Pak-Qatar Family Takaful opens new branch

Karachi—Pak-Qatar Family Takaful Limited (PQFTL) has inaugurated a new branch in Gulshan-e-Iqbal area of Karachi. This new branch will create great convenience and provide a wide range of Takaful services to a vast number of consumers, living in Gulshan-e-Iqbal and surrounding areas. The inauguration ceremony was graced by senior management officials and prominent professionals.

The Zonal Head of TDT (Individual) Haq Nawaz said that the opening of this new branch is a significant milestone in the progressive journey of the company, as it reflects the company’s customer-centric approach, by enhancing the outreach and ‘accessibility’ for our valuable customers. The opportunity to continue the company’s high quality customer service is very exciting for me, as we continue to expand to new locations all over the country.

Kamran Saleem CFO of PQFTL, while congratulating the team for this successful endeavour said, “With these new branches, we’re not simply expanding our business, but making a commitment towards promoting Takaful among the masses. Our primary aim is to transform the financial industry in Pakistan by offering our highly competitive products and services, while realigning it with Islamic principles.”

The Country-Head of Sales and Deputy Chief Executive Officer of PQFTL Menhas expressed his delight about this wonderful team-effort and said that the key to successfully serving a community and higher cultural values, along with the company’s brand, is to find and nurture the most talented, like-minded Takaful professionals in the region. 

The team has shown remarkable diligence for maintaining the company’s stature as a pioneer and a leading innovator of Takaful in Pakistan. Nasir Ali Syed CEO, Waqas Ahmad Chief Operating Officer, Saqib Zeeshan Head of TDT Corporate and several other senior executives were also present during the grand inaugural ceremony.

(Pakistan Observer / 12 August 2016)

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Qatar International Islamic Bank plans Tier 1 Sukuk issue

The meeting delegated the bank’s board of directors' to decide the size of each issuance ,terms and conditions and issuance currency.

Doha-based Gulf Times quoted QIIB CEO Abdulbasit A al-Shaibei as saying the Sukuk would be issued before the end of April to boost the bank’s capital ratio. 

(C P I Financial / 30 March 2016)

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Qatar Islamic Bank to boost capital via bond sales

Qatar’s biggest Islamic bank plans to sell bonds to help boost core capital to comply with Basel III banking standards.

Qatar Islamic Bank (QIB) expects to issue a Tier 1 capital-boosting bond between this quarter and the third quarter, the bank’s chief financial officer said yesterday. The Doha-listed lender in February received shareholder approval to issue up to 5 billion Qatari riyals (Dh5.04bn) to increase its Tier 1 or core capital in line with Basel III banking standards.

The bond will have a perpetual tenor.

“We have taken approval for 5bn Qatari riyals worth of issuance but at this point when we look at our organic growth requirements and we need up to 2bn riyals only and for the other 3bn riyals we have taken approval from our shareholders in case there are growth opportunities we could tap into and not have to go through the entire approval process,” Gourang Hemani said on the sidelines of a conference in Dubai.

“It is going to be a private placement, most likely within Qatar. We are looking somewhere between the second quarter and third quarter.”

Banks in the Arabian Gulf are issuing capital-boosting bonds as part of raising new funds through capital tools to foster growth and comply with the new Basel III banking rules, which will be phased out by 2019.

The IMF expects Qatar’s economy to grow 7.1 per cent this year and 6.5 per cent next year.

“We see the [credit] market growing on average of 10-12 per cent [a year] over the next two to three years,” said Mr Hemani. “I don’t see why we shouldn’t participate in the growth story.”

QIB’s net profit rose 19 per cent to 400 million riyals in the first quarter of this year, compared to a year earlier. Total income grew 13 per cent in the first quarter to 950m riyals, compared with the year-earlier period.

(The National Business / 18 May 2015)

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Dubai: Qatar Islamic Bank plans $549 mln Tier 1 sukuk

DUBAI, Jan 18 (Reuters) - Qatar Islamic Bank (QIB) plans to raise up to 2 billion riyals ($549.4 million) through a capital-boosting sukuk; the latest Gulf bank eyeing debt markets to replenish its reserves after a period of strong lending growth.

Qatar's largest sharia-compliant institution by assets announced the sukuk after reporting fourth-quarter net profit that was up an estimate-beating 30.4 percent year on year, according to Reuters calculations.

Unlike European peers that have been dogged by capital concerns in recent years, Gulf banks have increasingly turned to capital-enhancing bonds for positive reasons, seeking to build on existing growth and diversify their sources of capital.

New Basel III banking standards, due to come into full force in 2019, will also oblige banks to set aside more capital.

A number of Saudi banks have used the local-currency sukuk market to raise instruments that enhance their Tier 2 -- or supplementary -- capital in the past two years, while banks from the United Arab Emirates have also sold bonds and sukuk that enhance core Tier 1 capital.

