Fitch Ratings (Fitch) has maintained Al Rajhi Banking and Investment Corporation (ARBIC)’s Long-Term Issuer Default Rating (IDR) of A-, as well as the Viability Rating (VR) of a- on Rating Watch negative (RWN), according to a report on the 6th of July 2020. In addition, Fitch affirmed ARBIC’s Support Rating Floor (SRF) at BBB+. According to Fitch, the IDRs and VRs reflect ARBIC’s standalone credit profile. Fitch placed ARBIC’s VR on RWN back in March 2020, in line with those of all the Fitch-rated banks in Saudi Arabia. Since ARBIC’s IDR...

Media reports indicate that Oman Arab Bank (OAB) has completed its Takeover of Alizz Bank (AIZ), creating a lender with over USD 8.4 billion in assets.  AIZ will be converted into a closed joint-stock company and the assets and liabilities of Al Yusr, OAB’s own Islamic brand, will be transferred to AIZ as part of the merger process. OAB, is currently an unlisted subsidiary of Oman International Development and Investment Company (Ominvest), and will be converted into a publicly listed company.  According to AIZ, OAB will continue to o...

The United Arab Emirates (UAE)-based Emirates Islamic Bank (EIB), has launched a novel digital business banking package and lowered the minimum balance to open accounts for the benefit of start-ups and small and medium-sized enterprises (SMEs) while lowering the minimum balance requirement to AED 10,000 to open a new bank account. According to local media reports, this initiative is a part of EIB’s commitment towards empowering entrepreneurs and SMEs, which accounts for 94% of the UAE's operating companies and represents over 86% of the private sector empl...

Ministry of Finance (MoF) officials confirmed that the Government of Bangladesh is currently in negotiations to obtain up to USD 2.0 billion in funding to support the budgetary gap during its current fiscal year, which commenced on the 1st of July 2020. According to the MoF, this support is being sought via bilateral and multilateral development partners and will go towards stabilising the economy in the wake of the on-going COVID-19 pandemic.  According to an MoF official, amongst the funding options being considered, the Government is antic...

Saudi Arabia has unveiled a SAR 670 million program to help businesses in the country postpone repayment of financing instalments in 2020 due to the economic uncertainty triggered by the COVID-19 pandemic. The Corporate Sustainability Program launched by Saudi Arabia’s Ministry of Finance (MoF) is anticipated to reduce the loan requirements to support projects for 192 companies employing more than 20,000 Saudi nationals across diverse industries. The Government has initiated this program to support the private sector and reduce the economic and financial e...

Local media reports citing a royal decree on the 12th of July 2020, stated that the Government of Bahrain is set to add in USD 470 million (BHD 177 million) in emergency funding to its 2020 State budget, which will go towards dealing with the impacts of the on-going COVID-19 pandemic. According to a new decree, USD 450 million will be taken as a one-off deduction from the Future Generations Fund (FGF) and added onto to the current years’ state budget.  The FGF was set up in 2006, as a fund to reinvest hydrocarbon r...

Osman Akyüz, Head of the Participation Banks Association of Turkey stated that increasing focus on Shariah-compliant financing could be a way for the Turkish economy to mitigate the financial impact of COVID-19. Speaking to local media, Akyüz stated that the principles of profit and loss would be more effective during periods of economic disruption and would support a faster recovery when compared to conventional financing systems.  Speaking at a virtual Islamic Finance conference held in June 2020,&nbs...

Following the report of a Sukuk default by a Saudi Arabia-based MMF in May 2020, Fitch Ratings (Fitch) stated that the risk profiles of money market funds (MMFs) can be strongly influenced by investment guidelines and country-specific regulation. According to Fitch, this could be exacerbated by a stressed operating environment, which could potentially cause increased defaults in instruments with a lower credit quality that may be held by MMFs. According to Fitch, Saudi-based MMFs can buy long-term assets such as Sukuk, despite being short-term vehicles. This differs from ...

Climate action suffers from a ‘tragedy of the horizon’, where incentives for action today are poorly aligned with what is needed for the futureThe long-term economic stakes are approaching catastrophic levels, with a 90% GDP drop projected for India by 2100Quantifying the near-term opportunity from protecting the sources of ecosystem services, which creates significant near-term economic growth, helps show the financial materiality of natural capital (mis)managementIf a choice we make today might have a catastrophic economic impact in five years’ time would we make a different choice? What if...

Advanced Petrochemical (AP), based in Saudi Arabia, has secured a SAR 1.5 billion (USD 400 million) cost-plus Murabahah facility with a tenure of 5.5 years.  In a filing to the Saudi Arabian Stock Exchange or Tadawul, made on the 12th of July 2020, AP noted that the Murabahah facility was signed between AP and Riyad Bank, SAMBA Financial Group, as well as Al Rajhi Bank.  According to AP, the funds obtained will go towards financing growth projects for AP and its subsidiary. AP manufactures propylene and polypropylene in Saudi Arabia and its ...