Islamic finance sees big growth in Europe

Islamic finance sees big growth in Europe
Updated 02 February 2017

Islamic finance sees big growth in Europe

Islamic finance sees big growth in Europe

JEDDAH: In today’s connected world of business, Islamic finance is a concept that people working in the banking and finance industries are likely to come across in their careers.
Islamic finance, despite its label, is not limited to Muslim countries. It has shown growth globally, including in Europe.
Total Islamic finance assets worldwide are projected to grow to $3.5 trillion by 2021 from $2 trillion currently, according to Thompson Reuters’ Islamic Finance Development “Resilient Growth” report published in 2016.
There are 622 institutions providing Islamic finance courses worldwide, and 201 provide Islamic finance degrees, according to the report.
Europe is increasingly showing interest in Islamic finance education. There are 109 institutions that provide Islamic finance education in Europe, 63 percent of them in the UK.
Britain issued its first Islamic bond (sukuk) worth £200 million (over $250 million), according to a statement by the Treasury published on the government’s website in June 2014.
“Islamic finance is attractive to ethical investors or those looking to do business with Shariah-compliant businesses,” said Farmida Bi, a London-based banking lawyer and head of Islamic finance in Europe at Norton Rose Fulbright global law firm.
“These economies (in non-Muslim countries) are interested in the financing opportunities that Islamic finance can offer, both as an external investor and to respond to the demands of their indigenous Muslim populations,” she told Arab News.
The case of the UK
Being home to 3 million Muslims, according to the Office of National Statistics in 2016, the UK is a leading hub for the Islamic finance industry in Europe.
It also has a fully Shariah-compliant retail bank: Al-Rayan Bank (formerly Islamic Bank of Britain).
“Britain is today the leading center for Islamic finance in the West, including British higher education institutions leading the non-Muslim world in the teaching of Islamic finance,” said Nyra Mahmood, managing director of the UK-based Simply Sharia Human Capital (SSHC Ltd.).
She emphasized the important role financial technology (FinTech) can play in further introducing Islamic finance and banking.
“The opportunities emanating from the FinTech scene and the ethical financial space gives rise to how the UK’s Islamic finance can look at shaping and taking the lead in fulfilling the wider needs of society through technology and innovation, especially with a younger, more socially active generation wanting to join the industry,” she told Arab News.
She said the younger generation expects more from their money, as they are socially conscious and want to see companies embrace their corporate social responsibility along with being part of a financial services sector.
“These are the issues driving a new generation of Islamic finance practitioners and consumers alike, both Muslim and non-Muslim in Europe and beyond.”
Mahmood said factors that can affect Islamic finance moving forward in the UK, directly and indirectly, include the aftermath of the Brexit vote, the UK’s economic outlook for 2017 onward, and customers’ needs.
“With this in mind, the UK’s Islamic finance industry is well positioned.
“As the country looks beyond the EU, there’s an opportunity to align the UK with investors and partners from other Islamic hubs, namely the Gulf and Malaysia, which is already happening,” she said.
“Further engagement and investments with these regions and others, through support from the UK government, can strengthen Islamic finance in the UK and assist Britain economically.”
Islamic finance has witnessed a rise in the past 10 years. Europe’s tallest building, the 95-story Shard skyscraper marking London’s landscape, was financed through Shariah-compliant instruments.
Other projects such as Chelsea Barracks and the Olympic Village were also partly or wholly financed in the same manner, said Mahmood.
There is growing demand among non-Muslims for more education and awareness of the industry as well as products.
In a survey by Al-Rayan Bank in 2014, 57 percent of non-Muslim participants said Islamic finance was relevant to all faiths because they believed it was ethical.
“Many professionals working in Islamic finance today have a background in conventional finance and banking, and many of those are non-Muslim,” Mahmood said.
“As a firm, most of our clients in terms of training in Islamic finance are from the conventional professional services, law firms, accountancy practices and non-Shariah-compliant banking and finance staff.”
