Financial heavyweight HSBC is planning to establish its first Mid-East branch location dedicated to Amanah, the bank’s Islamic-banking wing.

According to the story reported by Arabian Business, CEO Abdul Hakeem Mostafawi said the move – which will see a branch opening in Doha, Qatar – underscored the bank’s commitment “to fulfilling our customers” diverse financial needs. “This will be the first branch in the Middle East dedicated exclusively to HSBC Amanah,” Mostafawi said in comments published by Gulf Times on June 6, 2010.  “We have seen a double digit growth in the Islamic banking business in the last five years or  so,” Mostafawi told the paper.

According to Arabian Business, on plans for HSBC Qatar to open more branches in the country, Mostafawi said: “We will assess the situation and take decision at the right time. If our presence is required in a particular zone or area, we will look at it. But then we also need to see the actual need given the rising acceptance of electronic banking channels including the ATMs and Internet.”

For the original Arabian Business story, please click here: http://www.arabianbusiness.com/589814-hsbc-eyes-first-mideast-branch-dedicated-to-shariah-banking#continueArticle

Business 24-7 has reported that the volume of Islamic loans over the course of the last 12 months has exceeded $5.6 billion in Saudi Arabia, which has been the largest lender. The loan volume in Qatar was the next highest at $2.75 billion, followed by the UAE at $900 million, Bahrain at $540 million, Turkey at $306 million and Kuwait at $293 million.

According to Business 24-7 recent report by Moody’s found that Islamic finance assets grew to $950 billion in 2009, in spite of the economic crisis. Moody’s estimates that the Islamic finance industry’s potential is worth at least $5 trillion.

According to industry experts, growth opportunities lie for Islamic finance in various areas including SME financing and also by tapping into the wealth of high net worth individuals which is estimated to increase at 8.1 percent on an average from 2009-2013, with Asia-Pacific and Middle East seeing the maximum increase in wealth.

For the original Business 24-7 story, please click here: http://www.business24-7.ae/banking-finance/islamic-finance/saudi-arabia-tops-in-islamic-loans-volume-2010-05-30-1.249651

The Global Head of Islamic finance at Thomson Reuters, Rushdi Siddiqui, predicts that Islamic Finance is set to be a $2 trillion industry in the next five years, according to AMEInfo.com.

Speaking at a panel discussion at the Middle East, North Africa and South Asia Forum titled “The Challenges Ahead for Islamic finance,” Siddiqui said, “It took the Islamic finance industry 40 years to become a $1 trillion industry. It will take another two to five years to become a $2 trillion industry.”

According to AMEinfo.com, there are many challenges that need to be overcome for the industry to realize its potential. Panelists said the lack of standardization in the industry, the lack of consensus among Shari’ah scholars, the poor “connectivity” between Islamic finance institutions across the world, and the global shortage of experienced Islamic finance professionals are some of the challenges facing the industry.

Hosted by the Dubai International Finance Center, the MENASA Forum is focused on discussing the critical opportunities and challenges confronting the Middle East, North Africa and South Asia region over the next decade. Under the theme of ‘finance for the Next Decade of Growth,’ the MENASA Forum featured over 250 members of the regional and international banking and financial services industry, regulators and senior business executives.

For the original AMEinfo.com article, please click here: http://www.ameinfo.com/233491.html

Arabian Business is reporting that a new study conducted by Bank Sarasin earlier this week has concluded that Islamic banks are largely failing to cater to their clients’ wealth management and estate planning needs – pushing them to rely on traditional asset managers.

The Islamic Wealth Management report also commented that Islamic succession planning is in need of an overhaul, as it currently lacks mechanisms to ensure wealth preservation over generations.

For more information about Shariah-compliant estate planning, Islamic inheritance rules, or other related information, please contact info@islamic-finance-blog.com.

For the original Arabian Business story (reprinted from Reuters), please click here: http://www.arabianbusiness.com/585120-islamic-finance-short-on-wealth-management

Canada’s The Province reports that Canada’s biggest banks have still not tapped a growing pool of investors and borrowers sitting on piles of cash or in need of loans. The Province reports that there is a need for Islamic financial instruments, but also, for Islamic and Shariah compliant retail banking.

“We have immigrants who come to us and sit in our offices and tell us they have a million dollars sitting in one of the Big Five banks, in cash,” said Omar Kalair, president of UM Financial, one of the few providers of Muslim mortgages in Canada, to The Province.

The potential market is huge, with the Canadian Muslim population expected to reach 1.5 million by 2017. And, according to The Province, a recent poll indicated that around half of Muslims would prefer shariah-compliant retail banking options.

The Province reports that Guidance Residential LLC, the biggest player in the United States, has provided more than $1 billion in Islamic mortgages. There is currently $2.75 billion invested in mutual funds that comply with shariah. And globally, Thomson Reuters recently pegged the value of the Islamic finance industry at $1 trillion.

Since 2005, UM Financial has provided 500 homebuyers in Canada with $120 million in murabaha financing. And the company recently partnered with MasterCard to introduce the first “credit” card in North America aimed at Muslim consumers. Cardholders must first load up their cards with cash, spending only money they actually own and avoiding interest payments or credit-card debt.

