#112 - December 2018

Dubai Technology and Media Free Zone Authority

ISSUE 112

ISSUE 112 NCB...IS THE EMPLOYER OF CHOICE Mutlaq Al Anezi, Senior Executive Vice President (SEVP) Head of Human Resources Group, The National Commercial Bank – Saudi Arabia

NCB...IS THE EMPLOYER OF CHOICE Mutlaq Al Anezi, Senior Executive Vice President (SEVP) Head of Human Resources Group, The National Commercial Bank – Saudi Arabia

A CPI Financial Publication

Special Report: Ranking the top institutions from across the Islamic economy

For generations, the better way to bank.

Over 40 years ago, Dubai Islamic Bank pioneered a way of banking that was truly better: Islamic banking. Since then, many generations of customers continue to enjoy world class products and services backed by the very latest in banking technology. For them as for you, this is still the better way to bank.

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CONTENTS

ISSUE 112

REGULAR SECTIONS

EDITOR'S LETTER

10

Greetings, all

W

elcome to Islamic Business & Finance.

This is the 112th issue of the longest-running Islamic finance magazine in the world. I hope you all had a productive fall as we head into what should be an exciting 2019.

It was a great pleasure seeing all of you at the Islamic Business & Finance Awards 2018, both in the Middle East and in Southeast Asia. I was proud to travel to both locations so that I could meet you all myself, and present each of you with the Awards you so deserve.

These awards are a testament to your esteem in the industry, as well as your performance and innovation. I look forward to seeing what you all do next!

Beyond that, there is plenty to peruse. I hope you enjoy digging into another great issue.

Till next time,

OPINION

8

2019 will see continued growth

16

NEWS + ANALYSIS

9

News & Analysis

COVER STORY

10

NCB...Is the employer of choice

ISLAMIC BANKING

16

26

A winning strategy

MALAYSIA

22

Harnessing collective wisdom

EXPERT OPINION

26 Inside Saudi Arabia’s mortgage initiative

William Mullally

28

HALAL BUSINESS

28

Creating Malaysian multinational corporations

Log on to www.islamicbusinessandfinance.net for news, polls, events, analysis, blogs, features, commentary and more.

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CONTENTS

FEATURES

CHAIRMAN

SALEH AL AKRABI CHIEF EXECUTIVE OFFICER

STEVE LEE steve.lee@cpifinancial.net Tel: +971 4 391 4681 EDITOR - ISLAMIC BUSINESS & FINANCE

WILLIAM MULLALLY william@cpifinancial.net Tel: +971 4 391 3718 EDITORS

NABILAH ANNUAR nabilah.annuar@cpifinancial.net Tel: +971 4 391 3726 MATT AMLÔT matt@cpifinancial.net Tel: +971 4 391 3716 WEB EDITOR

JESSICA COMBES jessica@cpifinancial.net Tel: +971 4 364 2024 EDITORIAL ASSISTANT

BUSINESS DEVELOPMENT MANAGERS

NEEMA SAJNANI neema.sajnani@cpifinancial.net Tel: +971 4 391 3717 DANIEL BATEMAN daniel@cpifinancial.net Tel: +971 4 375 2526 AKASH AMBALE akash.ambale@cpifinancial.net Tel: +971 4 433 5320

KUDAKWASHE MUZORIWA kuda.muzoriwa@cpifinancial.net Tel: +971 4 391 3729 EDITORIAL

ADVERTISING

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AWARDS

34

Islamic Business & Finance Middle East and Africa Awards

36

Islamic Business & Finance Southeast Asia Awards

ADIB - Egypt continues to grow and influence

42 Editor’s letter 43 Methodology 44 Top Islamic financial

institutions worldwide

financial institutions worldwide

by revenues

by assets

ISLA MACFARLANE isla@cpifinancial.net Tel: +44 7875 429476

48 Top 50 Islamic institutions

CHIEF DESIGNER

SENIOR DESIGNER

FLORANTE MAGSAKAY florante@cpifinancial.net Tel: +971 4 391 3724

DIGITAL MANAGER

FINANCE & DATA EXECUTIVE

SIYA PAINAYIL siya@cpifinancial.net Tel: +971 4 391 3722

KHALED TAHA khaled.taha@cpifinancial.net Tel: +971 4 433 5322

EVENTS MARKETING MANAGER

FINANCE & DATA MANAGER

HR & OFFICE MANAGER

RIZZA INFANTE rizza@cpifinancial.net Tel: +971 4 391 4682

SHAIS MEMON, ACCA, CMA shais.memon@cpifinancial.net Tel: +971 4 391 3727

ADMINISTRATION & SUBSCRIPTIONS

CAROL BASA carol@cpifinancial.net Tel: +971 4 391 3709

36

SPECIAL REPORT LEADERS IN ISLAMIC FINANCE

LONDON BUREAU

BUENAVENTURA R. JALUAG, JR. jun@cpifinancial.net Tel: +971 4 391 3719

34

ADVERTORIAL

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46 Fastest growing Islamic

CRIS BALATBAT cris.balatbat@cpifinancial.net Tel: +971 4 391 3725

ISSUE 112

50 Top 50 Islamic institutions 51

Top 50 Islamic institutions by net profits

54 South Asia 56 Far East Asia 58 Middle East 62 Africa & Europe

40

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©2018 CPI Financial. All rights reserved. No part of this publication may be reproduced or used in any form of advertising without prior permission in writing from the editor.

Islamic Business & Finance | ISSUE 112

TRANSFORMING MALAYSIA’S FUTURE

HOW TECH AND GOVERNANCE WILL ENSURE ISLAMIC FINANCE’S GROWTH A CPI Financial Publication

4

@IBFMag on Twitter for stories as they're being told

TRANSFORMING MALAYSIA’S FURURE HOW TECH AND GOVERNANCE WILL ENSURE ISLAMIC FINANCE’S GROWTH

Printed by United Printing & Publishing – Abu Dhabi, UAE

PUBLISHED BY CPI FINANCIAL FZ LLC REGISTERED AT DUBAI MEDIA CITY, DUBAI, UAE.

ISSUE 110

PLUS:

24 KSA:

Sukuk issuance a boon for Saudi

28 LONDON:

BLME: Connecting the UK to the Middle East

54 AWARDS:

The 13th Islamic Business & Finance Awards

www.islamicbusinessandfinance.net

BEST ASSET BEST ASSET MANAGER IN MANAGER IN SAUDI ARABIA SAUDI ARABIA by the Islamic Business & by the Islamic Business Finance Awards 2018. & Finance Awards 2018.

Alkhabeer Capital Alkhabeer Capital The asset manager specialized

Best Asset Manager Best Asset Manager Alkhabeer Capital Alkhabeer Capital

The asset manager specialized in alternative investments, in alternative investments, founded in 2008. founded in 2008.

P.O. Box 128289, Jeddah 21362, Kingdom of Saudi Arabia Alkhabeer Capital is regulated by the Capital Market Authority (CMA), license no. 07074-37 P.O. Box 128289, Jeddah 21362, Kingdom of Saudi Arabia Alkhabeer Capital is regulated by the Capital Market Authority (CMA), license no. 07074-37

Islamic Business & Finance Awards 2018 award 50x32.indd 1

alkhabeer.com alkhabeer.com

24/12/18 6:10 PM

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OPINION

2019 will see continued growth G

rowth has become a key part of the Islamic finance story, and that should continue into 2019. According to Fitch Ratings, GCC Islamic banks have a stable outlook for the next year, with stronger economic growth due to higher oil prices, which will help fundamentals.

Islamic lenders are slated for weaker credit growth averaging at five per cent, which remains above financing growth levels for conventional banks, Fitch said. “Fitch forecasts a more stable operating environment for GCC Islamic banks in 2019 as higher oil prices support growth and maintain strong liquidity in the region,� Redmond Ramsdale, Head of GCC Bank Ratings at Fitch Ratings, said.

There is an expectation that the asset-quality metrics of Islamic banks will deteriorate slightly, however the liquidity of Islamic banks is believed to remain strong.

In November, oil reached an average price of $80 a barrel, with spikes up to $90; it could have touched the $100 mark if further disruptions worsen a supply crunch amid rising consumption, suggested Citigroup. Additionally, benchmark Brent crude topped at $85 on concerns that US sanctions on Iran would create a shortage but the prices have since dropped back to $65 a barrel.

The positive GDP growth forecast across GCC has been projected at three per cent in 2019 due to oil output increases, and higher oil prices are likely to result in moderate government spending, which is a major source of growth in the GCC. Islamic finance is not immune to the conventional economy of course, but it is often better protected when things take turns. Though there is still risk in the next year, the future for Islamic finance institutions in the Middle East remains bright.

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William Mullally

Editor

www.islamicbusinessandfinance.net

NEWS & ANALYSIS

The IFSB disseminated data of Islamic banking systems from 21 countries, including full-fledged Islamic banking data of Afghanistan for the first time.

With a regular dissemination of the PSIFIs data since its launch in April 2015, the IFSB database has received global acknowledgement as credible, consistent and comprehensive database of Islamic banking systems covering over 95% of global Islamic banking activities and all the jurisdictions with systematically important Islamic banking sector. This project has entered into a new stage as the IFSB secretariat has started collecting detailed financial statements (DFS) – more granular information on income statements and financial positions by countries – and is expected to start the dissemination of the DFS data in the beginning of 2019.”

- DR BELLO LAWAL DANBATTA The Secretary-General of the IFSB

www.islamicbusinessandfinance.net

The International Finance Facility for Immunisation (IFFIm) and the Islamic Development Bank Group (IsDB), a development partner of Gavi, the Vaccine Alliance, have announced plans for the IsDB to purchase a Sukuk issued by IFFIm.

Our experience with the previous two Sukuks showed that there is immense enthusiasm among Islamic investors for Gavi’s important mission. IFFIm is a good fit for socially responsible and Islamic investors, providing both with an opportunity to invest in an area with a clear and significant social purpose – to save children’s lives.”

- CYRUS ARDALAN Chair of IFFIm’s Board of Directors

Ento Capita launched the Ento Wonderland Fund (CEIC), which is a Shari’ah-compliant income generating property fund. The fund size, an estimated AED 702 million has a 15-year tenure.

Investment in real estate assets may weaken but it is one of the most profitable types of investments.

The investment is not limited to professional; a large segment of society can generate incomes through real estate investment, as they venture to generate additional income. However, the real estate activity is one of the most complex activities, but in the Arab world—and the Arabian Gulf in particular—the real estate sector is one of the most secure and stable sectors, only when managed by specialised companies that follow the best standards and deal with the variables through investment strategies of a flexible, dynamic and transparent nature.”

- HAITHAM AL MASRI CEO of Ento Capital

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COVER INTERVIEW

NCB… THE EMPLOYER OF CHOICE

MUTLAQ AL ANEZI, SENIOR EXECUTIVE VICE PRESIDENT (SEVP), HEAD OF HUMAN RESOURCES GROUP THE NATIONAL COMMERCIAL BANK – SAUDI ARABIA

H

uman resources is one of the most important assets that NCB exerted much efforts to develop over the past years, in line with the bank’s strategic plan to support the development of Saudi talents’ skills, prepare a new generation of leaders to ensure business continuity and efficient performance, as well as development of services and products and continuous commitment to promoting work environment in achieving the bank’s strategic aspiration to be the ‘Employer of Choice’.

NCB’s ongoing developed approach in the area of human resources has met the satisfaction of employees and strengthened their loyalty and belonging to the bank, along with revealing their

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profound desire to make the bank the ‘Employer of Choice’. In return, the bank strives to attain the highest possible levels of satisfaction of its employees.

Mutlaq Al Anezi, Senior Executive Vice President (SEVP), will speak in more detail on Saudisation.

NCB has achieved an outstanding position in terms of Saudisation of jobs How does NCB perceive Saudisation of jobs?

Before answering your question, I would like to emphasise that NCB’s efforts in Saudisation of jobs are based on a broad concept and a comprehensive vision that goes beyond recruitment; mainly to support our national economy. We also have an important strategic direction to build and develop

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COVER INTERVIEW

leadership talents in order to achieve NCB’s aspiration of being the Employer of Choice. At NCB, we consider Saudisation as one of the main pillars in the field of human resources.

