Data gaps do play a part in limiting banks’ ability to understand their climate-related financial risks. But banks that don’t develop climate stress-testing capabilities, or those that do but don’t use them to inform strategy or credit decisions, are impairing their ability to use the data that exist today and to synthesise the data they get from customers. European Central Bank (ECB) stress tests have found that EUR 70 billion is at risk from the impact of climate change, although that is likely to understate the true risk levelLess than half of European banks currently...

The total number of US dollar-denominated Sukuk issued from the core markets of the Gulf Cooperation Council (GCC), Malaysia, Indonesia, Turkey, and Pakistan, including multilaterals, witnessed a 17.2% quarter-on-quarter (QoQ) fall in the second quarter of 2022 (2Q 2022), according to Fitch Ratings (Fitch). Why it Matters? In 2Q 2022, the market saw a return of more than 90% investment-grade Sukuk. According to Bashar Al-Natoor, Global Head of Islamic Finance at Fitch, due to factors such as higher oil prices decreasing the need for new funding by oil-exporting sovereigns, l...

Malaysian automotive company, Proton Holdings Berhad (Proton), announced that it has successfully completed issuing the second tranche of its Islamic Medium-Term Notes (IMTNs) worth MYR 700 million (USD 158 million), under its Sukuk Wakalah programme, through its subsidiary PONSB Capital Bhd. Why it Matters? The Sukuk was roughly four times oversubscribed and the funds acquired will fund the company's working capital needs as well as future expansion goals. The offering follows the first tranche of MYR 500 million (USD 113 million) IMTN which was concluded in December 2021. ...

Saudi-based Methanol Chemicals Company (Chemanol) has announced the signing of two Murabaha financing agreements, with Banque Saudi Fransi and Alinma Bank, valued at SAR 695 million (USD 185 million), as per a bourse filing on the 13th of July 2022. Why it Matters?  Through the first deal, worth SAR 455 million (USD 121 million) , the company aims to repay existing debts with better terms and cheaper finance charges, while the second financing, valued at SAR 240 million (USD 64 million), will fund the methanol plant expansion project. The project will lower production costs...

Changes to the International Capital Market Association's (ICMA) green, social and sustainability (GSS) bonds framework could inhibit issuance of GSS Sukuk and the development of green capital market assets in Islamic markets. Developments from within Sukuk markets provide a way for sustainability-linked sukuk to help fill the gap.   ICMA releases new guidance to ensure green assets are not double-counted, but in doing so hits upon a point of ambiguity relating to green SukukDepending on how the guidance is applied, it could substantially increase the review process for lab...

Malaysia-based TH Plantations Berhad (TH Plantations), the plantation arm of Lembaga Tabung Haji, has announced the issuance of Sukuk Wakalah nominally valued at MYR 300 million (USD 68 million), through its special purpose vehicle THP Suria Mekar Sdn Bhd (TSM) and under its unrated MYR 1.08 billion (USD 244 million) Sukuk Wakalah Programme, as per a bourse filing on the 8th of July 2022. Why it Matters? The Sukuk has a perpetual tenure and a 5.98% annual periodic distribution rate up to its first call date on the 7th of July 2034. TSM will use the proceeds o...

IBA Group Pty Ltd (IBA), known as Islamic Bank Australia, has been granted a restricted authorised deposit-taking institution (ADI) licence from the Australian Prudential Regulation Authority (APRA), under the Banking Act 1959, on the 6th of July 2022. This licence enables it to begin developing and testing Shariah-compliant retail banking products in advance of a full launch scheduled for the end of 2023 or early 2024. Why it Matters? After having halted its plans and closing fundraising in 2020 as the APRA stopped processing new licences, IBA now becomes the country's...

Bahri, previously known as the National Shipping Company of Saudi Arabia (NSCSA), has successfully issued seven-year tenured SAR 3.9 billion (USD 1.04 billion) Saudi Riyals denominated Sukuk. Why it Matters?  The offering began in mid-June 2022 and was settled on the 5th of July 2022. Leading the issuance were Al Rajhi Capital, HSBC Saudi Arabia, and SNB Capital. Proceeds from the Sukuk will be used by Bahri to refinance the existing Sukuk which will mature in July 2022.  Details  Bahri, which was established in 1978 by royal decree, runs a fleet of 93 ta...

The Debt Management Office (DMO) of Nigeria has announced the listing of 10-year tenured NGN 250 billion (USD 595 million) Ijarah Sovereign Sukuk on Nigerian Exchange Limited (NGX).  Why it Matters? The listing of the Sukuk which was issued on the 29th of December 2021 and is set to mature in 2031 is expected to enhance trading and liquidity. Proceeds from the offering will be used to fund road projects, allowing the government to make substantial headway in closing Nigeria's infrastructure gap. Accordingly, key economic road projects would be renovated and built a...

Malaysia-based Affin Bank Berhad has announced the appointment of Musa Abdul Malek as the new Chairman of Affin Islamic Bank Berhad (AiBB), effective the 22nd of June 2022.  Why it Matters?  Musa has more than 40 years of experience in banking, during which time he has held a number of senior leadership positions with HSBC Group, Bank Muamalat Malaysia Berhad, and CIMB Islamic Bank Berhad. According to the entity, Musa has been an Independent Non-Executive Director at AiBB since the 1st of August 2019.Details  Prior to his retirement in February 2019, Musa also served a...