Newswrap: Islamic finance
A summary of the latest Islamic finance news from around the world.
Moody’s expects Islamic finance growth to continue, but sukuk issuance to drop on back of high oil prices
Ratings agency Moody’s expects Islamic banks’ assets to grow this year and outperform the conventional sector, while higher oil prices may reduce requirements for sukuk issuances, according to Moody’s-DIFC.
The report expects Islamic finance growth to be particularly strong in the GCC countries. “The economic recovery in key Islamic finance markets will boost credit growth and demand for Sharia-compliant products and we expect Islamic banks' asset growth to continue to outperform their conventional peers,” said Ashraf Madani, VP-Senior Analyst at Moody’s. “At the same time we expect higher oil prices will lead to lower sukuk issuance in 2022, largely driven by lower financing needs in the GCC.”
Oil prices have surged 30% since the Ukraina-Russia conflict. With Saudi Arabia’s budgetary breakeven price is $72 a barrel of oil, the country is expected to post a surplus this year, while the UAE has a breakeven price of $67 a barrel, reported Bloomberg.
Sukuk issuance fell 12% to $181 billion in 2021 in the GCC and Indonesia. Issuances are slated to drop in 2022, to around $160-$170 billion. In 2020, Islamic assets under management reached $140 billion, a 31.9% year-on-year rise.
Takaful premiums are expected to have moderate growth over the next three years buoyed by more demand for medical coverage and the introduction of compulsory health cover in certain markets in the the GCC, Africa and Southeast Asia.
UAE to create 5,000 Emirati jobs in banking sector
The Central Bank of the UAE, in coordination with the Emirates Institute for Banking and Financial Studies and the Emirati Talent Competitiveness Council, has approved the Emiratisation of managerial positions in the banking and insurance sectors, Lebanon’s Bank Audi reported. The aim is to create 5,000 new jobs by 2026.
Egyptian fintech investments at $276 million during 2017-2021
There were 112 fintech startups operating in Egypt at the end of 2021, an increase of 19% from 94 fintech startups at the end of 2020, according to FinTech Egypt and Bank Byblos. Investments in fintech startups reached $159m in 2021, an increase of 328.6% from $37.1m in 2020. Fintech startups received nearly $276m in funding during the 2017-2021 period.
The 34 payments and remittances sub-sector start-ups accounted for 30.4%; 15 firms in the lending and alternative finance segment (13.4%); nine startups in each of the personal finance management and literacy, accounting and expense management, and payroll and benefits sub-sectors (8% each); seven companies in the wealth management & savings segment (6.3%); six startups in the business-to-business sub-sector (5.4%); four firms in each of the data analytics and artificial intelligence, insurance technology, regulations technology, and rotating credit and savings associations segments (3.6% each); three firms in the open banking and infrastructure segment (2.7%); and two startups in each of the agricultural technology and property technology sub-segments with (1.8% each).
UAE’s Dar Al Takaful and Watania agree to merge
Islamic insurers (takaful) Dar Al Takaful, based in Dubai, and the Abu Dhabi National Takaful Company (Watania) have agreed to merge by end of the year, reported Zawya. The merger is expected to be completed by Q3 2022 and is slated to bring greater consolidation in the Emirates’ takaful market.
Arab Financial Services (AFS) and Aafaq Islamic Finance team up to support Islamic fintech in the UAE
Bahrain-based Arab Financial Services (AFS), a digital payment solutions provider and fintech enabler, and Dubai-based Aafaq Islamic Finance, a products and services provider, inked a strategic partnership to support fintech startups in the UAE through a platform, TradeArabia reported.
“Technology and innovation have become an imperative in today’s modern payments system. AFS recognises the importance of new-age technology and continues to create shared initiatives and platforms that support the development and growth of the fintech ecosystem. In this collaboration, we are combining expertise and knowledge that provides a framework of BIN (bank identification number) sponsorship, technology, operation and distribution to all fintechs and startups in the UAE,” said Samer Soliman, AFS Chief Executive Officer.
Oman's Munz Islamic Bank goes digital
The National Bank of Oman’s Islamic window, Munz, has added features to its corporate internet banking platform, reported the Oman Daily. “Muzn continues to pioneer innovation in the Islamic finance industry and our digital banking suite allows us to serve the evolving needs of our customers, whether individual or corporate. Backed by our exceptional customer service, it’s part of an expanding list of modern Sharia-compatible solutions that provide our customers with a modern and seamless banking experience,” said Salima Al Marzouqi, Chief Islamic Banking Officer.
