Fitch Ratings (Fitch) has affirmed Kuwait International Bank’s (KIB) Long-Term Issuer Default Rating (IDR) at A+ with a Negative Outlook. In addition, Fitch has affirmed KIB’s Viability Rating (VR) at bb-.  Ratings Rationale KIB’s IDR is driven by support from the Kuwaiti state, with the Support Rating (SR) of 1 and Support Rating Floor (SRF) of A+ reflecting Fitch’s anticipation of high support by Kuwaiti authorities to all domestic banks. This is underpinned by Kuwait’s robust ability to provide support to domestic banks irrespective...

Malaysian highway operator MEX II has deferred its MYR 1.3 billion Sukuk Murabahah Programme’s (Sukuk) principal repayment and profit payments due at the end of April 2021 for up to four months, following approval from Sukukholders, according to a recent statement released by CIMB Investment Bank. In addition, Malaysian Rating Corporation (MARC) has maintained its C-IS/C ratings on MEX II’s MYR 1.3 billion Sukuk and MYR 150 million Junior Bonds, as MEX II obtained permission from Sukukholders to defer the Sukuk payment. Why...

According to a recent report titled ‘Islamic Finance 2021-2022: Toward Sustainable Growth’ by Standard & Poor’s Global Ratings (S&P), the global Islamic finance industry, which is worth around USD 2.2 trillion, is expected to grow 10-12% over 2021-2022 on the back of increased Sukuk issuance and modest economic recovery in key Islamic finance markets.  Why it Matters? Despite COVID-19, the industry continued its growth path in 2020, although at a slower pace than in 2019. S&P...

BIMB Holdings’ Annual Report 2020, has stated that its subsidiary Bank Islam Malaysia (Bank Islam) is embarking on a five-year plan to be a champion in offering Shariah environmental, social and governance (Shariah-ESG) total financial solutions and to hold a leadership position in digital banking and social finance by 2025. Why it Matters?  This plan mobilises six strategic objectives underpinned by Bank Islam’s role as a value-based intermediary (VBI): sustainable prosperity, value-based culture, community empowerment, customer-centricity, real economy...

The Central Bank of the United Arab Emirates (CBUAE) has released new regulations for specialised banks in order for them to operate in line with a low credit risk model. Specialised banks in the UAE are allowed to provide their services only to nationals and residents and should conduct their activities only in AED. Why it Matters?  The regulator stated that the objective of these new regulations is to provide a regulatory framework in which specialised banks operating in the UAE’s financial sector can do so in a robust and prudent manner. Banks that are licensed unde...

Oman’s Ministry of Finance has stated its intention to launch the third issuance of a sovereign Sukuk denominated in OMR, under the framework of its sovereign sukuk programme that was revealed in 2019.  Why it Matters? The issuance is anticipated to contribute to promoting the speedy growth of the Islamic financial sector in Oman. It also forms a part of the Government of Oman’s strategy to deepen the capital market and increase its scope, allowing the sector to play a great...

Fitch Ratings (Fitch) anticipates that the outlook for the Shariah banking sector in Indonesia is improving and that financing growth will continue to outperform that of the conventional sector. In 2020, the Indonesian Shariah banking sector recorded financing growth of 8%, compared to just 4% experienced in the conventional banking space. Why it Matters?  Although the Shariah banking sector's market share is growing, it amounted to just 7% of Indonesia’s total banking industry in 2020, up from 6% in 2019. The improved outlook is...

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