities improve their financial awareness and implement best financial practices. We believe that providing children with financial literacy will play a key role in their future financial decisions and will build a sense of responsibility. Our partnership with the Ministry of Social Affairs emphasizes our commitment to help citizens enjoy a balanced financial life, which will contribute to a strong national economy.”
Under the agreement, ADIB will offer participants of the “Tejuri” initiative the opportunity to save through the "Banoun" children’s savings account for under 18s, and the "Shabab" account, aimed at young adults of 15 to 25 years.
The partnership is part of ADIB’s broad programme to increase financial literacy in the UAE. ADIB has launched a ‘Smartmoney’ campaign, which includes a booklet, a Website and an app that provide advice and practical tools for budgeting, saving, managing debt and investments, aunderstanding risks and creating personal wealth.
ADIB’s “banoun” children’s account is a Shari’ah compliant savings account that enables parents to save for their children and provides them with a host of unique features and privileges. To appeal to the imagination of children and involve them in this initiative, ADIB has created Darhoom, a mascot in the shape of a UAE Dirham. Children are expected to interact with Darhoom initially through a booklet of tips and stories that explains financials in a simplified manner.



Muscat - 
The Meethaq Shari’a Supervisory Board conducted its final meeting of 2014 under the chairmanship of Sheikh Ali Qaradaghi, attended by Sheikh Essam Muhammad Ishaq, Sheikh Majid al Kindi, Abdulqader Thomas and Saeed al Muharrami. 
The board reviewed Meethaq activities during the year and discussed the strategy for the coming period, especially Meethaq products in the pipeline as well as contracts and agreements relating to these products.
Sulaiman al Harthy, group general manager – Meethaq Islamic Banking, said: “The Meethaq Shari’a Supervisory Board discussed many important topics such as new product contracts and Meethaq workflow. Meethaq is proud to have on board some of the brightest minds on Islamic finance to chart the way forward. The Shari’a Board has made valuable contributions in establishing Meethaq as the leading Islamic banking services provider in Oman.”
Meethaq offers a full suite of Islamic banking products. The Shari’a compliant products and services include savings account, current account, home finance, auto finance, credit card, mobile banking etc.
Presently, Meethaq has 11 branches across the sultanate and plans to expand the branch network as well as launch new products and services to complement the unique Islamic banking experience.

AAOIFI Issues New Accounting Standard on Investment Accounts

Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) has issued a new accounting standard on investment accounts - Financial Accounting Standard No. 27 (FAS 27) Investment Accounts.The new FAS 27 updates and replaces two of AAOIFI 's previous accounting standards relating to investment accounts - FAS 5 Disclosure of Bases for Profit Allocation between Owners' Equity and Investment Account Holders as well as FAS 6 Equity of Investment Account Holders and Their Equivalent.
This standard applies to investment accounts based on Mudaraba contracts which represent "equity of investment accountholders and on Mudaraba contracts that are placed on "short term basis" (overnight, seven days, one month basis) by other financial institutions as "interbank-bank deposits" for the purpose of liquidity management. However, it is not applicable to own equity instruments, wakala contracts, reverse murabaha, musharaka or sukuk.
Dr Hamed Hassan Merah, Secretary General of AAOIFI said that the new standard was developed through extensive consultation with the international Islamic finance industry. The standards development process (the due process) was carried out through up to thirteen stages, commencing with the commissioning of consultants who prepared the exposure drafts and concluding with the official inssuance and publication. One of the essential stages is the public hearing which is designed to gather and gauge the opinions and views of experts and practitioners from the broader Islamic finance industry. He added, " AAOIFI is currently working on revision of a number of existing standards and developing new ones in order to give better support to the industry".
The new standard will be included in the next publication of AAOIFI standards scheduled for early 2015.
About AAOIFIAAOIFI , established in 1991 and based in Bahrain, is the leading international not-for-profit organisation primarily responsible for development and issuance of standards for the global Islamic finance industry. It has issued a total of 88 standards in the areas of Shari'a, accounting, auditing, ethics and governance for international Islamic finance. It is supported by over 200 institutional members, including central banks and regulatory authorities, financial institutions, accounting and auditing firms, and legal firms, from over 45 countries. Its standards are currently followed by all the leading Islamic financial institutions across the world and have introduced a progressive degree of harmonisation of international Islamic finance practices.
For more information, please contact:
Mr. Khairul Nizam, 
Deputy Secretary General, AAOIFI 
Office: +973 - 1724 4496; 
Mobile: +973 - 3974 5528; 