Kalair said to The Province that it is now only a matter of time before UM teams up with a major bank to expand and extend its line of products. “Even though there are limited products and the pricing is high … in the Muslim community, if they were provided an opportunity, they would be ready to switch over.”

For more information on Islamic financial instruments or Shariah-compliant loans or lending, please contact info@islamic-finance-blog.com.

For the original story courtesy of The Province, please click here: http://www.theprovince.com/life/story.html?id=2754081

The Minnesota Daily has reported that the city of Minneapolis is providing Islamic financing and Shariah-compliant loans and lending solutions to Minneapolis businesses. According to the paper, the city of Minneapolis has partnered with the African Development Center to loan funds to Muslim business owners in the local Minneapolis community in a manner that is Shariah-compliant and avoids variable rate interest financing.

Provisions in the loan program, termed the “Alternative Finance Program,” require Minneapolis Muslim-owned businesses to pay a fixed rate of return, similar to an altered version of the “Two-Percent” loans offered by the City’s Department of Community Planning and Economic Development. The Minnesota Daily reports that 38 such loans have been provided so far. The loans have gone to restaurants, retailers, computer, clothing, and bookstores.

Minneapolis Community Planning and Economic Development Business Finance Director Bob Lind states that he believes Minneapolis is the first U.S. city to adopt Shariah-friendly loan programs. He sees the city’s version as becoming a model for others in the future.

For the original Minnesota Daily story, please click here: http://www.mndaily.com/2010/03/24/loan-caters-minneapolis-muslim-business-owners

For information on Islamic financing or Shariah-compliant transactional products, please contact Ice Miller’s Islamic Finance, Business, and Litigation attorneys at info@islamic-finance-blog.com.

U.S. Connecticut-based Shariah Capital predicts that more Shariah-compliant hedge funds will likely be launched, specializing in healthcare, telecommunications, and technology stocks.

According to Reuters, thus far, Islamic hedge funds have had trouble getting off the ground, due to the prohibitions against speculative financial techniques and transactions that are commonplace in hedge funds, derivatives, and other sophisticated financial investment tools. But now, the $1 trillion Islamic finance industry is broadening its reach into areas that were strictly off limits. In recent years, there have been increasing developments in, for example, issuance of credit cards that are Islamic-compliant, as well as hedge funds and derivatives trading.

Earlier this month, IIFM, an Islamic finance industry body, with the backing of a derivatives association and banks such as Credit Agricole (CAGR.PA) and Standard Chartered (STAN.L), launched a template over-the-counter Islamic derivative contract. The move was intended to address concerns by industry practitioners and scholars about the extent to which derivatives trading comports with traditional Shariah principles.

There is no doubt that there will be more attention paid to Shariah-compliant financial products as the industry continues to grow. For more information on the challenges posed to financial instruments and common diversification techniques or products by Islamic principles, please contact the attorneys at Ice Miller at info@islamic-finance-blog.com.

For the original Reuters story, please click here: http://www.reuters.com/article/idUKSGE61308Z20100311

HSBC Amanah has been named Best International Islamic Bank by Euromoney magazine, in its Islamic Finance Awards 2010. AMEinfo.com reports that the Euromoney awards are widely considered to be the most high profile accolades in the Islamic Finance calendar and annually recognize outstanding performance, quality, service, and innovation in the sector.

In addition to being awarded the title of Best International Islamic Bank, Euromoney also named HSBC Amanah Best Sukuk House for the leading role it continues to play in Islamic debt capital markets.

According to AMEinfo.com, During 2009 HSBC Amanah grew its operations in Saudi Arabia, through SABB, UAE, and Malaysia, while expanding in the key growth territories of Indonesia, Qatar and Bahrain. The business launched HSBC Amanah Premier, the world’s first international Islamic premium banking service and led activity in the Islamic debt capital markets, structuring and lead managing many of the landmark transactions in 2009.

For the full story, click here: http://www.ameinfo.com/223934.html

Just when many of the world’s financial systems have been working to weather the capital market turmoil and its spread to economies around the globe, Islamic finance growth has stayed strong and will likely be brisk during the next year, said Standard & Poor’s Ratings Services in a report titled “Islamic Finance Is Likely To Advance In 2010 On Firm Growth And Widening Geographic Reach,” published today on RatingsDirect.  

“We believe Islamic finance has become a recognized and a specific segment of finance on its own with still-bright growth prospects. We think Islamic finance is set to make further inroads in developed Western markets while Southeast Asian countries will likely fuel the Islamic finance advance in Asia in 2010,” said Standard & Poor’s credit analyst Mohamed Damak.

“At the same time, though, we believe there are a number of important questions for which the answers are not necessarily yet clear but that may play a part in shaping the sector’s future growth. Specifically in non-Muslim countries, and especially in Europe, we consider they include the size of demand for Sharia-compliant products, regulatory and tax environments, the support of the political and financial communities, sovereign sukuk issuance, and the possibility of a common strategy for extending Islamic finance across EU countries.”

Assets of the top 500 Islamic banks expanded 28.6% to total $822 billion in 2009, compared with $639 billion in 2008, according to S&P.    For the press release click here: http://www.standardandpoors.com/ratings/articles/en/us/?assetID=1245205629399