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IFP - Aug and Sep 2012
IFP - Aug and Sep 2012
IFP - Aug and Sep 2012
In the recent years, Takaful has made its place in Pakistani market at a rapid pace. This is supported by the rules and regulations issued by SECP over the years.
O you who believe, when the call for Salah (prayer) is proclaimed on Friday, hasten for the remembrance of Allah, and leave off business. That is much better for you, if you but know. Then once the Salah is over, disperse in the land, and seek the grace of Allah, and remember Allah abundantly, so that you may be successful. [Surah AlJumua:9,10]
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Ask US 13 By Mufti Ibrahim Essa and Mufti Javed Pakistan Islamic Banking Industry Analysis 14
Editorial
Sukuk is an Islamic financial certificate, similar to a bond in Western finance, that complies with Shariah. In its simplest form Sukuk are assetbacked trust certificate evidencing ownership of an asset or its usufruct. As the traditional Western interest paying bond structure is not permissible, the issuer of a Sukuk sells an investor group the certificate, who then rents it back to the issuer for a predetermined rental fee. The issuer also makes a contractual promise to buy back the bonds at a future date at par value. As Sukuk securities adhere to Islamic laws sometimes referred to as Shariah principles, it prohibits the charging or payment of interest as to conventional bonds. Modern Islamic finance is a recent phenomenon. Only 30 years have passed since the first fully fledged Islamic financial institution (IFI) emerged, and the market for Sukuk (Islamic bonds) was non-existent up until the beginning of this century. The emergence of Sukuk has been one of the most significant developments in Islamic capital markets in recent years. Simply put, Sukuk instruments links their issuers, with a wide pool of investors, many of whom are seeking to diversify their holdings beyond traditional asset classes, thereby acting as a bridge for linking issuers with a pool of investors. Sukuk issuance has proven its resilience during the recent periods of global capital markets financial crisis. According to Moodys report on Islamic Banks and Sukuk, growth rates are at least twice as high as those recorded on global conventional financial markets. Nevertheless, liquidity in the Sukuk market is expected to improve gradually as the variety of Sukuk issuances widens. Not only the volumes are expected to exceed by the end of the current decade as seen by the industry experts, but the nature, geographic location and credit quality of future issuers are also expected to considerably diversify. Happy Reading!
Advisory Board
Mufti Irshad Ahmed Aijaz Mufti Najeeb Khan Anwar Ahmed Meenai Mohammad Aslam Mujeeb Baig Syed Shahjahan Salahuddin Faizan Memon
Editor-in-Chief
NusratUllah Khan
Associate Editors
Muhammad Shahzad Hussain Arshad Hussain Zubairi Ammar Khalid Rima Farooq
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65%
Takaful companies profitability graph have moved up in the recent years, solely based on the profitability.
30.0
20.0 10.0 PQFTL DFTL PKTCL TPL
PQGTL
PQFTL
DFTL
PKTCL
TPL
63%
also support the improvement in the performance of PTF. PQGTL Shareholders Fund (SHF) made pace ahead compared to the previous year as accumulated loss moved down by 20.8%.
was the increase in the issued share capital. Moreover, the increase in Shariah compliant fixed income and investment in low risk government backed Sukuks supported the increase in the fund. DFTL PTF figure increased by 144.9% compared to 2010 results. The gross contribution allocated to the PTF moved up by 54.7% compared to 2010 which improved PTF performance. Accumulated loss in the year caused the SHF to decrease. PKTCL PTF performance weakened as the deficit further decreased 12.7% increasing the accumulated deficit.
PQFTL Participation Reserve Fund improved by 115% compared to the last year. The main reason behind the improvement in the performance of the fund was the surplus in individual life and group life which overall strengthened the Takaful pool. Companys SHF increased by 19.8% , the primary reason behind the same
Conclusion
There was slight improvement witnessed in PTF of PQFTL, DFTL and TPL. However, the same showed an increasing negative trend in PQGTLs and PKTCLs PTF.
There was slight improvement witnessed in PTF of PQFTL, DFTL and TPL. However, the same showed an increasing negative trend in PQGTL and PKTCL. Moreover, the analysis of SHF reveal that except in the case of DFTL every other operators SHF fund showed improvement, which is caused by increased paid up capital and better returns on investments in certain cases.
434
447 362 267
275
155 131 23 DFTL PKTCL -257 9 TPL PQGTL -104 PQFTL DFTL PKTCL 134 56 13 TPL
72
PQGTL -93
PQFTL
-290
An initiative of IFP forum
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Continued The Performance of Takaful companies (2011) Financial summary of the Takaful Companies for the year 2011
Statement of Financial Position
Sr. No 1. 2. 3. 4. 5. 6. 7. 8. Description Total assets Investments Waqf / Cede money Creditors and accruals Total liabilities Paid up capital Share holders fund Participants Takaful fund PQGTL 443,621,775 131,274,372 500,000 54,867,057 271,930,919 307,800,080 275,297,452 (103,606,596) PQFTL 2,072,039,407 902,195,231 500,000 237,358,334 1,637,879,911 710,628,850 434,159,496 155,180,653 DFTL
Amounts in Rupees
PKTCL TPL
116,055,062 152,825,078 174,366,245 321,223,707 481,306,680 341,587,131 750,000,000 400,000,000 300,000,000 552,380,289 489,609,180 134,448,233 56,228,690 (289,879,246) 12,866,655
9.