The latest was a Tier 1 sukuk from Dubai Islamic Bank , completed last week.

On Sunday QIB said that its board had proposed a Basel III-compliant Tier 1 sukuk worth up to 2 billion riyals, subject to shareholder and regulatory approval.

QIB's total capital adequacy ratio, a combination of Tier 1 and Tier 2 capital -- regarded as one of the key indicators of a bank's health -- stood at 14 percent at the end of 2014, against a 12.5 percent minimum prescribed by Qatar's central bank.

STRONG GROWTH

Qatari banks have been able to build their loan books at a fast pace in recent years as the Gulf state spends billions of dollars developing infrastructure and prepares to host the 2022 soccer World Cup finals.

QIB's lending book jumped 27 percent in 2014 to stand at 60 billion riyals on Dec. 31, while deposits surged by 32 percent to reach 67 billion riyals at the end of last year.

This helped the bank make a net profit of 470 million riyals during the fourth quarter, according to Reuters calculations based on financial statements, compared with 360.3 million riyals in the last three months of 2013 and well ahead of the 333.3 million riyal average estimate of five analysts polled by Reuters.

The bank's board proposed a cash dividend of 4.25 riyals per share for 2014, up from 4 riyals for 2013, the statement added.

(Reuters / 18 January 2015)

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FIFA Rattles Qatari Sukuk Mired in Worst Month This Year

Prospects for the 2022 World Cup in Qatar are unsettling bond investors already rattled by political turmoil between the country and its neighbors, with its sukuk on course for its worst month in more than a year.

The yield on Qatar’s Islamic notes due January 2018 rose 19 basis points in September, on course for the biggest monthly increase since August 2013, according to data compiled by Bloomberg. The average yield for Middle East Shariah-compliant securities jumped 12 basis points in the period, JPMorgan Chase & Co. indexes show.

FIFA Executive Committee member Theo Zwanziger told Germany’s Bild this week that Qatar probably won’t host the world’s biggest soccer event in 2022 because of the summer heat. While Qatar dismissed his comments, it’s creating more market turbulence for the country, which has been at odds with Saudi Arabia and the United Arab Emirates over its support for the Muslim Brotherhood in the region.

“The political differences with its neighbors combined with uncertainty over the World Cup is affecting sentiment,” Thomas Christie, head of fixed income at Prometheus Capital Finance Ltd., said by phone from Dubai yesterday. “The bond will drop further if its neighbors continue to isolate Qatar and this FIFA situation isn’t resolved.”

Personal Remarks

Delia Fischer, a spokeswoman for Zurich-based FIFA, soccer’s global governing body, said “these were personal remarks made in his personal capacity and not as a FIFA representative.” A panel will meet next month and in February to discuss the scheduling of the event, not moving it to another country, she said.

Qatar in 2010 won the right to host the tournament during its summer and after the end of most major European leagues. The world’s biggest liquefied natural gas producer reiterated a promise to use technology to cool stadiums in a statement yesterday, as temperatures can reach 50 degrees Celsius (122 degrees Fahrenheit). In the run-up to the event, Qatar is spending $200 billion on roads, stadiums, a rail network and a new city.

“There’s a lot riding on this,” Montasser Khelifi, a senior manager for global markets at Quantum Investment Bank Ltd. in Dubai, said by phone yesterday. “The potential for economic growth outside of the hydrocarbon industry is linked to the World Cup.”

Negative News

Qatar’s World Cup woes coincide with the nation being isolated for its foreign policies toward political Islamists. Saudi Arabia and the United Arab Emirates have accused Qatar of threatening the region’s stability because of its support for the Muslim Brotherhood. Together with Bahrain they withdrew their ambassadors in March.

A Qatari diplomat denied Sept. 13 comments on Twitter by an official from the Egyptian section of the Brotherhood that Qatar had asked members of the Islamist group to leave the country. The diplomat said they were leaving on their own accord.

“It’s mostly negative news flow that’s affecting the sukuk,” Khelifi said. “The country’s fundamentals are still very strong.”

While Qatar’s economic growth will probably slow to 6 percent this year, according to the median estimate of 11 economists surveyed by Bloomberg, its higher than the 4.4 percent estimated for Saudi Arabia and 4.45 percent for the U.A.E., the Arab world’s two biggest economies. The nation’s benchmark stock index climbed to a record on Sept. 18.

“There’s no question that Qatar will repay the debt,” Christie said. “What it’s dealing with is a political issue and a series of public relations problems. These need to be resolved.

(Bloomberg / 24 September 2014)

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Qatar: Islamic banks outperform conventional peers

DOHA: The Islamic banks in Qatar outpaced conventional banks in the country in terms of growth in net profit during the second quarter of 2014 (Q2,14).

Qatar Islamic Bank (QIB) reported a 15.0 percent YoY bottom-line growth in Q2, 14, mainly due to improvement in top-line as well as fee income. Top-line growth was backed by strong financing growth.