At NCB, we pride ourselves of adopting our Government’s direction towards increasing Saudisation rates in all private and government sectors through our programmes and initiatives that aim at qualifying Saudi talents to reduce the gap between education outputs and labor market needs.

In terms of figures, how did NCB assumed a distinguished position compared to other Saudi banks in respect of Saudisation of the private sector?

www.islamicbusinessandfinance.net

The bank has achieved this excellent position thanks to its strategy to expand in all banking activities, which helped Saudisation at NCB to reach 95.3 per cent in jobs and 100 per cent in senior management talents. The number of NCB’s staff in the Kingdom reached 7,937 employees, of which 13 per cent are Saudi women.

NCB’s direction in the Saudisation of jobs comes in line with its understanding of the Kingdom’s needs to be run by its own citizens in the first place, as well as the understanding of rapid changes in the labor market and increased demand for employment in the Kingdom.

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COVER INTERVIEW

ROWAD ALAHLI ATTRACTS, DEVELOPS, AND PREPARES LEADERS Taking the initiative to recruit and develop future leaders is a paramount importance. May I ask you to explain more on the mechanism you use for identifying and preparing your future leaders and following up on their development?

Your question touches upon a vital issue for us at NCB. Identification and development of future leadership is one of the bank’s priorities in the field of human resources, given that preparation of a new generation of leaders is a guarantee of business continuity, efficient performance and continued development of the bank’s services and programmes provided to its customers. We need to make sure that our big organisation will not suffer from any vacant leadership position in any business.

In 2014, NCB launched Rowad AlAhli Program, one of the most important qualification programmes in the Saudi financial sector, with an aim to attract, develop and prepare leaders, provide them with the best opportunities for career advancement, achieve professional ambitions and deepen their participation to business added value. The bank also offers highly designed programmes to attract and qualify graduates and on-the-job development programmes. The bank also continued to provide scholarships to selected talents in development programmes at the world’s best universities, such as Harvard, Wharton, and Stanford, as well as some of the world’s best-known executive development institutes such as IMD.

MANY TRAINING AND E-LEARNING PROGRAMMESS WITH 500 TRAINING PROGRAMMES What are NCB’s key capabilities for training and preparing employees?

Our capabilities are highly dependent on our human resources, therefore, the bank established a ‘training academy’, in which experienced training professionals prepare banking and financial training programmes to equip participants with the skills required and develop their capacities. The academy endeavors to maintain a leading position in training in various fields of banking sectors in order to provide the bank with highly skilled employees. The training programmes of the academy are concentrated in

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COVER INTERVIEW

96% 100%

the bank’s staff and

of its leadership are Saudis

banking, investment, credit, risk management, capital markets, financial management and others. In 2017, the number of trainees exceeded 7,046 trainees.

What are the most important training programmes you use to qualify and develop your staff?

The bank has launched several training programmes aimed at improving the performance of employees and achieving NCB’s aspirations such as the aforementioned Rowad AlAhli, which aims to attract, develop and prepare leaders, Wessam AlAhli , and AlAhli Technology Program, which contributes to developing Saudi capabilities in such areas as technology, security, information systems and smart banking. In addition, the bank has designed the banking qualification programme for branch network staff, and highlyqualified training programmes, in addition to on-the-job development programmes aimed at qualifying employees with knowledge and skills. The bank also launched an e-learning portal for its employees, offering more than 500 training programmes.

WOMEN’S EMPOWERMENT IS OF CONSIDERABLE INTEREST Women are a key element in Saudi society.

Does NCB have a special vision to increase the empowerment of women in different jobs, and is there a differentiation between male and male employees in terms of salaries and benefits?

NCB is proud to be one of the first national institutions to open its doors to women. We have recently celebrated the opening of the bank’s 111th women branch. This remarkable growth in the establishment of women’s branches reflects NCB’s keenness to offer more job opportunities for Saudi qualified women. This is also an indication that the bank’s policy does not differentiate between male and female employees in terms of salaries, benefits or opportunities for career promotion, training and leadership positions, as NCB is used to granting equal opportunities for females and males, with the concern to find suitable jobs for women.

MUTLAQ AL ANEZI, Senior Executive Vice President (SEVP), Head of Human Resources Group, The National Commercial Bank – Saudi Arabia

www.islamicbusinessandfinance.net

Some consider job opportunities offered to women in the private sector ‘secondary’ jobs that may not qualify them later for leadership positions. What about NCB? This perception is not true—at least for us at

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COVER INTERVIEW

NCB. For many years, there were many female employees of the bank holding positions of high responsibility and some of such employees chaired important divisions and departments. At NCB, Saudi women assume leadership and executive positions, including CEO of the NCB Capital.

Let me assure you that efficiency is the standard we rely upon when it comes to recruitment or promotion of both male and female employees.

For years, the bank’s female employees have taken on positions commensurate with their qualifications and practical experience. Many of female colleagues have proved high efficiency qualifying them for leadership positions. The most recent prominent figure among them so far is Lama Ghazzaoui, who has recently been promoted to a senior executive position as Senior Executive Officer and Head of the Strategy and Finance Group. Previously, she was the Chief Financial Officer (CFO). Ghazzaoui is the first woman to have this leadership position throughout the history of the bank. We are ready to place Saudi women in key positions in the bank as long as they have the efficiency, qualifications and perseverance for such positions.

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NCB’S INITIATIVES TO ATTRACT SAUDI TALENTS

NCB Headquarters in Jeddah, Saudi Arabia

With the economic openness and many world international financial institutions coming to Saudi Arabia, the banking sector faces challenges in retaining the human resources. What are your plans to retain your distinguished human capital?

This is a very important issue. At NCB, we believe that our employees are our most precious asset and our top priority towards achieving our strategic aspiration to be the Employer of Choice, and there is no doubt that retaining them in light of the labor piracy poses a challenge that needs to be taken into account.

In order to maintain our human resources and prevent them from being attracted by our competitors, we have paid more attention to the bank’s staff, especially efficient employees, who the bank is keen to invest in their expertise by providing them with many advanced development opporutnities, not to mention the work environment continuous enhanced initiatives.

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ISLAMIC BANKING

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ISLAMIC BANKING

A winning strategy IN EXTRAORDINARY CIRCUMSTANCES AL BARAKA BANK LEBANON HAS CHOSEN A PATH THAT ENSURES GROWTH, MUTASIM MAHMASSANI, GENERAL MANAGER OF AL BARAKA BANK – LEBANON

W

hat does your win at the Islamic Business & Finance Awards 2018 mean for your institution?

We are extremely grateful to be honored with this prestigious Award. It is always encouraging when our efforts in building a high-performing Islamic bank are acknowledged. We stand proud today of the leading position and reputation we enjoy as the first Islamic Bank in the local market and remain committed in pursuing to even greater achievements.

Personally I am delighted to receive the Islamic Business & Finance Awards 2018, it is a huge honor and we aim to continue our efforts to reach sustainable growth and to contribute in the progress of Islamic banking in Lebanon.

Al Baraka Bank was founded in Lebanon in 1992, based on the vision of His Excellency Sheikh Saleh Kamel, the Chairman and Founder of the Dallah Al Baraka Group, in order to promote the values of Islamic banking. This vision is born not only from his firm belief in the pioneering nature of the Islamic banking industry, but also his desire to serve the financial services needs of Lebanese consumers.

How has the bank evolved over time?

Al Baraka was the first bank in Lebanon to operate

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ISSUE 112 | Islamic Business & Finance

(Diplomedia/SHUTTERSTOCK)

Tell me about the bank’s history. What was its initial vision?

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ISLAMIC BANKING

in compliance with Shari’ah principles. In the absence of any formal Islamic banking law, the bank began by implementing Islamic financing principles, based upon its own expertise, and reinforced by the expertise of its parent group, Dallah Al Baraka, one of the leading diversified financial services groups in Saudi Arabia. In 1996, when the Fiduciary Contracts Law was decreed in Lebanon, Al Baraka was able to begin offering Islamic banking services, albeit in a limited capacity. It was only in 2004, when the Lebanese parliament passed the law on Islamic banks, that it was able to offer the full range of products and services.

Since 2004, Al Baraka Bank has been able to provide Lebanese consumers with comprehensive and distinctive Islamic banking services that have met most of their needs. This encompasses some 42 products and services that have been developed during that time, in the fields of accounts, investment, housing, education, automotive, as well as credit and debit cards.

development and, on a corporate level, has sought to meet and surpass the requirements of disclosure, transparency and banking best practices.

What are you focused on looking into 2019?

Going forward in 2019, Al Baraka Bank aims to continue its strategy of growing its products and services, as well as expanding its network.

In terms of its product development, in 2019 Al Baraka Bank will be launching several products aiming mainly on the cutting edge technologies we will introduce our new mobile app, a new ebanking solution and new Lebanese pound and euro card will be offered to our clients.

In addition to these new services, Al Baraka is planning on focusing its efforts on digital banking transformation, a committee has been assigned to lead this journey and we expect to begin with implementation of the digital transformation strategy by the end of second quarter 2019.

What is your personal management style?

What have been the key initiatives and focuses for the bank in 2018?

The year 2018 was rife with major events that have changed the face of the MENA region, creating new challenges, conditions and circumstances. In addition, the domestic state of affairs in Lebanon has generated an air of caution, leaving the potential for unexpected shifts in the political landscape, which could potentially disrupt the country’s stability.

In response to these extraordinary circumstances, Al Baraka Bank has elected to pursue a strategy that focuses on ensuring the growth of the organisation.

As such, the bank launched a range of new services and products designed to meet the growing demand for Islamic banking services in general, and more specifically, the needs of Al Baraka’s customers.

The common denominator of these new products launched has been to continue to raise the awareness of Islamic banking on the whole and its services, specifically among our clients, as well as the general public.

In addition to new products development, Al Baraka Bank has continued to upgrade its IT systems by installing the latest software packages IMAL. The bank has also purchased new cutting-edge equipment and technologies in order to improve its services and enable its staff to carry out their roles efficiently. It has also focused on the gathering of information and data for products that need further

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For me, it starts with the human factor—our employees.

I focus on recruiting the best talent, and then I do my best to inspire them to reach their full potential, to set a clear vision and to empower the team to lead the company’s future growth and achieve the required goals.

I believe nowadays what we need is a leader rather than a manager. Good leaders will execute the required tasks with a team spirit, putting the right people in the right place, with everyone operating with complete clarity on what is needed to do their job and to succeed.

I feel that the team spirit is essential sharing knowledge and expertise enabling everyone to learn and to acquire new skills, in an atmosphere of cooperation and fraternity rather than instructions and orders.

Leadership means that you are ready to embrace change, not to be afraid to start experiencing new things and be part of the disruptive new technologies that will shape the future.

I am confident that Al Baraka team with this type of leadership will result in everyone doing what is expected of him and feel that he is personally responsible for the success of the bank.

How else is Al Baraka Lebanon working to overcome those challenges?

Well I can summarise the challenges that are facing Islamic finance in Lebanon and in the region in the following points:

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ISLAMIC BANKING

MUTASIM MAHMASSANI, General Manager of Al Baraka Bank – Lebanon

a-Human resources requirements: Due to a shortage of skilled professionals in the Islamic banking industry, many of the current staff recruited are from the conventional banks that see this as another new product in the market. This effects the cross selling ability of the frontline staff who lack knowledge of the true nature and purpose of Islamic banks and their products.

At BBL, we offer our staff continuous training, lectures and workshops to ensure their deep knowledge in all the aspects of Islamic financing b-Appropriate legal framework and tax neutrality: An appropriate legal, institutional and tax framework is a basic requirement for establishing sound financial institutions and markets. Like the common law and civil law systems, Islamic jurisprudence offers its own framework for the implementation of commercial and financial contracts and transactions. In most countries, Islamic asset-based financing contracts are treated as purchase and re-sales of the assets and hence are taxed twice.