Islamic banking in Canada increases dramatically amid N. American financial crisis

After emerging largely unscathed from the financial crisis that hammered North American and European financial institutions, Islamic banking has momentum.
Worth $1 trillion in assets, Islamic banking is being lauded by British Prime Minister David Cameron and supported by Canada’s Conservative government, major banks and credit unions, leading business schools and influential Muslims across the country.
Islamic banking — which bans interest payments, pure monetary speculation and investing in such things as alcohol, gambling, pornographic media and pork — is being sold as the next big thing in financing for Canada, which is home to just over a million Muslims.
“Awareness in Canada of Islamic banking has increased dramatically in the last few years,” says Walid Hejazi, an associate professor at the University of Toronto’s Rotman School of Management, where he teaches on the subject.
“With the federal government’s efforts in this respect, Canada’s attractiveness to Islamic finance will grow,” Hejazi says. He cited how Prime Minister Stephen Harper’s government helped sponsor a World Islamic Banking Conference last year in the oil-rich Persian Gulf.
Many Canadian Muslims are seeking “Shariah-compliant banking solutions to their personal finances,” says Hejazi, a Lebanese-Canadian. They want home mortgages that are not based on conventional Western interest payments, but which operate more like a partnership.
The International Monetary Fund, Hejazi says, recently attributed the expansion of Islamic finance to demand from the increasing number of Muslims living in the West, growing oil wealth in Muslim countries and people seeking “ethical” and lower-risk financial products.
Even though Islamic banking has some harsh critics among Canadian Muslims who consider it unwieldy — with many still suffering from the 2011 bankruptcy of Toronto-based UM Financial, which offered Shariah-compliant mortgages — the movement is gaining energy.
In addition to Canadian banks, such as CIBC, making explicit gestures to offer Islamic banking, Hejazi says the Canada Mortgage and Housing Corporation recently reported there are no regulatory hurdles to stop Shariah-compliant banking expanding in Canada.
To continue to grow, some of the world’s largest Islamic banks — most of which are in the Middle East, Indonesia and Pakistan — are looking at rebranding to appear less religious and more open to Western investors drawn to the kind of no-interest cooperative banking that is also offered in countries such as Sweden.
For instance, the Abu Dhabi Islamic Bank, the largest Shariah-compliant lender in the emirate, is considering removing the word “Islamic” from its name and calling itself Abu Dhabi International to emphasize its service quality. Many financial institutions in Muslim-majority countries already simply call themselves “participation banks.”
“I think many Muslims in Metro Vancouver are excited about the idea of Islamic banking. In general, I think it’s a good idea,” says Luay Kawasme, director of the Vancouver Muslim Community Centre.
“The appeal of it for Muslims is they don’t have to get involved in financing that involves interest. Instead, the risk occurs between the financial institution and the borrower. You basically go into business together as partners.”
The Islamic ban on usury grew out of the seventh-century era of Mohammed. The founder of Islam, Luay says, opposed the way “the wealthy would get outrageous returns on their loans; charging interest rates of 20, 30 and 40 per cent.”
Bans on usury are also embedded in Hebrew and Christian scriptures, Luay recognizes.

