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Islamic Finance

Global Home > Islamic Finance

فيتش: البنوك الإسلامية ستكون المُستفيد الأكبر من ارتفاع أسعار الفائدة في السعودية

القطاع املصرفي السعودي من ارتفاع أسعارالفائدة هذا العام. إذ م سيكون التأثيراملقابل لتكاليف التمويل األعلى أقل لدى املصار اإلسالمية من البنوك التقليدية - التي ستحصل أيض ً ا على زيادة – ألنها تمتلك نسبة أعلى من الودائع غير الربحية.

Islamic Finance in the UK

Bashar Al-Natoor, Global Head of Islamic Finance, recently spoke with CNBC Arabia about the position of the UK in Islamic finance words, with focus on takaful changes and opportunities.

BFM 89.9

Malaysia Has Most Evolved Islamic Finance Industry

Global Head of Islamic Finance, Bashar Al Natoor discusses the outlook for the global and Malaysian islamic finance markets on BFM 89.9. The total volume of sukuk rated by Fitch Ratings stood at US$80 billion at the end of 1Q18, which is a net increase of 6%, compared to end-2017. Al Natoor shares his outlook on the supply and demand dynamics of Islamic bonds, both here in Malaysia and globally.

Fitch Named Best Islamic Finance Rating Agency for Second Year

Fitch Ratings has been recognised as the Best Rating Agency for Islamic Finance for the second consecutive year by The Asset, a leading financial magazine in the Asia-Pacific region.

CNBC

Sukuk Constraints and Drivers in 2018

Bashar Al-Natoor, Global Head of Islamic Finance, recently spoke with CNBC Arabia about sukuk performance YTD and oil prices, geo-political tensions and the pace of US monetary policy tightening impact on issuance.

why forum

Why Takaful May Have a Friend in the UK

The UK has carved out a pivotal role in growing it’s footprint in Islamic finance over the past several years. With Brexit having no discernible impact on either the market’s expansion or its central role the UK’s position in international Islamic finance industry will continue to be central for the foreseeable future. 

UAE Reforms Aid Sukuk Market; Implementation Still Key

New rules governing sukuk offerings in the UAE could support market activity in tandem with other regulatory initiatives, although consistent adoption and implementation remains key to their success.

rating action

Rated and Affirmed: Etiqa Entities at IFS 'A-'; Outlook Stable

This follows a reorganisation within the group to comply with Malaysia's regulatory requirement to split the composite businesses into separate life/non-life and general/family takaful entities. Etiqa Insurance Berhad has been renamed EGIB and the life business now resides in ELIB. 

UAE Eases Foreign Ownership For Growth, Free Zones Tested

The UAE's decision is a strategic move to encourage foreign investments and accelerate growth, as well as retain its regional hub status in light of rules relaxation across the GCC, notably in Saudi Arabia, Qatar and Bahrain.

Sukuk Volumes Grow but Structural Constraints Remain

فيتش: حجم إصدارات الصكوك يشهد نمواً، مع وجود قيود هيكلية

The relatively moderate growth in sukuk volumes in 1Q18 highlights continued interest in the asset class, but also the structural constraints on faster expansion. Issuer funding needs and investor appetite for the remainder of the year will be determined by various factors including oil prices, tighter global financing conditions, and investor sentiment in the light of regional tensions in the Middle East.

rating action

KFH Sukuk Company SPC Ltd's Trust Certificate Issuance Programme Rated 'A+(EXP)'/'F1(EXP)'

The expected ratings are in line with KFH's Long- and Short-Term Foreign-Currency Issuer Default Ratings (IDR) of 'A+' and 'F1', respectively, and apply only to senior unsecured certificates issued under the programme.

Less Funding Pressure at Qatari Islamic Banks than Conventional Peers

Qatari Islamic banks have less foreign funding and typically higher retail deposits than their conventional peers and are therefore less at risk of deposit flight. Nevertheless, liquidity pressures remain as for all Qatari banks due to the financial and economic sanctions on Qatar as well as higher funding costs. Islamic banks made up 23% of sector assets at end-2017.

Remaining Zakat Bill Assessments Key to Saudi Bank Impact

The extra Zakat levied so far on Saudi Arabia's banks due to a backdated change in the Zakat calculation would have a modest impact on banks' capital and therefore has not affected their ratings. However, some banks' ratings could come under pressure if the amounts for the remaining years to be assessed are large enough.
 

Islamic Business & Finance

What is Holding Back Sukuk?

William Mullally sat down with Fitch's Bashar Al Natoor to discuss the state of sukuk, and ask him about whether the issuance of sukuk in Africa could slow down as more funding possibilities pop up. 