Net contributions
272,568538
10. Profit / (loss) before taxation 11. Taxation 12. Profit / (loss) after taxation 13. Net investment income 14. Commission expense 15.. Management expenses 16. Wakala fees
(4,373,116) (115,532,353) 5,022,323 (9,395,439) 34,010,017 544,569,703 159,741,563 459,421,984 25,156,712 (90,375,641) 29,828,009 116,174,453
Disclaimer:
The data presented in this summary is extracted from the published audited financial statements of the respective Takaful companies for the year ended 31 December 2011. The newsletters management does not take any responsibility of authenticity of any data presented here and will not assume any liability due to any loss or damage caused by the usage of the information presented here. User discretion advised.
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An initiative of IFP forum
Announcement of the Islamic Financial Services Board's awareness program and FIS workshops 2012
The Islamic Financial Services Board (IFSB) is pleased to announce the upcoming awareness programmes and the Facilitating the Implementation of IFSB Standards workshops that will be held throughout the third and fourth quarters of 2012.
Kuwait's experience in this field and Turkey's promising economy. This led to a bank that is a source of pride for Kuwait and the GCC.
Disclaimer:
The news included here is on the basis of information obtained from local and international print and electronic media sources. IFP team does not accept any responsibility about their bona-fide.
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An initiative of IFP forum
KFH-Research: Promising potential and numerous challenges facing Islamic finance in South Africa
KFH-Research prepared a report about Islamic banking in South Africa, where it noted that significant developments occurred during the past years in South Africa. Such developments allow South Africa to become one of the most important African countries in the Islamic finance field.
Emirates Money and Aman Insurance in partnership to launch "Banca Takaful" insurance programme
Emirates Money, a wholly owned subsidiary and consumer finance arm of the Emirates NBD Group, announced the launch of "Banca Takaful" insurance product, in conjunction with Dubai Islamic In sur a nc e an d R ei nsu ran c e company (AMAN) and FWU Global Takaful Solutions.
Over 90% of Moroccan consumers interested in Islamic finance survey findings revealed
Key findings published in July from Morocco's first independent market study, entitled 'Islamic Finance in Morocco - Sizing the retail market' points to a very strong interest from local consumers in Islamic Finance products and services. Over 80% of the Kingdom's consumers indicated their likelihood to take up a Shariah compliant financing (loan) upon launch.
QIB teams up with QIIB to provide $380m finance package for Nakilat
QIB - the benchmark Islamic bank in Qatar - has announced the signing of a financing package for the Qatar Gas Transport Company ( Nakilat ) in partnership with Qatar International Islamic Bank ( QIIB ). The value of the Sharia'-compliant 'Murabaha' financing is $380 million.
Disclaimer:
The news included here is on the basis of information obtained from local and international print and electronic media sources. IFP team does not accept any responsibility about their bona-fide.
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An initiative of IFP forum
Emirates Islamic Bank offers consumer finance for new-to-UAE nad newto-job customers
Emirates Islamic Bank (EIB), the Islamic banking arm of Emirates NBD Group, announced the launch of a banking package for new entrants to the UAE. The package includes personal and vehicle finance up to AED 75,000 and credit cards with one monthly salary limit, along with various account options and online banking facilities.
Disclaimer:
The news included here is on the basis of information obtained from local and international print and electronic media sources. IFP team does not accept any responsibility about their bona-fide.
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An initiative of IFP forum
open 20 per cent of all new branches i n r u r a l a r e a s . Islamic banking will help draw the funds of rural customers, a less sophisticated client base who also traditionally shun conventional banks due to concerns over interest which is forbidden under Islam, said Saleem Ullah, director of the Islamic banking department at the State Bank.
Bank of Khyber (BoK) expanded its wings in Islamic Banking with the brand name of BoK Raast
Managing Director, Mr. Bilal Mustafa, said; BoK is committed to cater the Banking requirements of Islamic Banking as well as conventional in a befitting manner in order to encourage the economic developmental activities in the country through its expanding network of branches.
Disclaimer:
The news included here is on the basis of information obtained from local and international print and electronic media sources. IFP team does not accept any responsibility about their bona-fide.