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c- Enabling supervisory framework: Islamic banking needs credible and more supportive supervision and regulation that accommodates its specificities. The approach of adapting existing regulatory and supervisory frameworks while taking into account the specificities of Islamic finance will also help to accelerate the integration of the IFSI into the global financial system d-Inter-bank liquidity placement and risk management: The competitiveness and soundness of financial institutions depend on the availability of efficient financial products. Islamic banks urgently need Shari’ahcompliant products to meet a number of pressing needs, including: • short-term placement of funds and liquidity and asset-liability mismatch management; • financial risk management and hedging; • resource mobilisation at a competitive cost;

•Balance sheet management through securitisation. Development of a wellfunctioning Islamic money market is crucial, as it can serve as the transmission channel for the conduct of monetary policy and provide

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ISLAMIC BANKING

the intersection between central banks and the financial system while also providing an avenue for liquidity management and more efficient use of excess funds of Islamic financial institutes. e-Lack of Regulatory Structures / Authority: The Islamic finance industry needs to develop and implement regulatory bodies like the GAAP, Basel, SOX (Sarbanes-Oxley Act), etc. That can minimise risk and set a platform for minimum requirements to classify and operate as an Islamic financial institution. Although there is the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI), membership is voluntary.

To start with, the central banks of all Muslim countries should make it compulsory for any IFI to be a member of the AAOIFI once its rules have been agreed upon by all leading Shari’aha scholars. f-Variation in Interpretation of the Shari’aha Law : Malaysia, Bahrain, UAE, Pakistan, all seem to have their own interpretation of the Shari’aha law. There are even differences between banks within the same country. There should be a uniform interpretation of the Shari’aha law approved by all major scholars and representing all Muslim countries. This once approved should be implemented and monitored through the central banks of the respective countries. g-Liquidity: Conventional banks can park and or borrow funds overnight at a minimal interest rate.

Islamic banks due to their nature of prohibition of interest have a major issue with this which leaves them with excess funds sitting idle and results in loss of income. A solution for all is still to be created.

What differentiates Al Baraka Lebanon from its competition?

Al Baraka Bank being the first established bank in Lebanon has a long history of success in the local market. Its presence is marked by three main unique points that puts him ahead of any competition this uniqueness could be summarised in three words; stability, innovation, and customer-centric.

Al Baraka Bank, with more than 25 years in Lebanon, has proven to be one of the most secure and stable banks in the country—we haven’t faced any problems or deficiencies in our operations, we are delivering a high-end Islamic financial services.

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Al Baraka bank management encourage innovation, this helped the marketing and product development team to come up with the latest products that satisfy the needs of Lebanese consumer. I am confident in saying that we are among the few banks to offer more than four to five products or services per year.

This heritage and being a member of one of the most reputable Islamic banking group in the region, AlBaraka Banking Group, along with an innovative team have helped Al Baraka Bank to preserve and to grow its clients’ database.

We consider our clients partners and we focus on fulfilling their needs along with giving them the right products and services backed by the proper advice leading to have high customer satisfaction that reached around 90 per cent in our last customer satisfaction survey.

What do you view as the main thing Islamic financial institutions should be focused on in the future?

I believe that standardisation can help in boosting the industry’s growth in the short to medium term.

We need to standardise Shari’ah interpretation to be unified in all the Shari’ah boards and Islamic banks across all the region; this will give more confidence in the Islamic banking daily work.

In addition, we should make room for innovation.

I mean by that Islamic banks have to embark in the digital banking transformation process, which I think will be of great benefit to the Islamic banking industry. This will stimulate growth first by making transactions quicker, easier, and second by enabling them to be more accessible and deliver high-end products and services that will satisfy the needs of all clientele specially the youngsters or what we call today Generation Z. I think that we have to be ready to build new relations with Fintech companies and engage in several Hackathons in which we will share our experience with the new generation of startups, I am sure that this will open new horizons for Islamic banking and the way we are doing business.

Islamic banks should be up to the challenge. The new disruptive technologies will have a big impact on the way payment services are executed and many unbanked people will join, hence an increase in the number of people using financial services is expected.

Islamic banks must be ready to study and see how we can use Blockchain capabilities in our future ways in dealing with transactions.

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MALAYSIA

Harnessing collective wisdom ENCIK ABDUL RASHEED GHAFFOUR, DEPUTY GOVERNOR, BANK NEGARA MALAYSIA, WRITES ON THE KEY ISSUES FACING SHARI’AH SCHOLARS LOOKING INTO 2019

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MALAYSIA

GDP Briefing by Malaysia's Central Bank Guvernor Nor Shamsiah Mohd Yunus as Growth Risks Mount

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e are at a time where our economies and financial systems are more connected. We are seeing greater crossborder trade and services, and mobility in capital.

Technological advancements are shaping the way businesses operate and influencing dynamism in customer behaviours.

The global Islamic finance industry has seen remarkable progress over the last decade. Global Islamic banking assets have doubled over the last 10 years and Islamic financial services are now available in more than 48 countries. In fact, in a number of jurisdictions such as Bahrain, Brunei Darussalam, Maldives, Nigeria and Malaysia, Islamic finance is increasingly becoming an important component of the broader financial system. In essence, Islamic finance is impacting the lives of many – individuals and business alike.

All these progress would not have been possible without the dedication of Shari’ah scholars in harnessing collective wisdom to resolve many practical and contemporary issues facing the Islamic finance industry. From enabling deposit taking to facilitating funding, investments and protection solutions—Shari’ah has been the underpinning thrust of Islamic financial intermediation in meeting the evolving expectations of businesses and consumers.

First, the world we live in is not static. It is important to understand that issues confronting the global economy and our modern society are intricately linked to the issues facing the financial sector. This therefore demands for Shari’ah rulings to constantly be contextualised towards addressing contemporary issues facing the Ummah.

From ending poverty and hunger to promoting responsible production and consumption; providing affordable housing; better healthcare and education— Shari’ah deliberations on Islamic finance matters should reflect on the evolving needs of the economy and society.

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Shari’ah scholars are constantly challenged to have a thorough and sound understanding of other fields of expertise such as economics, law, psychology and technology to formulate well-rounded and pragmatic ijtihad. With Shari’ah scholars at the forefront of multi-disciplinary knowledge, the Shari’ah fraternity can play a more prominent role in the global call for action for the financial sector to better respond to the contemporary challenges facing our world today. Closer engagement with wider stakeholders, be it the financial industry, regulatory authorities, central banks and the public sector, has never been more pressing than before.

It is the way forward. It is the way to ensure that the Islamic finance industry continues to be able to deliver on the intended objectives of Shari’ah.

My second point relates to the importance of transparency of Shari’ah reasoning and credibility of Shari’ah rulings. This will encourage a deeper understanding of Shari’ah requirements and outcomes beyond a compliance mindset.

Pronouncing a clear and comprehensive Hukum is certainly not easy; Shari’ah deliberations would need to be anchored to a comprehensive and robust decision-making approach that captures holistic considerations including legal, risk, accounting, operations and also stakeholder implications.

It is equally important that Shari’ah rulings are well-understood by everyone. This calls for an effective communication strategy to advocate the intended outcomes of each rulings and the underlying reasons for each decisions. Platform such as this gathering—offers all of us the opportunity to learn and exchange views from each other’s experiences. Best practices in Shari’ah methodology and governance can be shared and deliberated to elevate the quality of rulings and stature of Shari’ah advisory authorities globally.

The final point is on increasing connectivity among centralised Shari’ah advisory authorities to promote mutual respect and knowledge-sharing.

Islam has flourished with a strong foundation of knowledge, wisdom and tolerance among its scholars. Differences in ideas and open discourses to assess the veracity of knowledge—have always been practiced in many Islamic societies. While achieving consensus is ideal—full appreciation of differences in circumstances and considerations is equally important and necessary.

I have observed over the years that the implementation of Islamic finance varies from one

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I have observed over the years that the implementation of Islamic finance varies from one jurisdiction to another – ENCIK ABDUL RASHEED GHAFFOUR, Deputy Governor, Bank Negara Malaysia

jurisdiction to another. Rightly so, this reflects the different stages of development and diversity in local customs, market conventions and cultural norms.

I believe through frequent and constructive dialogue, Shari’ah boards and advisory authorities will become more appreciative of the many differences in business and economic environment—that lead to different Shari’ah interpretations. Concerted efforts to cultivate greater understanding of the variations in fiqh interpretations and approaches to Islamic finance development are positive steps towards harmonisation that can deliver certainty of Shari’ah implementation in the global Islamic financial system.

Ibnu Taymiyyah once said, “Surely among the main thrusts in a religion is the union of hearts, the unison of views and easing of disputes conducted in good way.”

I implore all of us to begin today’s dialogue with an open mind and candid sharing of experiences that can benefit us all. It is through collaboration and cooperation that the intended values and impact of Islamic finance can be realised for the betterment of the Ummah.

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EXPERT OPINION

Inside Saudi Arabia’s mortgage initiative MOHAMMED KHNIFER, DEBT CAPITAL MARKETS (DCM), BANKER AT SUPRANATIONAL BANKING INSTITUTION, WRITES EXCLUSIVELY FOR ISLAMIC BUSINESS & FINANCE ABOUT THE BIG CHANGE IN THE SAUDI MORTGAGE SCENE, PROVIDING INSIGHT ON ALL THE LATEST DEVELOPMENTS AND WHERE THINGS MIGHT BE HEADED

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he landscape of pricing housing loans for retails has changed forever after the recent entrance of the Saudi Real Estate Refinance Company (SRC). These rules were almost impossible to abandon by local lenders if it were not for the full government support across all spectrums. The goal is to increase homeownership to 60 percent by 2020 and 70 percent by 2030.

BACKGROUND Throughout May to June, more than eight Saudi banks embarked on a rare low-profile initiative, on a global scale, to convert mortgages that are priced with floating rate to fixed ones. Such initiative is only limited to the retail portfolio for mortgage lending. Early this year, mortgage holders who lack financial knowledge found themselves exposed to the Saudi interest rate rise (SAIBOR).

After nine years of stable interest rates, Saudi mortgage holders found themselves suddenly tangled with the mechanics of high interest rates that started to eat up their income through monthly mortgage installments being repriced more than once per year. Having a Murabahah contract means the rate will be fixed.

WHAT HAPPENED AFTER? Second half results of 2018 show that majority of Saudi banks are not affected after shifting mortgages under floating rates to fixed ones, due to the use of interest-rate swaps.

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MOHAMMED KHNIFER

SRC has launched an initiative to allow retailers to apply for cheaper mortgages at fixed rates, with at least seven local financial institutions taking part to provide new mortgages for home buyers. SRC is basically buying these housing portfolios and will be issuing a Sukuk against it, be it floating or fixed rate.

While the number of local lenders who embrace this initiative reached nine so far, it seems understandable that Saudi British Bank (SABB) and Alawwal Bank are yet to announce anything on this regard. This is likely due to the expected merger between them, which will create Saudi Arabia’s third-biggest lender in 2019.

Mohammed Khnifer can be reached at mkhnifer@gmail.com and on twitter at @mkhnifer

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EXPERT OPINION

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ISSUE 112 | Islamic Business & Finance

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HALAL BUSINESS

Creating Malaysian multi-national corporations

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HALAL BUSINESS

BELAL EHSAN BAAQUIE, OF INCEIF WRITES FOR ISLAMIC BUSINESS & FINANCE ABOUT HOW THE ISLAMIC ECONOMY CAN BE BEST SERVICED WITH THE GROWTH OF MALAYSIA’S HALAL BUSINESS SECTOR

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he Malaysian economy has had phenomenal export-driven growth over the last three decades. Large in-flows of Foreign Direct Investment (FDI) – with 1,161 MNCs (Multi-National Corporations) investing MYR 95.64 billion in Malaysia since 1980 – have contributed substantially.

Nevertheless, the Malaysian economy seems to be approaching a ‘middle-income trap’ (in which a country is stuck at a middle-income level) since it is facing structural issues, such as a sluggish manufacturing sector and an overdependence on exports; the following are further indications of a possible ‘middle-income trap’.

The cost of living is rising and wages have been stagnating. Over the last 10 years, inflation has been around two to three per cent, and Malaysia’s gross national income (GNI) per capita fell from $10,677 in 2014 to an estimated $8,821 last year (2016).

In 2017, the median salaries in the urban areas was around MYR 2,200. The average price of houses in the main cities is around MYR 300,00, well beyond the estimated price of MYR 200,000 to MYR 150,000 that can be afforded by a family with monthly income of MYR 4,500.

There is increasing youth unemployment—10.8 per cent in 2017, of which unemployed graduates

A factory outside of Kuala Lumpur in Malaysia.

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HALAL BUSINESS

were over 40 per cent. Over 86 per cent of vacancies were for low skill jobs, with only four per cent jobs being suitable for fresh graduates.

