LONDON, 30 January 2003 — Saudi Arabia’s National Commercial Bank (NCB) and Al-Rajhi Banking and Investment Corporation (ARABIC) have won the "Best at Islamic Asset Management" and the "Best at Islamic Commodities Dealing" category awards at the inaugural Euromoney Islamic Finance Awards 2002, which was held in London last week during the 2nd Annual Islamic Finance Summit. There were awards in nine categories with banks from Malaysia, Kuwait, and Bahrain sweeping the other awards.
"National Commercial Bank," stressed Euromoney, "offers one of the widest ranges of Islamic investment funds and is by far the largest sponsor of funds under management. NCB’s funds have wide recognition outside its home market of Saudi Arabia. The Saudis dominate the field of Islamic asset management by virtue of their size."
Al-Rajhi, according to Euromoney, has over the decades developed commodities trading as a core line of business and is the only bank that takes positions in the commodity markets. Other Gulf banks to be honored include Shamil Bank, the flagship entity of the Geneva-based Dar Al-Maal Al-Islami (DMI) Group headed by Prince Muhammad Al-Faisal, which won the "Best at Islamic Project Finance" award; Bahrain-based First Islamic Investment Bank (FIIB) which was judged to be the "Most Innovative Islamic Finance House", and in which is headed by Chairman Mohammed Abdulaziz Al-Jomaih; Kuwait Finance House judged to be "Best at Islamic Leasing"; and Bahrain Islamic Bank which won the "Best Islamic Commercial Bank" award. Takaful Nasional of Malaysia, which is technical adviser to Bank Al-Jazira’s Takaful Ta’awuni Program, won the "Best at takaful (Islamic Insurance)" award; and Aseambankers of Malaysia was judged to be the "Best at Islamic Bonds" and its parent Maybank the "Best Islamic Retail Bank". FIIB CEO Atif Abdulmalik, commenting on the award, stressed that the bank "was formed to take advantage of the growing interest in the Middle East for modern and innovative financial products that are consistent with Islamic principles. It is our firm belief that financial products can be designed to deliver a full and competitive range of risk-adjusted returns and liquidity while maintaining compliance with Islamic principles." The bank has pioneered innovative Islamic real estate investment products and direct equity investments in excess of $1 billion mainly in the US market. FIBB has just announced a 10.1 percent increase in net profits for the year ending Dec. 31, 2002 to $36 million from $32.7 million in 2001.
The conference charted the progress, challenges and shortcomings of the global Islamic finance movement. Bahraini Minister of Finance & National Economy Abdulla Hassan Saif, in his keynote speech, stressed that encouraging progress has been made by leading professionals and regulators in articulating the Islamic system of financial management as a "highly ethical, profit-seeking form of business activity. The tragedy of Sept. 11 prompted better two-way communication between Islamic market participants and authorities on the one hand, and their conventional counterparts, on the other."
Saif commended the outreach policies of the US and UK regulators, which has inter alia resulted in the Financial Services Authority (FSA) in the UK expressing interest in welcoming a license application to create a UK Islamic bank; and the US Treasury hosting two briefings on Islamic finance at the Department in Washington DC during 2002.
He stressed that there are minorities in all religions who abuse and exploit charities and charitable foundations. But in the wake of 9/11, it would be a further tragedy if "the lawful flow of funds to legitimate charities were to be constrained." Charity is one of the basic tenets of Islam, and the solution must be "to ensure that all charitable institutions operate within the rule of law, follow appropriate procedures, and are subject to regular independent audits." Saif also added that further efforts will be needed in 2003 throughout the world to continue to combat terrorist financing, under the stewardship of the Financial Action Task Force Against Money Laundering (FATF).
Malaysia, according to Bakaruddin Ishak, head of Islamic Banking & Takaful Department at Bank Negara (the central bank), is now in its third phase of developing its Islamic banking sector, which at end November 2002 had $17.9 billion in assets or 8.9 percent of the total domestic banking assets market of $200 billion. In the secondary market, $5 billion or 60 percent of bonds issued in Malaysia, revealed Ishak, were Shariah-compliant.
