Moody's Investors Service (Moody's) stated that the three largest banks (based on assets) in Malaysia are under growing pressure with regard to profitability due to the COVID-19-driven economic downturn. The rating agency's latest assessment follows the release of Q1-2020 financials by the three banks namely, Malayan Banking (Maybank), CIMB Group Holding (CIMB) and Public Bank (PB).  According to Moody's Vice President and Senior Credit Officer, Alka Anbarusa, a significant rise in the cost of financing and the deterioration of net interest margins (NIM)...

Analysis by KPMG in Saudi Arabia indicates a likely increase in mergers and acquisitions (M&A) across the Gulf Corporation Council (GCC) nations as struggling small and medium enterprises and large corporates alike seek equity injections to meet working capital requirements. According to the Head of M&A at KPMG in Saudi Arabia, Ali Maabereh, the on-going COVID-19 virus has led to a strong sense of uncertainty due to the prolonged extent of the pandemic with the biggest anticipated threat to companies being liquidity shortages in. Maabereh...

Moderating for the third month in a row, Indonesia’s headline Consumer Price Index (CPI) increased 0.07% month-on-month (MoM) in May 2020, driven by further easing in food inflation, according to media reports. This increase in the CPI was driven by higher transport prices (up 0.87% MoM) and health costs (+0.27% MoM), with other major components of the CPI recording marginal increases.  However, food, beverage and tobacco declined 0.32% MoM in May 2020, contributing to the easing up of the overall CPI. According to ANZ Research, low...

In a statement issued on the 1st of June 2020, the Government of Sharjah, United Arab Emirates (UAE) announced the raising of AED 2 billion via Sukuk trust certificates issued on the 19th of May 2020. Bank of Sharjah took on the roles of sole lead manager and arranger for the Sukuk issuance which was made on behalf of the Government of Sharjah. The issuance was made under the Sharjah Liquidity Support Mechanism; a Government framework initiated to enhance liquidity for the Emirate&rsquo...

According to a media report, Indonesia’s BNI Syariah (BNIS) has plans to expand overseas by adding on representative offices offering trade finance and remittance services. The state-owned Islamic bank aims to grow the branch offices of its Bank Negara Indonesia (BNI), its parent company in Singapore, Tokyo, Seoul, Hong Kong, London, and New York. BNI already has six overseas branch offices at present. BNIS President Director, Abdullah Firman Wibowo, stated that trade finance was an integral and profitable segment for BNIS, given that many of Indonesia’s forei...

Saudi Arabia’s National Commercial Bank (NCB) is planning to raise funding by issuing a SAR denominated additional Tier-1 Sukuk through a private placement, according to a bourse filing made by NCB. Funds raised through the Sukuk issuance will be utilized towards strengthening NCB's capital base in accordance with the Basel III framework. According to the filing, the value of the Sukuk will be determined based on market conditions subject to applicable laws and regulations. NCB has appointed NCB Capital as the sole book runner, lead arranger and lea...

A survey carried out by Ernst & Young (EY) has suggested that, Malaysian businesses expect the COVID-19 pandemic to have a prolonged as well as a greater impact on the country’s economy, and are most likely to consider mergers & acquisitions (M&A) as a growth strategy. In its 22nd edition of the EY Global Capital Confidence Barometer (CCB22), EY noted that executives could be more ambitious in their aspirations and aim to acquire certain assets that would lead to a quicker recovery, should there be a sustained slowdown as a result of the current turmoil. ...

Moody’s Investor Services (Moody’s) has stated in a recent report that it expects the outlook on Turkey’s banking sector to remain negative due to the impacts of the COVID-19 pandemic, which is expected to cause a reduction in the repayment capacity of borrowers and an increase in default facilities. Moody’s added that it anticipates the profit levels of Turkish banks to erode, driven by lower lending volumes and increased provisions, whilst an additional impact from the depreciation of the TRY is also expected. T...

The Saudi Arabian Monetary Authority (SAMA) will inject SAR 50 billion into the banking system to overcome the impacts of the drop in oil prices and the COVID-19 pandemic by enhancing financial stability and increasing lending capacity to the private sector. According to the SAMA, the program intends to help banks restructure or adjust private sector debts without additional charges, as well as to sustain employment levels and offer certain e-services free of charge. The COVID-19 pandemic is expected to cause the banking sector to experience a reduction in activity in 2...

Reputed local lawyer, Habib Al Mulla, Chairman of Baker McKenzie in the United Arab Emirates (UAE), expressed his views about the introduction of corporate tax in the country. According to Al Mulla, corporate tax is ‘unavoidable’ as the Government of the UAE seeks to diversify its revenue sources away from primarily oil and generate more steady sources of income.  Al Mulla also anticipates that the COVID-19 pandemic will accelerate the process as the UAE currently has a high government fee system, which authorities are likely seeking to replace. ...