Saudi Arabia: Alinma Bank set for launch in 2nd quarter

Points of Essence:

• Saudi Arabia is ready to launch its biggest bank, Alinma Bank at the end of the 2Q of 2009. Once in operation, the Shariah compliant bank will serve the entire Kingdom and leverage on the latest banking technology to reach out to its customers. Zawya.com has the report.

RIYADH: Final preparations are being made by Alinma Bank for its launch by the end of the second quarter of 2009, Abdulaziz Al-Zamil, chairman of the board of directors of the bank told newsmen here yesterday .

“At launch, the bank will operate branches in Riyadh, Jeddah, Dammam, Jubail, Hofuf, Madinah, Taif and Khamis Mushayt. Branch distribution is expected to continue through 2009 and into the early part of 2010 with location opening in cities such as Makkah, Alkhobar, Unaizah, Buraidah, Hail, Hafr Al-Batin, Arrar, Tabuk, Al-Mubarraz, Kharj and Al-Najran,” Al-Zamil said at a press conference held at the bank’s headquarters here yesterday.

Symposium delineates Shariah role in banking

Points of Essence:

• Saudi National Commercial Bank recently held an Islamic banking event to chart the future direction of Islamic banking where the Shariah mechanism is concerned. It was proposed that there should be a Shariah decree issuing body which subscribe to the general accounting principles and Islamic banking to avoid any untoward conflicts between the principles. Industry players were also called upon to strictly formulate Islamic banking products based on the requirements of Islamic banking. The Saudi Gazette has the report.

By Saudi Gazette Staff

JEDDAH – As part of the National Commercial Bank’s strategy aimed at supporting Islamic banking and rationalizing its plans, the bank recently organized a symposium entitled “The Future of Islamic Banking” attended by a group of Islamic jurisprudents, economists and experts in Islamic banking from in and outside the Kingdom.

Unicorn wins licence to set up Saudi operation

Points of Essence:

• Unicorn Investment Bank, of Bahrain, was granted a licence by Saudi Arabia’s Capital Market Authority to operate Islamic investment business in Saudi Arabia. The kingdom’s presence is part of its global expansion plan where currently it has subsidiaries in the US, Malaysia, UAE and Turkey.

By Andy Sambidge

Bahrain-based Unicorn Investment Bank announced on Tuesday that it has been awarded a licence by Saudi Arabia’s Capital Markets Authority (CMA) to establish operations in the kingdom.

Unicorn Capital Saudi Arabia will focus on providing the market with an integrated and comprehensive range of Islamic investment banking products and services.

Islamic lender wins licence for Saudi operation

Points of Essence:

• Kuwait Finance House is now expanding to Saudi Arabia. Currently, the Kuwait based Shariah financial institution has already set up operation bases in Bahrain, Malaysia and Singapore.

RIYAL DEAL: Kuwait Finance House has won a licence to operate in Saudi Arabia. (Getty Images - for illustrative purposes only)

by:Inal Ersan

Islamic lender Kuwait Finance House said on Thursday its fully-owned Saudi unit has won an investment licence to operate in Saudi Arabia.

The 500 million Saudi riyal ($133.3 million) firm would be allowed underwrite, manage and offer consultancy services for securities in the Saudi market, the lender said in a statement. (Reuters)

Source: http://www.arabianbusiness.com

Saudi Binladin’s SR1b sukuk a big success

Points of Essence:

• The Saudi Binladin Group’s debut Sukuk issuance into the Saudi debt capital markets was successful in raising more than SR1 billion to finance its construction of an iconic hotel project in Mecca. With HSBC Saudi Arabia being the sole lead manager and bookrunner for the issuance, the privately placed securities has a 5-year maturity with semi-annual profit payments.

RIYADH: The Saudi Binladin Group successfully completed the issuance of a privately placed Saudi riyal sukuk of finance raising more than SR1 billion from the capital markets in Saudi Arabia. The Sukuk has a 5-year maturity with semi-annual profit payments.

This is The Saudi Binladin Group’s debut Sukuk issuance into the Saudi debt capital markets. HSBC Saudi Arabia was the sole lead manager and bookrunner for the issuance.

This innovative issuance has to its credit several firsts including the first unrated sukuk of its size to be successfully distributed entirely within the Kingdom and the first issued through an offshore special purpose vehicle, which is registered, cleared and settled through Tadawul.

The Sukuk proceeds are to be used for the construction of an iconic hotel project that Saudi Binladin Group is developing in Makkah.

The Tawreeq Process

Points of Essence:

• The newly approved mortgage law in Saudi Arabia has spurred the interest for the real estate finance business. The size of the business is expected to double due to the long term finance requirements of real estate acquisitions.
  
• The growth of real estate finance will pump up activities on asset securitizations (Tawreeq) where non-liquid assets will be transformed into marketable securities through securitizing or converting them into negotiable bonds to be sold to investors. Thus, providing a new source of fund.
  
• The Tawreeq will contribute to reduce the financial instutions’ receivables so that they can meet the standard of capital adequacy as per the Basel II Accord, the author, nevertheless, cautioned on the risks entailed in this industry in the absence of adequate governing laws, standards and qualified financial institutions.
• The author has expressed hope that the Saudi Capital Market Authority would have a contingency action plan for Tawreeq process in the event of a mortgage crisis. This would include legal, technical or regulatory address. Rules and regulations governing the Tawreeq process should be drawn with the Shariah experts being consulted to ensure compliance with the requirements of Islamic law.

09/09/2008

By Lahem al Nasser

Riyadh, Asharq Al-Awsat- As the Shura Council approved the mortgage law that is expected to be applied soon in the Kingdom of Saudi Arabia, many businessmen and banks have looked towards setting up companies that specialize in real estate finance, seeking to take advantage of the leap that is expected to take place after the mortgage system has been adopted. The size of real estate finance is expected to double in Saudi Arabia in view of the fact that its nature is of long-term finance where the funding period ranges from 15 to 25 years.