Russian Banks Warm to Shariah as Crisis Looms: Islamic Finance

Russian lenders are stepping up efforts to tap Islamic finance as international sanctions and a slump in oil prices push the world’s biggest energy exporter to the brink of a recession.
Vnesheconombank, Russia’s state development bank, is seeking advice from lenders in the Middle East on how to sell its first Islamic bonds, the RIA Novosti state-news service reported Dec. 16. Banks and companies are seeking Shariah financing after the nation’s currency weakened to an all-time low almost two weeks ago, according to the Russian Business Council in Dubai.
The increased efforts underscore how the highest overnight lending rate since at least 2006 and U.S.-led sanctions linked to the conflict in Ukraine are putting a squeeze on banks including Gazprombank and VTB Bank OJSC. Lawmakers rushed through legislation on Dec. 23 allowing the Deposit Insurance Agency to buy stakes in banks before they face bankruptcy proceedings to keep the system stable.
Banks and corporates “want to know how it works and how they can get into this market,” council Chairman Igor Egorov said in an interview at his Dubai office on Dec. 23. “They see an urgent need within one-to-two years, when the hunger for finance will be very acute because at the moment we still don’t see the full effect of sanctions.”
Attitude Shift
Sensitive Issue
Cash Pool
Adopting Islamic finance would mark sea change for the predominantly Russian Orthodox nation. Alexei Ulyukayev, who was first deputy chairman of the central bank until last year and is currently economy minister, said in 2011 the industry isn’t of “primary, secondary or even tertiary importance,” reported.
The central bank is now considering legislature for Islamic finance following requests from lenders, Governor Elvira Nabiullina said on Nov. 26.
Russia’s economy will probably contract next year and won’t see growth for four consecutive quarters, according to a Bloomberg survey of economists. The ruble declined almost 40 percent in 2014 as Brent crude headed for its biggest drop in six years. It’s the worst performance of about 170 currencies tracked by Bloomberg after Ukraine’s hryvnia. Brent rose 0.9 percent to $60.01 a barrel at 12:11 p.m. in Moscow.
The Bank of Russia increased the interest rate 6.5 percentage points to 17 percent on Dec. 16, which means Islamic banks can offer better deals than their conventional counterparts, according to the Association of Russian Banks.
“There’s a strategic opportunity for Islamic finance to develop in Russia because given the 17 percent rate, clients won’t go to regular banks,” Sergey Grigoryan, head of analysis division at the association, said by phone from Moscow on Dec. 23. “The market is forcing the central bank to take a closer look at the current situation.”
While Muslims make up as much as 15 percent of the nation’s 142 million people, U.S. government data show, a limited understanding of Shariah finance’s principles may delay its development inRussia.
“It’s quite a sensitive area because many people don’t really understand it, or they may see it as a threat, something unknown,” Egorov said. “They don’t understand how business is related to religion.”
That hasn’t stopped businessmen from exploring the industry. The heads of Russian banks and companies, including Vnesheconombank and Uralvagonzavod, discussed Islamic finance as part of a two-day meeting in Bahrain with their counterparts from the six-nation Gulf Cooperation Council this month, state-run news agency BNA reported Dec. 14.
“It’s now on the agenda,” Egorov said of Shariah-compliant banking. “There’s no reason why Russia should limit itself and not get funds through Islamic finance.”

