The UAE’s banking regulator said lenders would be consulted for the second time since its announcement last year that it was seeking to cap mortgage loan-to-value ratios.

“The board reviewed the draft mortgage loans regulations, and decided to refer the regulations to the concerned institutions for consultation,” the Central Bank said in a statement, without giving further details.

The Central Bank also said it had approved a proposal for its risk management framework, declining to give details.

At the end of December, the UAE’s banking regulator distributed a circular to local banks in which it detailed plans for a cap on loan-to-value limits, with first-time expatriate buyers expected to put down half of a property’s value as a deposit when seeking a home loan.

After an outcry from banks and property firms, the Central Bank clarified that the limits were not binding and issued a questionnaire to commercial lenders.

The Central Bank has until now given few signs of progress on the mortgage cap at any of its three most recent board meetings.

In the meantime, the Dubai property market has surged, with all-cash purchases and speculative buyers of under-construction properties returning in droves.

The UAE Banks Federation, which is leading the banking sector’s negotiations with the Central Bank on the issue, declined to comment yesterday.

thenational.ae

http://noorislamicbank.livejournal.com/171621.html

Those of the fairer sex don’t just face tougher financial squeeze, they are behind men in financial literacy and are in danger of not meeting their own long-term needs, including retirement. The gender divide can be attributed to the fact that many women in this part of the world rely on men to make major financial decisions.

“Women who are at home with the children quite often don’t know how much the husband is earning, and have no means to save independently,” said Kirsten Gilray, a financial consultant at Acuma Independent Financial Advice.

“It is very easy here in Dubai to get financially distracted. A lot of women I speak with know how much they earn, but not how much they spend,” she added.

The latest survey by consumer champion Which? showed a “stark gender divide” in dealing with the financial squeeze. Women feel they are the hardest hit, and they are less optimistic about the prospects of their personal finances.

Although the survey was conducted in the UK, financial experts said the same trend is replicated in the UAE.

According to the survey, 38 per cent of women are feeling the economic brunt compared to 31 per cent of men. While nearly half of men (45 per cent) think their finances are good, only 33 per cent of women feel the same way.

Tightening purse strings

Women are tightening their purse strings to cut back expenses on food, socialising and household goods. Nearly half of them (45 per cent) said they would find it hard to cope with an unexpected expense, compared to 37 per cent of men.

“In these circumstances, many women are failing to save,” Which? said in its report. About 25 per cent of women said they had no savings at all whereas only 16 per cent of men said the same.

“There is a concern here among both men and women. In general, we have found women are a bit more cautious when it comes to cutting expenses and managing finances. The recent experiences with the downturn, uncertainties of the recent past and incidents with friends and colleagues losing jobs play a role in this,” Ashok Sardana, managing director at Continental Group, told Gulf News.

Sardana said a “large” part of the reason many women rely on men to make financial decisions is that they lack financial knowledge and confidence.

“Women, like men, need to build their confidence by learning more about financial needs and planning for them as well as by getting their feet wet, starting small and then building up gradually as their awareness and confidence grows,” Sardana said.

“As women, we should not be reliant on others to provide for us and plan for our own future financial well-being,” added Gilray.

gulfnews.com

http://noorislamicbank.blogspot.com/2013/05/financial-squeeze-hits-uae-women-harder.html

Noor’s human resources team is on hand at stand C6-5 in Hall 5 to welcome potential candidates and answer their questions about a career in Islamic banking, throughout the duration of the UAE Careers Fair.

In line with its Emiratization efforts, Noor’s participation at the UAE Careers Fair builds on the bank’s key priorities to attract talented UAE national graduates and develop them to excel in functional roles within the bank. Noor provides selected talent with a range of training and development programs to enhance their banking knowledge and professional competencies.

Maheen Kamali, Senior Emiratisation Manager at Noor Islamic Bank, said: “In addition to offering full time employment to selected UAE nationals, we provide work placement opportunities to UAE national students to help them fulfil their university requirements. Scholars receive a monthly allowance and upon the successful completion of their studies are considered for employment with Noor, depending on suitability.”

As part of its Emiratization efforts, Noor supports young talent through its Scholarship Program and Part Time Program. The Part Time Program seeks to support UAE national students keen to add meaningful work experience to their years of study. Students are provided with classroom training to acquire the basics of banking systems, Islamic products and customer service/soft skills. This is followed by on-the-job learning and coaching support.

godubai.com

http://noorislamicbank.livejournal.com/171153.html

Dubai set out in January its plans to become the “capital” of the Islamic industry, with global rules to enforce standards on industries as diverse as Sharia finance, halal food, pharmaceuticals and cosmetics, and charitable endowments.

