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Sunday, 29 November 2015

New insights on outlook of global Islamic finance to be unveiled

MANAMA — The convener of the 22-year World Islamic Banking Conference (WIBC) — Middle East Global Advisors — is set to reveal cutting-edge insights on the outlook of the global Islamic financial industry in its inaugural “Finance Forward Islamic Finance Outlook Report 2016” this December.
The “Finance Forward Islamic Finance Outlook Report 2016” will be launched on Dec. 1 during the World Islamic Banking Conference in Bahrain. The three-day conference will cover various areas related to Islamic banking in the current global financial environment.
Speaking ahead of the presentation of the report — to be launched at WIBC itself — Dr. Sayd Farook, vice chairman and CEO of Middle East Global Advisors, shared: “The Outlook Report is expected to serve as a compass for Islamic Finance leaders who are undertaking key decisions that will fundamentally shape their business strategies for 2016.”
The uniqueness of the report, he continued, is that it combines meaningful insights from Islamic finance leaders — gathered from an extensive survey of practitioners’ sentiment — with robust analysis of the performance of Islamic financial institutions.
According to the report, three major global macro developments of 2015 will shape the outlook of the industry: commodity prices (particularly oil), development in global interest rate policy, and a slowdown of the Chinese economy. Low commodity prices do not bode well for either the Gulf Cooperation Council or Southeast Asian economies, home to most of the world’s Islamic banks.
However, a positive outcome for Islamic banks in a ‘new normal’ of low oil prices is that they enter with low rates of non-performing loans, high liquidity (in part due to the limited liquidity management options), high capital levels and simple balance sheets with mostly Tier 1 capital overall.
Thus, while the outlook for Islamic banks is likely to be muted going forward (and some may even face some fall-off in profitability), many leading Islamic banks have built up their resilience in the face of tightening liquidity, slowing loan growth and worsening credit risks.

Survey results of the Outlook Report highlighted two key trends: the development of ethical business models and that of Digital Banking.
Speaking about the importance of these trends, Blake Goud, chief research officer at Middle East Global Advisors added, “Shariah compliance is necessary but not sufficient for consumers demanding ethical financial services. This implies that corporate social responsibility is not enough — consumers want their financial institutions to integrate an ethical approach into their core business mode.

(Saudi Gazette / 29 November 2015)
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