Institutional Money Fund Foundations Laid in Saudi Arabia

Overall, we estimate that the Saudi Arabian money fund sector grew by around 10% over the three years to end-December 2017 in US dollar terms, with asset expansion particularly high in 2017. This compares with a global money fund growth of 5% over the same period.

cnbc arabia

Fintech Islamic Finance Landscape

Bashar Al-Natoor, Global Head of Islamic Finance, recently spoke with CNBC Arabia about Fintech challenges and opportunities in Islamic finance industry.

rating action

Bahrain's USD Sukuk Rated 'BB-'

CBB7 is the issuer and the trustee of the sukuk incorporated primarily for the purpose of participating in the sukuk transactions. CBB7 is a single person company incorporated in the Kingdom of Bahrain with limited liability whose proprietor is the Central Bank of Bahrain.

rating action

Turkiye Finans's Sukuk Rated 'BBB-(EXP)'

TFVK is the issuer and certificate holders' agent in respect of the sukuk. TFVK is incorporated in accordance with the laws of, and formed and registered in, Turkey as an asset leasing company. TFVK's ongoing activities will principally be the issue of lease certificates (including the sukuk certificates). TFVK is wholly owned by Turkiye Finans.

rating action

Barwa Bank Affirmed at 'A'; Outlook Negative

Barwa's SRF is at the Qatari banks' domestic systemically important bank (D-SIB) SRF of 'A', and is not differentiated by franchise or level of government ownership because we see an extremely high probability that all rated Qatari banks would receive support should they require it.

rating action

QIIB Affirmed at 'A'; Outlook Negative

This reflects Qatar's strong ability to support its banks, as indicated by the sovereign's rating (AA-/Negative), combined with our belief of a strong willingness to do so. The latter is based on a strong track record of sovereign support to the banking sector.

rating actiom

Affirmed: Qatar Islamic Bank at 'A'; Outlook Negative

The government has demonstrated a strong commitment to its banks and key public sector companies. The sovereign's capacity to support the banking system is sustained by sovereign reserves and revenues, mostly from hydrocarbon production, despite lower oil prices.

rating action

Jordan Islamic Bank Outlook Revised to Stable; Affirms IDR at 'BB-'

The Outlook change reflects the stabilisation of the operating environment in Jordan while the affirmation reflects limited changes to JIB's credit profile since the last review. However, the operating environment remains challenging due to sluggish growth, the significant influx of Syrian refugees, and the rising government debt trajectory. 

Developed SF Markets a Better Fit for Asset-Backed Sukuk

Established structured finance markets are likely to be more supportive of the development of asset-backed sukuk than the largest Islamic finance markets. A key limitation on SF in major Islamic finance jurisdictions is the absence of legal certainty and precedent relating to some key SF principles. 

Rating action

Indonesia's USD Sukuk Rated 'BBB'

The sukuk is in two tranches - USD1.25 billion maturing March 2023 and USD1.75 billion maturing March 2028. The March 2023 maturity is a green sukuk, the proceeds from which are to be used to finance or refinance green projects. 

Indonesian Islamic Banks Held Back by Weak Asset Quality

Islamic banks' NPL (overdue by more than 90 days) ratio had improved to 3.9% by end-9M17, from 4.3% at end-2016, as NPLs stabilised and loan growth picked up. However, the NPL ratio remained higher than that of conventional peers (2.9%), which Fitch attributes to the sharia banks' less-developed underwriting standards and risk controls.

Continued Positive Momentum for Malaysian Islamic Finance

Malaysian Islamic banking loan growth continued to outpace conventional banking loan growth in 2017, underpinned by a supportive regulatory regime which aims to boost the share of Islamic loans to 40% of Malaysia's domestic loans by 2020, from 30%. The conducive operating backdrop should continue to support industry growth over the next few years.

Structural Demand, State Push Could Drive Indonesian Takaful

Indonesia's takaful industry experienced diverging growth trends in 2017, as the life sharia segment continued to expand, while general sharia remained relatively flat. We expect the takaful industry to benefit from the government's push to accelerate developments in the broader sharia ecosystem.
 

Structural Factors to Drive Growth in Malaysian Takaful

Malaysia's takaful growth continues to outpace the conventional insurance sector, driven by stable domestic consumption and government efforts to reach out to the mass-market.

New Entrants Spur Turkish Islamic Banks' Growth

We expect the Islamic segment's high financing growth to outpace the banking sector's in 2018, given rapid expansion of the two recently established state-owned Islamic banks. While competition among participation banks is set to increase, the market leaders are well-established and the overall low penetration implies room for growth.

Al Arabiya

Budget 2018: How do International Experts See the Saudi economy?

Ed Parker, Head of EMEA Sovereign Ratings, appeared on Al Arabiya to discuss progress Saudi Arabia has made with its 2030 vision program.