Plans for a UK sovereign sukuk may have been shelved, but the British government recently established an Islamic finance task force, intended to rejuvenate the UK’s Sharia-compliant industry.

For HSBC, the British banking giant that is the biggest underwriter of sukuk worldwide, it helps to have a foot in each city, Simon Cooper, the bank’s regional chief executive, said last week.

“The Islamic capital markets are markets that we dominate, and trading of those bonds takes place in Dubai,” he said. “As we look to continue the development of both the tenor and the structure of Islamic bonds, that will definitely benefit Dubai’s expansion and its development of its financial centre.”

The British capital – described last month as the “eighth emirate” of the federation by Boris Johnson, London’s mayor, because of the large number of UAE nationals who travel there during the summer – is also presenting opportunities for the increasingly healthy UAE banking sector.

Emirates NBD, the biggest bank in Dubai, was seeking to grow its business in the UK through London, said Rick Pudner, the bank’s chief executive, in a conference call on Thursday.

“As far as London perspective, we’ve said we want to build up our wholesale banking operations, treasury markets and the private bank. That’s a key component there,” he said. He added that the bank was a key supporter of Dubai’s Islamic initiatives.

Islam is the fastest-growing religion in the UK and the potential gains from Sharia-compliant industries are attracting companies including Abu Dhabi Islamic Bank. The lender has established a private banking centre at One Hyde Park in Knightsbridge, one of the most exclusive addresses in the capital, where large numbers of the very wealthy reside.

The 2.7 million Muslims in England and Wales represent the second-biggest religious group after Christians, according to official census data from 2011.

Hussain Al Qemzi, who sits on the board of a Dubai committee tasked with overseeing the development of the emirate’s Islamic economy, has said that there is no reason why Dubai could not take London’s crown as the biggest listing centre for sukuk.

Dubai’s Government, Emirates Airline and Dubai Electricity and Water Authority have raised a total of US$2.75 billion through listings on the Nasdaq Dubai and the Dubai Financial Market, according to data from Bloomberg.

So far, Dubai is way ahead – London, which raised four times more than Dubai with $9.7bn in listings last year, has listed no sukuk at all this year.

That said, Dublin’s efforts to swipe a greater share of the sukuk industry from London are bearing fruit – the Irish Stock Exchange has listed $5.75bn so far this year.

But an increasingly global outlook was something that the industry currently lacked, said Moinuddin Malim, the chief executive of Mashreq Al-Islami, at a conference in Dubai last month.

“Islamic finance as of today is really a local if not regional business. There’s no Islamic banks in the world that have a presence in 10 or 15 countries, they’re mostly regional players and mostly local players,” he said. “Today, we look at Malaysia and say that Malaysia is the leading Islamic hub, but the fact is it’s all for the in-house requirements of Malaysia.”

thenational.ae

http://noorislamicbank.blogspot.com/2013/04/london-and-dubai-want-islamic-finance.html

Asked whether the UAE could decriminalise bounced security cheques if a pilot programme to create credit reports for individuals is a success, Younis Al Khoori, the undersecretary at the Ministry of Finance and vice chairman of Al Etihad Credit Bureau said: “Definitely. We’re aiming towards that. It’s one of the key purposes of approving this entity.”

Mr Al Khoori did not give a time frame for when the law could be changed, although the ministry expects full credit scoring to become available next year.

Al Etihad Credit Bureau will begin a pilot programme in July, with a dozen UAE banks participating.

Currently, cheques account for payment of more than Dh1 trillion in the Emirates every year, with certain transactions such as mortgages required to be backed by security cheques. Bouncing a cheque is a criminal offence, although a presidential decree in October immunised UAE nationals from serving jail time.

Banks use cheques as a means of providing security, because without effective credit scoring it is impossible to determine a potential borrower’s likelihood of default.

However, a total of 1.4 million cheques failed at the point of use during 2012, representing about one in every 20 cheques used for payments worth Dh46.8 billion. The rate of failure is about 10 times higher than developed countries such as the United Kingdom, despite Britain clearing many more cheques per head of population.

Banks have lobbied the Central Bank to find a replacement system after the financial crisis laid bare the flaws in the current model.

The new federal credit bureau would “introduce transparency” into consumer borrowing, Mr Al Khoori said. “Whoever wants to have his own personal information, collectively throughout the banks, they can come to the bureau and collect his record,” he said.

Those individuals that believe they are being charged too high a rate of interest may be able to appeal their credit rating by providing other information such as consistent utility bill repayments, he added.