SUKUK PIPELINE - Issue plans around the world

| Tuesday, September 30, 2014
Following are major Islamic bond issues in the global pipeline.
The Thomson Reuters Global Sukuk Index is at 114.57474 points, down from 114.88023 at the end of last month but up from 109.78969 at the end of last year. The Thomson Reuters Investment Grade Sukuk Index is at 112.19700 points, against 112.59309 at end-August and 107.28036 at the end of 2013.
SABANA REIT - Singapore's Sabana Shariah Compliant Industrial REIT announced on Sept. 24 an offer of aSingapore dollar, 4.5-year senior unsecured sukuk, at initial price guidance in the 4.375 percent area; the size, off the issuer's S$500 million ($394 million) multicurrency programme, was yet to be determined. Pricing could come as soon as later in the day.
TURKIYE FINANS - Turkiye Finans Katilim Bankasi plans to issue $50 million worth of ringgit-denominated sukuk in Malaysia by year-end to diversify its funding base, chief executive Derya Gurerk told Reuters in late September.
DIFC INVESTMENTS - DIFC Investments, the investment arm of the company running Dubai's financial free zone, is looking to raise as much as $700 million before the end of October by issuing a sukuk to help repay existing debt and fund real estate development, its top executive said.
MAHCO MALAYSIA - Mahco Malaysia, a vehicle to issue sukuk for Mohammed Othman Al Houkail Trading & Contracting Co, a medium-sized contractor in Saudi Arabia, proposed an Islamic medium-term note programme of up to 300 million ringgit ($93 million), RAM Ratings said in late September.
1MDB - 1Malaysia Development Bhd, a sovereign wealth fund, plans to sell some 8.4 billion ringgit of sukuk by the end of this year, The Edge quoted former prime minister Mahathir Mohamad as saying in late September.
CENDANA SEJATI - Malaysia's Cendana Sejati, a unit of local bank Masraf Al Barakah, proposed a 360 million ringgit senior sukuk murabaha medium-term note programme, RAM Ratings said in late September.
INDONESIA - Indonesia's finance ministry will hold auctions of project-based sukuk as well as six-month sharia T-bills on Oct. 7 and Oct. 21.
LUXEMBOURG - Luxembourg planned to meet fixed income investors starting on Sept. 21 ahead of a debut issue of five-year euro-denominated sukuk, a document from lead arrangers said.
AGAOGLU - Turkish construction-to-energy Agaoglu Group plans to raise around $300 million by issuing sukuk,Niyazi Albay, Agaoglu's chief investment officer, told Reuters in mid-September. No specific time frame was given.
KUVEYT TURK - Lender Kuveyt Turk, 62 percent owned by Kuwait Finance House , plans to issue sukuk inMalaysia, aiming to raise as much as 2 billion ringgit, Turkey's Capital Markets Board said in mid-September. It gave no details.
AKTIF BANK - Aktif Bank, Turkey's largest privately owned investment bank, has received regulatory approval to issue 200 million lira ($91 million) in sukuk, the Capital Markets Board said.
IFFI - The International Finance Facility for Immunisation Co. (IFFI), for which the World Bank acts as treasury manager, has picked four banks for a potential U.S. dollar-denominated sukuk, a document from lead managers showed in mid-September.
ADVANCED PETROCHEMICAL - Shareholders of Saudi Arabia's Advanced Petrochemical Co gave approval on Sept. 15 for the company to issue sukuk in a total amount not exceeding its share capital.
OMAN - The government of Oman is expected to issue 200 million rials ($520 million) of sukuk early next year, its first issue of Islamic bonds, Jamil Al Jaroudi, chief executive of Bank Nizwa, told Reuters.
PAKISTAN - Pakistan's Ministry of Finance selected Citigroup, Deutsche Bank, Dubai Islamic Bank and Standard Chartered as bookrunners for a U.S. dollar sukuk issue, a ministry official said; the tenor of the bond and the format would be decided as soon as the week of Sept. 8.
DOGUS GROUP - Turkish conglomerate Dogus Group has received regulatory approval to raise $370 million by issuing the country's first U.S. dollar-denominated corporate sukuk, the Capital Markets Board said in late August. No time frame was given.
CIMB Islamic - CIMB Islamic, the sharia-compliant unit of Malaysia's second largest bank, is preparing an Islamic bond programme to raise up to 5 billion ringgit, ratings agency MARC said in late August.
SUNWAY - Malaysian property developer Sunway will raise up to 2 billion ringgit by issuing sukuk mudaraba, it said in August; short-term commercial paper under the programme will have maturities of between a month and a year, while medium-term notes will have maturities of one to seven years. Sunway will make its first issuance within two years.
MALAYSIA AIRPORTS - Malaysia Airports Holdings hired four banks for a subordinated perpetual sukuk musharaka to raise 1 billion ringgit; investor meetings would be held on Aug. 25.
RAS AL-KHAIMAH - The emirate of Ras al-Khaimah, part of the UAE, invited banks to pitch for arranger roles on a potential dollar-denominated sukuk, sources said in early June. However, bankers said in August that Ras al-Khaimah had sent out requests for proposals for a syndicated loan, casting doubt on whether the planned sukuk issue would now go ahead.
GULF FINANCE HOUSE - Bahrain-based Gulf Finance House said in mid-August it planned a $200 million sukuk issue to repay outstanding debt and for acquisitions. The deal would take place in coming months.
TURKEY - Turkey's Treasury said it plans to issue lira-denominated sukuk worth 1.5 billion lira in October.
ADIRA DINAMIKA - Indonesia's PT Adira Dinamika Multi Finance plans to raise at least 500 billion rupiah ($42 million) with ringgit-denominated sukuk in Malaysia by the end of the year, bankers said.
K-ELECTRIC - Karachi-based utility K-Electric plans to raise as much as 22 billion rupees ($223 million) through sukuk to refinance existing debt, the company said in late June.
