Islamic banking influencing North American institutions



ABDUL HANNAN TAGO

Published — Thursday 15 November 2012

Last update 23 November 2012 7:11 pm

| نسخة PDF Print News | A A

RIYADH: While Shariah-compliant banking is not widespread in the United States, Islamic financial institutions are making headway in gaining a foothold in North American banks to bring services to customers.
“I have no doubt that investment in a purely Islamic-compliant banking is growing in the US, where there is a lot of openness, I guess, through a Shariah-compliant investment,” said Benjamin Newland, partner with King & Spalding. The firm has offices in Riyadh and specializes in Islamic Financing.
“I can see even before coming over here (to Saudi Arabia) that there was a shift by the time I left in 2006,” he added. “There was a lot of recognition in the market for Islamic structure and investment due to the presence of the Muslim community in the US.”
Newland was attending the first Islamic Finance News Forum, which concluded Tuesday in Riyadh. The forum focused in Islamic financing in Muslim countries and the growing role that Saudi financial institutions are playing in the region.
Saudi Arabia had one of its best years in 2011 when Islamic capital markets had issuances that included $ 4 billion Sukuk for the General Authority of Civil Aviation (GACA).
In addition, Islamic Development bank reported assets of $ 94 billion in December 2011, which represents slightly more than one-quarter of the GCC’s total Islamic financing assets.
Despite the growing interest in Europe and Asian countries in Islamic banking, Shariah compliance has hardly made a dent in North America. Yet Newland argues that the time is right for US banks to embrace the concept.
“If you look at the financial crises in the US, a lot of it was caused by a financial conflict instruments,” he said. “That’s why the banks here have a strong footing as they do not rely on exhausted financial instruments, which are causing a lot of trouble.”
Meanwhile, banking experts spent the second day of the forum debating key issues facing investors in the Kingdom.
Humphrey Percy, chief executive officer of the Bank of London and Middle East (BLME); Jawad Ali, managing partner of the Middle East offices and deputy global head of Islamic Finance; King & Spalding's Neil Miller and Abdulkader Thomas, president and CEO of SHAPE Financial Corporation
discussed sovereign wealth funds and their reach and scope in Asia and the Gulf.
They also addressed investment in Saudi Arabia compared to other Gulf countries in terms of costs, legal considerations, opportunities and sectors.
Investor protection, recourse to assets, default, insolvency and restructuring of Islamic finance, key practical issues and avoiding costly mistakes of enhancing risk management were among the other subjects listed for discussion.
The session on Islamic Private Equity (IPE) dealt with IPE and Saudi Arabia and Gulf, and the future of IPE vis-a-vis conventional private equity.
King & Spalding focuses on Islamic finance and investment and its presence in the region dates to early 1980s. In 1995, it was the first law firm to establish a dedicated Islamic finance and investment practice group.
The firm has advisers to sponsors of more than 50 Shariah-compliant property funds valued at approximately $ 10 billion that have invested in properties in the United States, Europe, the Middle East and Asia.
It also specializes in private equity funds with advisers to sponsors of private equity funds valued in excess of $ 6 billion domiciled in Saudi Arabia, Bahrain, the United Arab Emirates, the Cayman Islands, Luxembourg, Jersey and other offshore jurisdictions for equity investments in Europe, the Middle East, Asia and the United States.

 

PICTURE CAPTION: Panelists at the first Islamic Finance News Forum: (From left) Abdulkader Thomas, president and CEO of SHAPE Financial Corporation; Ayham Al Yousef, CEO AlBilad Investment Company; Benjamin Newland, partner, King & Spalding; Hisham S. El-Farouki, director, Eastgate Capital Group; and Mr. Yasser Dahlawi, CEO Shariyah Review Bureau.

What's happening around Saudi Arabia

SYDNEY: Amnesty International has demanded that Mustafa Al-Hosawi, a Saudi prisoner at Guantanamo Bay in Cuba, be treated for the torture he underwent at the hands of the CIA.The US branch of the organization sent a message to health officials at the...
JEDDAH: The city’s airport staff saved a 20-year-old woman who tried to throw herself from the upper floor to the mezzanine floor in the southern hall. Sources said the suicide attempt was due to family disputes. Administrators said a supervisor in t...
RIYADH: Education Minister Ahmad Al-Issa has ordered to gradually close down private night schools beginning from the current year. The closure of these schools will be complete by 1439H.Al-Issa’s decision is based on reports of a body, which highlig...
RIYADH: A cross-section of Saudi society on Friday denounced the Jazan massacre that shook the nation on Thursday, when a gunman went on the rampage killing seven education officials and injuring several others in Al-Dair governorate.The culprit, ide...
JEDDAH: Maj. Gen. Awad Al-Balawi, head of the Saudi Border Guard, recently confirmed the expansion of the employment program for women within the border security sector. He said that the sector is entering a new phase as women will be employed in a n...
RIYADH: A medical team of the King Abdullah Specialist Children’s Hospital (KASCH) at the King Abdulaziz Medical City (National Guard) here have successfully conducted the first liver transplant on a baby boy. Fahad Mari Said Al-Sairdh, father of the...
JEDDAH: The Makkah Investigation and Prosecution Board reintroduced the crane crash incident to the Riyadh Investigation and Prosecution Board recently, adding 10 more employees and supervisors from different government agencies before the courts. Th...
JEDDAH: The teacher who gunned down seven education officials in Al-Dair governorate on Thursday had been showing behavioral problems in recent days, Al-Janob Misfer Al-Subhan, director of King Faisal Secondary School in Dharan, was quoted as saying...
JEDDAH: The Human Rights Commission (HRC) is investigating the Nakheel Mall case, in which a girl was beaten up by a group of Haia members, an official of the commission has said. “The HRC is supposed to guarantee the rights of those harmed, whoever...
AL-AHSA: King Faisal University (KFU) in Al-Ahsa is currently studying the possibility of admitting female students to specialize in veterinary medicine, the director of the university, Dr. Abdulaziz Al-Saati, confirmed. He said the matter has been p...
JEDDAH: A fingerprinting campaign, titled “Imprint Homeland,” against extremism and terrorism, was launched at the Jeddah corniche on Thursday night. The drive will cover all the 17 regions of Makkah province.The campaign, initiated by the Makkah gov...
RIYADH: The number of unemployed Saudi nationals reached 647,000 by the end of last year, of whom 56 percent, or 363,800, hold bachelor’s degrees or licenses. Female bachelor’s degree and license holders accounted for three-fourths of unemployed Saud...
RIYADH: Four citizens have been arrested in two murder cases, one of which was a road rage. One of the suspects resisted arrest and even opened fire on the police, but no one was injured.According to the Riyadh police, a clinic informed them that it...
MAKKAH: Thirty percent of male middle school students and 23 percent of female students take some form of drugs, a recent scientific study from the National Center for Youth Research confirmed. The study shows drug consumption rates among students in...
RIYADH: Several government departments participating in a campaign to fight breast cancer in the Eastern Province will offer their recommendations to the Ministry of the Interior to include breast cancer checks for women aged 40 and above as part of...

Stay Connected

Facebook