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Kuveyt Turk hitherto had a representative office in Frankfurt-am-Main in Germany, and the new authorization, albeit limited, of Ku- veyt Turk Beteiligungsbank is effectively an upgrade of the representative office.
Kuveyt Turk Participation Bank has hitherto marketed its profit-and-loss (PLS) sharing products to expatriate Turks working and liv- ing in Germany and the Benelux countries through representative offices. Kuveyt Turk also subsequently got permission to set up branches in Germany.
Kuveyt Turk Participation Bank also has a banking subsidiary in Bahrain and the Du- bai International Financial Centre (DIFC) and plans to open further offices in selected countries, especially those with which Tur- key has promising trade relations.
International; rating agency, Fitch at the end of 2009 placed Kuveyt Turk Participation Bank’s long-term foreign currency rating on positive watch (RWP).
Fitch also affirmed Kuveyt Turk’s long-term local currency rating at BBB-, short-term for- eign currency rating at B and short-term lo- cal currency rating at F3. The ratings reflect- ed the bank’s sound fundamentals and the strong support of its majority shareholder, Kuwait Finance House.
Kuveyt Turk net profit totaled 107 million TL in the first nine months of 2009 - up 26.7 percent from the same period in 2008. To- tal assets similarly increased from 4.954 million TL to 6.439 million TL in the same period for 2008 to 2009; total cash loans too increased from 4,136 million TL to 4,957 million TL, while customer deposits increased by 40.7 percent to reach 4,989 million TL for the same period.
Kuveyt Türk Beteiligungsbank (KTB) got the initial go-ahead toward the end of 2009, ef- fectively making it the first stand alone bank to operate under Islamic banking principles in Germany, and second only in the Euro- pean Union after the UK’s Financial Service s Authority (FSA) authorized five banks that operate under Islamic banking principles over the last two years.
Qatar Islamic Bank is also reportedly in the process of setting up a joint venture Islamic bank in France after getting approval from the French central bank.
Germany, whose history of credit unions and mutual societies, should be the ideal fit with Islamic finance. But, apart from Deutsche Bank, Hypo Real Estate Bank, Commerz- bank and insurance giant Allianz and FWU AG, another insurance company, structuring and distributing a number of ad hoc Islamic
10 GlobalIslamic Finance June 2010
financial products such as real estate trans- actions, private equity deals, equity certifi- cates, sukuk, Takaful and Retakaful in the Middle East and Asia, the German financial services sector has been conspicuous in its absence of promoting such offerings in its home market.
Commerzbank, for instance, was the fund manager for Albaraka’s asset management company, Al Tawfeek’s Al-Sukoor European Equity Fund, which has since matured and closed.
KTB is set to start operations in Mannheim in early 2011 with branches in several other German cities to follow. KTB’s license allows it to collect deposits and investment funds in Germany that will be transferred to PLS ac- counts in depositors and investors’ names in Turkey.
As far as the Meridio Global Islamic Multi As- set Fund is concerned, it is a dual currency (US dollar and Euro) open-ended multi-asset mutual fund with an issue price of $100 or 100 euros, is targeting high end Shariah- compliant stocks in the real estate, energy, raw materials, infrastructure, pharmaceuti- cals, alternative energy, transportation, food or water sectors in the countries of the Euro zone, United States, Canada, Brazil, India, Southeast Asia, Australia, the GCC coun- tries, Turkey, North Africa and Russia.
The subscription period closes at the end of April 2010 and the fund will start investing in early May 2010.
The fund’s investment manager, Meridio Ver- mögensverwaltung AG, is an independent asset manager for private and institutional investors, and has experience of launching investments with partners in the Middle East, where it launched its latest Meridio Arab World Fund in 2007.
According to Meridio Vermögensverwaltung AG, it can draw on a universe of more than 12,000 global securities/bonds, all of which meet the strict requirements and specifica- tions of the Accounting and Auditing Organi- zation for Islamic Financial Institutions (AAO- IFI) rule-book for Shariah-compliant equities and sukuk.
These take into account the fundamental data, technical analysis and market psychol- ogy, upon which the fund management then decides when and with what amount it in- vests in the relevant securities.
The Ethical Review Board (the Shariah Advi- sory Board) then reviews the fund at regular intervals, in order to guarantee that the eq- uities and sukuk fund portfolio comply with Islamic investment guidelines.
First Islamic Finance Centre to be Opened at UK University
Aston Business School opened the doors to its Islamic Finance Centre with the in- tention of establishing Birmingham as “the centre for Islamic finance in the UK.”
Named after Dr El Shaarani, the ceo of Surgi-Tech, a surgical instruments manufac- turer based in Dubai, the El Shaarani Centre for Islamic Finance and Business, was con- structed as a result of Dr El Shaarani giving a £1.5 million grant, the largest recorded financial gift Aston has received.
“We are honoured to sponsor a UK business school as prestigious as Aston and help to fund research that will explore the role of Is- lamic finance in the future global financial system,” says Dr El Shaarani.
“We believe that the creation of this centre will result in the development of new finan- cial tools that will attract greater foreign in- vestment to the West Midlands region. We look forward to continuing a prosperous re- lationship with Aston University.”
The Centre will offer a variety of degree pro- grams on Islamic finance for 2010, ranging from undergraduate level to executive level programs.
In addition to providing education, the Cen- tre will also research Islamic Finance and Shariah-compliant business as well as pro- viding consultation service to the govern- ment and commercial sector.
In the wake of the recession, Islamic fi- nance received positive media attention as it eschews usury and the selling of debt in favour of sharing the risk and rewards of en- tering into a business agreement. To some commentators it was this model that left the Middle East relatively untouched by the downturn.
“...Aston has established this Centre to meet the growing interest in Shariah-complaint fi- nance across the world,” says Dr Omneya Abdelsala.
“Through the Centre, we will educate the next generation of Islamic economists and business leaders – both nationally and inter- nationally.
Our research will allow us to investigate how mainstream financial institutions can learn from Islamic finance practices in their recov- ery from and avoidance of the next global economic crisis.” gif
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