The modernisation of the countryside will release large numbers of working people who will need gainful employment. Generating employment for these will be a major challenge in the coming decades.

How can the Malaysian economy a) generate many new jobs—including higher paying jobs appropriate for absorbing fresh graduates, b) create more value for the Malaysian economy and c) increase the value of raw material-based exports? In doing so, the ultimate positive effect would be to move Malaysia out from a potential middle-income trap to a developed country.

One response of policy makers to the current predicaments has been to emphasize an increase in FDIs as well as to encourage the expansion of local enterprises. However, both these levers of the economy are already in place since the 1980s.

A new lever of economic growth that can potentially move the Malaysian economy to the higher rungs of the global economy is the creation of Malaysian Multi-National Corporations (MMNCs).

Durian Harvest and Festival as Malaysia Looks To Cash-in on China's Love of Pungent Fruit

Large in-flows of Foreign Direct Investment (FDI), starting from the 1980s, has made Malaysia into one of the world’s largest exporters of semiconductor components and devices, electrical goods, solar panels, and information and communication technology (ICT) products.

Exports are substantial and in 2016 were worth $176 billion, almost 48 per cent of the GDP of $365 billion. In 2017, exports were worth MYR 935 billion of which 30 per cent were resource based and 37 per cent electrical and electronic based; over 35 per cent of exports were by MNCs. Of the total workers employed in manufacturing, about 30 per cent are foreign labor, with only 3 per cent of those being highly skilled (including in upper management).

The following are indicators of the need for a new wing to the Malaysian economy.

Since the technology, market and capital belong to the MNCs, such as Nestle or Panasonic , a substantial share of the value added in their output accrues to foreign capital. Typically, MNCs profit is over 300 per cent times the wages they pay.

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EXPORTS AND FOREIGN DIRECT INVESTMENT (FDI)

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HALAL BUSINESS

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Foreign workers, with official numbers being two million and unofficial estimates running to four million, are required to take up jobs that do not offer high enough salary for local workers. Industries employ about 75 per cent of foreign workers, with the rest in the services and other sectors.

An increase in FDI may increase exports but it will also increase the dependence on foreign unskilled and semi-skilled workers.

The main reason that FDI’s are welcomed is to create employment and to use the infrastructure and raw materials of the country. Foreign MNCs repatriate large fraction of profit; foreign workers also repatriate their savings.

For these and other reasons overdependence of Malaysia on FDIs needs to avoided.

SOUTH KOREAN EXAMPLE Consider the example of South Korea, which did not have any significant global MNCs even up to the 1990s. The South Korean government’s policy of developing MNCs led to the setting up of many MNCs including that of Samsung in 1979. In 2015, Samsung, along with Hyundai, accounted for 33 per cent of the country’s GDP. By 2017, Samsung alone was responsible for 15 per cent of the country’s $1.1 trillion economy. Samsung employed 3,000 fresh graduates in 2014.

Both Samsung and Hyundai are the result of the government’s policy of creating South Korean MNCs—based on innovation and invention of new technologies.

The example of South Korea shows that a country needs only a few global MNCs in order for these firms to contribute significantly to the national economy. However, Malaysia should avoid the family-based MNCs that are the norm in South Korea.

GROWING MALAYSIA’S MNCS The Government needs to take the lead in launching the MMNCs. Key sectors of the global market need to identified in which Malaysia has a natural advantage—based on its population’s size as well as its abundant natural resources. The Government needs to have a concerted plan to select the lines of industry in which Malaysian companies, be they private or government-linked, could become major MMNCs—and provide the policies, infrastructure and finance to grow these MMNCs.

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Muslims spent $2.1 trillion across the food, beverage and lifestyle sectors in 2017, and forecasts spending to reach $3 trillion by 2023.

Islamic finance avoids debt and, instead, creates risk-sharing partnerships between investors and (start-up) firms. Malaysia can use Islamic finance to provide venture capital for funding potential MMNCs. Two notable companies -- Petronas and MISC (Malaysian International Shipping Corporation) -are Malaysian firms that have a substantial business operation overseas. Petronas is the chief exemplar of how Malaysia can generate a world class MNC. Local firms are facing competition in the home market due to Malaysia’s open economy. The creation of MMNCs will allow local firms to compete in both the home and international market thus ensuring the continued growth of Malaysia.

The emergence of Malaysian MNCs will need innovations and inventions that will require

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HALAL BUSINESS

entrepreneurs as well as highly qualified graduates. Institutions of higher learning would provide these entrepreneurs and graduates and thus lead to the all-round development of human capital.

Malaysia’s population of 31 million provides fertile grounds for innovations and invention of new products. These products, if successful domestically, could then find markets overseas. Connecting the domestic with the international market will provide further synergies for Malaysian companies to go global.

The natural overseas markets for potential Malaysian MNCs are China and Indonesia, with ASEAN and Muslim countries worldwide being the next step. Once it can establish itself, Malaysian MNCs can then venture into Europe, the US and beyond.

Given below are the possible sectors in which MMNCs can emerge.

Industrialised, modernised and high precision agriculture is based on high-technology--hence dispensing with the need for foreign workers.

The halal economy has scope for tremendous growth. Muslims spent $2.1 trillion across the food, beverage and lifestyle sectors in 2017, and forecasts spending to reach $3 trillion by 2023.

An international trading company, similar to Gunvor or Cargill, which could initially leverage on, and consolidate, Malaysia’s exports and imports— and later on branch out into global trading.

In terms of the digital economy, It is predicted that in the next 30 years internet based firms will account for over 80 per cent of global business.

Malaysian MNCs could lead in the digital economy by drawing upon advantages in niche areas such as Halal and Islamic products.

Science and engineering based high-tech MMNCs are required for cutting-edge innovations in nano-, bio- and info-technology, fields that will dominate the global economy for the coming century. In particular, Malaysia needs to be a player in emerging info-technology fields of big data, AI, quantum computing and connectivity.

CONCLUSIONS For Malaysia to continue to prosper it is not a matter of choice but a necessity that it moves up the economic ladder and become a developed country.

For Malaysia to avoid a middle-income trap, the economy needs to be diversified and broadened:

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In terms of the digital economy, It is predicted that in the next 30 years internet based firms will account for over 80 per cent of global business.

in addition to attracting FDIs, a major component of the economy needs to be Malaysia’s own home grown MMNCs. The past few decades have been that of importing capital by inviting foreign MNCs. Malaysia should continue to attract FDIs while simultaneously export its capital in the form of Malaysian MNCs. The time has now come for Malaysian companies to compete in the global market and provide the fuel to continue the sustained growth of the Malaysian economy.

The trend over thousands of years has been towards greater connectivity and integration between nations and peoples. The nature of the economy of the future is going to be global and MMNCs can play a key role in assuring Malaysia has a leading place in the globalised economy.

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AWARDS

Winners of 13th annual Islamic Business & Finance Awards revealed THE AWARDS DESIGNED TO HIGHLIGHT, ENCOURAGE AND REWARD THE EXCEPTIONAL PERFORMANCE AND GROWTH OF THE INTERNATIONAL ISLAMIC BUSINESS AND FINANCE COMMUNITY

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he winners of the 13th Islamic Business & Finance Awards were announced at a gala dinner held at Emirates Towers Hotel, Dubai on Thursday, 6 December 2018, attended by more than 200 Islamic bankers and financiers from around the world. A total of nearly 8,000 votes were cast across 34 voted-for categories in the online poll held on www. cpifinancial.net, in addition to two categories based purely on results and three individual Awards that were chosen by an expert panel of judges.

The top Award, for Best Islamic Bank, once again went to Dubai Islamic Bank (DIB), based on analysis of the bank’s audited financial statements and DIB's unique contributions to the Islamic economy. The report details exemplary performance across all categories, including the greatest change in assets across all banks in the industry.

DIB’s GCEO, Dr. Adnan Chilwan, was named Islamic Banker of the Year for his outstanding contributions towards DIB’s growth, and his role in fostering advancements in the Islamic finance industry. In addition, DIB was named Best Islamic Bank, Best Islamic Retail Bank, Best Islamic Corporate Bank, Best Islamic Home Finance, and Best Sukuk Arranger in the region.

“We are incredibly grateful to be honored, once again, with these prestigious awards and the industry recognition that they carry.” commented Dr. Chilwan on the occasion. “It is always heartening and encouraging when our efforts in building a high-performing bank are acknowledged by the fraternity. We stand proud today of the

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leading position and reputation we enjoy in the local and global markets and remain steadfast in progressing to even greater heights.”

“I am personally delighted to receive the Islamic Banker of the Year award again this year,” he added. “It is a huge honor and I aim to continue my individual efforts whilst working collectively with those around me further the growth and progress of Islamic finance as it transforms into a global norm.”

WILLIAM MULLALLY, Editor, Islamic Business & Finance; WALEED AL AWADHI, Boardmember, CPI Financial; DR. ADNAN CHILWAN, GCEO, DIB; STEVE LEE, CEO, CPI Financial

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AWARDS

A FULL LIST OF THE ISLAMIC BUSINESS & FINANCE AWARDS 2018 WINNERS FOLLOWS:

WILLIAM MULLALLY, Editor, Islamic Business & Finance.

Steve Bertamini, CEO, Al Rajhi Bank, was also present to collect both the institution’s award for Best Islamic Bank – KSA and the individual award of Islamic Banker of the Year – KSA, following the bank’s remarkable achievements and strong performance, as well as it’s leadership role in the Islamic finance community.

The Islamic Business & Finance Awards programme, supported by the Dubai International Financial Centre, once again honoured winners from the Middle East and Africa. It is designed to highlight, encourage and reward the exceptional performance and growth of the international Islamic business and finance community.

“Islamic finance continues its global expansion, entering more markets and raising awareness about its unique value proposition every year. We at Islamic Business & Finance are proud to honor the thought leaders, innovators and pillars of the Islamic finance community, as well as to provide a platform for the industry’s top professionals to choose who they believe to be the true top contributors to Islamic finance’s present, and future,” said William Mullally, Editor, Islamic Business & Finance.

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Fastest Growing Islamic Bank - KSA

Alinma Bank

Fastest Growing Islamic Bank - Bahrain

Bahrain Islamic Bank

Fastest Growing Islamic Bank - UAE

Ajman Bank

Fastest Growing Islamic Bank

Warba Bank

Best CSR in Islamic Banking - Syria

Al Baraka Bank Syria

Best Branding - Kuwait

Kuwait International Bank

Best HR Program - KSA

The National Commercial Bank

Innovation in Islamic Banking

Mashreq Al Islami

Best SME Innovation

Noor Bank

Best Islamic Fintech Company

Eiger Trading Advisors

Best Islamic Core Banking Transformation

Emirates Islamic with Infosys Finacle

Best Islamic Window - UAE

NBF Islamic

Best Humanitarian Initiative

Islamic Solidarity Fund for Development (ISFD)

Best Customer Loyalty Programme - KSA

The National Commercial Bank

Best Sukuk Arranger

Dubai Islamic Bank

Best Asset Manager

Alkhabeer Capital

Best Islamic Investment Fund

ADCB Asset Management GCC Islamic

Best Investment Bank Middle East

GFH Financial Group

Best Islamic Home Finance

Dubai Islamic Bank

Best REIT - MENA

Emirates REIT (CEIC) Limited

Best Premium Banking - Kuwait

Ahli United Bank Kuwait

Best Islamic Corporate Bank

Dubai Islamic Bank

Best Corporate Advisory - Kuwait

Warba Bank

Best Corporate Advisory - KSA

The National Commercial Bank

Best SME Bank - Egypt

ADIB Egypt

Best SME Bank

Noor Bank

Best Islamic Credit Card - KSA

The National Commercial Bank

Best Islamic Retail Bank - Egypt

ADIB Egypt

Best Islamic Retail Bank

Dubai Islamic Bank

Best Islamic Bank - Africa

Faisal Islamic Bank

Best Islamic Bank – Syria

Al Baraka Bank Syria

Best Islamic Bank - Lebanon

Al Baraka Bank Lebanon

Best Islamic Bank - Bahrain

GFH Financial Group

Best Islamic Bank - Kuwait

Ahli United Bank Kuwait

Best Islamic Bank - KSA

Al Rajhi Bank

Best Islamic Bank

Dubai Islamic Bank

Islamic Banker of the Year - Kuwait

Tareq Muhmood, Senior Deputy Chief Executive Office, Ahli United Bank Kuwait

Islamic Banker of the Year - KSA

Steve Bertamini, Chief Executive Officer, Al Rajhi Bank

Islamic Banker of the Year

Dr. Adnan Chilwan, Group Chief Executive Officer, Dubai Islamic Bank

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AWARDS

Islamic Business & Finance Southeast Asia Awards return to Kuala Lumpur THIS YEAR’S AWARDS WERE ONCE AGAIN ANNOUNCED AT A GALA DINNER AT THE INTERCONTINENTAL KUALA LUMPUR, MALAYSIA

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AWARDS

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he winners of the second Islamic Business & Finance Southeast Asia Awards were announced at a gala dinner held at the InterContinental Kuala Lumpur, Malaysia on Tuesday, 4 December 2018, attended by more than 60 Islamic bankers and financiers from around the region. A total of nearly 5,000 votes were cast across 28 voted-for categories in an online poll held on www.cpifinancial.net. Two categories, Best Islamic Bank and Fastest Growing Islamic Bank, were chosen based on analysis by CPI Financial.