Muslims and non-Muslims “are looking for an alternative that promises and delivers on ethical values.
The underlying principles of Islamic finance promote equity, fairness and the betterment of the wider community.”
The case of Spain
Spain is one of the countries curious about Islamic finance. One of its top business schools, IE Business School based in Madrid, has a center that teaches and researches Islamic finance.
“There’s a lack of knowledge in Islamic finance. Everybody is looking but no one is pushing yet,” Gonzalo Rodríguez, general coordinator at the Saudi-Spanish Center for Islamic Economics and Finance (SCIEF), told Arab News during a visit in Jeddah.
“After the financial crisis (in 2008), ethical banking became much more popular, especially among young people. We believe it’s fair, ethical and based on real economy, and we try to spread this approach.”
SCIEF is the fruit of collaboration between the Islamic Economics Institute at King Abdulaziz University (KAU) in Jeddah and IE Business School, and has been running since 2009.
Although Islamic finance and banking remains non-existent in Spain, it is becoming popular among finance students who wish to gain international experience. The role it plays is both educational and advisory.
“We’re trying to spread knowledge of Islamic finance in Spain, and to reach out to all players to explain to them what Islamic finance is, its potential in Spain, and the opportunities we have for Islamic finance in the country,” Rodríguez said.
“We see Islamic finance as an industry and an alternative way to make finance. It opens windows for foreign investments.”
He pointed out what he believes are the three main reasons behind growing interest in Islamic finance in Spain. First, it is seen as a new industry that is booming.
“Second, when people study Islamic finance they find it more ethical and believe in its principles.”
The third reason is that the person is Muslim and wants to adhere to his or her religious teachings.
“As an international business school, we think worldwide. Islamic finance makes 1 percent of assets worldwide. We have students interested in that. They’ll probably not work in Spain, but in other countries,” Rodríguez said.
He and a number of his colleagues from SCIEF came to Jeddah last week to give the third edition of the center’s annual four-day Islamic Finance Executive Program (Jan. 23-26), in partnership with the Islamic Research and Training Institute (IRTI) and KAU.
The program consisted of classroom sessions, roundtable discussions and field visits. Students were mainly international.
The university played a role in teaching and organizing, as the teachers were both from the university and the center.
“Students studying finance at IE Business School can choose the Islamic finance module as an elective, and they’re not necessarily Muslims,” Rodríguez said.
The collaboration between Jeddah and Madrid goes both ways. Every year, SCIEF hosts 10-15 students from KAU coming to the IE Business School “immersion week” on entrepreneurship, not Islamic finance, but they take advantage of Saudi Arabia having a center in Madrid at a top university.
Being a country with a small Muslim minority — 4 percent of the population as of 2015 — having a religious label can be a barrier, Rodríguez said. Applying it will require changes in the way the banking system works.
“At a regulatory level, it’s quite difficult to accept Islamic finance and give a license to a bank, because then we’ll need to change many things in our laws and banking regulations in terms of interest for example,” he said.
“It’s difficult to put it in the agenda because it’s difficult to explain it in Spain. I think there are challenges and opportunities for Islamic finance in terms of lands, investments in real estate, in the halal industry that is growing.”
The center created a think tank in 2016 with “main players of the economy in Spain from banks and law firms,” including Santander Bank.
“We’ll have four meetings per year,” Rodríguez said. “They see the opportunity, and if something happens they want to be there. They know Islamic finance represents 1 percent of assets worldwide.” The first meeting is set to take place on Feb. 23.
Rodríguez said Spain is yet to start adopting Islamic finance and banking due to the small number of Muslims in the country and the lack of knowledge about it.
However, he said FinTech can accelerate its introduction: “Banking is changing, and will absolutely change in the next five years. FinTech is the future. Relations between the bank and client will change.”