Masraf Al Rayan reported 12.1 percent YoY growth in its bottom-line due to strong growth in net financing income,  Global Investment House (GIH) noted in its Q2, 14 “GCC Banking Sector” analysis.

The GIH analysts who covered five major Qatar-based banks   said the loan books of banks in Qatar grew the most in the region, by registering 15.4 percent growth on year-on-year basis, followed by the banks in Saudi Arabia (9 percent), UAE (4.8 percent) and Kuwait (4.6 percent).  

Due to stable growth in loan book, net interest income (NII) of GCC banks rose 4.3 percent YoY. Qatar’s NII grew by 2.9 percent. NII growth was led by UAE-based banks (8.2 percent YoY), followed by those in  Saudi Arabia (7.3 percent. NII of Kuwait declined 6.8 percent.

The asset base of GCC banks expanded by 9.5 percent YoY to $1.11 trillionn in 2Q14, with all the countries witnessing stable YoY growth. Increase in loan book supported the overall asset growth. Qatar-based banks witnessed the strongest growth in total assets (13.9 percent YoY), followed by banks in Kuwait (8.9 percent ), Saudi Arabia (8.7 percent ) and UAE (7.7 percent )

Net earnings of  GCC banks under GIH coverage increased 11.1 percent YoY to $5.3bn in 2Q14, mostly due to higher NII non-interest income and a 7.7 percent YoY drop in provisions;though4.6 percent YoY increase in operating expenses (opex) partially dampened the profit growth. Net profit of banks in the Kuwait and UAE increased by 20.7 percent  and 20.1 percent YoY, respectively while net profit of Saudi Arabia and Qatar based banks increased decently by 7.4 percent and 3.5 percent , respectively.  On QoQ basis,  net profit  of  the GCC aggregate  increased  5.4  percent, with Saudi Arabia and UAE (7.9 percent each) , followed by  Qatar (6.0  percent) ;  while  Kuwait witnessed a 14.9 percent decline in net profit on QoQ basis.

Qatar-based banks maintained their loan growth momentum due to an increase in public sector spending backed by several developmental initiatives taken by the government.

Among Qatar -based banks, Commercial Bank of Qatar, Qatar Islamic Bank and Doha Bank registered higher growth in loan book of 33.4 percent, 31.8 percent and 25.3 percent YoY, respectively.

Provision expenses of  GCC banks under GIH coverage declined 7.7 percent YoY during  Q14; however, increased 14.0 percent QoQ. Banks in Qatar witnessed 21.2 percent YoY plunge in provisions. Provisions of Qatar National Bank reduced by 56.4 percent YoY during the quarter.

(The Peninsula / 31 August 2014)

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Global Finance names QIB Qatar’s ‘Safest Islamic Bank'

QIB has been recognised as the ‘Safest Islamic bank in Qatar’ in Global Finance’s first-ever list of the “Safest Islamic banks in the GCC” through a rigorous evaluation process that assessed the stability of the region’s banks.

QIB Group CEO Bassel Gamal said, “It’s great to see that all our efforts and achievements in 2013 are being recognised by a trusted financial magazine like Global Finance.

The bank “scored high” for its 2013 credit standing, which was rated (A) by Fitch and (A-) by Standard & Poor’s, he said.

“The overall QIB 2013 financial results were very positive; it has increased business volumes across all market segments, which has a positive impact on QIB’s end of year financial results, solidifying its position as a leading bank in Qatar,” Gamal said. The ranking reflects QIB’s implementation of a “successful risk management policy” that strengthened all prudential ratios and built a strong foundation for future business expansion.

Gamal added that “QIB’s innovation and excellence in risk management meets all the rigorous safety standards and this, together with the bank’s commitment to providing excellence in banking services to all the clients, is what differentiates QIB.”According to Gamal, customer deposits saw a steep rise of 16.7% or QR50.4bn by the end of 2013 compared to QR43.1bn in 2012. “This enabled QIB to effectively support the constant growth of assets,” he stressed.

The “strong operating performance” in 2013 has enabled the bank to pursue a conservative impairment policy by allocating QR360mn towards improving the provision coverage on financial investments and financing activities compared to QR491mn in 2012. Gamal noted that QIB managed to raise the quality of its investment portfolio this year, where non-performing financing assets dropped 0.9% with provision coverage of 94% in 2013 compared to 1.6% with provision coverage of 63% in 2012.

For the first time, this year, Global Finance assessed banks that only offered Islamic products and have been rated by at least two reputable international agencies. A total of 25 Islamic banks currently operate in the Gulf, representing a third of all active commercial banks in the region.

Gamal said this recent accomplishment “is a result of our ongoing commitment to provide a seamless banking experience to our individual and corporate customers while at the same time ensure that we are applying a successful risk management strategy,” Gamal stressed.