In addition, an expert panel named Tan Sri Dr. Zeti Akhtar Aziz, former Governor, Bank Negara Malaysia, winner of the Lifetime Achievement Award - Malaysia. Dr. Zeti was the Governor of Malaysia’s central bank from 2000 to 2016, and is credited for her invaluable support for Islamic finance, helping to make Malaysia one of the leading markets for Islamic finance in the world.

The top Award, for Best Islamic Bank, went to Maybank Islamic. Maybank Islamic also took home the Awards for Best Digital Bank, Best Retail Bank – Malaysia, and Best Investment Product.

The Islamic Business & Finance Awards programme, supported by the Dubai International Financial Centre, honours winners from across the industry, encourage and reward the exceptional performance and growth of the international Islamic business and finance community.

“Islamic Business & Finance was proud to bring our esteemed Awards programme to Southeast Asia for the second year, in order to celebrate the excellence that is found across the Islamic finance sector in Malaysia, Indonesia, and the broader region. Our Awards, as always, are a reflection of how the

A FULL LIST OF THE ISLAMIC BUSINESS & FINANCE AWARDS 2018 WINNERS FOLLOWS: Best Islamic Bank

Maybank Islamic

Fastest Growing Islamic Bank

CIMB Islamic

Best Digital Bank

Maybank Islamic

Best Corporate Bank

RHB Islamic

Best Commercial Bank - Malaysia

OCBC Al-Amin

Best Commercial Bank - Indonesia

Bank BNI Syariah

Best Retail Bank - Malaysia

Maybank Islamic

Best Retail Bank - Indonesia

Bank Rakyat Indonesia Syariah

Best SME Bank

Bank Rakyat

Best Investment Bank

CIMB Islamic

Best Investment Product

Maybank Islamic

Best Asset Manager

CIMB-Principal Islamic Asset Management

Best Ratings Agency

RAM Rating Services

Best Syariah Advisory Service

Amanie Advisors

Best Sustainability

Bank Islam

Best Law Firm

Shook Lin & Bok

Best Islamic Fintech Company

Eiger Trading Advisors

Best Training Institute

INCEIF

Best Family Takaful

AmMetLife Takaful Berhad

Best Takaful Operator - Malaysia

Etiqa

Best Takaful Operator - Indonesia

Takaful Indonesia

Best BancaTakaful Operator

Prudential BSN Takaful

Best ReTakaful Operator

Munich RE

Best Sukuk Arranger

CIMB Islamic

Best ESG Investment Initiative

Saturna

Best Retail Banking Product

KFH Malaysia

Best CSR in Islamic Banking

KFH Malaysia

Best Islamic Banking Website

KFH Malaysia

Innovation in Digital Banking

Standard Chartered Saadiq

Lifetime Achievement Award – Malaysia

Tan Sri Dr. Zeti Akhtar Aziz, Former Governor, Bank Negara Malaysia

industry views the institutions leading the way through innovation and dedication to the true values of Islamic finance. Though 2018 was a challenging year both in the region and across the world, these institutions continue to shine a bright light forward.

As technology continues to transform the industry, we are excited to see what the Southeast Asian Islamic finance community accomplishes in 2019,” said William Mullally, Editor, Islamic Business & Finance.

www.islamicbusinessandfinance.net

WILLIAM MULLALLY, Editor, Islamic Business & Finance

ISSUE 112 | Islamic Business & Finance

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ADVERTORIAL

ADIB - Egypt continues to grow and influence IN 2018, ABU DHABI ISLAMIC BANK EGYPT (ADIB - EGYPT), A LEADING, FULLY SHARI’AH-COMPLIANT UNIVERSAL BANK, WAS RECOGNISED

BY GLOBAL FINANCE AS ‘BEST ISLAMIC FINANCIAL INSTITUTION’. DRIVEN BY THE EFFORTS OF ITS EXPERT TEAM, THE BANK CONTINUES TO BOLSTER ITS SUCCESS AS A LEADING AND INNOVATIVE FINANCIAL INSTITUTION

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DIB - Egypt is committed to enhancing its Sharia-compliant products and services to cater to an even wider segment of corporate, retail and SME clients; while its subsidiaries—ADIB Capital, ADIB Lease and ADIB Invest—concurrently serve different and vital marketsegments. ADIB - Egypt also plans to continue investing in its digital platform offering both retail and corporate customers an unmatched banking experience.

With the improvement in economic indicators, including the fall in inflation and currency stabilisation, the market is once again on the path to healthy growth, creating attractive investment opportunities. To maximise the benefits of better economic conditions and drive growth in Egypt’s financial industry, ADIB - Egypt is focused on tackling the persistent challenge of a large unbanked population.

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ADVERTORIAL

ADIB - Egypt continually optimises its resources by strategically relocating branches to serve its growing customers, including critical segments.

The bank now offers new account options free of charges or administrative fees, and with no minimum balance. Since the launch of its operations in Egypt, ADIB has been at the forefront of financial inclusion—taking active part in the Central Bank of Egypt’s (CBE) directives to enhance access to banking and finance, marked by the dedicated Financial Inclusion Week initiative held in 2017 and 2018.

Today, widening financial access is a key part of ADIB - Egypt’s strategy to drive overall sector and economic growth as well as expanding its client base. In addition to its existing network spanning more than 70 branches across Egypt. ADIB - Egypt continually optimises its resources by strategically relocating branches to serve its growing customers, including critical segments.

ADIB - Egypt’s accomplishments have extended beyond the substantial growth in its performance, strong capitalisation and liquidity. A pioneer of microfinance in Egypt, ADIB recognises the transformational potential of extending finance to critical population segments lacking such opportunities, thereby catalysing economic empowerment and financial inclusion. The bank opens branches in areas where the population can benefit from micro-financing, helping them with the financial and educational resources they need to set up their businesses. Currently, ADIB - Egypt focuses its microfinance strategies on commercial, handicraft, service and production sectors.

Meanwhile in a world where Fintech is rapidly expanding, Egyptian businesses are on the quest to enhance their digital technologies to cater to a growing clientele of millennials. To tap into this vital market, ADIB - Egypt is enhancing its online platform to provide its customers with quicker and easier access to full-fledged banking services, including savings, transfers and payments.

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In view of the major strides Egypt has made in its economic reform plans and the improving market sentiment, the future looks promising. This outlook is further strengthened by the vast opportunities created by the huge and diverse national mega projects underway. ADIB - Egypt is committed to play a growing role on diverse financial fronts, offering exceptional Sharia-compliant services, introducing world-class products, and maintaining the excellence of customer experience at the core of its endeavors.

ADIB - Egypt’s performance continues to garner global and regional recognition. ADIB - Egypt was also awarded ‘Best Islamic Retail Bank’ and ‘Best Islamic SME Bank’ in 2017 by Islamic Business and Finance magazine. Such high-level recognition comes on the back of ADIB - Egypt’s continuous efforts and builds on previous success achieved in 2017 when the bank was recognised by Banker Africa as ‘Best Islamic Bank’, ‘Best Islamic SME Bank’ and ‘Best Islamic Retail Bank’ in North Africa. In 2017 ADIB - Egypt ranked among the top 50 companies on the Egyptian Exchange in Forbes Middle East’s study, and was awarded the ‘Musharakah’ award by IFN for the milestone deal it has facilitated for AlMarasem Real Estate Development.

The prestigious awards garnered by ADIB - Egypt were a fitting culmination of the entire team’s exceptional performance, catalysing strong financial results and bolstering prospects of ongoing growth.

Winner at the Islamic Business & Finance Awards 2018 - Best Islamic Retail Bank (Egypt) - Best Islamic SME Bank (Egypt)

ISSUE 112 | Islamic Business & Finance

39

An Islamic Business & Finance Special Report

TOP PERFORMERS The institutions and individuals making the difference in Shari'ah-compliant financing

LEADERS IN ISLAMIC FINANCE

BY THE NUMBERS‌

T

William Mullally

42

Leaders In Islamic Finance 2018

he Islamic finance industry has grown more far reaching than ever before. Next year, we will see an Islamic bank open for the first time in new markets across the world, after so much headway was made in 2018.

This end of year issue is special, because our team at CPI Financial has crunched all available numbers from around the world from banks that publicly report and have come up with rankings and data for all Islamic financial institutions across the world. We have included all of that data here for you to peruse.

The numbers tell an interesting story. In some respects, markets that we do not often discuss, such as Australia, have come to the fore here, as one institution, MCCA Ltd. has grown at an incredible rate, pushing it to the top of our rankings because of that performance. Though there are much larger institutions whose growth may be smaller but more notable, we felt that it was important to note even smaller institutions in more nascent areas of the Islamic finance world that were making impressive gains.

Though not every institution grew, there was strong growth across the world overall, which has become a regular development in the world of Islamic finance. We hope you find this data useful, and we look forward to seeing how things develop in 2019.

LEADERS IN ISLAMIC FINANCE

METHODOLOGY How we’ve ranked the region’s top financial institutions SCOPE

O

ur analysis covers financial institutions in Middle Eastern countries, excluding Qatar, as well as institutions in South Asia, Far East Asia, Africa, and Europe.

SCORING SYSTEM

We have adopted a rigorous evaluation process to rank the best financial institutions in the Islamic finance world and have adopted various financial parameters to evaluate them based on different weightages. The financial institutions that have been ranked the best institutions or the fastest growing have cumulatively scored as the best based on respective parameters for each ranking.

Best Bank: points are given to each bank out of 100 based on eight different parameters with their respective weightages mentioned below: PARAMETER

POINTS

Total Assets

20

Net Profit Margin

20

Revenue

10

Net Profit

10

Return on Assets

10

WEIGHTAGES FOR DIFFERENT PARAMETERS—AND WHY WE USETHEM

Total Assets, Revenues and Net Profit: The size of the bank is a very important consideration.

These are based entirely on size and have a combined weightage of 40 points out of 100.

Net Profit Margin: Weightage of 20 points is given to net profit margin as this demonstrates how cost efficient the bank is in generating the amount of revenues. The benchmark used in this regard is 20 per cent.

Return on Assets and Assets Turnover: With a combined weightage of 20 points for these two parameters, these demonstrate how well the bank has been utilising its assets to generate revenues and profitability.

Return on Equity and Debt to Equity Ratios: The two ratios with a combined weightage of 20 points demonstrate how well the bank has been using the shareholders’ equity and the funds of the depositors (liabilities for the bank). Therefore, a bank with higher debt to equity ratio will score higher than other banks that have a greater proportion of their capital as shareholders’ equity.

FASTEST GROWING BANK

Points are given to each bank out of 70, based on four different parameters. Namely: PARAMETER

POINTS

Assets Percentage Change

20 20

Return on Equity

10

Liabilities Percentage Change

Assets Turnover

10

Revenues Percentage Change

20

10

Net Profit Percentage Change

10

Total

70

Debt to Equity Ratio Total

100

Out of 92, the top bank based on any parameter scores the full points for that parameter and every other institution is scored relative to that.

Consideration has been given to an institution’s size and efficiency and the cumulative score, based on all parameters, is calculated to rank the institution.

The growth of the bank is considered relative to its own size; therefore, we use the percentages for assets, liabilities, revenues and net profit growth instead of the growth in dollar ($) size.

