World Wide Fund for Nature Singapore's (WWF-Singapore) sustainable banking assessment report has found progress among Association of Southeast Asian Nations (ASEAN) banks on sustainability. In particular, there has been progress in setting the broad direction and starting on implementation. Much less progress has been made to date on impact through client engagement, portfolio decarbonisation targets, and disclosures. The best way to make progress on underlying data gaps is to focus on tools to incrementally improve accuracy, rather than waiting too long for precision. ASEAN banks have made...

Global Sukuk issuance is predicted to increase at a 6.8% compound annual growth rate in the next five years and is projected to reach USD 257 billion by 2027, despite the decline in 2022 caused by a global monetary tightening cycle, according to a new Refinitiv report.  Why it Matters? Despite strong activity in the Sukuk market early in 2022 due to the high demand from foreign investors, international Sukuk issuance’s momentum began to decline in the January–June period. Among the factors contributing to this slowdown is lower government borrowing needs in...

Deposits into Islamic banks in Bangladesh totalled BDT 4.12 trillion (USD 43 billion) at the end of June 2022, witnessing a 12% increase from 3.68 trillion (USD 38 billion) in the same period in 2021, as per the quarterly report by Bangladesh Bank, the country’s Central Bank. Why it Matters? Ten fully functional Islamic banks are now active in the banking sector. Islamic financial services are also offered through the 45 Islamic banking branches of nine conventional commercial banks and 480 Islamic banking windows of thirteen conventional commercial banks. Despite...

Pakistan-based Faysal Bank Limited (Faysal Bank) has announced that it will ring-fence its remaining conventional loan portfolio and transition into a full-fledged Islamic lender by the end of 2022, according to a statement by the bank's Chief Financial Officer, Syed Majid Ali, on the 30th of August 2022.  Why it Matters? Currently, Pakistan has five Islamic banks and 17 conventional banks with Islamic banking branches. Five years ago, Faysal Bank made the decision to change the entirety of its operations from conventional to Sharia-compliant. It used the "asset-led conversi...

The Financial Regulatory Authority (FRA) of Egypt has granted its first licence to a financial institution to finance micro firms in the non-banking financial sector through the Wakala investment structure, according to the authority’s Chairperson Mohamed Farid on the 30th of August 2022. Why it Matters? The new licence, issued to the Egyptian Microfinance Company, Maksab, gives the existing financing instruments on the local market a fresh perspective in terms of modernising the Wakala investment structure. The issuance is part of ongoing efforts to maximise the nonbank financi...

Assets of Takaful companies in Qatar reached QAR 2.33 billion (USD 640 million) in 2021, compared to QAR 2.23 billion (USD 612 million) in 2020, recording a 4.4% growth year-on-year (YoY), according to the 5th Annual Report on Islamic Finance in Qatar by Bait Al Mashura Finance Consultations. Why it Matters? The Qatar Central Bank (QCB) oversees a number of insurance companies, including five independent Takaful firms, namely: Qatar Islamic Insurance Company, Alkhaleej Takaful Insurance Company, Damaan Islamic Insurance (Beema), General Takaful Company of the General Insurance an...

Middle- and high-income emerging markets are unlikely to receive climate investment grants or debt-for-climate swaps, but still have an important role in climate mitigation. Issuance structures such as Environmental, Social, and Governance (ESG) -linked bonds could be adapted to suit the situation of these markets, especially those that need more than just ‘green’ investment to achieve Net Zero targets. An International Monetary Fund (IMF) report casts doubt on the prospects of significant ‘scale-up’ of debt-for-climate swaps compared to other forms of climate invest...

Al Rayan, the largest and oldest fully-fledged Islamic bank in the United Kingdom (UK), has closed its last retail banking branch in the country located at Edgware Road on the 3rd of August 2022, and now only operates one branch for customers with high and ultra-high net worths, according to a report in Salaam Gateway.Why it Matters? This branch's closing comes following the steady closure of other retail branches of Al Rayan over the previous few years. The decision was reached by the bank as the demand for branch services and client numbers in the UK continued to fall, while custome...

Saudi National Bank (SNB) has commenced the issuance of its Additional Tier 1 Sukuk, denominated in Saudi riyals on the 28th of August 2022, as per as a stock exchange filing, in efforts to increase its capital base. Why it Matters? Earlier in August 2022, SNB had announced its intention to offer the Sukuk to qualified investors in Saudi Arabia. The size and offer price of the Sukuk are yet to be determined based on the conditions of the market and the offering is anticipated to end on the 31st of December 2022. A minimum of SAR 1 million (USD 266,000) will be subscribed to...

Nigeria-based TAJBank Limited (TAJBank) has commenced the issuance of NGN 100 billion (USD 236 million) worth of Sukuk, the country’s first private sector Sukuk offering, after the signing of the transaction documents which took place at the bank’s headquarters, in Abuja on the 25th of August 2022.  Why it Matters?   All necessary regulatory approvals have been acquired by TAJBank to launch the offering to the general public and the Sukuk will be listed on the Nigerian Stock Exchange (NSE). According to the bank’s Managing Director and Chief...