LIBYA - Libya's central bank is proposing to issue Islamic bonds to help fund the country's budget and offset a loss of oil revenues that could create a deficit of $25 billion this year, a bank official said in June.
KENYA - Kenya plans to issue another international bond and may consider a debut sukuk issue, the finance minister said in late June, after a successful debut $2 billion eurobond closed.
BANK MUAMALAT - Malaysia's Bank Muamalat, a unit of sovereign fund Khazanah and auto-to-property conglomerate DRB-Hicom Bhd, will raise up to 2 billion ringgit with Islamic bonds, credit agency Malaysian Rating Corp said in late June.
BAHRI - National Shipping Co of Saudi Arabia (Bahri) plans to arrange long-term sharia-compliant financing in the next year to replace a bridge loan backing its $1.3 billion acquisition of Saudi Aramco's marine unit, Bahrisaid in June. Banking sources prebiously told Reuters Bahri was looking at a potential debut sukuk issue to replace the bridge loan.
SOCIETE GENERALE - Societe Generale completed the roadshow for the first issue in its 1 billion ringgit multi-currency sukuk programme in Malaysia, and would decide on the size in days, the bank said on June 18. In early July, banking sources said Societe Generale was still seeking a window to launch.
IFC - The International Finance Corp, the World Bank's lender to the private sector, is considering a return to the Islamic bond market, an IFC official said. A sukuk issue is still in the early stages of discussion but would likely be in the fiscal year starting in July 2014.
JORDAN - Jordan's government is studying a proposal to issue its first Islamic bond as early as next year, possibly raising over $1 billion in multiple currencies, but a preference for concessionary loans from aid donor countries could hinder the plan, government sources said.
MALAYSIAN RESOURCES CORP - Malaysian Resources Corp, a local construction firm, said on June 12 it would issue Islamic bonds to raise up to 680 million ringgit for land acquisitions and working capital.
BOTM - Bank of Tokyo-Mitsubishi UFJ said on June 5 it was seeking to raise as much as $500 million through a multi-currency Islamic bond programme in Malaysia, becoming the first Japanese bank to use sukuk for fund-raising.
BANGLADESH - The central bank is seeking to amend rules on its existing sukuk programme to broaden its use and allow for sovereign issuance by the government, a central bank spokesman said in June.
BANK ISLAM - Malaysia's Bank Islam plans to raise 1 billion ringgit by selling Islamic bonds to fund organic growth as well as a potential acquisition in Indonesia, two people involved told Reuters in early June. A 300 million ringgit Basel-III compliant Tier 2 sukuk is awaiting approval from the central bank and the Securities Commission for issue in July.
AL OTHAIM - Saudi Arabia's Al Othaim Real Estate and Investment Co, owner of five shopping malls in the kingdom, plans to issue its debut local currency sukuk as early as in June, sources aware of the matter said at the start of the month. The transaction is likely to be worth between 500 million and 1 billion riyals ($133-267 million), one of the sources added.
AL BARAKA - Bahrain-based Al Baraka Banking Group said in mid-May that it was considering issuing subordinated Islamic bonds through its South African and Pakistani units to boost their regulatory capital.
TUNISIA - Tunisia will sell its first sovereign Islamic bond in September after months of delays, raising $140 million, its finance minister said in mid-May. The ministry had previously planned a $500 million sukuk and gave no reason for the reduction in size.
JEDDAH ECONOMIC CO - Saudi Arabia's Jeddah Economic Co said in mid-May it was in talks with local banks to raise funds for the 14 billion riyal first phase of its Kingdom City project. For part of the money, "we are looking at the bonds and sukuk market but this will need a structure in place, which we are working on," chief executiveMounib Hammoud said.
IOI PROPERTIES - Kuala Lumpur-listed IOI Properties is considering an offer of Islamic bonds; it is looking to raise up to 750 million ringgit off a 1.5 billion ringgit sukuk programme, the company said in early May.
BANK MUSCAT - Bank Muscat plans a dual-currency U.S. dollar and rial sukuk issue worth around $300 million that would be the first sukuk sale by an Omani bank. The issue, which could carry tenors of three to five years, would be part of a 500 million rial ($1.3 billion) sukuk programme which shareholders approved in March, Sulaiman Al Harthy, group general manager of Meethaq, Bank Muscat's Islamic operation, told Reuters in early May.
PELABURAN MARA - Malaysia's Pelaburan MARA, the investment arm of Majlis Amanah Rakyat, plans to issue sukuk worth up to 1 billion ringgit this year or next to finance its investments in the oil and gas and technology sectors, group chief executive Nazim Rahman was quoted as saying in April by The Edge Financial Daily.
HUA YANG - Malaysian property development firm Hua Yang Bhd said on April 29 it had won approval from thesecurities commission to raise up to 250 million ringgit with an Islamic bond programme.
FIRST GULF BANK - Abu Dhabi's First Gulf Bank, the third-largest bank by assets in the United Arab Emirates, plans to raise up to 3.5 billion ringgit with Islamic bonds in Malaysia, RAM Ratings said in March.
KILER REIT - Turkish real estate investment trust Kiler GYO plans to issue a five-year sukuk worth at least $100 million in the second half of this year, parent company Kiler Holding's chief financial Officer Kaan Aytogu said in February.
ACWA - Last December, Saudi Arabia-based water and power project developer ACWA Power said it had raised a 1.77 billion riyal Islamic loan from four local banks to help finance investments including acquisitions and act as a bridge to a sukuk issue in 2014.
ADB - The Asian Development Bank said in December that it was considering an Islamic bond issue as early as in 2014.
© Reuters 2014

