On the 20th of September 2021, global rating agency Moody’s Investors Service (Moody’s) said that Oman's Islamic banking industry, which has enjoyed solid development since its establishment in 2012, is forecast to reach roughly 20% of overall banking assets by 2025, driven by high demand for Shariah-compliant products and growing supportive government regulation. Why it Matters? As at end-June 2021, in terms of market share, Oman’s Islamic banking assets already made up 15% of total banking assets. According to...

According to a statement issued by the Director General of Financing and Risk Management on behalf of Indonesia’s Ministry of Finance on the 20th of September 2021, proceeds from the sale of Retail Sukuk Series SR015 reached IDR 27.001 trillion, after the end of the offering period spanning from the 20th of August 2021 to the 15th of September 2021.  Why it Matters? The issuance of SR015 is part of the Government of Indonesia’s efforts to strengthen the domestic financial market and expand the domestic investor base, partic...

The Securities Commission Malaysia (SC) has launched its Capital Market Masterplan 3 (CMP3) on the 21st of September 2021, to accelerate Malaysia’s sustainable and inclusive economic growth. CMP3, which will serve as a strategic framework of Malaysia’s capital market over 2021-2025, outlines six key development and regulatory thrusts, which includes an expansion of Islamic capital market offerings to better support the needs of stakeholders of the economy.  Why it Matters? According to the CMP3, regarding the expansion of Islamic offering...

Turkey-based Kuveyt Turk Katilim Bankasi A.S. (Kuveyt Turk), which is majority-owned by Kuwait Finance House, has issued a landmark subordinated Fixed Rate Resettable Sustainability Tier 2 Sukuk facility (Sustainability Sukuk) worth USD 350 million on the 16th of September 2021. The issuance, which has a 10-year maturity, was carried out through special purpose vehicle KT21 T2 Company, which was solely established to issue Sukuk. The Sustainability Sukuk was oversubscribed 12 times, with demand for the is...

Islamic banking sources in Bangladesh say that the decrease in investments in the aftermath of the COVID-19 pandemic is directly linked to the excess liquidity in Shariah-based banks in the country.  Why it Matters? Loose monetary policy, introduction of stimulus packages by the government and higher inward remittances are reasons cited by bankers and experts for the increase in liquidity in the overall banking sector in Bangladesh. The excess liquidity of Islamic banks grew 20% in the second quarter of 2021 to BDT 363.65 billion from BDT 304.09 billion in the previous...

On the 17th of September 2021, the State Bank of Pakistan (SBP) launched a gender mainstreaming policy, titled Banking on Equality: Reducing the Gender Gap in Financial Inclusion.  Why it Matters?  The objective of the policy is to shrink the gender gap in financial inclusion and enhance women’s access to financial services, which according to Dr Arif Alvi, President of Pakistan, is a key driver for achieving sustainable and inclusive economic growth of the country. There are five main pillars of the policy: improving gender dive...

According to a research announcement by Moody’s Investors Service (Moody’s), asset managers in Gulf Cooperation Council (GCC) countries expect increased inflows over the next year amid growing demand for Islamic and environmental, social and governance (ESG)-compliant investments. The announcement was based on a report released on the 20th of September 2021 covering Moody’s 2021 survey of chief investment officers (CIOs) from eight leading fund firms in the GCC.  Why it Matters?  According to Vanessa Robert, Vice President-Senior Credit Officer at...

On the 20th of September 2021, Moody’s Investors Service (Moody’s) stated in a report that Islamic banks in Gulf Cooperation Council (GCC) countries and South and Southeast Asia are concentrating on low-risk retail finance, which should help in protecting their asset quality amid a volatile economic recovery from the pandemic.  Why it Matters?  The deterioration of banks’ loan books has been masked through regulatory forbearance and this is anticipated to continue to impact profitability. Return on assets is expected to still be bel...

Dr Abdulbasit Ahmad al-Shaibei, Chief Executive Officer of Qatar International Islamic Bank (QIIB) said that they intend to open the first fully digital branch of QIIB in 2022 in Lusail City. He said QIIB which had already proposed to adopt digital technology fast tracked its efforts, with the onset of the COVID–19 pandemic. Why it Matters? In a world with fast evolving technology, digital technology is mandatory to retain the market share, al-Shaibei said, adding that the bank found digitalisation cost-effective as well. With QI...

Speaking on “Dynamics of Portfolio Investment in Non-Interest Finance”, Chidi Uzo, Head, Investment Strategy & Research at CitiTrust Asset Management Limited, remarked that the net asset value (NAV) of Shariah-compliant funds in Nigeria rose 174% between December 2019 and August 2021. Why it Matters? Uzo spoke in detail about investments and how it is not wise to keep large amounts of cash in hand, especially in places that are affected by high inflation. For example, the current headline inflation rate in Nigeria (for August 2021) stands at 17.1%. ...