The participation banks’ share in assets is 5 percent and in funds it’s 6 percent.
These figures are below their desires.
Babacan has expressed his concerns during the conference on “Islamic Finance Instruments: Expectations and Opportunities for Turkey.”
The minister stated that the private sector has started sukuk exports like the Treasury.
The tax difference between sukuk and bonds has been removed, legislation related to Islamic financing has been completed, and the private pension system has become able to be built on non-interest instruments, as preferred by 300,000 people.
Meanwhile, Bahrain-based Albaraka CEO Adnan Ahmed Yousif said they told Turkish authorities that they were planning to found an Islamic insurance firm.
Turkey does not have a legal basis for this, but it has expressed its intention to the authorities, Yousif added.
He also said two new participation banks from the Gulf countries had been preparing to enter to the country. Albaraka Türk, Bank Asya, Türkiye Finans and Kuveyt Türk are the participation banks currently operating in Turkey.
Despite Turkey’s turmoil in the current days, many believe that the Islamic Finance in the region would not slow down.
In related news the parent foundation, the international credit rating agency, announced that it has affirmed Bahrain-based AlBaraka Islamic Bank (AIB)’s Financial Strength Rating (FSR) at ‘BB’, supported by its good capital adequacy ratio and comfortable liquidity.
The FSR remains constrained by a high ratio of impaired financings, asset concentration risks, weak profitability and sovereign risk exposure to Pakistan (through its Pakistan subsidiary). In view of AIB’s strong ownership, the Long and Short-Term Foreign Currency Ratings (FCR) are maintained at ‘BB+’ and ‘A3′, respectively.
Accordingly, the Support Level is affirmed at ‘2’. The likelihood of official support from the Bahraini authorities in case of need is assessed as very high.
In view of the moderate improvement in asset quality and profitability in the first quarter of the current year, coupled with management’s expectation of a further decline in NPFs and a sustained profit recovery in full-year 2013, the ‘Stable’ Outlook for the ratings is maintained.
However, CI notes that in the event the anticipated improvements in profitability and asset quality do not materialize, and if sovereign risk exposure to Pakistan rises further, it is more than likely that the ratings will be adjusted downwards in the next review.
Videos You May Like
Leave a Reply
Latest on Amilin TV
Islamic Economy News
- WIEF to generate greater awareness of Islamic economy
- Chiba to be gateway for Malaysian Halal products into Japan
- Taiwan’s Halal System
- Halal certification: a gateway to export markets
- Middle East funding record number of airplane deliveries
- UAE planning national halal certification scheme