IFSB - INCEIF Executive Forums for Islamic Finance to Discuss the Global Regulatory Reforms and Sound Governance Practices for Islamic Finance

The Islamic Financial Services Board (IFSB) and the INCEIF - The Global University of Islamic Finance are organising the fifth and sixth Executive Forum (EF) on Islamic Finance series in November and December 2014. The IFSB-INCEIF Executive Forums aim to provide a platform for global leaders in Islamic finance to discuss selected emerging issues facing the global Islamic financial services industry, emphasising on issues related to supervision and prudential regulation, both at national and international levels, harnessing from the experiences of a distinguished pool of global experts, academics and practitioners.
The 5th edition of the Executive Forum, themed, Global Regulatory Reforms: What They Mean For Islamic Finance will be held on 10 - 11 November 2014 in Sasana Kijang, Kuala Lumpur, Malaysia. This EF emphasises on the recent global regulatory reforms and how they impact the stability, development and growth of the Islamic financial services industry. It will also include deliberations on macroprudential reforms highlighting the importance of macroprudential issues in financial stability and the efficiency of macroprudential policy in achieving greater stability for the industry.
This EF will provide in-depth knowledge on the fundamental subjects related to the existing Basel Framework, and the main aspects of the Basel III Requirements. It will also discuss reforms made to the banking sector capital framework, moving from bail-out to bail-in, and enhanced focus on Internal Capital Adequacy Assessment Process (ICAAP). Speakers will also follow global developments in liquidity management and their impact on asset liability management in order to develop a comprehensive and effective liquidity infrastructure for the banking sector. Furthermore, the EF will feature a panel discussion on the strategies and practices in implementing the reform agenda, in which participants will be exposed to real issues and challenges in implementing global regulatory reform from the perspective of both market players and supervisors.
The final EF for this year on Sound Governance Practices: Promoting Stability in Islamic Financewhich will be held on 9 - 10 December 2014 aims to provide a platform for high level deliberations and exchanges of views among speakers and participants - global leaders from among practitioners, regulators and academics.
The 6th edition of EF also aims to deliberate on the key trends and dynamics of corporate governance initiatives in the global and Islamic finance industry. Among others, the two-day Executive Forum will discuss the evolving roles of the Board of Directors, Board and management committees and their capacity to meet challenges related to risk governance and internal control. It also seeks to provide insights on how institutions offering Islamic financial services (IIFS) should align their corporate and Shari`ah governance practices to promote and achieve industry stability. Participants will benefit from the differing views of counterparts and peers of various backgrounds and geographical locations.
The Executive Forum is targeted for mid to senior-level management who seek to sharpen their skills and deepen their knowledge of the industry's driving factors, as well as broaden their cross-border perspective. It is ideal for Chief Executive Officers and Board Members of investment companies, credit rating agencies, special purpose entities, credit enhancement companies, as well as originators/issuers, and senior financial advisors. The Forum will also benefit senior managers in risk management, governance and compliance functions, as well as regulators and supervisors of the Islamic banking sector, auditors, lawyers and academics. Experienced practitioners, banking supervisors, and thought leaders are brought together in this Executive Forum, which encourages knowledge sharing and active discussions.
For further information and to register, do visit Please contact Mr. Hamizi Hamzah / for queries on the Executive Forum series.
About the Islamic Financial Services Board (IFSB)The IFSB is an international standard-setting organisation that promotes and enhances the soundness and stability of the Islamic financial services industry by issuing global prudential standards and guiding principles for the industry, broadly defined to include banking, capital markets and insurance sectors. The IFSB also conducts research and coordinates initiatives on industry-related issues, as well as organises roundtables, seminars and conferences for regulators and industry stakeholders. Towards this end, the IFSB works closely with relevant international, regional and national organisations, research/educational institutions and market players.
The members of the IFSB comprise regulatory and supervisory authorities, international inter-governmental organisations and market players, professional firms and industry associations.
For more information about the IFSB, please visit
About INCEIFINCEIF - The Global University of Islamic Finance, is set up by Bank Negara Malaysia to develop human capital for the global Islamic finance industry. Apart from its academic programmes, which are Chartered Islamic Finance Professional, Master in Islamic Finance Practice, MSc in Islamic Finance and PhD in Islamic Finance, INCEIF also offers customised executive training programmes and industry-focused applied research in line with its vision to be the knowledge and thought leader in Islamic finance.
INCEIF syllabus is structured with inputs from industry players to bridge the gap between academic knowledge and industry experience. INCEIF faculty members, who are globally respected among the Islamic finance academia and industry, have a combined wealth of experience and diversity. The faculty, coupled with continuous support from the industry, provides INCEIF students with strong mentoring relationships and opportunities for professional development. For more information, please visit
© Press Release 2014