At present, the rates of interest available on unsecured consumer finance compare unfavourably to other markets where credit data is more readily available.

The average annual rate of interest on a UAE credit card is 37.8 per cent, which bankers have attributed to the lack of an operational federal credit bureau.

That compares with an annual interest payment of 17.5 per cent on a credit card in the UK, where the adult population is fully covered by credit scoring companies.

The main benefit of a credit bureau is to reassure banks that a customer has not spread debts out across the financial industry by dealing with many different lenders, said Surya Subramanian, the chief financial officer at Emirates NBD and a former adviser to Singapore’s accounting regulator.

“We think pricing will improve and products will improve,” he said last week.

Additionally, the large amounts of personal financial information which Al Etihad Credit Bureau will store should make the process of gaining approval for personal loans and credit cards better for consumers. “They certainly speed up the credit approval process,” Mr Subramanian added.

“As long as every bank is able to provide quality data, the entire industry takes back quality data.”

thenational.ae

http://noorislamicbank.posterous.com/credit-bureau-to-reform-borrowing-and-bounced

Of the four banks arranging the deal for Turkiye Finans, an Islamic bank majority-owned by Saudi Arabia’s National Commercial Bank, two were based in the Gulf: NCB Capital and Dubai’s Noor Islamic Bank.

And Middle Eastern investors dominated buying of the sukuk, taking 51 per cent of the deal, which received just under $2 billion in orders.

In the past, European arrangers and investors dominated issuance of international bonds from Turkey. But in recent months the Gulf has started to play a major role, for commercial and possibly even political reasons.

“You will find more demand from investors in this region, in particular banks which are fairly liquid and sovereign wealth funds, to invest in financing in Turkey, be it through private placements, new issuances, or the public debt capital markets space,” said Georges Elhedery, head of global markets in the Middle East and North Africa (Mena) for HSBC.

“These investment flows are a developing trend as Turkey, which has a low savings rate, looks to tap the deep and liquid capital pools in Mena to fund its 2023 Vision, which includes investing some $350 billion in transport and other infrastructure.”

Boom

Turkey’s upgrade to investment status by Fitch Ratings last November, and expectations that it will secure similar ratings from the other two major agencies, have fuelled an explosion of international issuance this year.

Turkish companies have issued about $9.5 billion of US dollar-denominated bonds so far this year, compared to a total of $16.5 billion for the whole of 2012, accoding to John Bates, corporate fixed income analyst for emerging markets at PineBridge Investments.

About $10 billion of last year’s Turkish issuance came in the final four months of the year, and was dominated by banks.

A few years ago, Gulf arrangers and investors might have been expected to play only a small role in Turkish bond sales; their attention was fixed on their own region, and Turkey focused on Western capital markets.

But the Gulf is central to the current stream of issuance.

Another Turkish bank, AlBaraka Turk, the local unit of Bahrain’s Al Baraka Bank, is expected to price a bond early next week, and three of the mandated arrangers are Gulf-based: Dubai’s Emirates NBD, Abu Dhabi’s Al Hilal Bank and Qatar’s Barwa Bank.

One reason for the shift is Turkey’s move into Islamic finance. After developing the industry only slowly for years, Turkey issued its first sovereign sukuk last September; nearly 60 per cent of the $1.5 billion issue was placed among Middle Eastern investors.

The appearance of the sovereign sukuk has facilitated more issuance by Islamic banks in Turkey, which is meeting strong demand among cash-rich Islamic funds in the Gulf that are unable to satisfy their appetite for sukuk within the region.

“Turkish issuers want to tap the liquidity that sits with money managers in this region,” said Chavan Bhogaita, head of markets strategy at National Bank of Abu Dhabi.

The fact that three of Turkey’s four Islamic banks are affiliates of Gulf banks has also helped steer sukuk issuance to the region.

Sales of Turkish sukuk to Gulf investors may increase further as Turkey expands its offerings; Istanbul is working on new regulations to allow use of a wider range of sukuk structures, which could see Islamic bonds used for project finance and infrastructure development.

Pricing

There are other factors behind the trend, however. One is Turkey’s increasing emphasis on developing political and economic ties with the Gulf, rather than merely focusing on the West, as the country seeks to play a more active diplomatic role in the Middle East and diversify its trade.

Two-way trade between Turkey and the six countries in the Gulf Cooperation Council jumped 60 per cent to $22 billion in 2012, according to a report from a joint economic committee. Growing economic ties have familiarised Gulf institutions with Turkish issuers.

Pricing is also a factor. A dramatic compression of yields in the Gulf over the past 18 months, partly because of increasing investor confidence in the area, has reduced the returns from bonds issued within the region.