(Gulf Times / 08 March 2014)

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Qatar: Call to make Zakat mandatory for commercial sector

If the payment of Zakat (obligatory alms giving in Islam) is made mandatory by law even on commercial entities in Qatar, the expected annual revenue would be to the tune of QR4bn, which is enough to support all the needy inside the country and many in other countries as well, a senior official has said.

Dr Mohamed Khalifa al-Kubaisi, director of Zakat services at the Zakat Fund, speaking at the Central Municipal Council (CMC) session yesterday, said that the Fund, unlike other charities, focussed on the needy inside Qatar, whether locals or expatriates. It is also a government entity which has limitations on publishing its activities.

“Currently the Fund supports 17,000 needy families. The number is expected to increase as the revenue of the Fund goes up due to the rapid increase in the country’s population. This puts great responsibilities and challenges on the Fund,” he pointed out.

Dr al-Kubaisi explained that the revenues of the Fund from donations and Zakat are spent 100% on charitable works and reach the needy in full without any deduction for the operational cost of the Fund such as salaries of the employees and other administrative issues as these are normally covered by the government.

He stressed that there are no really poor people among the locals, but those in need are usually who accumulated huge debts and could not pay back. He called for awareness efforts to persuade such people not to live beyond their means. As for the expatriates, there are still some needy families that need regular support.

“We calculate it like this: We divide the total income of the family members. We have standards for Qataris and expatriates. If the allowance of a Qatari family member falls beyond QR2,000-2,500 a month then the family is in need of a financial support from the Fund. For expatriates the allowance of a person in the family should come short of QR1,000-1,500 a month to be eligible for support.”

Dr al-Kubaisi said the Fund works in a way to spare the needy people any embarrassment. “They have to visit one time only the headquarters of the Fund to submit a request and register their information. They can call by phone and the staff of the Fund will reach out to them. A study of the case will ensue, when confirmed that the family is really needy, a monthly sum would be credited to their bank accounts on a regular basis for the duration of the aid as if it was a salary transfer.”

Dr al-Kubaisi urged yesterday CMC members to join its volunteers and ambassadors programme to promote the practice of Zakat giving in their constituencies and simultaneously help the Fund reach out to the needy.

“You know better your constituencies and we need your help in this respect. We have also engaged other influential people in this programme such as journalists, writers, artists, government officials and expatriate community heads,” he said.

Eventually, the move was highly welcomed by all CMC members, who saw a real need to focus efforts to address the local needs.

(Gulf Times / 22 Jan 2014)

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Zakat payment by firms almost doubles in 2013

The number of companies that has paid their annual Zakat (obligatory Islamic alms ) to the Zakat Fund has almost doubled in 2013, compared to the 2012 figures.

Dr Mohamed bin Khalifa al-Kubaisi, head of Zakat services section at the Zakat Fund, said yesterday that the number of companies that contributed the Zakat was 57 in 2012 and the number has jumped to 103 in 2013 when the Fund launched its free service for calculating the Zakat due on companies.     

The Fund honoured companies that paid huge amounts of Zakat at a programme yesterday. These were approved as Zakat giving companies and some others were also thanked for facilitating the collection of Zakat and promoting its importance among the local community.

Dr al-Kubaisi stressed the need to promote the practice of Zakat in all segments of the society. He also said that there was a proposal to ask ministries to deduct one, two or three days wages from the annual salaries of willing employees and the same forwarded to the Zakat Fund.

He said that it is still an idea under study and it would be perfectly a voluntary process with no obligations whatever.

(Gulf Times / 23 Jan 2014)

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Qatar's Masraf agrees deal to buy UK Islamic bank

Masraf al Rayan (MAR), Qatar's largest sharia-compliant bank by market value, has said it has reached an agreement on a cash offer by its UK unit, to buy out the Islamic Bank of Britain (IBB).

MAR said in a statement that the acquisition would give it the opportunity to grow services in the UK and continental European markets.

"IBB offers MAR the opportunity to invest in a financial institution with an established platform and with an existing client base of over 50,000 customers," the statement said.

Adel Mustafawi, Group CEO of MAR, said: “As one of the leading banks in Qatar, we look forward to supporting the Islamic Bank of Britain in its growth plans by strengthening its balance sheet and position in the market.

"We believe together we can build a stronger bank that is more capable of exploiting the enormous business opportunities available in the UK market for the benefit of our customers, shareholders, employees and the economies we operate in."

MAR declared a net profit of QR1.250bn, an increase of 15.4 percent during the first nine months of 2013 compared to similar period in 2012.

MAR currently operates 11 branches in Qatar.

(Arabian Business.Com / 01 Dec 2013)

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Qatar Islamic banks set to outpace rivals

Growth of Shariah-compliant banks in Qatar is poised to outpace that of the UAE lenders as borrowing rises amid $200bn in government spending for the 2022 soccer World Cup.