Meethaq, Zubair SEC collaborate on supporting entrepreneurs with Islamic finance

Meethaq, the pioneer of Islamic banking in Oman from Bank Muscat, and Zubair Small Enterprises Centre (Zubair SEC), signed a Memorandum of Understanding (MoU), to extend support to entrepreneurs and owners of small businesses and maximise successful entrepreneurial channels in the Sultanate.
The MoU was signed at the Zubair Corporation headquarters in Athaiba by Sulaiman Al Harthy, Group General Manager - Islamic Banking, and Mohammed Al Hasani, Chief of Communications Officer of Zubair Corporation , in the presence of top management executives from both sides.
Sulaiman Al Harthy said: "Meethaq is proud to join hands with Zubair SEC to provide Islamic finance for SMEs in Oman. The main objective of the bank's SME strategy is to complement the government efforts in empowering entrepreneurs to chart successful business ventures by providing necessary training, guidelines, tools etc. The partnership with Zubair SEC marks a clear progression of the well defined strategy pursued by the bank in line with the directives of His Majesty Sultan Qaboos bin Said to support the SME sector and strengthen its role in the economic development of Oman."
Al Harthy added: "Meethaq strives to fulfill the needs of customers with innovative Shari'a based products and is well positioned to provide Islamic financial expertise to diverse segments and thereby promote the good of society as a whole. Meethaq has adopted the best practices in Islamic banking and finance worldwide to combine a robust model which protects customers and complements the Islamic banking industry."
Commenting on the MoU, Mohammed Al Hasani said: "Today we are adding significant value to the system that we have been building for entrepreneurs and owners of small businesses in the Sultanate. This facility has been evolving and developing based on the close attentiveness to the needs of Zubair SEC's members and the market demand. What we always aim for is to cater to entrepreneurs' needs with all our capacity and reach. Hence, the partnership with Meethaq Islamic Bank has been very well received by our members and brings a new perspective to the "access-to finance" that we try to facilitate for them through our network of strategic partners."
On fulfilling the funding criteria based on Meethaq credit policy, financial assistance will be extended to micro and small enterprises in the Sultanate, including members of Zubair SEC's Direct Support Programme who get selected every year by Zubair SEC as the most engaged and committed members.
Zubair SEC will direct its members possessing feasible business proposals to Meethaq for Islamic financing for SME ventures. Mutual efforts by both parties will also be in place towards raising awareness on Islamic financing, entrepreneurship, and business administration.
Zubair SEC is one of the initiatives which emanated from Zubair Corporation 's strategic social responsibility vision towards Omani society. The vision reflects the corporation's belief in the importance of small enterprises (SEs) in enhancing the national economy and contributing to sustainable socio-economic development. The centre comprises a team of socially engaged and business savvy advisors who put all efforts to contribute to leveraging the Omani community through equipping and enabling entrepreneurs and start-ups to grow with their businesses in a sustainable and responsible manner. Since its launch in 2013, Zubair SEC has added to its membership 200 small businesses and around 220 entrepreneurs from all sectors of the economy to benefit from its services and support.

