KFH Wins 'Innovative Islamic Bank' Award

Kuwait Finance House (KFH), one of the largest and pioneering Islamic banks, has been named as the 'Most Innovative Islamic Bank' at this year's London Sukuk Summit.

"The 2009 London Sukuk Summit Islamic Finance Awards" were given recently at a gala dinner in Radisson Hotel, London.

The awards were in recognition of the achievements, progress and effort by individuals and institutions in the Islamic finance space. This year there were 24 award categories.

The KFH won another award when Ali Al-Ghannam, head of International Real Estate at KFH, clinched the 'Most Innovative Islamic Real Estate Financing Transaction' for the $1bn investment in the Multi-Million Dollar Iskandar City Development Project in Johor in Malaysia through its long-term Al-Nibras II Fund.

KFH is one of the few banks that weathered the worse effects of the global financial crisis and subsequent credit crunch especially in Kuwait and the GCC countries.

The bank, earlier this year, reported total profits of KD379.35 million ($1.3 billion) for 2008 with assets increasing to KD10.54 billion and deposits to KD 6.612 billion. The KFH Board had also recommended a 40 per cent cash dividend, and a 12 per cent stock dividend to shareholders for 2008.

KFH in recent months has also been spearheading a global expansion drive which is yet another sign that the Islamic finance market is bouncing back albeit a bit more cautious and selective.

In other awards category, this year's 'Islamic Banker of the Year Award' went to Ayman Sejiny, CEO of Unicorn Bank in Saudi Arabia.

Sejiny is recognized for his role in helping to structure and launch the three Sukuk issued by Dar Al-Arkan Real Estate Development Company (DAAR) to date and in helping to establish Unicorn Investment Bank in Bahrain. DAAR is a major shareholder in Unicorn Investment Bank.-

From Trade Arabia News

Sukuk Defaults Seen Rising As Global Slowdown Weighs

A default on Islamic bonds by Kuwaiti firm Investment Dar is just the tip of the iceberg, with more failures expected as the weak global economy hits issuers, industry experts warned on Wednesday.

Unlike traditional banking, the $1 trillion Islamic finance industry has just begun to feel the chill of the global downturn, with practitioners and analysts trying to assess the extent of the fallout on the sector.

Investment Dar said in May it had defaulted on a $100 million Islamic bond, the first such default for a major, public Islamic instrument in the Gulf.

Troubled Saudi conglomerates Saad Group and Ahmad Hamad Algosaibi & Bros, are restructuring their debt, triggering concerns of a spillover effect on the Islamic finance industry.

Neale Downes, a Bahrain-based lawyer at Trowers & Hamlins, estimated that 5-8 percent of Islamic bonds, or sukuk, in the market are susceptible to default as many were raised for real estate projects which have been hurt by the slowdown.

"A lot of the issuers are ultimately really sovereign or quasi sovereign so they will probably be able to draw on government support either directly or behind the scenes," Downes said on the sidelines of an Islamic banking conference in Kuala Lumpur.

The value of sukuk issued in 2008 dropped by more than 56 percent compared with 2007 to $14.9 billion, due mainly to the global credit crunch, according to Standard & Poor's. It expects the market to recover in the second half of 2009 or early 2010.

"The longer the global recession goes, the higher the likelihood of default," said Mohammad Faiz Azmi, global Islamic finance leader at PricewaterhouseCoopers.

"People are now using reserves or savings to try to keep themselves going. How long can that last? So far what we've seen is the tip of the iceberg."

From Reuters

Sukuk Market Boom

The Sukouk (Shariah-compliant bonds) market was in boom over the last three years and attracted much interest on global scale as issues peaked in 2007 in both number and volume of issues, a corporate figure told KUNA here on Monday.

The Chairman and Managing Director of Liquidity Management House, Emad Al-Monayea, said the company aims to bolster the Sukouk market on local, regional, and global scale and was in the process of gaining firm foothold in both the Malaysian and Singaporean markets, two main Islamic-finance markets.

The company is wholly owned subsidiary of Kuwait Finance House.

Al-Monayea remarked the Sukouk market has an advantage over regular bonds as it has asset support. The current boom in the Islamic financing and banking industry is also bolstering its performance.

The figure said the company is seeking strategic partnerships globally and expressed hope the Central Bank of Kuwait show more support to Islamic banking and institutions pursuing that line of business. He also urged legislation to render the Kuwaiti market Sukouk-attractive.

Al-Monayea is to give an introductory seminar here Tuesday and a similar one in Singapore the following day on the company's objectives in these two markets, in presence of Kuwaiti officials and corporate representatives of the home states.

From Kuwait News Agency

The Optimal Solution For Financial Crisis

Speaking on the the role of Islamic banks in providing initial solutions in view of the current financial crisis, Safa Abdul Rahman Al-Hashem (pic left), Chairman and Managing Director of Advantage Consulting Company, said that Despite all the skepticism the world had toward the Islamic banking system in the GCC, particularly in Kuwait, not only does the integrity of the system hold, but Islamic finance also remains the most optimal solution to avoiding the repercussions of the Financial Crisis

She said however, that Islamic finance needs to be revitalized. As although Islamic banks do contain an array of real Islamic Banking products like Tawreeq, Sukuk, Murabaha, Islamic real estate mortgages, they in effect provide the same traditional products of commercial and investment banks with only change of trade name.

Al Hashem added, 'This is primarily due to the fact that the Islamic banking system is a part of capitalistic system and endeavors to realize profits using Fiqh (Jurisprudence) tricks to reformulate products in an Islamic framework and then sell Islamic products at a higher price as compared to original traditional financial products.'