Qatar’s four Islamic lenders will almost double their asset base to $100bn by 2017, Standard & Poor’s has said in a report. The assets of the largest Shariah-compliant bank in the country, Qatar Islamic Bank, last year grew five times faster than those of the biggest one in the UAE, Dubai Islamic Bank.

Spending for the world’s most-watched sporting event will spur lending for roads, stadiums and hotels. Bond sales by Qatari Islamic banks, only two of which have sold sukuk, also stand to benefit from the implementation of new global capital rules, S&P said.

“Qatari banks in general clearly have substantial scope to grow their asset base given the sheer magnitude of projects and infrastructure development going on in Doha at present,” said Chavan Bhogaita, head of markets strategy at the National Bank of Abu Dhabi.

The project pipeline in the UAE is also flowing, “albeit not at the same aggressive pace,” he added.

QIB’s Islamic bonds due in October 2017 yielded 2.74% by afternoon in Doha, according to data compiled by Bloomberg. DIB’s sukuk maturing in May the same year has a yield of 3.34%.

Both banks are rated A by Fitch Ratings, the sixth-highest investment grade. That compares with a yield of 3.32% for the HSBC/Nasdaq Dubai GCC Financial Services US Dollar Sukuk Index.

Qatar now has one of the fastest-growing Islamic banking industries in the world because of the surge in demand for local credit, S&P said.

“Unlike the UAE, conventional banks in Qatar aren’t allowed to offer Islamic products, which allows the Shariah-compliant banks to completely capture the Islamic banking market,” said Chiradeep Ghosh, a Bahrain-based analyst at Securities and Investment Co.

“We expect to see stronger borrowing appetite from corporations in Qatar compared to the UAE, supported by the roll-out of Qatari government projects.”

Qatar’s economy will grow 5.2% next year, the fastest in the GCC, according to the median of 17 estimates compiled by Bloomberg. Economic growth will reach 3.4% in the UAE and 4.2% in Saudi Arabia.

Still, total loans at QIB fell 14% to $11.5bn in the first six months of the year. Loans at DIB declined 3.3% to $16.2bn in the same period, while UAE loans grew 4.4%.

“We have seen an up-tick in lending in the UAE,” Jaap Meijer, the Dubai-based director of equity research at Arqaam Capital, said. “There are a lot of opportunities for UAE banks in the retail and corporates sectors” that will help drive their expansion, he added.

The UAE central bank expects to release revised limits for bank exposures to government-related entities in the next two months, the chairman of the Banks Federation said.

The central bank said in April 2012 that banks must not lend more than 100% of their capital to local governments and the same amount to government-related entities to help reduce risk.

“The forthcoming GRE lending restrictions from the UAE central bank will certainly be a key factor for the future growth trajectory of certain UAE banks,” Bhogaita said. “While they will still have ample scope to expand their balance sheet, they may need to work harder for such growth.”

Lending growth in Qatar will re-accelerate in 2014 after a visible slowdown during the first half of the year due to “administrative delays with certain projects,” S&P said. Islamic banks may grow an average of 15% over the next five years, it added.

“If the banks grow, they need to find the matching funding,” Timucin Engin, S&P credit analyst, said in an interview. “We might see some of the banks more active on debt issuances.”

QIB has total assets of $20.32bn compared with $30.26bn for DIB, according Bloomberg data. Total loans at QIB grew 62% in 2012 to $13.4bn compared to a 5.9% increase to $16.8bn at DIB.

“On our numbers, it could take until about 2022 for QIB to overtake DIB,” Meijer said.

(Gulf Times / 19 Sept 2013)

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Islamic trade finance set to make strong inroads into Qatar

Islamic trade finance could “provide new opportunities and become the preferred choice” for emerging rapid growth markets (RGMs) such as Qatar, Turkey, Indonesia, Malaysia, Saudi Arabia and the UAE, it said.  

RGMs are emerging as “hot spots” for global business and they promise to permanently alter the global trade scene over the next 10 years.

Many of these markets already have strong trade links with other “core” Islamic finance markets, which offer new opportunities for growth for Islamic trade finance.

According to Ashar Nazim, partner, Global Islamic Banking Center of Excellence at Ernst & Young, the increase of trade flows to the East and within emerging economies combined with growing interest in Islamic finance, meant that Islamic trade finance was now a serious alternative.

“A constant challenge for business leaders is to anticipate and interpret how global trade is changing, while understanding the opportunities and risks it creates.

“Boards and management of Islamic banks must take note. Trade, technology, culture, labour and capital will integrate at different rates across these markets and need to be anticipated when transforming the financial institution’s trade finance operations.”

RGMs are now an increasingly significant part of the global economy. They will become an even more dominant force in global trade and as a result, businesses are going to have to adjust their strategies to reflect the increasingly regional pattern of world trade and in this context should now start to consider Islamic trade finance.