The rankings and data provided are based on a different time frame fom the Islamic Business & Finance Awards, which also incorporates additional criteria, methodology and voted-for categories.

www.islamicbusinessandfinance.net

43

LEADERS IN ISLAMIC FINANCE

TOP ISLAMIC FINANCIAL INSTITUTIONS WORLDWIDE

44

INSTITUTION NAME

COUNTRY

Al Rajhi Bank

Saudi Arabia

RANK 1

Dubai Islamic Bank

United Arab Emirates

2

Habib Bank Limited - Islamic

Pakistan

3

Maybank Islamic Berhad

Malaysia

4

MCCA Ltd

Australia

5

Kuwait Finance House

Kuwait

6

Abu Dhabi Islamic Bank

United Arab Emirates

7

Bank Rakyat (Bank Kerjasama Rakyat Malaysia Berhad)

Malaysia

8

Alinma Bank

Saudi Arabia

9

Reef Real Estate Finance Co

Bahrain

10

Faisal Islamic Bank Egypt

Egypt

11

First Habib Bank Modaraba

Pakistan

12

ABC Islamic Bank

Bahrain

13

RHB Bank Berhad

Malaysia

14

Bank AlBilad

Saudi Arabia

15

Social Islami Bank (SIBL)

Bangladesh

16

GFH Financial Group BSC

Bahrain

17

Kuveyt Turk

Turkey

18

Public Islamic Bank Berhad

Malaysia

19

BIMB Holdings

Malaysia

20

Bank AlJazira

Saudi Arabia

21

CIMB Islamic Bank Berhad

Malaysia

22

OCBC Al-Amin Bank Berhad

Malaysia

23

Hong Leong Islamic Bank Berhad

Malaysia

24

Boubyan Bank

Kuwait

25

Emirates Islamic

United Arab Emirates

26

PT Bank Aceh Syariah

Indonesia

27

Citi Islamic Investment Bank

Bahrain

28

Ahli United Bank - Kuwait

Kuwait

29

Meezan Bank Limited

Pakistan

30

PT Bank OCBC

Indonesia

31

KAF Investment Bank Berhad (Islamic Banking)

Malaysia

32

First Energy Bank

Bahrain

33

Sharjah Islamic Bank

United Arab Emirates

34

PT Bank Kalbar

Indonesia

35

Bank Islam Brunei Darussalam Berhad (BIBD)

Brunei

36

United Bank Limited - Islamic

Pakistan

37

Alliance Islamic Bank Berhad

Malaysia

38

Export Import Bank of Bangladesh

Bangladesh

39

Al-Arafah Islami Bank

Bangladesh

40

Mashreq Al-Islami Finance Company

United Arab Emirates

41

Turkiye Finans

Turkey

42

First Security Islami Bank

Bangladesh

43

1st Punjab Modaraba

Pakistan

44

Jordan Islamic Bank

Jordan

45

Leaders In Islamic Finance 2018

LEADERS IN ISLAMIC FINANCE

INSTITUTION NAME

COUNTRY

RANK

Islami Bank Bangladesh (IBBL)

Bangladesh

46

Islamic International Arab Bank

Jordan

47

Inovest

Bahrain

48

Bank Islami Pakistan Limited

Pakistan

49

Noor Bank

United Arab Emirates

50

Gulf African Bank

Kenya

51

Bank Muamalat Malaysia Berhad

Malaysia

52

Kuwait International Bank

Kuwait

53

Agrobank Islamic Banking

Malaysia

54

Al Salam Bank - Bahrain

Bahrain

55

Al Rayan Bank

UK

56

Shahjalal Islami Bank

Bangladesh

57

Ajman Bank

United Arab Emirates

58

Palestine Islamic Bank

Palestine

59

HSBC Amanah Malaysia Berhad

Malaysia

60

Bosna Bank International

Bosna

61

Banque Zitouna

Tunisia

62

Sepah Bank

Iran

63

First Community Bank

Kenya

64

PT Bank Mega Syariah Indonesia

Indonesia

65

Warba Bank

Kuwait

66

PT Bank Syariah Mandiri

Indonesia

67

Bahrain Islamic Bank

Bahrain

68

Al Hilal Bank

United Arab Emirates

69

Amana Bank Limited

Sri Lanka

70

Standard Chartered Saadiq Berhad

Malaysia

71

Amana Bank Tanzania

Tanzania

72

Arab Islamic Bank

Palestine

73

Bank Nizwa

Oman

74

KASB Modaraba

Pakistan

75

Safwa Islamic Bank

Jordan

76

Jaiz Bank

Nigeria

77

Bank of London & The Middle East

UK

78

Ithmaar Bank

Bahrain

79

Bank Muamalat Indonesia

Indonesia

80

Kuwait Finance House - Malaysia

Malaysia

81

PT Bank Syariah Bukopin (BSB)

Indonesia

82

Khaleeji Commercial Bank

Bahrain

83

National Bank of Pakistan (Islamic Banking)

Pakistan

84

Al Baraka Islamic Bank

Bahrain

85

Asian Finance Bank Berhad

Malaysia

86

Alizz islamic bank

Oman

87

A'Ayan Real Estate Company

Kuwait

88

Gulf North Africa Holding Company

Kuwait

89

United Bank of Albania

Albania

90

First Fidelity Leasing Modaraba

Pakistan

91

ICB Islamic Bank

Bangladesh

92

www.islamicbusinessandfinance.net

45

LEADERS IN ISLAMIC FINANCE

FASTEST GROWING ISLAMIC FINANCIAL INSTITUTIONS WORLDWIDE

46

INSTITUTION NAME

COUNTRY

MCCA Ltd

Australia

1

Social Islami Bank (SIBL)

Bangladesh

2

Alizz islamic bank

Oman

3

Warba Bank

Kuwait

4

CIMB Islamic Bank Berhad

Malaysia

5

Bank Nizwa

Oman

6

PT Bank Aceh Syariah

Indonesia

7

United Bank Limited - Islamic

Pakistan

8

Sepah Bank

Iran

9

RHB Bank Berhad

Malaysia

10

Bosna Bank International

Bosna

11

Maybank Islamic Berhad

Malaysia

12

Hong Leong Islamic Bank Berhad

Malaysia

13

National Bank of Pakistan (Islamic Banking)

Pakistan

14

Habib Bank Limited - Islamic

Pakistan

15

Agrobank Islamic Banking

Malaysia

16

Palestine Islamic Bank

Palestine

17

Bank Rakyat (Bank Kerjasama Rakyat Malaysia Berhad)

Malaysia

18

OCBC Al-Amin Bank Berhad

Malaysia

19

HSBC Amanah Malaysia Berhad

Malaysia

20

Reef Real Estate Finance Co

Bahrain

21

Banque Zitouna

Tunisia

22

BIMB Holdings

Malaysia

23

Jaiz Bank

Nigeria

24

Alliance Islamic Bank Berhad

Malaysia

25

Public Islamic Bank Berhad

Malaysia

26

Bank Muamalat Malaysia Berhad

Malaysia

27

Bahrain Islamic Bank

Bahrain

28

Alinma Bank

Saudi Arabia

29

KAF Investment Bank Berhad (Islamic Banking)

Malaysia

30

Amana Bank Limited

Sri Lanka

31

Bank AlBilad

Saudi Arabia

32

Bank Islam Brunei Darussalam Berhad (BIBD)

Brunei

33

First Community Bank

Kenya

34

PT Bank OCBC

Indonesia

35

Al Rayan Bank

UK

36

Arab Islamic Bank

Palestine

37

Bank Islami Pakistan Limited

Pakistan

38

First Energy Bank

Bahrain

39

Bank of London & The Middle East

UK

40

Dubai Islamic Bank

United Arab Emirates

41

Kuwait Finance House - Malaysia

Malaysia

42

Kuveyt Turk

Turkey

43

Islamic International Arab Bank

Jordan

44

Citi Islamic Investment Bank

Bahrain

45

Leaders In Islamic Finance 2018

RANK

LEADERS IN ISLAMIC FINANCE

FASTEST GROWING INSTITUTION MCCA Ltd 160% 140%

139.11%

137.73%

120% 100% 80% 60%

32.14%

40%

24.54%

20% 0% Assests

Liabilities

Revenues

Net Profits

PARAMETER

2016

2017

Assets

8,828

20,986

137.73%

Liabilities

8,546

20,434

139.11%

Revenues

3,017

3,986

32.14%

198

247

24.54%

Net Profits

% CHANGE

GROWTH OF ISLAMIC FINANCIAL INSTITUTIONS YoY 18%

15.68%

16% 14% 12%

10.59%

10.88%

10%

7.78%

8% 6% 4% 2% 0% Assests

PARAMETER

Liabilities

Revenues

Net Profits

2016

2017

% CHANGE

Assets

677,720,539

749,468,591

10.59%

Liabilities

580,218,256

643,341,414

10.88%

Revenues

25,760,810

27,765,719

7.78%

8,607,289

9,957,065

15.68%

Net Profits

www.islamicbusinessandfinance.net

47

LEADERS IN ISLAMIC FINANCE

TOP 50 ISLAMIC INSTITUTIONS BY REVENUES

48

INSTITUTION

COUNTRY

Al Rajhi Bank

Saudi Arabia

REVENUES (USD'000) 4,241,294

RANK 1

Kuwait Finance House

Kuwait

2,148,434

2

Dubai Islamic Bank

United Arab Emirates

2,093,156

3

Abu Dhabi Islamic Bank

United Arab Emirates

1,692,115

4

Alinma Bank

Saudi Arabia

1,166,122

5

Bank Rakyat (Bank Kerjasama Rakyat Malaysia Berhad)

Malaysia

926,450

6

Maybank Islamic Berhad

Malaysia

925,253

7

CIMB Islamic Bank Berhad

Malaysia

843,781

8

Sepah Bank

Iran

838,670

9

Bank AlBilad

Saudi Arabia

789,276

10

Bank AlJazira

Saudi Arabia

690,778

11

Emirates Islamic

United Arab Emirates

651,407

12

BIMB Holdings

Malaysia

625,041

13

Kuveyt Turk

Turkey

562,286

14

PT Bank OCBC

Indonesia

556,463

15

Noor Bank

United Arab Emirates

530,321

16

Turkiye Finans

Turkey

504,283

17

Islami Bank Bangladesh (IBBL)

Bangladesh

434,777

18

Social Islami Bank (SIBL)

Bangladesh

434,777

18

Sharjah Islamic Bank

United Arab Emirates

405,733

20

Al Hilal Bank

United Arab Emirates

380,045

21

Boubyan Bank

Kuwait

378,214

22

PT Bank Syariah Mandiri

Indonesia

362,145

23

Ahli United Bank - Kuwait

Kuwait

361,666

24

Bank Islam Brunei Darussalam Berhad (BIBD)

Brunei

249,452

25

Meezan Bank Limited

Pakistan

245,085

26

Ithmaar Bank

Bahrain

237,231

27

Public Islamic Bank Berhad

Malaysia

233,653

28

GFH Financial Group BSC

Bahrain

211,648

29

Jordan Islamic Bank

Jordan

207,293

30

RHB Bank Berhad

Malaysia

198,371

31

Kuwait International Bank

Kuwait

193,527

32

Faisal Islamic Bank Egypt

Egypt

189,486

33

Al Salam Bank - Bahrain

Bahrain

167,489

34

Agrobank Islamic Banking

Malaysia

158,577

35

Ajman Bank

United Arab Emirates

154,036

36

Al-Arafah Islami Bank

Bangladesh

148,200

37

Bank Muamalat Malaysia Berhad

Malaysia

135,186

38

Export Import Bank of Bangladesh

Bangladesh

133,200

39

PT Bank Aceh Syariah

Indonesia

127,754

40

Bank Muamalat Indonesia

Indonesia

127,088

41

Hong Leong Islamic Bank Berhad

Malaysia

123,006

42

First Security Islami Bank

Bangladesh

119,937

43

Warba Bank

Kuwait

114,410

44

Bahrain Islamic Bank

Bahrain

114,112

45

OCBC Al-Amin Bank Berhad

Malaysia

108,959

46

Islamic International Arab Bank

Jordan

106,788

47

PT Bank Kalbar

Indonesia

92,121

48

Shahjalal Islami Bank

Bangladesh

88,283

49

HSBC Amanah Malaysia Berhad

Malaysia

85,285

50

Leaders In Islamic Finance 2018

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LEADERS IN ISLAMIC FINANCE

TOP 50 ISLAMIC INSTITUTIONS BY ASSETS

50

INSTITUTION

COUNTRY

ASSETS (USD'000)

