Scenario analysis is complex and cannot use a shared set of inputs and scenarios for every use. Instead of seeing that as a weakness that undermines comparability, this should be seen as an important part of the process of becoming better prepared to deal with uncertainty as physical impacts and impacts of the climate transition become more visible. Regulators and standard setters have made increasing use of scenario analysis as part of stress testing and climate disclosureScenario analysis for climate-related financial risks remains a new area, with considerable uncertainty driven by the...

The Islamic finance industry in Bangladesh is anticipated to continue developing over the medium term, supported by rising public demand, new branch openings, and supporting government policies, according to Fitch Ratings on the 23rd of November 2022.Why it Matters? Bangladesh's financial industry remains underdeveloped as asset quality, capitalisation, governance, and regulatory quality in the banking industry are poor, particularly for public-sector banks. Banking adoption is still quite low and in 2021, over 47% of Bangladesh's adult population lacked a bank account. Despite t...

The Dubai Islamic Bank (DIB) has announced the sale of its debut Sustainable Sukuk valued at USD 750 million for a five-year tenure, as per a bank document on the 22nd of November 2022.  Why it Matters? International bond sales in the Gulf Cooperation Council (GCC) have dropped in 2022 due to persistent volatility and rising rates. The transaction occurs as Gulf issuers seize windows of opportunity to issue debt in shaky markets. Demand for the offering exceeded USD 1.6 billion and the Sukuk, which sold at 155 basis points (bps) over U.S. Treasuries (UST), tightened from ini...

The Nigerian Debt Management Office (DMO) has announced, on behalf of the Federal Government of Nigeria, plans to raise NGN 100 billion (USD 226.6 million) through the issuance of Sovereign Sukuk Ijarah with a ten-year term in order to fund more road improvements across the nation, on the 21st of November 2022.  Why it Matters? Ijarah Sukuk, which was first issued in Nigeria in 2017, is a domestic component of government borrowings and has given the Federal Government NGN 612,557 billion (USD 1388) to fund 71 roads and six bridges totaling 1,881 kilometres across the co...

Financial institutions face expectations for robust, data-driven action in the short-term but in many cases these can be seen as being in conflict. The faster the risks evolve, and the more uncertainty there is about future economic, social and environmental conditions, accelerated action becomes still more important.  A high-level expert group convened by the United Nations (UN) Secretary-General has produced 10 recommendations to reduce greenwashing in Net Zero commitmentsThe recommendations push ‘non-state actors’ such as financial institutions to take more immediate a...

The Kingdom of Saudi Arabia's (Saudi Arabia) National Debt Management Center (NDMC) has closed its Sukuk issuance November 2022 worth SAR 6.608 billion (USD 1.75 billion) under the Saudi Arabian Government SAR-denominated Sukuk Programme, as announced on the 15th of November 2022. Why it Matters? The local Sukuk Programme is one of Saudi Arabia's financing vehicles, under which, the Ministry of Finance issues regional securities that the NDMC then organises and divides into monthly tranches for investors. In accordance with the approved Annual Borrowing Plan, the NDMC will c...

The planned acquisition of Malaysian Industrial Development Finance Berhad (MIDF) by Malaysia Building Society Berhad (MBSB) is scheduled to be finished by the first quarter of 2023 (1Q 2023) and is expected as early as February 2023. Why it Matters? The application seeking clearance for the purchase of MIDF from Permodalan Nasional Berhad (PNB) was submitted to Bank Negara Malaysia, the Central Bank of Malaysia, by MBSB on the 21st of October 2021 in order to create a global Islamic banking group. The parties anticipate obtaining Bank Negara Malaysi...

Banks are likely to have to move quickly to improve their climate risk assessment and mitigation as regulatory expectations rise. The European Central Bank's (ECB) review of European banks’ progress shows how important it is to move quickly as climate risks are no longer distant and have rapidly become material risks in the short- to medium-term (3-5 years).  The ECB released a ‘thematic review’ of over 100 banks of varying sizes with EUR 25 trillion of assets and found significant gaps in climate risk managementBanks have rapidly increased their focus on...

PT Intiland Development Tbk (Intiland Development), Indonesia-based property developer, has announced plans for the issuance of an IDR 250 billion (USD 16.16 million) Sustainable Sukuk ijarah I Phase III in 2022, offered in two Series, namely Series A worth IDR 125 billion (USD 8.08 million) with a two-year term and Series B valued at IDR 125 billion (USD 8.08 million) with a three-year term. Why it Matters? The proceeds from the offering will be utilised to increase the capital of Intiland Development and pay off (refinance) company debt, while the beneficial rights to a 9,...

Kingdom of Saudi Arabia-based energy-focused multilateral financial institution, Arab Petroleum Investments Corporation (APICORP) and Hartree Partners LP affiliate, Hartree Partners Power & Gas Company (UK) Limited, a global energy and commodities firm, have signed a USD 75 million Murabaha agreement in favour of the latter, according to a press release issued on the 7th of November 2022. Why it Matters?  The facility will provide funding for top-notch voluntary carbon offsets that are registered with the non-profit platform Verra as well as the development of...