Ernst & Young’s Mena Financial Services Industry leader Gordon Bennie said: “Trade will grow between these markets, creating a wide range of new opportunities for them and advanced economies will also benefit, as exports to emerging markets become a rising source of growth.

“Middle Eastern countries are trading increasingly with other RGMs, reflecting the faster growth in demand from these countries.

“Banking, insurance and other financial services sectors in these countries will grow as the economies mature and the middle classes expand, offering new opportunities for trade. Demand for more sophisticated financial services is already growing rapidly as wealth levels rise.”

The degree of change in both the scale and direction of trade will have a profound impact on the competitive environment for all companies wherever they are located around the world. Trade will also be increasingly focused around Asia, the Middle East and Africa, suggesting that the key geographical location for companies will change.

To compete in the market effectively, Islamic institutions will need to align their trade finance operations with global common practices, the report said.

There has to be a clear understanding of how Islamic financial institutions can add value to businesses in their trade functions.

Despite the high percentage of Muslim populations in emerging markets, E&Y said conversion to Islamic trade finance will not be successful without a clear framework that gives businesses a good reason to switch.

Islamic institutions also need to maintain the talent pool that serves these emerging markets and ensure that talent management is an integral part of their business strategy. There is currently a shortage of staff with extensive experience in Islamic markets so this issue needs to be addressed with the industry’s rapid growth.

Islamic banks need to build international connectivity and scalable trade finance platforms that can connect with businesses and financial institutions beyond borders.

This could be challenging given the small size and localised nature of most Islamic banks.

(Gulf Times / 02 June 2013)

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Qatar to emerge as Islamic finance hub

A new report has predicted that Qatar will soon become a “key international distribution hub” for Shariah-compliant products as the Islamic finance market grows at an unprecedented pace.

Qatar Financial Centre Authority in its first ‘Mena Asset Management Barometer‘ suggests that Qatar’s position in the Islamic finance market will be boosted with the development of new infrastructure projects that will help in the growth of alternative fund structures and encourage public-private partnerships.

Currently, about 50 percent of the funds in Qatar are Shariah-compliant. Therefore, along with Saudi Arabia, Qatar is rated as a prominent Islamic finance fund centre. The demand for Shariah-compliant products is expected to grow because of increased interest from MENA’s internal markets, Southeast Asia, Australia and pension funds in the UK and Europe.

The report also highlights that the asset management sector in Qatar is still in its infancy and the alternative sector will need time to develop. In 2013, the respondents believe that asset management sector will develop well because of increased infrastructure spending, financial support of government agencies and financial regulation to promote strategy diversity among the country’s pool of asset management firms.

As Qatar accelerates investment on infrastructure projects to host the 2022 FIFA World Cup, the country envisages public investment plans worth USD 95 billion over five years. Several private equity and infrastructure funds are keen to relocate to Qatar to benefit from the country’s infrastructure boom through direct investment or by holding stakes in firms engaged in supply chains of the development projects.

The survey respondents also believe that, within the MENA region, Qatar was most likely to introduce short-selling regulation that would help in the creation of a domestic hedge fund sector. The county was also chosen by hedge fund management firms as the most favored location to establish a presence in the GCC.

(Arabian Gazette / 11 APRIL 2013)

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Qatar to sell $1.1bn bonds, sukuk

Qatar will sell QR4 billion ($1.1 billion) of three-year and five-year bonds and sukuk, its state news agency said. The local currency issues will take place quarterly, it said, without specifying how much of each maturity would be sold.

The Gulf state's central bank will offer local banks QR3 billion worth of bonds and QR1 billion worth of Shariah-compliant notes, Qatar News Agency (QNA) said.

In January the International Monetary Fund's (IMF) mission chief for Qatar told Reuters that the objective behind an issuance would be to build a domestic sovereign yield curve. Qatar's central bank was not available for comment.

Qatar has issued local currency bonds before. In January 2011, the central bank issued a QR50 billion three-year bond directly to local banks as a step to drain excess money from the banking system.

In recent months, Qatar-related debt denominated in dollars has drawn strong demand from international investors; majority state-owned Qatar Telecom saw heavy bids for a $1 billion bond sale in January.

(Trade Arabia / 09 March 2013)

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Qatar has potential to become major Islamic finance platform, says QIIB CEO

Qatar can become a major global platform for Islamic finance in view of its resources, expertise in Shariah-compliant products and services, and world class regulatory framework, said International Islamic (QIIB) chief executive officer, Abdulbasit A al-Shaibei.

Qatar, he said, is significantly active in the major global Islamic centres such as Malaysia. Also, Islamic finance has growing demand in Qatar and the region.

“We have the resources, expertise, empowered regulators and adequate manpower (human resources) in our country. We can easily build a much stronger platform for Islamic finance in Qatar that can cater to, not just the region, but the whole world,” al-Shaibei said in an interview with Gulf Times.