RANK

Al Rajhi Bank

Saudi Arabia

91,497,741

1

Dubai Islamic Bank

United Arab Emirates

56,456,640

2

Kuwait Finance House

Kuwait

52,283,075

3

Maybank Islamic Berhad

Malaysia

50,053,157

4

Abu Dhabi Islamic Bank

United Arab Emirates

33,567,760

5

Alinma Bank

Saudi Arabia

30,668,018

6

Sepah Bank

Iran

28,604,322

7

Bank Rakyat (Bank Kerjasama Rakyat Malaysia Berhad)

Malaysia

25,990,667

8

CIMB Islamic Bank Berhad

Malaysia

21,079,063

9

Bank AlJazira

Saudi Arabia

18,209,988

10

Bank AlBilad

Saudi Arabia

16,855,380

11

Emirates Islamic

United Arab Emirates

16,849,929

12

BIMB Holdings

Malaysia

16,260,786

13

Kuveyt Turk

Turkey

15,049,820

14

Public Islamic Bank Berhad

Malaysia

14,119,762

15

RHB Bank Berhad

Malaysia

13,772,361

16

Al Hilal Bank

United Arab Emirates

12,195,489

17

Boubyan Bank

Kuwait

11,959,024

18

Noor Bank

United Arab Emirates

11,618,390

19

PT Bank OCBC

Indonesia

11,330,799

20

Ahli United Bank - Kuwait

Kuwait

11,040,901

21

Islami Bank Bangladesh (IBBL)

Bangladesh

10,870,758

22

Sharjah Islamic Bank

United Arab Emirates

10,425,737

23

Turkiye Finans

Turkey

10,296,369

24

Ithmaar Bank

Bahrain

8,623,455

25

Bank Islam Brunei Darussalam Berhad (BIBD)

Brunei

7,172,118

26

Meezan Bank Limited

Pakistan

7,077,135

27

Hong Leong Islamic Bank Berhad

Malaysia

7,033,773

28

PT Bank Syariah Mandiri

Indonesia

6,479,822

29

Jordan Islamic Bank

Jordan

5,954,328

30

Bank Muamalat Malaysia Berhad

Malaysia

5,815,291

31

Kuwait International Bank

Kuwait

5,771,205

32

Ajman Bank

United Arab Emirates

5,453,412

33

Warba Bank

Kuwait

5,340,488

34

Faisal Islamic Bank Egypt

Egypt

4,635,529

35

Bank Muamalat Indonesia

Indonesia

4,546,124

36

HSBC Amanah Malaysia Berhad

Malaysia

4,393,845

37

Al Salam Bank - Bahrain

Bahrain

4,226,755

38

First Security Islami Bank

Bangladesh

4,162,777

39

GFH Financial Group BSC

Bahrain

4,110,457

40

Export Import Bank of Bangladesh

Bangladesh

4,034,759

41

OCBC Al-Amin Bank Berhad

Malaysia

3,923,607

42

Al-Arafah Islami Bank

Bangladesh

3,857,882

43

Agrobank Islamic Banking

Malaysia

3,759,242

44

Social Islami Bank (SIBL)

Bangladesh

3,338,695

45

Bahrain Islamic Bank

Bahrain

3,267,678

46

Islamic International Arab Bank

Jordan

2,894,329

47

Shahjalal Islami Bank

Bangladesh

2,549,684

48

Alliance Islamic Bank Berhad

Malaysia

2,445,460

49

Al Rayan Bank

UK

2,439,276

50

Leaders In Islamic Finance 2018

LEADERS IN ISLAMIC FINANCE

TOP 50 ISLAMIC INSTITUTIONS BY NET PROFITS INSTITUTION

COUNTRY

Al Rajhi Bank

Saudi Arabia

NET PROFITS (USD'000) 2,432,194

RANK 1

Dubai Islamic Bank

United Arab Emirates

1,226,298

2

Kuwait Finance House

Kuwait

645,045

3

Abu Dhabi Islamic Bank

United Arab Emirates

626,310

4

Alinma Bank

Saudi Arabia

536,362

5

Bank Rakyat (Bank Kerjasama Rakyat Malaysia Berhad)

Malaysia

462,958

6

Maybank Islamic Berhad

Malaysia

429,376

7

Bank AlBilad

Saudi Arabia

249,645

8

Bank AlJazira

Saudi Arabia

228,670

9

Emirates Islamic

United Arab Emirates

191,150

10

Kuveyt Turk

Turkey

177,572

11

BIMB Holdings

Malaysia

173,925

12

PT Bank OCBC

Indonesia

160,325

13

CIMB Islamic Bank Berhad

Malaysia

158,152

14

Boubyan Bank

Kuwait

143,590

15

Ahli United Bank - Kuwait

Kuwait

133,925

16

Sharjah Islamic Bank

United Arab Emirates

130,068

17

GFH Financial Group BSC

Bahrain

103,188

18

Public Islamic Bank Berhad

Malaysia

101,463

19

Noor Bank

United Arab Emirates

100,991

20

Turkiye Finans

Turkey

98,893

21

Faisal Islamic Bank Egypt

Egypt

96,676

22

RHB Bank Berhad

Malaysia

90,813

23

Bank Islam Brunei Darussalam Berhad (BIBD)

Brunei

86,877

24

Jordan Islamic Bank

Jordan

76,360

25

Islami Bank Bangladesh (IBBL)

Bangladesh

59,461

26

Meezan Bank Limited

Pakistan

57,153

27

Hong Leong Islamic Bank Berhad

Malaysia

55,109

28

Kuwait International Bank

Kuwait

53,593

29

Social Islami Bank (SIBL)

Bangladesh

51,848

30

Al Salam Bank - Bahrain

Bahrain

48,019

31

OCBC Al-Amin Bank Berhad

Malaysia

47,379

32

Agrobank Islamic Banking

Malaysia

42,677

33

Islamic International Arab Bank

Jordan

40,617

34

Export Import Bank of Bangladesh

Bangladesh

39,858

35

Al Hilal Bank

United Arab Emirates

38,307

36

Al-Arafah Islami Bank

Bangladesh

38,300

37

Bank Muamalat Malaysia Berhad

Malaysia

37,054

38

Habib Bank Limited - Islamic

Pakistan

36,506

39

Ajman Bank

United Arab Emirates

36,110

40

PT Bank Aceh Syariah

Indonesia

31,948

41

Bahrain Islamic Bank

Bahrain

26,971

42

PT Bank Syariah Mandiri

Indonesia

26,907

43

KAF Investment Bank Berhad (Islamic Banking)

Malaysia

25,940

44

ABC Islamic Bank

Bahrain

25,569

45

PT Bank Kalbar

Indonesia

24,921

46

HSBC Amanah Malaysia Berhad

Malaysia

21,352

47

Warba Bank

Kuwait

20,386

48

First Energy Bank

Bahrain

20,143

49

Alliance Islamic Bank Berhad

Malaysia

18,946

50

www.islamicbusinessandfinance.net

51

LEADERS IN ISLAMIC FINANCE

TOP 50 ISLAMIC INSTITUTIONS BY ASSETS

52

INSTITUTION

COUNTRY

ASSETS (USD'000)

RANK

Al Rajhi Bank

Saudi Arabia

91,497,741

1

Dubai Islamic Bank

United Arab Emirates

56,456,640

2

Kuwait Finance House

Kuwait

52,283,075

3

Maybank Islamic Berhad

Malaysia

50,053,157

4

Abu Dhabi Islamic Bank

United Arab Emirates

33,567,760

5

Alinma Bank

Saudi Arabia

30,668,018

6

Sepah Bank

Iran

28,604,322

7

Bank Rakyat (Bank Kerjasama Rakyat Malaysia Berhad)

Malaysia

25,990,667

8

CIMB Islamic Bank Berhad

Malaysia

21,079,063

9

Bank AlJazira

Saudi Arabia

18,209,988

10

Bank AlBilad

Saudi Arabia

16,855,380

11

Emirates Islamic

United Arab Emirates

16,849,929

12

BIMB Holdings

Malaysia

16,260,786

13

Kuveyt Turk

Turkey

15,049,820

14

Public Islamic Bank Berhad

Malaysia

14,119,762

15

RHB Bank Berhad

Malaysia

13,772,361

16

Al Hilal Bank

United Arab Emirates

12,195,489

17

Boubyan Bank

Kuwait

11,959,024

18

Noor Bank

United Arab Emirates

11,618,390

19

PT Bank OCBC

Indonesia

11,330,799

20

Ahli United Bank - Kuwait

Kuwait

11,040,901

21

Islami Bank Bangladesh (IBBL)

Bangladesh

10,870,758

22

Sharjah Islamic Bank

United Arab Emirates

10,425,737

23

Turkiye Finans

Turkey

10,296,369

24

Ithmaar Bank

Bahrain

8,623,455

25

Bank Islam Brunei Darussalam Berhad (BIBD)

Brunei

7,172,118

26

Meezan Bank Limited

Pakistan

7,077,135

27

Hong Leong Islamic Bank Berhad

Malaysia

7,033,773

28

PT Bank Syariah Mandiri

Indonesia

6,479,822

29

Jordan Islamic Bank

Jordan

5,954,328

30

Bank Muamalat Malaysia Berhad

Malaysia

5,815,291

31

Kuwait International Bank

Kuwait

5,771,205

32

Ajman Bank

United Arab Emirates

5,453,412

33

Warba Bank

Kuwait

5,340,488

34

Faisal Islamic Bank Egypt

Egypt

4,635,529

35

Bank Muamalat Indonesia

Indonesia

4,546,124

36

HSBC Amanah Malaysia Berhad

Malaysia

4,393,845

37

Al Salam Bank - Bahrain

Bahrain

4,226,755

38

First Security Islami Bank

Bangladesh

4,162,777

39

GFH Financial Group BSC

Bahrain

4,110,457

40

Export Import Bank of Bangladesh

Bangladesh

4,034,759

41

OCBC Al-Amin Bank Berhad

Malaysia

3,923,607

42

Al-Arafah Islami Bank

Bangladesh

3,857,882

43

Agrobank Islamic Banking

Malaysia

3,759,242

44

Social Islami Bank (SIBL)

Bangladesh

3,338,695

45

Bahrain Islamic Bank

Bahrain

3,267,678

46

Islamic International Arab Bank

Jordan

2,894,329

47

Shahjalal Islami Bank

Bangladesh

2,549,684

48

Alliance Islamic Bank Berhad

Malaysia

2,445,460

49

Al Rayan Bank

UK

2,439,276

50

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LEADERS IN ISLAMIC FINANCE

SOUTH ASIA

GROWTH OF ISLAMIC FINANCIAL INSTITUTIONS IN SOUTH ASIA 35%

29.80%

30% 25% 20% 15%

15.15% 11.60%

12.15%

Assests

Liabilities

10% 5% 0%

PARAMETER

Net Profits

2016

2017

Assets

36,995,999

41,285,843

11.60%

Liabilities

34,778,443

39,002,899

12.15%

Revenues

1,358,415

1,763,257

29.80%

332,032

15.15%

Net Profit

54

Revenues

288341.3886

Leaders In Islamic Finance 2018

% GROWTH

LEADERS IN ISLAMIC FINANCE

TOP ISLAMIC INSTITUTIONS IN SOUTH ASIA INSTITUTION

COUNTRY

RANK

ICB Islamic Bank

Bangladesh

1

First Fidelity Leasing Modaraba

Pakistan

2

National Bank of Pakistan (Islamic Banking)

Pakistan

3

KASB Modaraba

Pakistan

4

Amana Bank Limited

Sri Lanka

5

Shahjalal Islami Bank

Bangladesh

6

Bank Islami Pakistan Limited

Pakistan

7

Islami Bank Bangladesh (IBBL)

Bangladesh

8

1st Punjab Modaraba

Pakistan

First Security Islami Bank

Bangladesh

10

Al-Arafah Islami Bank

Bangladesh

11

Export Import Bank of Bangladesh

Bangladesh

12

United Bank Limited - Islamic

Pakistan

13

Meezan Bank Limited

Pakistan

14

Social Islami Bank (SIBL)