Korean envoy invites Saudi Arabia to GICC2021

Korean Ambassador Jo Byung-Wook during a meeting with Prince Saud bin Talal bin Badr and officials from Ministry of Municipal and Rural Affairs and Housing. (Supplied)
Korean Ambassador Jo Byung-Wook during a meeting with Prince Saud bin Talal bin Badr and officials from Ministry of Municipal and Rural Affairs and Housing. (Supplied)
Updated 2 min 54 sec ago

Korean envoy invites Saudi Arabia to GICC2021

Korean Ambassador Jo Byung-Wook during a meeting with Prince Saud bin Talal bin Badr and officials from Ministry of Municipal and Rural Affairs and Housing. (Supplied)
  • The annual conference provides an opportunity to present projects to potential Korean partners, and to hold personal consultations

RIYADH: South Korean Ambassador Jo Byung-Wook has invited Saudi Arabia to attend the Global Infrastructure Cooperation Conference (GICC2021).

The annual conference provides an opportunity to present projects to potential Korean partners, and to hold personal consultations.

The ambassador met Prince Saud bin Talal bin Badr, undersecretary at the Ministry of Municipal and Rural Affairs and Housing for housing subsidies, and general supervisor of the International Cooperation Department at the ministry in Riyadh.

GICC2021 is scheduled for “later this year,” the ambassador told Arab News, adding that the meeting “reviewed the close, friendly and cooperative relations” between the two countries, and “agreed to continue to expand bilateral cooperation in the housing sector.”

He said: “I commended the Saudi government’s efforts to help Saudi families own their house through the Sakani program, taking note of the signing of four agreements during the Sakani Forum held last Thursday in Riyadh.”

The Sakani program helped 70,000 families in the first quarter of 2021, surpassing its target of serving 51,000 families.

It was formed in 2017 by the Ministry of Housing and the Real Estate Development Fund, with the aim of facilitating home ownership in the Kingdom by creating new housing stock, allocating plots and homes to nationals, and financing their purchase. It has a goal of reaching 70 percent home ownership by 2030.

The program aims to serve 220,000 Saudi families this year by creating 50,000 housing units, facilitating the reservation of 30,000 residential land plots, and arranging 140,000 real estate loans. To date, Sakani has enabled more than 350,000 families to own homes.


Finance giant Fitch partners with SIDF Academy for Saudi talent program

SIDF Academy has more than 47 years’ experience in training employees in the finance, technology, industry, mining, energy and logistics industries. (File Photo)
SIDF Academy has more than 47 years’ experience in training employees in the finance, technology, industry, mining, energy and logistics industries. (File Photo)
Updated 22 min 30 sec ago

Finance giant Fitch partners with SIDF Academy for Saudi talent program

SIDF Academy has more than 47 years’ experience in training employees in the finance, technology, industry, mining, energy and logistics industries. (File Photo)
  • Fitch Learning: Scheme will ‘set professionals on fast track for success’
  • SIDF Academy: ‘Collaboration represents major step on path to train, develop keen talent’

LONDON: Fitch Learning, the knowledge and training arm of global financial leader Fitch Group, has announced a partnership program with the Saudi Industrial Development Fund (SIDF) to boost financial education in the Kingdom.

The delivery of the Certified Investment Financing Professional (CIFP) training program will “enrich the financial skills of local talent,” and “provide them with a better insight into the increasingly complex global financial landscape,” Fitch Learning said in a statement.

The program will be delivered in cooperation with SIDF Academy, which aims to build knowledge in key sectors in line with Saudi Arabia’s industrial vision.

It will “allow CIFP participants to keep pace with the Saudi economy, and also offer them a pathway to building global expertise and qualifications,” Fitch Learning said.

The CIFP program will target employees in the finance, credit and investment industries. It will include three levels with 18 distinct training modules, including financial accounting, financial analysis, lending, business development and financial modeling.

“Saudi Arabia is a key strategic market for the Fitch Group, and we are delighted to play a key role helping the Kingdom enrich financial training skills across the Kingdom,” said Fitch Learning CEO Andreas Karaiskos.

“We will deliver exactly the right international financial certification opportunities via our CIFP program to set professionals on the fast track for success.”

SIDF Academy Director Dr. Kholod Ashgar said: “We are proud to be working together with Fitch Learning, a leading global provider of professional development courses for the financial services industry, to deliver this CIFP program via SIDF Academy.

“This collaboration represents a major step on our path to train and develop our keen talent to stimulate future prosperity, jobs and growth in this vital sector of the Saudi economy.”

SIDF Academy has more than 47 years’ experience in training employees in the finance, technology, industry, mining, energy and logistics industries.

In 2019, SIDF was aligned with Saudi Arabia’s Vision 2030 reform plan, enabling the fund to play a vital role in shaping the Kingdom’s future. 


Abu Dhabi issues major schools and lighting PPP tenders

The Abu Dhabi Investment Office (ADIO) has advertised the procurement of the schools. (Shutterstock/File Photo)
The Abu Dhabi Investment Office (ADIO) has advertised the procurement of the schools. (Shutterstock/File Photo)
Updated 38 min 55 sec ago

Abu Dhabi issues major schools and lighting PPP tenders

The Abu Dhabi Investment Office (ADIO) has advertised the procurement of the schools. (Shutterstock/File Photo)

RIYADH: Abu Dhabi is seeking private sector partners for three new schools and a street lighting project.

The Abu Dhabi Investment Office (ADIO) has advertised the procurement of the schools and phase 2 of its street lighting upgrade program, WAM reported.

Potential bidders can now submit expressions of interest.

