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Tuesday, 21 July 2015

Investments help to lift Sharjah Islamic Bank profit

Sharjah Islamic Bank said its net profit for the first half increased 1.2 per cent, boosted in part by a jump in the value of its investments.
Net income rose to Dh204.6 million in the first six months of the year compared to Dh202.1m in the corresponding period last year.
The value of its investments jumped 42 per cent to reach Dh2.2 billion compared to Dh1.6bn in the same period last year.
The bank’s deposits rose 7 per cent to Dh27.8bn at the end of the second quarter compared to Dh26bn at the end of the second quarter last year.
The lender did not provide a breakdown of its profit for the second quarter.
Separately, Invest Bank, another Sharjah-based lender, said its second quarter net income decreased less than 1 per cent as gains in fees and commissions were weighed down by losses in the value of its investments.
Net income fell to Dh97.4m from Dh98.2m in the same period last year, the bank said. Net fees and commission income rose 33 per cent to Dh46.7m from Dh35.1m, but net income from investment securities at fair value fell to Dh6.9m from Dh23.5m in the corresponding period last year.
The report did not say which securities the bank invests in, but many lenders in the UAE have exposure to the local stock market which has been volatile amid the collapse in the price of oil.
The price of crude, to which the fortunes of the UAE economy is tied, has dropped 1.3 per cent this year. Last year the price of crude shaved 48 per cent of its value.
Like most UAE lenders, Invest Bank is making more money from fees and commissions. That is because amid a spate of low interest rates, the returns banks have been making from giving out loans have been dwindling, forcing them to offer customers more services from asset management to trade finance.
(The National Business / 20 July 2015)
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Islamic Finance to fund Sustainable Development Goals

As part of its commitment to the SDGs, the Islamic Development Bank has announced it will increase its funding of SDG related activities through its ten year strategy framework, from $80 billion recorded during the MDGs, to $150 billion over the next 15 years (2016-2030).
Dr Savas Alpay, said the SDGs, which contain 17 goals and 169 targets, and are expected to replace the Millennium Development Goals (MDGs), could address major global challenges and promote financial inclusion especially to the under-privileged segment of the society. 
He called on world leaders to move faster, take strong and decisive actions in order to fulfill the commitments made by governments and international agencies for the implementation of the SDGs. 
 “Islamic finance has footprint in Asia and Middle East, is ripe for growth in South America and Europe and has future markets in North America, Central Asia and Australia. 
Its global assets have grown considerably and are estimated to have reached US$1.8 trillion by 2014 with compounded annual growth rate of about 15-20 percent,” the Chief Economist stated.  
 Dr Savas Alpay said IDB is a pioneer in initiating innovative means of Islamic finance, and the instruments applied in this mode of financing have the potential to address key targets of the SDGs such as food security, provision of shelter, building infrastructure, providing sustainable energy and ensuring financial inclusion. 
He added that Islamic financial instruments like Sukuk (Islamic capital market instruments), could be utilized as an effective non-traditional means of mobilizing resources for the implementation of the SDGs. Dr Alpay told delegates at the conference that  IDB has used such instruments in funding a number of short term and long term development activities. 
Dr Sami Alsuwailim of the IDB explained the concept of Islamic finance as a participatory system of financing whose core principles are accepted globally irrespective of faith or nationality.  
Dr. Mahmoud Mohieldin of the World Bank, said there are several advantages provided by Islamic financial services, and that is why the World Bank is paying significant attention to them. 
He stressed that during the financial crisis, the World Bank noticed that Islamic financial institutions developed some resilience, and because of the provisions of Islamic law that prohibit certain types of transactions like gambling and speculation, Islamic finance is linked with the real economy and prevents institutions from accumulating debt beyond reason. 
(East African Business Week / 19 July 2015)
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