The Financial Services Authority (OJK) in Indonesia stated that with a 17.3% growth year on year (YoY), the value of the total assets of Indonesia’s Islamic financial institutions reached IDR 1,901.1 trillion (USD 132.7 billion) by September 2021. Why it Matters? In an official statement, Wimboh Santoso, Chairman of the OJK Board of Commissioners said that Islamic banking has successfully endured the disruptions caused by the COVID-19 pandemic with a Capital Adequacy Ratio (CAR) of 23.2% and stable financing risk with a gross Non-Performing Financing of...

Following the Accounting and Auditing Organization for Islamic Financial Institutions' (AAOIFI) Shariah standards might have been a ‘nice-to-have’ factor in the past, but today, it has become a necessity. Much has been written so far about Shariah Standard 59. For me, this experience is not new as I have witnessed two other similar cornerstone events in the past. The following is how I see it.The First EventStakeholders of the Islamic finance industry will still recall the 22nd of November 2007, a day that marks the remarkable stance for reforming the Sukuk industry by Sheikh Muh...

The G20 Sustainable Finance Working Group tackled taxonomies, disclosure requirements and capacity building, and outlined a packed agenda on sustainable finance through 2025Upcoming milestones are likely to include broad acceptance for anchoring climate reporting requirements to standards from the IFRS Foundation and the release of the ‘common ground taxonomy’ by year-endThe scale of the challenge will be difficult for every financial institution, but those based in emerging and developing countries will face significant challenges building enough capacity in responsible fina...

Nigeria’s Debt Management Office (DMO) said on the 2nd of November 2021 that the country is to issue sovereign Sukuk on its domestic market for up to NGN 250 billion (USD 610 million) in order to finance road projects.  Why it Matters?   Muhammadu Buhari, President of Nigeria, has made improving transportation networks and investing in outdated power grids a priority of his administration, with the goal of further developing agricultural and other non-oil businesses in order to reduce reliance on diminishing crude earnings. However, fundin...

Bahrain-based Al Salam Bank has recorded net profit attributable to shareholders of BHD 5.6 million (USD 14.8 million) in the third quarter of 2021 (3Q 2021) compared with BHD 1.0 million (USD 2.6 million) in the third quarter of 2020 (3Q 2020), a growth of 472% year-over-year (YoY). Why it Matters? Higher returns from the bank's fixed income portfolio as well as lower provision costs drove the increase in net profit compared to the previous period. Details   Earnings per share came in at 2.4 fils (USD cents 6.4) for 3Q 2021 compared to 0.4 fils (USD cent...

Fitch Ratings Indonesia (Fitch Indonesia) has affirmed Bank BTPN Syariah’s (BTPN Syariah) National Long-Term Rating at ‘AAA(idn)’, with a Stable Outlook.  Ratings Rationale  BTPN Syariah’s rating is support-driven and reflects Fitch Indonesia’s view of a high likelihood of support from its parent Bank BTPN (BTPN; AAA(idn)/Stable), which owns a 70% stake in the company. Meanwhile, BTPN’s ratings are also driven by support from Sumitomo Mitsui Banking Corporation (SMBC, A/Negative/a), which...

The Saudi Real Estate Refinance Company (SRC), a mortgage finance company that is wholly owned by Saudi’s sovereign wealth fund Public Investment Fund (PIF), has signed an agreement with Saudi-based Real Estate Development Fund (REDF) to refinance a property portfolio worth SAR 10 billion (USD 2.7 billion), according to a SRC press release.  Why it Matters?  The agreement aligns with the objectives of Saudi Vision 2030 to increase homeownership in Saudi Arabia to 70% by the end of the decade. According to Fabrice Susini, Chief Executi...

With the inauguration of i-Arbitration Rules 2021, the first Shariah guided dispute resolutions, in Malaysia on the 1st of November 2021, the country is set to be a hub for dispute resolution globally. Why it Matters? Dr Wan Junaidi Tuanku Jaafar, Minister in the Prime Minister’s Department (Parliament and Law), speaking at the launch of i-Arbitration Rules 2021 said the Islamic arbitration structure of the Asian International Arbitration Centre (AIAC) will strengthen Malaysia’s position in leading Alternative Dispute...

The Islamic Financial Services Board (IFSB) has announced the dissemination of country-level Prudential and Structural Islamic Financial Indicators (PSIFIs) data on the Islamic banking sector for the first and second quarters of 2021 (1Q and 2Q 2021) from IFSB member jurisdictions. Why it Matters?  The IFSB Task Force on PSIFIs, involving representatives from 26 participating jurisdictions, has made a commitment to facilitate the collection of Islamic banking data. Nine regulatory and supervisory authorities (RSAs) from the Takaful sector and six RSA...

With the highest score of 83.35, Indonesia has been placed first in the Islamic Finance Country Index (IFCI) in the Cambridge Global Islamic Finance Report (GIFR) 2021. Following this at second place and onwards are Saudi Arabia with a score of 80.67, Malaysia with a score of 80.01, Iran with a score of 79.73, and Pakistan with a score of 60.23. Why it Matters?  This ranking is expected to support the development of Indonesia’s Islamic finance industry in its continued growth.  Details   Dr Humayon Dar, Director General at C...