Bangladesh

15

First Habib Bank Modaraba

Pakistan

16

Habib Bank Limited - Islamic

Pakistan

17

9

FASTEST GROWING ISLAMIC INSTITUTIONS IN SOUTH ASIA INSTITUTION

COUNTRY

RANK

Social Islami Bank (SIBL)

Bangladesh

1

United Bank Limited - Islamic

Pakistan

2

National Bank of Pakistan (Islamic Banking)

Pakistan

3

Habib Bank Limited - Islamic

Pakistan

4

Amana Bank Limited

Sri Lanka

5

Bank Islami Pakistan Limited

Pakistan

6

Meezan Bank Limited

Pakistan

7

First Fidelity Leasing Modaraba

Pakistan

8

1st Punjab Modaraba

Pakistan

Islami Bank Bangladesh (IBBL)

Bangladesh

10

ICB Islamic Bank

Bangladesh

11

Export Import Bank of Bangladesh

Bangladesh

12

First Habib Bank Modaraba

Pakistan

13

First Security Islami Bank

Bangladesh

14

Al-Arafah Islami Bank

Bangladesh

15

Shahjalal Islami Bank

Bangladesh

16

KASB Modaraba

Pakistan

17

9

www.islamicbusinessandfinance.net

55

LEADERS IN ISLAMIC FINANCE

FAR EAST ASIA

GROWTH OF ISLAMIC FINANCIAL INSTITUTIONS IN FAR EAST ASIA 35.00%

29.79%

30.00% 25.00%

20.55%

20.82%

20.37%

Assests

Liabilities

Revenues

20.00% 15.00% 10.00% 5.00% 0.00%

PARAMETER

Net Profits

2016

2017

% GROWTH

Assets

173,434,540

209,083,865

20.55%

Liabilities

158,054,185

190,964,465

20.82%

Revenues

5,104,688

6,144,605

20.37%

Net Profit

1,548,861

2,010,338

29.79%

TOP ISLAMIC INSTITUTIONS IN FAR EAST ASIA

56

INSTITUTION

COUNTRY

Maybank Islamic Berhad

Malaysia

1

MCCA Ltd

Australia

2

Bank Rakyat (Bank Kerjasama Rakyat Malaysia Berhad)

Malaysia

3

RHB Bank Berhad

Malaysia

4

Public Islamic Bank Berhad

Malaysia

5

BIMB Holdings

Malaysia

6

CIMB Islamic Bank Berhad

Malaysia

7

OCBC Al-Amin Bank Berhad

Malaysia

8

Leaders In Islamic Finance 2018

RANK

LEADERS IN ISLAMIC FINANCE

Hong Leong Islamic Bank Berhad

Malaysia

9

PT Bank Aceh Syariah

Indonesia

10

PT Bank OCBC

Indonesia

11

KAF Investment Bank Berhad (Islamic Banking)

Malaysia

12

PT Bank Kalbar

Indonesia

13

Bank Islam Brunei Darussalam Berhad (BIBD)

Brunei

14

Alliance Islamic Bank Berhad

Malaysia

15

Bank Muamalat Malaysia Berhad

Malaysia

16

Agrobank Islamic Banking

Malaysia

17

HSBC Amanah Malaysia Berhad

Malaysia

18

PT Bank Mega Syariah Indonesia

Indonesia

19

PT Bank Syariah Mandiri

Indonesia

20

Standard Chartered Saadiq Berhad

Malaysia

21

Bank Muamalat Indonesia

Indonesia

22

Kuwait Finance House - Malaysia

Malaysia

23

PT Bank Syariah Bukopin (BSB)

Indonesia

24

Asian Finance Bank Berhad

Malaysia

25

FASTEST GROWING INSTITUTIONS IN FAR EAST ASIA INSTITUTION

COUNTRY

RANK

MCCA Ltd

Australia

1

CIMB Islamic Bank Berhad

Malaysia

2

PT Bank Aceh Syariah

Indonesia

3

RHB Bank Berhad

Malaysia

4

Maybank Islamic Berhad

Malaysia

5

Hong Leong Islamic Bank Berhad

Malaysia

6

Agrobank Islamic Banking

Malaysia

7

Bank Rakyat (Bank Kerjasama Rakyat Malaysia Berhad)

Malaysia

8

OCBC Al-Amin Bank Berhad

Malaysia

9

HSBC Amanah Malaysia Berhad

Malaysia

10

BIMB Holdings

Malaysia

11

Alliance Islamic Bank Berhad

Malaysia

12

Public Islamic Bank Berhad

Malaysia

13

Bank Muamalat Malaysia Berhad

Malaysia

14

KAF Investment Bank Berhad (Islamic Banking)

Malaysia

15

Bank Islam Brunei Darussalam Berhad (BIBD)

Brunei

16

PT Bank OCBC

Indonesia

17

Kuwait Finance House - Malaysia

Malaysia

18

PT Bank Kalbar

Indonesia

19

PT Bank Syariah Mandiri

Indonesia

20

Standard Chartered Saadiq Berhad

Malaysia

21

PT Bank Mega Syariah Indonesia

Indonesia

22

Bank Muamalat Indonesia

Indonesia

23

PT Bank Syariah Bukopin (BSB)

Indonesia

24

Asian Finance Bank Berhad

Malaysia

25

www.islamicbusinessandfinance.net

57

LEADERS IN ISLAMIC FINANCE

MIDDLE EAST

GROWTH OF ISLAMIC FINANCIAL INSTITUTIONS IN THE MIDDLE EAST 13.09%

14.00% 12.00% 10.00% 8.00%

6.59%

6.46%

6.00% 3.10%

4.00% 2.00% 0.00% Assests

PARAMETER

58

Liabilities

Revenues

Net Profits

2016

2017

% GROWTH

Assets

457,918,288

488,084,848

6.59%

Liabilities

379,247,259

403,754,927

6.46%

Revenues

18,851,905

19,435,650

3.10%

Net Profit

6,615,746

7,481,513

13.09%

Leaders In Islamic Finance 2018

LEADERS IN ISLAMIC FINANCE

TOP ISLAMIC INSTITUTIONS IN THE MIDDLE EAST INSTITUTION

COUNTRY

Al Rajhi Bank

Saudi Arabia

RANK 1

Dubai Islamic Bank

United Arab Emirates

2

Kuwait Finance House

Kuwait

3

Abu Dhabi Islamic Bank

United Arab Emirates

4

Alinma Bank

Saudi Arabia

5

Reef Real Estate Finance Co

Bahrain

6

ABC Islamic Bank

Bahrain

7

Bank AlBilad

Saudi Arabia

8

GFH Financial Group BSC

Bahrain

9

Kuveyt Turk

Turkey

10

Bank AlJazira

Saudi Arabia

11

Boubyan Bank

Kuwait

12

Emirates Islamic

United Arab Emirates

13

Citi Islamic Investment Bank

Bahrain

14

Ahli United Bank - Kuwait

Kuwait

15

First Energy Bank

Bahrain

16

Sharjah Islamic Bank

United Arab Emirates

17

Mashreq Al-Islami Finance Company

United Arab Emirates

18

Turkiye Finans

Turkey

19

Jordan Islamic Bank

Jordan

20

Islamic International Arab Bank

Jordan

21

Inovest

Bahrain

22

Noor Bank

United Arab Emirates

23

Kuwait International Bank

Kuwait

24

Al Salam Bank - Bahrain

Bahrain

25

Ajman Bank

United Arab Emirates

26

Palestine Islamic Bank

Palestine

27

Sepah Bank

Iran

28

Warba Bank

Kuwait

29

Bahrain Islamic Bank

Bahrain

30

Al Hilal Bank

United Arab Emirates

31

Arab Islamic Bank

Palestine

32

Bank Nizwa

Oman

33

Safwa Islamic Bank

Jordan

34

Ithmaar Bank

Bahrain

35

Khaleeji Commercial Bank

Bahrain

36

Al Baraka Islamic Bank

Bahrain

37

Alizz islamic bank

Oman

38

A'Ayan Real Estate Company

Kuwait

39

Gulf North Africa Holding Company

Kuwait

40

www.islamicbusinessandfinance.net

59

LEADERS IN ISLAMIC FINANCE

FASTEST GROWING ISLAMIC INSTITUTIONS IN THE MIDDLE EAST

60

INSTITUTION

COUNTRY

Alizz islamic bank

Oman

RANK 1

Warba Bank

Kuwait

2

Bank Nizwa

Oman

3

Sepah Bank

Iran

4

Palestine Islamic Bank

Palestine

5

Reef Real Estate Finance Co

Bahrain

6

Bahrain Islamic Bank

Bahrain

7

Alinma Bank

Saudi Arabia

8

Bank AlBilad

Saudi Arabia

9

Arab Islamic Bank

Palestine

10

First Energy Bank

Bahrain

11

Dubai Islamic Bank

United Arab Emirates

12

Kuveyt Turk

Turkey

13

Islamic International Arab Bank

Jordan

14

Citi Islamic Investment Bank

Bahrain

15 16

Ajman Bank

United Arab Emirates

Ithmaar Bank

Bahrain

17

Emirates Islamic

United Arab Emirates

18

Abu Dhabi Islamic Bank

United Arab Emirates

19

Al Hilal Bank

United Arab Emirates

20

Al Rajhi Bank

Saudi Arabia

21

Sharjah Islamic Bank

United Arab Emirates

22

Turkiye Finans

Turkey

23

Boubyan Bank

Kuwait

24

ABC Islamic Bank

Bahrain

25

Safwa Islamic Bank

Jordan

26

Al Salam Bank - Bahrain

Bahrain

27

Noor Bank

United Arab Emirates

28

Ahli United Bank - Kuwait

Kuwait

29

Bank AlJazira

Saudi Arabia

30

Jordan Islamic Bank

Jordan

31

Kuwait Finance House

Kuwait

32

Kuwait International Bank

Kuwait

33

Gulf North Africa Holding Company

Kuwait

34

Inovest

Bahrain

35

GFH Financial Group BSC

Bahrain

36

Mashreq Al-Islami Finance Company

United Arab Emirates

37

Khaleeji Commercial Bank

Bahrain

38

A'Ayan Real Estate Company

Kuwait

39

Al Baraka Islamic Bank

Bahrain

40

Leaders In Islamic Finance 2018

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LEADERS IN ISLAMIC FINANCE

TOP ISLAMIC INSTITUTIONS IN AFRICA & EUROPE INSTITUTION

COUNTRY

Faisal Islamic Bank Egypt

Egypt

RANK 1

Gulf African Bank

Kenya

2

Al Rayan Bank

UK

3

Bosna Bank International

Bosnia

4

Banque Zitouna

Tunisia

5

First Community Bank

Kenya

6

Amana Bank Tanzania

Tanzania

7

Jaiz Bank

Nigeria

8

Bank of London & The Middle East

UK

9

United Bank of Albania

Albania

10

FASTEST GROWING ISLAMIC INSTITUTIONS IN AFRICA & EUROPE INSTITUTION

COUNTRY

RANK

Bosna Bank International

Bosnia

1

Jaiz Bank

Nigeria

2

Bank Islam Brunei Darussalam Berhad (BIBD)

Brunei

3

First Community Bank

Kenya

4

Al Rayan Bank

UK

5

Bank of London & The Middle East

UK

6

Amana Bank Tanzania

Tanzania

7

Gulf African Bank

Kenya

8

Faisal Islamic Bank Egypt

Egypt

9

United Bank of Albania

Albania

10

GROWTH OF ISLAMIC FINANCIALINSTITUTIONS IN AFRICA & EUROPE 20.00%

18.19%

17.52%

15.00% 10.00% 5.00% 0.00% -5.00% -5.29%

-10.00% -15.00% -20.00%

PARAMETER

62

-13.71% Assests

Liabilities

Revenues

Net Profits

2016

2017

% GROWTH

Assets

9,371,712

11,014,035

17.52%

Liabilities

8,138,369

9,619,124

18.19%

Revenues

445,802

422,208

-5.29%

Net Profit

154,341

133,182

-13.71%

Leaders In Islamic Finance 2018

AFRICA & EUROPE

KFH_Press ad_21cm X 27cm_FA.pdf 1 4/3/2017 12:16:27 PM

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