That is prompting Gulf investors to take a fresh look at the yields on offer from Turkey, which are generally higher for similar credit ratings.

For example, Sharjah Islamic Bank, based in the UAE and rated BBB+, priced a five-year, $500 million sukuk this month at a profit rate of 2.95 per cent.

That was one full percentage point below the 3.95 per cent profit rate offered on the five-year Turkiye Finans sukuk, which is rated BBB, just one notch lower than the Sharjah issue.

“Despite the flurry of recent issuance, the Turkish corporate sector is still relatively limited in scale and is dominated by the banks,” PineBridge’s Bates said.

“The banks still offer decent value when compared to their EEMEA (Eastern Europe, Middle East and Africa) peers, yielding about 50 basis points more than other BBB-rated banks. In general, they also compare well on credit fundamentals.”

gulfnews.com

http://noorislamicbank.blogspot.com/2013/04/gulf-banks-investors-involved-in-flood.html

Considering that business travellers in the country take about 2.7 trips overseas and spend an average of Dh8,830 each time, and leisure travellers take 1.6 trips and spend Dh10,388 out of pocket, there is a huge opportunity for prepaid providers in the UAE.

According to the Visa Prepaid Travel Card study, more than one-third of travellers in the country now see prepaid cards as a viable alternative to cash.

For nearly half of business travellers (40 per cent), they like the idea that prepaid cards allow them to lock in good exchange rates prior to their trip. Those who travel for leisure (41 per cent) said the believe that prepaid is safer to use than carrying cash or traveller’s cheques.

Francesco Burelli, a frequent business traveller and partner at consultancy firm Value Partners, uses a range of payment cards, such as debit, credit and prepaid for various transactions. However, when it’s time to travel, his prepaid card proves very useful, especially when securing good exchange rates abroad.

“With the prepaid card, I can lock in the currency exchange rate and enjoy a much better rate than having to exchange money at the airport. If I expect to travel to a specific region, say US for example, I keep an eye out on the dollar rates and buy dollars in advance,” Burelli told Gulf News.

In Visa’s study, close to half (47 per cent) of the residents who spend holidays abroad and 40 per cent of those who take business trips said that a prepaid card’s flexibility to be used at ATMs, in store and online, is another major reason they would choose prepaid.

“Instead of carrying wads of cash, travellers want an easier and more convenient way to pay while overseas. This is what makes the prepaid card so appealing,” said Marcello Baricordi, general manager, UAE, Visa.

The study questioned 608 respondents from the UAE aged 18 to 59 across the student, leisure and business traveler segments.

Prepaid cards issuance in the Middle East and North Africa markets is forecast to grow at a compound annual growth rate (CAGR) of 18 per cent every year between 2013 and 2017.

zawya.com

http://noorislamicbank.posterous.com/more-uae-travellers-prefer-prepaid-over-cash

His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, yesterday was presented with the Middle East’s City of the Future Award, which was awarded to Dubai by the Financial Times.

Shaikh Maktoum Bin Mohammad Bin Rashid Al Maktoum, Deputy Ruler of Dubai, and Shaikh Ahmad Bin Saeed Al Maktoum, President of Dubai Civil Aviation and Chairman and Chief Executive of Emirates airline and Group, were present.

Dubai was chosen for the award due to the ease of doing business, quality of infrastructure, as an investment destination and its competitiveness.

Shaikh Mohammad was presented with the award at Zabeel Palace as he received Dhaen Al Qamzi, Director General of Dubai’s Department of Economic Development (DED), who was accompanied by Fahd Al Gergawi, Executive Director of the Foreign Investment office at DED.

Shaikh Mohammad congratulated the work teams in DED for winning the award, which he said reflects the attention given by the media, financial, and global trade circles for the UAE’s achievements. He stressed that the international awards are awarded to Dubai because it’s a city of joy, security and stability, and also reflects the attention given by these circles to the emirate’s modern achievements. “We are happy with this international interest and we welcome it. We are proud of our nation and our citizens and the creative potential of our youth,” said Shaikh Mohammad.

Shaikh Mohammad later hosted a lunch banquet in Zabeel Palace that was attended by shaikhs, ministers, dignitaries, and directors and heads of governmental department and economic activities.

gulfnews.com

http://noorislamicbank.livejournal.com/169829.html

The Visa Prepaid Travel Card Study found that that while cash is commonly used to pay for travel expenses, more than one third of leisure and business travelers see a prepaid travel card as a viable replacement to cash.

