A Note on the Profitability of African Banks: Islamic versus Conventional

Cost Efficiency and Profit Efficiency Analysis and Its Effect on Profitability in Islamic Banks in IndonesiaIslamic banking

Fitch Ratings (Fitch) has affirmed the Long-Term Issuer Default Rating (IDR) of the United Arab Emirates’ (UAE) Sharjah Islamic Bank (SIB) at BBB+, with a Viability Rating (VR) of bb+ and a Stable Outlook. Key ratings drivers supporting the affirmation of the long-term IDR include the fact that SIB is likely to receive support from the Government of the UAE if needed, with this financing being sourced through sovereign wealth funds, as well as recurring revenue from hydrocarbon production. According to Fitch, the willingness of the authorities to provide support to...

Amidst the impact of COVID-19, Malaysia-based OCBC Al-Amin Bank (OAAB) has announced plans to reinforce its commitment towards sustainable financing as well as take its value-based intermediation (VBI) to a new level via an increase in green financing projects in 2020. OAAB noted that VBI is a sustainability initiative focused on solidifying the presence of Islamic banking institutions in industry-driven investments, in order to generate a positive and sustainable impact on the community, environment and the economy. Earlier in May 2020, OAAB served as the lead arranger...

The Relationship between Participation Funds and Macroeconomic Variables: SVAR Analysis ApproachIslamic banking, PLS, Sukuk, Participation, Reserves

Economists have suggested that an economic recovery in the second half of 2020 appears unlikely for Malaysia, if Singapore experiences a significant economic downturn. This was suggested after Singapore forecast its Gross Domestic Product (GDP) to decline between 4-7% in 2020, as opposed to the earlier prediction of 1-4% made in March 2020, possibly marking Singapore’s worst recession to date. According to former World Bank Economist, Lim Teck Ghee, an economic downturn in Singapore is expected to have a worsening impact on Malaysia’s employment and also across the entire ra...

Japan’s Ambassador to Malaysia, Hiroshi Oka, has stated that Malaysia will be in a good position to benefit from Japan’s economic stimulus package due to its close trade and cultural proximity to Japan, in addition to having an extensive Japanese business network.  According to Oka, Malaysia can become an ideal destination for Japanese businesses to diversify their manufacturing facilities, due to Malaysia's political stability, good command of the English language, as well as the value-added supply chain to produce aircraft spare parts and medical equipment. Oka added...

Indonesia’s manufacturing industry accounts for almost 20% of the country’s gross domestic product (GDP), making it the largest business sector in the economy, according to a local media report.  The lock-down and restrictions pertaining to the COVID-19 pandemic which forced the closure of shops, factories, schools and offices has taken a toll on the manufacturing industry as nation-wide lay-offs have led to a decline in production. According to Industry Minister, Agus Gumiwang Kartasismita, factories across Indonesia have seen productivity levels drop to 20-3...

Research from the Oxford Business Group (OBG) indicates a growing appetite for Islamic financing products in Qatar. The OBG indicated that although conventional players continue to dominate Qatar financial services industry, Islamic financial services (IFS) are playing a progressively vital role in the expansion of Qatar’s economy.   Data from the Qatar Financial Centre (QFC) revealed that total assets in the IFS sector were valued at USD 129 billion as of June 2019 and accounted for 33% of Qatar’s total financial sector assets. Further, IFS sector assets witnessed...

Malaysian Islamic Funds have witnessed a 15% decline in its assets under management (AUM) due to the effects of the COVID-10 pandemic, according to a report by Fitch Ratings (Fitch). The report draws comparison of Malaysia’s Islamic funds to Saudi Arabia, citing stark differences in fund performance across both countries. Fitch stated that although AUM in Saudia Arabian Islamic funds increased in the same period, Saudi Arabia remains more susceptible to declines in Islamic fund AUMs in the long term, particularly in the event of a prolonged market recovery.&nbs...