(Reuters) - Bank of London and The Middle East (BLME) , Britain's largest stand-alone Islamic bank, aims to pay its first dividend in early 2016 as the lender diversifies its revenue and funding streams, its chief executive said on Wednesday.
Founded in 2006 by Kuwait's Boubyan Bank , BLME has not paid a dividend, but its net distributable reserves are expected to reach a sufficient level in 2015, chief executive Humphrey Percy said in a conference call.
“We have been constrained from having net distributable reserves...We expect this to change...not in 2014, but only in 2015,” he said.
Asked whether a dividend would be paid in 2016, Percy replied: “Absolutely, based on current forecasts...This is what we anticipate.”
London-based BLME, which provides corporate banking and wealth management services, posted a net profit of 4.0 million pounds in the first half of 2014, up from 1.0 million pounds during the same period last year.
This was aided by diversification of revenue streams, with the corporate banking division seeing its total operating income grow 32.5 percent from a year earlier.
The Dubai-listed bank has reduced its reliance on short-term funding sources: deposits with maturities of more than one year now account for 34 percent of total deposits, up from 20 percent a year earlier.
BLME had total assets worth 1.3 billion pounds as of June, a 13 percent rise year-on-year.
The bank opened a Dubai representative office in the third quarter of last year and listed its shares on Nasdaq Dubai in October, becoming the first new equity listing in Dubai for over four years.
ISLAMIC Finance is traditionally a very important sector in the Islamic financial world, providing finance to significant projects for economic development, as well as alternative options and tools for investments.
Islamic Finance can take various forms, both in terms of bonds, as well as in terms of Funds, and be listed on the Securities Exchanges.
The Cyprus Stock Exchange is currently intensifying its efforts for promoting new initiatives and plans in this direction in order to help our country overcome the present difficult and challenging economic situation,thus contributing to the rebuilding of Cyprus’ economy.
As it was noted recently, one of the industries that the Cyprus Stock Exchange has focused its efforts on, and was included in its strategic plans, is the development of the Funds sector, in order to extend the range of products offered to investors and consequently facilitate the further development of the financial market in Cyprus.
Very recently, within this general direction, the Cyprus Stock Exchange has started examining, along with other interested authorities and market participants, the possible development of the Islamic Financial Instruments.
Everybody considers this sector as extremely important and see the efforts being undertaken favourably with the aim of promoting Cyprus as an effective jurisdiction for Islamic Finance and for promoting their listing on the Cyprus Stock Exchange.
Islamic Finance are considered internationally as a credible alternative source of funds in light of the credit crunch worldwide that has contributed significantly to the economic growth throughout the Muslim world. For this sector, a growing demand was exhibited during the last years for securing finance, in regards to a number of projects, supporting many industrial sectors.
Islamic Finance products, should always comply with Shariah Law, which sets the framework regarding the permitable investments in various assets. Among them, we mention the restriction about charging of interest, about uncertainty (there must always be full disclosure), the excessive speculation or gambling, as well as the avoidance of unethical investment, given the fact that Islam is intolerant of certain products. Therefore such investments should in advance receive relevant licensing, while they are constantly monitored by independent bodies of internationally recognised experts, namely a Shariah Scholars Boards, who verify the compliance with Islamic Law.
A number of financial products that come under the Shariah compliant entities, invest in a wide range of sectors, such as equities, real estate, infrastructure for development, private equity etc.
Sukuk is one of the commonly used Islamic Structures in project finance, classified in various forms such as, among others, istisna’a ijara, wakala ijaras etc Other forms of Islamic Funds include Parallel Islamic Funds, Equity Investment Funds, Real-Estate Funds (REITs), etc. Sukuks are certificates representing ownership of an underlying pool of assets and most of them are asset-based. Sukuks are used for developing new big projects.
Therefore, given all the above as presented in brief, it is obvious that there is potential for Cyprus with regards to Islamic Finance products. Cyprus’ projects can be wholly or partly financed by Islamic funds. Sukuk listings for various projects including the shipping industry, present a clear opportunity for the Cyprus Stock Exchange.
The Cyprus Stock Exchange, in case there is interest from Cyprus or abroad could facilitate the listing of Islamic Finance products, sukuks as follows:
Through the facility of listing of such products on the Cyprus Stock Exchange, that have been established/issued by other sovereigns or organisations; through the listing of Cyprus sovereign or other organisations’ sukuks. This initiative could take place within the framework of accomplishing big projects for economic development, which could be financed via such Cyprus schemes.
In order for Cyprus to be advanced as an Islamic Fund domicile worldwide, it should be competitive in terms of listing procedures, backed by the authorities and the private sector, as well as to provide an efficient and speedy listing process – as a listing destination. Cyprus’ law should be fully compatible with Shariah principles and Cyprus should always be a cost-effective, low tax jurisdiction and listing centre.
A range of vehicles available to address the specific needs of investors and promoters should also be provided. As regards the Cyprus Stock Exchange, it should be noted that it adequately provides all these credentials, in relation to its listing process, as well as for the cost and speedy process factors.
It is believed that the development and promotion of CSE’s initiatives, such as the Funds Industry, New Markets. Islamic Finance projects, Bonds, etc, could bring significant benefits to the Cyprus economy, as well as to the Cyprus Stock Exchange.
They can also contribute to a significant extent to the process of securing the required fundraising for major projects for development, the creation of new jobs and the expansion of partnerships with various professional investment groups. Such initiatives should therefore contribute to the efforts of attracting further investment in Cyprus.
Last but not least, it should be underlined and stressed that the CSE is ready to discuss listings of Islamic financial investment with interested parties.
We very much welcome such initiatives and we are here to work with anybody interested to see them materialise, as fast as possible.
CIMB Islamic, the shariah-compliant unit of Malaysia's second largest bank, is preparing an Islamic bond programme to raise up to RM5 billion ($1.58 billion), according to ratings agency MARC.
The Basel III compliant sukuk programme, assigned a preliminary rating of AA+ by MARC, will go towards replacing an existing RM2 billion Tier-2 sukuk and to fund working capital, the agency said on Monday.
The securities commission is still finalising approval and CIMB is not expected to issue sukuk from the programme any time soon, an official with MARC said. The company did not specify the range of maturities or sizes for sukuk under the programme.
CIMB is currently in talks with two smaller banks to create a mega-Islamic bank. The deal would make CIMB the country's biggest bank by assets, ahead of Malayan Banking Bhd (Maybank).
Maybank last week said it won regulatory approval to raise RM10 billion by issuing capital securities, with funds going towards working capital, general corporate purposes and the refinancing of existing debt. – Reuters, August 26, 2014.
DUBAI: The Malaysia-based International Islamic Liquidity Management Corp (IILM) lengthened maturities in its Islamic bond programme on Monday by auctioning $400 million of six-month sukuk, its first sale of that tenor.
The IILM, a consortium of central banks from Asia, the Middle East and Africa, began the programme last year to address a shortage of instruments Islamic banks can use to manage short-term liquidity. Previously, it had only issued three-month paper.
The IILM sold the six-month sukuk at a profit rate of 0.729 percent, attracting $652 million of bids, the Malaysian central bank's website showed. It also sold $390 million of three-month sukuk at 0.525 percent, attracting $523 million of bids.
The issues were bought by primary dealers at nine banks across the Islamic world, increasing IILM's outstanding sukuk to $1.65 billion from $1.35 billion, the group said in a statement.
It has said it may eventually expand issuance to $2 billion or more; the programme permits maturities of up to one year.