Close to 40% of business travellers saying they liked the locked-in exchange rates (set prior to travel) offered by prepaid travel cards while 41% of leisure travellers like that it is safer to handle compared to cash or travellers cheques.

The study was shared last week at the Prepaid Summit: Middle East 2013 Conference & Awards held at the Shangri-La Hotel in Dubai. The summit comes amidst reports that revenues for the prepaid industry are expected to reach $18.4bn in the UAE by 2015.

Kamran Siddiqi, General Manager, Middle East and North Africa at Visa, presented an introduction on the regional market at the Summit, which included experts and representatives from across the sector. Later in the day, Scott Salmon, Head of Prepaid Products, Asia Pacific, Central Europe, Middle East and Africa, Visa, presented an overview of the new prepaid trends. This was followed by a keynote on the prepaid value proposition by Richard Bialek, Director of Prepaid for Central Europe, Middle East and Africa, Visa.

Approximately 47% of leisure travellers and 40% of business travellers also agree that a prepaid travel card’s flexibility to be used at ATMs, in store and online was a key reason they would choose a prepaid card. Amongst business and leisure travellers who use little or no cash, the top reasons cited were that carrying large sums of cash was inconvenient, less secure and it was a hassle to exchange unused currency.

“Each year business travellers take an average of 2.7 trips and spend an average of Dhs8,830 each time, while those travelling for leisure take 1.6 trips and spend an average of Dhs10,388. Instead of carrying wads of cash, travellers want an easier and more convenient way to pay whilst overseas. This is what makes the prepaid card so appealing, it is widely accepted, safer than cash and its ability to hold multiple currencies on one card protects users from wavering conversion rates and helps limit the number of different currencies that need to be withdrawn as cash,” said Marcello Baricordi, General Manager, UAE, Visa.

The most appealing features of the prepaid travel card to business travellers are as follows:

• It can be used at any store (56%)
• It is easy to use in general (56%)
• It is easy to use for low cost items (47%)

The most appealing features of the prepaid travel card to leisure travellers are as follows:

• It is easy to use in general (50%)
• It can be used in any store (46%)
• It is easy to use for low cost items (44%)

ameinfo.com

http://noorislamicbank.blogspot.com/2013/04/travellers-from-uae-see-prepaid-cards.html

Earlier this year, the Reserve Bank of India (RBI) made it clear that it could not allow interest-free banking in India, in a blow to attempts by Islamic banking players to get the system recognised in India, but the tide seems to be turning for a solution.

“The RBI, while declining interest-free banking, had suggested to look at another vehicle within the federal law in India,” Mohamed Saeed Shingeri, a member of the well-known Shingeri family said to The Malaysian Reserve.

He added since RBI becomes the platform for interest-bearing banking this meant an interest-free banking system could be sought under the Society Act and not under the Banking Act.

H Abdur Raqeeb, general-secretary of the Indian Centre for Islamic Finance, an NGO campaigning for Islamic banking and finance, said Syariah-compliant finance can be introduced to a limited extent, through alternative investment funds and mutual funds that fall under the Securities and Exchange Board of India.

“However, once the Microfinance Bill is enacted, all the microfinance activities will come under RBI and problems will surface again. Issuing of Islamic bonds – sukuk – may be made possible, though, with minor changes in the rules without making major changes in the laws,” he said.

Allowing Syariah-compliant tools in India would open up the market for foreign investors, including Malaysian buyers, who would be interested in taking up shares in India’s interest free institutions.

Asia’s potential

A former Indian High Commissioner to Malaysia RI Narayan stated last year that Islamic banking may attract more funds to India especially in the infrastructure field where India intends to spend US$1 trillion (RM3.03 trillion) over the next five years in road building, railways, aviation and energy.

Bank Negara Malaysia (BNM) governor Zeti Akhtar Aziz indicated last year that Malaysian Islamic banks needed to expand further, either by taking up stakes in existing partnerships or alliances since that would further unlock Asia’s potential. On the other hand, Zoe Rai, a BNM media officer told The Malaysian Reserve that though banks investing abroad may seek some form of approval from the local central bank, it was their prerogative to venture abroad, adding that such investments depend largely on the reciprocating nation’s approval.

Abdur Raqeeb urged Malaysian investors to invest heavily in India’s booming infrastructure revamp exercise, saying their massive presence in the country will help Malaysia penetrate the Islamic fnance sector in the future.

He also said there seems to be a change in understanding the need for Islamic banking at the RBI, which stated to the local press in India recently that they are not averse to Islamic banking and finance and could seek changes required for Syariah-compliant banking.

gulfbase.com

http://noorislamicbank.posterous.com/tides-turning-for-islamic-banking-in-india