Impact of Islamic and conventional corporate governance mechanisms on ethical performance of Islamic banks: Evidence from MalaysiaIslamic banking, Mudaraba, Zakat

Egypt’s gross domestic production (GDP) grew by 5% during the third quarter of fiscal year (FY) 2019/20 (quarter ended 31st March 2020), according to Hala El-Said, Egypt’s Minister of Planning and Economic Development.  The decline was attributed to the COVID-19 pandemic, which has led to a slowdown in several sectors including tourism, wholesale and retail, and industry.El-Said had previously revealed two scenarios to indicate the likely outcome of the pandemic on Egypt’s Gross Domestic Product (GDP), the first scenario estimating 4.2% growth for FY2019/2020 (ending 3...

Banks in Malaysia are in a position of strength in facing the COVID-19 crisis, and are considered to be faring better than their regional counterparts, according to S&P Global Ratings (S&P).Nancy Duan, Associate, Financial Institutions Ratings of S&P, stated that the robust position of Malaysia’s banks was based on the country’s Common Equity Tier 1 ratio, which stood at a sturdy 14%, and gross non-performing loan (NPL) at 1.5%, which was the lowest in the region, as at December 2019. Speaking at a recent webinar, Duan highlighted that a consistent annual compression...

Key economists in Malaysia have stated that Malaysia will not experience deflation, despite the plummeting Consumer Price Index (CPI) which declined a further 2.9% in April 2020 year-over-year (YoY), its biggest drop since 2010.According to Dr Mohd Afzanizam Abdul Rashid, Chief Economist of Bank Islam Malaysia (BIM), the country was not heading towards deflation since the main driver behind the decline in the headline CPI was fuel prices and electricity charges, with both sub-indices declining by 38.2% and 33.3%, YoY respectively, in April 2020. Dr Afzanizam stated that the core CPI, which e...

Consumer lending in Malaysia is expected to decelerate in 2020 in the wake of the COVID-19 pandemic, according to data and analytics company, GlobalData. Data from GlobalData’s Global Retail Banking Analytics revealed that growth in consumer loans are expected to slow down to 2.4% in 2020, following a compound annual growth rate (CAGR) of 5.9% over 2015-2019,The deceleration is attributed to the downturn of the Malaysian economy amidst the COVID-19 outbreak, which has impacted consumer lending. Shivani Gupta, Senior Banking and Payment Analyst at GlobalData, stated that a decline in ne...

Statistics provided by the State Bank of Pakistan (SBP) indicated that private sector borrowings from Islamic banks declined to PKR 52 billion during the first ten months of the current fiscal cycle (July 2019-April 2020), against PKR 79 billion in the same period of the previous fiscal cycle. Notably, Islamic banking windows of conventional banks experienced an increase in private sector borrowings to PKR 122.7 billion during the same period in the current fiscal cycle, compared to PKR 100 billion during the same period in the last fiscal year.Meanwhile, private sector borrowings from conve...

Turkey’s Turkiye Emlak Katilim Bankasi AS Long-Term Foreign Currency (LTFC) Issuer Default Rating (IDR) was downgraded to B from B+ by Fitch Ratings (Fitch), with the Outlook revised to Negative from Stable.The LTFC IDR downgrade and Outlook reflects Turkey’s weaker foreign currency reserves position, and therefore its limited ability to provide support to Emlak Katilim in foreign currency if needed. This has also led to Emlak Katilim’s Support Rating Floor (SRF) being lowered to B from B+. However, Fitch notes that Emlak Katilim’s LTFC IDR continues to be supported b...

Fitch Ratings (Fitch) has affirmed the Long-Term Issuer Default Rating (IDR) of Emirates Islamic Bank at A+ with a Stable Outlook. EIB’s viability rating (VR) has also been maintained at bb-.The key rating drivers supporting the affirmation include the fact that EIB is an integral part of its group; hence the ratings of EIB are stated to be in line with that of its parent company, Emirates NBD Bank (ENBD, A+/Stable/F1). ENBD’s IDR’s rating is indicative of Government support. Fitch noted that the support offered to ENBD is likely to flow through to EIB, given EIB’s fa...

Marking its sixth issuance exercise for the year, National Mortgage Corporation of Malaysia (Cagamas Berhad) has concluded its pricing for MYR 750 million worth securities comprising of MYR 305 million 3 month Sukuk, MYR 300 million 3 month conventional commercial papers and MYR 100 million dual tenure one and two year conventional securities, according to Datuk Chung Chee Leong, the President and Chief Executive Officer of Cagamas.According to Chee Leong, proceeds from the issuance of these securities will be utilized towards funding the procurement of eligible assets. Leong added that the...

The Malaysian Rating Corporation (MARC) has affirmed its ratings on the MYR 140 million outstanding Islamic Medium-Term Notes (IMTN) of Ranhill Powertron II (RPII) at AAis and the AAAis (fg) rating of the MYR 350 million [S2] outstanding guaranteed IMTN with a Stable Outlook.The AAis rating on the MYR 140 million IMTN illustrates the favourable conditions in the Power Purchase Agreement (PPA) transferring demand risk and fuel price risk to the offtaker, Sabah Electricity (SE), in which Tenaga Nasional Berhad (AAA / Stable) has an 83% stake.Meanwhile the AAAis (fg) rating of the MYR 350 mil...