He stressed that Qatar was one of the first countries in the world to identify the significance of Islamic banking. Qatar is now home to major and reputable Islamic banks such as QIB, QIIB and Masraf Al Rayan.

“We have had the first Islamic bank in our country in the 80s through QIB. Qatar International Islamic Bank was established in the 90s. Masraf Al Rayan was established a few years ago.

“On the conventional side, the largest bank in the entire Middle East by assets is Qatar’s QNB,” al-Shaibei pointed out.

Qatar is one of the first countries that identified the potential and importance of Islamic debt markets. In 2003, $700mn was raised for the sovereign through a seven-year sukuk, which was joint-lead managed by HSBC and QIIB.

“Our banking industry, Shariah-based in particular, has grown phenomenally over the last few years. We now have many Qataris with proper competence, knowledge and expertise in Islamic banking. In our banking industry, we have significantly gained because of them,” he said.

On Dubai’s recent initiative to build a global centre for Islamic economy, al-Shaibei said: “I strongly believe we have the potential to do it on a global scale here. If we can play an active role in leading Islamic financial centres such as Malaysia, why can’t we do it here?”

He said the credibility of Qatar’s Islamic banks is indisputable.

“In Shariah-based banking, we have proper risk management in place.  Also, our banking principles are highly value-based and customer-centric. In Qatar, we have a well developed banking regulatory framework, which are of truly global standards. Our regulators are all very competent. We also are blessed with a pool of Shariah scholars who advise us on Islamic financial principles,” al-Shaibei said.

“Whenever our Islamic banks do cross border transactions or issue sukuks around the world, they are well received. A case in point is our own sukuk.”

QIIB’s $700mn five-year sukuk last year was very successful in the international market with subscription exceeding $5bn or seven-fold oversubscription.

“QIIB was very pleased with the success of the transaction, which highlighted the confidence placed by investors in the bank’s credit story and its strategy,” al-Shaibei said.

Islamic economic principles play a growing significance in today’s global business environment, with Islamic economy size reaching $2.3tn and a growing community of 1.6bn Muslims around the world.

Recently, Ernst & Young’s World Islamic Banking Competitiveness Report 2013 said global Islamic banking assets are expected to reach $1.8tn by 2013, up from the $1.3tn of assets held in 2011.

(Gulf Times / 24 Feb 2013)

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Qatar Financial Centre (QFC) and Turkey are top Islamic finance hubs in MENA region says study

Turkey and the Qatar Financial Centre (QFC) have the most Islamic finance-friendly tax systems out of eight countries in the MENA region, according to a study sponsored by the QFC.

The study was conducted by three tax experts, Mohammed Amin, Salah Gueydi and Hafiz Choudhury, in partnership with the International Tax and Investment Centre, based in Washington DC. 

The ITIC is a database for information on best practices in taxation and investment policy, and acts as a training centre to transfer knowledge to improve the investment climates of developing countries.

The study, “Cross border taxation of Islamic finance in the MENA region - Phase One”, shows that while simpler Islamic finance transactions can be carried out in some countries without prohibitive tax costs, of the countries reviewed only Turkey and the QFC have a tax system that enables sukuk transactions to be carried out without excessive tax costs. Sukuk refers to the Islamic equivalent of bonds. Since fixed income, interest bearing bonds are not permissible in Islam, Sukuk securities are structured to comply with the Islamic law and its investment principles.

The study examines two alternative approaches a country can take to update its tax system to support Islamic finance transactions, referred to as the UK model and the Malaysian model, and recommends the Malaysia model as being quicker and simpler to implement for Muslim countries.

The study reviewed the tax treatment of four common Islamic finance structures, commodity murabaha, sukuk, salaam and istisna in eight MENA region countries: Egypt, Jordan, Kuwait, Libya, Oman, Qatar, Saudi Arabia, Turkey, and the Qatar Financial Centre.

The work was led by Mohammed Amin who is an Islamic finance consultant and was UK head of Islamic finance at accountants PricewaterhouseCoopers, with the collaboration of Salah Gueydi, senior tax adviser at the Qatari ministry of economy and finance, and Hafiz Choudhury, tax administration and policy adviser at the international tax and investment Centre.

Ernst & Young’s Qatar office co-ordinated the distribution of questionnaires to their offices in the MENA region for completion and review by country tax authorities. PricewaterhouseCoopers Malaysia completed a questionnaire for Malaysia to provide a comparison from outside the MENA region. The UK provided a second non-MENA comparison, based upon Mohammed Amin’s knowledge as a UK tax adviser.

The report is the first of a series.  The team intends to extend the work to cover, for example, the impact of consumption taxes such as Value Added Tax on Islamic finance transactions, the cross-border treatment of Islamic finance transactions within international double tax treaty arrangements designed primarily with conventional finance in mind, the Zakat treatment of Islamic finance transactions and the Shariah governance framework for Islamic finance. Other countries in the MENA region may be reviewed in subsequent reports.