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An initiative of IFP forum
Meezan Bank profit after tax grows by 34%; declares interim cash dividend of 15%
The Board of Directors of Meezan Bank Limited, in its meeting held at Karachi on August 12, 2012 approved the half yearly financial statements of the Bank for the six months ended June 30, 2012. The Bank recorded 34% growth in its Profit-after-tax and EPS of the Bank was recorded at Rs. 2.04 on enhanced share capital of Rs 9b. The Bank not only maintained its impressive pay-out track record but improved upon it by approving a 15% interim cash dividend 50% higher than last years interim cash dividend.
Pakistan's conventional insurance firms will have to wait a few more weeks to learn if they can open Takaful windows after a state court adjourned a case challenging new regulations for the sector. Takaful operators filed a petition in a court in the province of Sindh to protest the rules which allow conventional insurers to offer Takaful services.
Disclaimer:
The news included here is on the basis of information obtained from local and international print and electronic media sources. IFP team does not accept any responsibility about their bona-fide.
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An initiative of IFP forum
This book is the first volume of the 8 volume set that is a compilation of different articles written by Mufti Muhammad Taqi Usmani. Some of them were published separately, while others were a part of his other independent books (the source of the article is mentioned on the title of each chapter). The book starts with a preamble written by Mufti Mahmood Ashraf (who is also a very senior member of the Darulifta Jamia Daruloom Khi) in which he describes the importance of innovational research in the field of various aspects of a Muslims life regarding Shariah rulings which also includes Islamic economic system, and he further sheds light on the author and his publications. The preamble is followed by compilers views about the contents of the book and his inspiration and respect for the original author.
The book generally describes the economical values for Muslim ummah, and this being the very first
good and bad intentions may render economical benefits impermissible for a Muslim. The first article is about unwanted human attachment with fame and money, but on the other hand also depicts the importance of work and earn income within the prescribed Shariah limits. He even writes the virtue of trading as it was also sunnat of the Prophet (P.B.U.H) and the evil practices involved in it today. All of his discussions are supported with Quranic verses and Hadiths with their translations and understandings, and they also include examples from the lives of the companions of the Holy Prophet (P.B.U.H) and the ongoing list of the followers. Published by: Idarat ul Islami, Karachi.
of the whole compilation the compiler came up with the articles which were intended for ethical and moral building of the reader, as
Ask Us
By Mufti Ibrahim Essa and Mufti Javed Ahmed
Question: In a deferred sale contract, is it permissible to stipulate a condition that the seller will retain the subjectmatter into his ownership until the full payment of the price? Answer: A seller is not allowed to stipulate, after conclusion of a sale contract, a right to retain an asset sold on a deferred basis, as security for payment. This is because the legal effect of a sale contract is the transfer of ownership of the asset sold. However, it is permissible for the seller to stipulate that the buyer should release the sold asset into the sellers custody as pledge of security so as to ensure recovery of the remaining deferred installments. It is also permissible for the buyer to retain an asset sold on an immediate payment basis until the consideration for the asset is paid. Question: In an Ijarah transaction, if the lessee stops using the leased asset or returns it to the asset before the term expires, is it permissible to charge him the remaining rentals of that period where the leased asset was not used by the lessee? Moreover, can the lessor lease that asset to another person for that period? Answer: If the lessee stops using the leased or returns it to the owner without the owners consent, the rental will continue to be due in respect of the remaining period of the Ijarah and the lessor may not lease the property to another lessee for this period, but must keep it at the disposal of the current lessee.
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IBIs and IBDs analysis was reported in previous issues separately. They are being reported together again in this issue to p rovide a comparison between them.
Description
MBL
DIB
Burj Bank
2,348
1,117
2,215
2. Investments
98,488
12,937
9,982
3. Financings
59,155
10,509
200,550
27,644
9,235
1,899 447,300
170,030
38,492
20,341
7. Total liabilities
186,764
21,840
8. Net assets
13,786
5,804
18,032
4,633
2,375
8,665
2,396
1,423
1,389
10 251,580
11. Provisions Net spread after 12. provisions Total other 13. income
7,977
2,227 700,834
2,504
457 188,537
6,125
1,236
14. Administrative / Profit / (Loss) 15. before taxation Profit / (Loss) 16. after taxation
4,356
316
(346)
3,391
190
(288)
Disclaimer:
The data presented in this summary is extracted from the published audited financial statements of the respective banks for the year ended 31 December 2011. The newsletters management does not take any responsibility of authenticity of any data presented here and will not assume any liability due to any loss or damage caused by the usage of the information presented here. User discretion advised.
The analysis of IBDs is reported again with the inclusion of Bank Al Falah Limited (BAFL) which was not included in the previous issue as its financial data was not available. Previously SCB was reported as the highest profit before taxation among all the IBDs with a profit of 1.2 billion whereas now with the inclusion of BAFL it is the leading IBD with a profit of 1.4 billion in FY 2011. The increase in profit of BAFL is 16% compared to SCB in the FY 2011. BAFL net assets are of 6.2 billion and SCB net assets are of 3 billion. Detailed comparative analysis of the IBDs was covered in our previous issue of July 2012.
An initiative of IFP forum
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