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Sunday, 25 November 2012

Qatar: QIB Extends USD500 Million Islamic Financing Package to Qtel

Today Qatar Telecom (Qtel) and QIB “ the leading Islamic bank in Qatar “ have signed a USD 500 million Islamic finance deal.

The signing ceremony took place at the Qtel headquarters. It is the first Islamic finance deal signed by Qtel, as QIB continues its mission to provide leading companies with the financial backing they need to fulfil their ambitions.
QIB assumed the role of Sole Mandated Lead Arranger and Investment Agent for the deal. The financing is an 18 month Sharia-compliant "Revolving Murabaha".

Dr. Nasser Marafih, Chief Executive Officer of the Qtel Group commented: "We are delighted to be part of the developing Islamic financing market in Qatar. QIB has done a great job in offering Qtel attractive terms, and this deal further strengthens the relationship between Qtel and QIB."

Mr. Ahmad Meshari, Acting Chief Executive Officer of QIB, added: "This deal is the first financing arrangement to be entered into with Qtel, opening doors for further avenues of collaboration between the two organisations. The transaction is another demonstration of the maturity of the Islamic finance industry in general, and QIB in particular, in the provision of credible financial solutions that meet the increasingly complex needs of large corporations such as Qtel."

"This financing deal confirms the leading role the Bank plays in supporting large companies operating in Qatar and we are keen to continue to play a pivotal role which sees us making a positive contribution to the ongoing development of this country," added Mr Meshari.

(Menafn.Com / 20 Nov 2012)

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Islamic Banking: Rising over Cynicism

Thriving with a staggering pace of over 20 percent year on year, the global Islamic finance industry now touts a vibrant size of 1.35 trillion dollars. 

Islamic banking industry (IBI), having a network of 430 banks and financial institutions and around 191 conventional banks conducting Islamic banking window operations, records its footprints in more than 75 countries across the globe. 

With its concentration in GCC countries, followed by non-GCC, MENA, Asia and Sub-Saharan Africa, S&P anticipates global IBI to grow by 20 percent YoY between CY13-CY15, consequently surpassing of two trillion dollars by CY15. 

Following the global trail, IBI in Pakistan, having faced initial failures, has now gained its momentum; accounting for over eight percent of the countrys banking system with a network of 964 branches and more than 500 windows across the country. 

At the outset of its operations in Pakistan, Islamic banking met little success due to the non-availability of appropriate infrastructure and human resources required for its sustenance. Moreover, in the early days, milestone changes were taking place in Pakistan banking industry including modifications in the Banking Companies Ordinance, enactment of Mudaraba Companies and Mudarabas (Floatation and Control) Ordinance, which hampered its activities. 

However, learning from the mistakes made in the past, IBI found its feet. After its relaunch in Pakistan in CY02, it has been rebounding strikingly, reporting an asset base of above Rs711 billion during 2QCY12, which represents 8.2 percent share of overall banking industrys assets. 

Deposits also witnessed a sturdy growth of 13 percent YoY to stand at Rs603 billion at the end of 2QCY12, accounting for nine percent of the overall industry deposits. 

Not only this, IBI in Pakistan has also won the laurel of improved liquidity, as LA/TA increased from around 38 percent in 2QCY11 to 45 percent in 2QCY12, whereas the indicator assumed a negative trend for the banking industry, as a whole. 

The success of Islamic banking doesn end here. Reportedly, bankers, economists and investors are moving towards an Islamic economic system because they have realised that this emerging system can be an alternative after capitalism system has dissatisfied masses. 

Moreover, S&P highlights a dazzling growth potential for Islamic banking keeping in view the young, fast-growing Muslim populations, robust macroeconomic environments, large infrastructure projects that require financing, formation of Shariah-compliant indices for companies listed in stock markets and recent political developments in several Muslim-majority countries.

(Business Recorder / 23 Nov 2012)
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Kuwait’s Boubyan Bank sees Islamic banking boom

Kuwait: Islamic banking is growing at more than double the pace of conventional banking in Kuwait and strong demand is expected throughout the Arab region, according to the chairman of Boubyan Bank.
Credit volumes at Islamic banks in Kuwait reached 11.1 billion Kuwaiti dinars ($39.3 billion) in the first nine months of 2012, up 13.2 per cent on last year, Boubyan chairman and managing director Adel Abdul Wahab Al Majid told the Reuters Middle East Investment Summit.
That compares with 5.6 per cent credit growth to 18.6 billion dinars at conventional banks, Al Majid said.
The hunger for sharia-complaint banking in Kuwait means that Boubyan is not interested in overseas expansion quite yet, in contrast to more-established rival Kuwait Finance House (KFH) .
“Innovation or presence outside, it is only a matter of time [for] the likes of us and others,” Al Majid said. “Right now we are busy because the slice of Islamic pie in Kuwait is big.”
However, in 2014 the bank will set out a new five-year strategy, which will include the possibility of an international presence.
This year’s Arab Spring uprisings are expected to boost sharia-compliant banking in the Middle East and North Africa because of the new Islamic governments it created, Al Majid said.
The Boubyan chairman was previously an executive at National Bank of Kuwait (NBK), which in July raised its stake in Boubyan to just over 58 per cent from 47 per cent in a deal valued at about 122 million dinars.
Al Majid moved to Boubyan as part of an executive team charged with the task of shoring up the struggling bank at a time when NBK held a minority stake in it.
During the financial crisis of 2009 Boubyan reported a net annual loss of 51.7 million dinars. This background has made the bank cautious about expansion.
“I think the mistake is that it started venturing outside before it had a stable, profitable base in Kuwait,” Al Majid said.
Since 2009, earnings have grown and the bank reported an 8 million dinar net profit in 2011.
“We expect this year to be in the same positive trend,” Al Majid said. In the first nine months of this year the bank posted net profit of 7.6 million dinars.
Provisions for problem loans at Boubyan were 26 million dinars in the first nine months of this year. Al Majid said he believed that these had peaked for the Kuwaiti banking sector as a whole, with the process continuing at a slower pace.
However, the Gulf Arab state is not completely immune to developments in global markets, Al Majid said, and lower profit growth has become the new norm.
“Given the whole turmoil all over the world, I don’t think anybody here wakes up in the morning with a smile on his face. You see what is happening in Europe, the US and China.”

(Gulfnews.Com / 25 Nov 2012)

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