Daniel A. Witt, president of the ITIC, said it was proud to have been associated with this study: “Part of our mission is to support countries in removing barriers from international trade and investment. Islamic finance institutions are already a very important part of the financial infrastructure of global business.”

(International Adviser / 14 Feb 2013)

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Qatar Financial Centre (QFC) Islamic finance tax regime ‘friendliest in Mena’

The Qatar Financial Centre (QFC) has the most Islamic finance friendly tax systems, out of the eight jurisdictions in the Middle East and North Africa (Mena) region, according to a study.

“While simpler Islamic finance transactions can be carried out in some countries without prohibitive tax costs, of the countries reviewed only Turkey and the QFC have a tax system that enables sukuk transactions to be carried out without excessive tax costs,” said the study, conducted by three leading experts Mohamed Amin, Salah Gueydi and Hafiz Choudhury, said.

None of the countries covered have modified their tax laws to facilitate Islamic finance, apart from Turkey, which has introduced limited changes to facilitate sukuk issuances and Qatar with its special tax regime in the QFC, said the study, which was sponsored by QFC Authority (QFCA) in partnership with the International Tax and Investment Center based in Washington DC.

The study examined two alternative approaches a country can take to update its tax system to support Islamic finance transactions (the UK model and the Malaysian model), and recommended the one that is adopted in Malaysia as being “quicker and simpler to implement for Muslim majority countries”.

The study reviewed the tax treatment of four common Islamic finance structures ‘murabaha’, ‘sukuk’, ‘salaam’ and ‘istisna’ in the eight Mena countries: Egypt, Jordan, Kuwait, Libya, Oman, Qatar, Saudi Arabia, Turkey, and also in the QFC.

“Islamic finance is of growing importance within the Mena region, but the taxation systems of almost all Mena countries were developed in an environment of conventional finance. This too often means that Islamic finance suffers an additional, and therefore unfair, tax burden not borne by conventional finance,” according to Ian Anderson, chief finance and tax officer at the QFCA.

In an increasingly globalised world, and rising prosperity in many Muslim majority countries, Islamic finance institutions are already a very important part of the financial infrastructure of global business, Daniel A Witt, president, International Tax and Investment Center, said.

“We very much hope that it will start the dialogue within and between countries with active Islamic finance markets on dealing with the very real barriers to the growth of such markets raised by tax rules,” he added.

“The study shows clearly that the additional transactions required by Islamic finance to achieve economic outcomes similar to conventional finance are at risk of being subject to transfer taxes or to taxes on income or gains, and can make Islamic finance transactions prohibitively expensive,” according to Amin, the report’s main author.

(Gulf Times / 13 Jan 2013)

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Qatar Islamic Bank signs QR800m financing deal with NBK Holding

Qatar Islamic Bank (QIB), one of the leading Islamic banks in Qatar, has announced the signing of an QR800m financing deal with NBK Holding.

The signing ceremony took place at NBK Holding's headquarters and was attended by His Excellency Sheikh Nawaf Nasser Bin Khaled Al Thani, Chairman and CEO of NBK Holding, and Mr Ahmad Meshari, Acting Chief Executive Officer of QIB.

His Excellency Sheikh Nawaf commented, "The financing agreement with QIB will enable NBK to move forward with its ambitious expansion plans. NBK Holding's subsidiaries have significantly contributed to the Qatari private sector and the company's strategy is to continue its pioneering role in the economic growth of Qatar."

He said, "This collaboration between NBK Holding and QIB is an example of successful partnerships that should and do exist between local institutions. We are very happy with the Islamic finance solutions that QIB presented to us to finance our projects, and we will work with the Bank to develop this relationship further into the future by nurturing the constructive co-operation between the two organisations."

"The diversity in the activities of NBK will enable it to help achieve the aspirations of the wise leadership of the country which is to diversify its economic resources in order to achieve sustainable economic growth," said HE Sheikh Nawaf.

Mr Ahmad Meshari, QIB's Acting Chief Executive Officer, added, "QIB has a strategic vision that aims to provide Islamic financing solutions to national companies. It also aims to build partnerships with these companies based on common interest and continuous co-operation to achieve the objectives of the Qatar National Vision 2030, one of which is to build an even stronger local economy."

He said, "This financing agreement reflects the strong relationship between QIB and NBK Holding that has a great history of serving the Qatari economy. NBK Holding widened its umbrella of businesses to encompass several new companies with various operations including cars, heavy equipment, real estate and others."

"This new arrangement enhances the leading role of the Bank in supporting local businesses and financing national development projects. QIB directs 98% of its operations and funding activities to the local market, and this is reflected in the growth of the financing activities of the Bank, which reached QR43.1bn by the end of 2012, a 45.7% increase compared to the 2011 figure," said Mr Meshari.

( Ame.Info.Com / 3 Feb 2013)

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