Islamic Finance: 2017 Performance & 2018 Outlook

Bashar Al-Natoor, Global Head of Islamic Finance, recently spoke with CNBC Arabia about Islamic Finance performance in 2017, including key developments and challenges, and the outlook for 2018.

 

rating action

Downgrades: OETC and Mazoon; Outlook Negative

We have downgraded Oman Electricity Transmission Company's (OETC) and Mazoon Electricity Company's (Mazoon) Long-Term Foreign and Local Currency Issuer Default Ratings (IDR) to 'BBB-' from 'BBB'. The Outlook is Negative. 

rating action

Emirates REIT and Sukuk Rated 'BB+'

The recently placed USD400 million, 5.125% Sukuk issue, the company's first Islamic bond, will mature in 2022. There are some variations among the final terms of the Sukuk compared with Fitch's base case assumptions, but in total they do not affect the rating. 

GCC Islamic Banks' Standalone Strength Weaker than Region's Conventional Banks

The sovereign ability to provide support has diminished in Saudi Arabia and Qatar, and this has reduced the average IDR by one notch in these countries since last year. The IDRs are on Negative Outlook in Qatar. Nevertheless, the sovereign willingness to provide support has remained extremely strong throughout the GCC and virtually no progress towards resolution has been made.

2018 outlook

GCC Islamic Banks' Outlook Negative

Of its rated Islamic banks, 17% in the Gulf Cooperation Council (GCC) region have a Negative Outlook. All the Negative Outlooks are in Qatar and are driven by the Qatari political dispute, which is affecting Qatar's ability, but not propensity, to provide support its banks. More Global 2018 Credit Outlooks

ifn news

Opportunities for Kuwait in 2018

Bashar Al Natoor, Global Head of Islamic Finance spoke on a panel about Kuwait’s external borrowing, structural reforms and prospects for privatization in the era of global market volatility and low oil prices at the recent IFN Kuwait Forum.

Islamica 500

Fitch Ratings' Global Head of Islamic Finance, Bashar Al Natoor, was named as one of the top 500 who make the Islamic economy for the third year running.

cnbc

Fitch on the Standardization of Islamic banks

Bashar Al Natoor, Global Head of Islamic Finance at Fitch Ratings, speaks about standardizing Sharia banking practices.

why forum

Why Canada is Welcoming Islamic Finance with Open Arms

Canada has helped to establish a template for other sovereigns in embracing alternative and socially conscious forms of investing. A recent notable example of Canada’s proactive push in this area is Islamic Finance.

Islamic Finance Standardisation Will Be Slow

The lack of standardisation in Islamic finance is a significant constraint on the industry's growth and we expect progress to be slow given the scale of the challenge. Greater harmonisation of sharia codification within and between jurisdictions is often cited as a limiting factor. 

why forum

Why Green Sukuk Could be a Growth Driver for Islamic Finance

Created to fund projects with positive environmental benefits, green bonds have become rapidly popular. Islamic Finance is one of the latest sectors to begin exploring the possibilities of what has been called “socially responsible” investing. Fitch Ratings' Bashar Al Natoor, Global Head of Islamic Finance discusses. 

Dubai TV

Green Sukuk Opportunities and Challenges

Fitch Ratings's Global Head of Islamic Finance Bashar Al Natoor weighs on green sukuk opportunities and challenges. He speaks on Dubai TV.

fitch on mena

Spotlight on Islamic Finance

Bashar Al Natoor, Global Head Islamic Finance, provides an insight into Fitch’s approach to rating Islamic finance and sukuk.

 

Related: Islamic Banks

Bloomberg

Saudi Arabia to Raise $9 Billion via Sukuk

Fitch Ratings's Global Head of Islamic Finance Bashar Al Natoor weighs in on Saudi Arabia's issuance. He speaks on Bloomberg Markets: Middle East.
Report: Record Saudi Issuance Supports Strong Sukuk Market Growth

Record Saudi Issuance Supports Strong Sukuk Market Growth

Saudi Arabia's record USD9 billion sukuk reinforces our expectation that total 2017 issuance in core Islamic finance markets will grow at least as rapidly as it did last year and that market-share will rise.

Contacts

Bashar Al Natoor

Global

Bashar Al Natoor

Analytical Group Head

+971 4424 1242

Redmond Ramsdale

Banks

Redmond Ramsdale

London

+44 203 530 1836

Ambreesh Srivastava

Banks

Ambreesh Srivastava

Singapore

+65 6796 7218

Jelena Babajeva

Infrastructure

Jelena Babajeva

London

+44 20 3530 1375

Jeffrey Liew

Insurance

Jeffrey Liew

Hong Kong

+852 2263 9939

Paul Gamble

Sovereigns

Paul Gamble

London

+44 20 3530 1623

Markus Papenroth

Structured Finance, ABS

Markus Papenroth

London

+44 20 3530 1707