“Collaboration with the private sector is an integral part of the Abu Dhabi leadership’s vision to drive long-term economic growth in the emirate. In 2020, ADIO laid the foundations to supercharge collaboration between business and government,” said the director-general of ADIO, Tariq Bin Hendi.

The Zayed City Schools PPP project will provide three new schools with a capacity of 5,360 students in Abu Dhabi’s Zayed City.

The contract will include the design, build, finance, maintenance and transfer of three schools with a concession period of 22 years, inclusive of a construction period of 24 months and a maintenance period of 20 years.

Phase 2 of the Street Lighting LED PPP program will see approximately 140,000 of the emirate’s streetlights replaced with energy-efficient LED technology.

This will offer a 76 percent reduction in their power consumption — equivalent to cost savings of 705 million dirhams — and will be structured as a 12-year concession agreement with the Department of Municipalities and Transport (DMT).

ADIO is the central Abu Dhabi government authority with responsibility for delivering infrastructure projects through a PPP framework.


Saudi Arabia’s biggest gym chain swings to loss

Saudi Arabia’s biggest gym chain swings to loss
Updated 20 April 2021

Saudi Arabia’s biggest gym chain swings to loss

Saudi Arabia’s biggest gym chain swings to loss
  • Operates 135 gyms in UAE and KSA
  • Pandemic has hit fitness sector hard

DUBAI: Saudi Arabia’s biggest gym chain swung to a first quarter loss as the pandemic forced the closure of thousands of fitness clubs worldwide.
Leejam Sports Company reported a net loss of more than SR6.9 million in the first quarter compared to a profit of SR6.2 million a year earlier, it said in filing to the Tadawul stock exchange where its shares are listed.
Overall revenues dipped by about a quarter over the period to SR148.5 million, it said.
Total gym memberships, personal training revenues and rental income fell by more than SR49 million as a result of gym closures in the Kingdom from Feb.5, 2021 to March 6, 2021, it said.
Meanwhile the need to apply precautionary measures in response to the pandemic reduced the number of members joining the clubs.
Leejam operates some 135 Fitness Time centers in Saudi Arabia and the UAE.


‘Many more airlines will go under’ Qatar Airways boss tells CNN

‘Many more airlines will go under’ Qatar Airways boss tells CNN
Updated 20 April 2021

‘Many more airlines will go under’ Qatar Airways boss tells CNN

‘Many more airlines will go under’ Qatar Airways boss tells CNN
  • Qatar Airways CEO Akbar Al-Baker gave a bleak assessment of the challenges facing the industry as it struggles to recover the collapse in global air travel

DUBAI: Qatar Airways CEO Akbar Al-Baker has warned that many more airlines will be forced out of business by the pandemic.
In an exclusive interview on CNN’s Quest Means Business, Qatar Airways CEO Akbar Al-Baker gave a bleak assessment of the challenges facing the industry as it struggles to recover the collapse in global air travel.
“By the time this pandemic is over, there will only be few airlines that are strong and will continue operating,” he said. “A lot of other airlines will go under. And this will continue to happen, because we have not seen the worst of it over yet.”
He said that returning the airline industry to full strength should be a key priority to boost the global economic outlook.


“If this pandemic prolongs for too long, this will completely destroy the world’s economy which is so dependent on airlines for delivering business, carrying freight around, and most importantly creating jobs,” he said.
The outspoken airline chief highlighted some of the safety measures adopted by the airline and its hub at Hamad International Airport in Doha.
These include high-tech temperature sensors, ultraviolet disinfectant processes, and mask-wearing on flights.
He also spoke about the process of asking the company’s shareholders – the Qatari government – for a cash injection during the pandemic, “I couldn’t just jump the queue and go and tell my boss, the ruler of my country, that our situation is so dire, and this is what we need. Because I am sure there were a lot of other people in the queue before me telling him the same thing.”

The CEO also spoke about access to vaccinations and mitigating the risks amid the slow roll out of vaccines in some countries. He told Quest, “It will be a problem for the aviation industry. And we will have to work a way within this risks that we will have to take. But we will have to do things, we'll have to put processes, we'll have to put systems in place to mitigate that risk.” A resurgence of the coronavirus in many countries in recent weeks is threatening to quash some positive signs that had been slowly emerging from the sector. At the same time many passengers are reluctant to fly even where permitted, because of safety concerns and confusion over the different vaccination, testing and quarantine requirements of different countries. Industry body IATA has been trying to address that challenge with its trial Travel Pass initiative aimed at informing passengers about what tests, vaccines and other measures they require at their destinations.