About Zubair Small Enterprises Centre (Zubair SEC)Established in June 2013, the Zubair Small Enterprises Centre (Zubair SEC) is one of the initiatives which emanated from Zubair Corporation 's strategic social responsibility vision towards Omani society. The vision reflects the corporation's belief in the importance of small enterprises (SEs) in enhancing the national economy and contributing to sustainable socio-economic development. The centre extends business mentorship and guidance to Oman's promising entrepreneurs as well as financial support to selected entrepreneurs every year, to help them succeed and grow in a sustainable manner.
For more information on Zubair SEC, please contact the Communications Office at

Banking sector looking up with positive prospects

Oman's macro-economy continues to remain strong with a positive outlook owing to its stable fundamentals and expansive policies to support growth of both oil and non-oil sectors.
According to the Central Bank of Oman (CBO), the Sultanate's economic growth prospects are encouraging for the coming years and the World Bank has projected Oman's real GDP growth at 4.9 per cent in 2014 and 5 per cent in 2015.
Supported by the steady economic advancement, Oman's banking sector too is witnessing healthy growth in lending, deposits and earnings.
Although there is presence of foreign banks in Oman, the six listed conventional banks form the significant chunk of the country's banking sector with a credit base of RO 15.2 billion against deposits of RO 15.8 billion contributing nearly 88 per cent and 96 per cent of the total commercial banks' credit and deposit respectively in the Sultanate as on June 30, 2014.
The widening gap between credits and deposits narrowed compared to the previous quarter as deposit growth slowed and loan growth remained healthy for the banks over the last one year.
Total loans of the banks registered an increase of 12.8 per cent in the twelve months until June 2014 which was in line with the increase in deposit base during the same period.
In terms of market share, Bank Muscat continues to be the market leader accounting for around 44.2 per cent of the total gross loans and advances and 41.2 per cent of the total deposits by the six banks as on 30 June 2014.
Amongst the listed conventional banks offering Islamic products too, Bank Muscat remains the market leader with 56.6 per cent of the Islamic finance market share and 64.1 per cent of the Islamic deposits market share.
Over the last one year Islamic banking activity is picking up pace as the banks expand their network of Islamic windows and introduce various Sharia compliant products.
The second quarter of this year witnessed a substantial increase in both credit and deposits to reach combined Islamic receivables of RO 634 million and Islamic deposits of RO 279 million by the five listed conventional banks (excluding HSBC Bank Oman). As banks' lending and Islamic banking activity grew, the combined income and profits of the six listed conventional banks too witnessed steady growth.
Hence although faced with stiff competition that marginally impacted the average interest spread and net interest margin, the six banks registered an increase of 6.7 per cent year-on-year in their operating income and 7 per cent year-on-year in their net profit to reach a total net profit of RO 155.4 million for the first half of the year.
The banks also managed to control their overall costs, supporting their bottom line growth and return to equity holders.
Combined return on average equity of banking thus remained steady above 12 per cent.
Based on the improving performance of banks and supported by positive market outlook, the average gain of the six banking stocks has been more than 20 per cent this year so far significantly outperforming the broad market index gain of 9.4 per cent. However, despite the recent run-up, banking stocks trade at average PE (TTM) of 12.2x and PBV of 1.4x which is at a discount to the GCC banks' valuations.
Compared to their GCC peers, Omani banks also have a better asset quality and higher capital adequacy mainly attributable to prudent market regulations.
Going forward, although the cap on personal loans portfolio and interest rate would temporarily impact the retail lending of banks and their interest margins, the corporate and Islamic business as well as buoyant market scenario would mitigate its impact and maintain the resilience of the sector.
Also as the sustainable economic development continues, Oman's banking sector would continue to benefit from the same and expand further also supported by the favourable demographics.
Hence the outlook continues to be encouraging for the banking stocks that are currently trading at attractive valuations compared to their GCC peers and the broader market.
As the six banks together constitute almost 40 per cent weight of the MSM 30 Index, a re-rating in banking valuations would also have a positive impact on the market, further boosting investor confidence and overall activity going forward.
Disclaimer: The views and opinions expressed in this article are solely those of the authors and do not reflect the opinion of the Observer.
© Oman Daily Observer 2014