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Ahead of the UK Fintech Week, the independent group of Islamic finance and fintech practitioners has reconvened under the UK Islamic FinTech Panel (the Panel) chaired by Harris Irfan.
The Panel, formed last year, aims to promote the UK Islamic fintech sector and bring together thought leaders to support the development of the sector. In 2019, the Panel aims to build on the work in the previous year with a greater focus on connecting entrepreneurs with the government, and building international connections.
The achievements of the Panel to date include providing networking opportunities for the UK Islamic fintech community, involvement with the UK government and creating international connections. The panel aims to continue building momentum for the Islamic fintech sector by leveraging London’s leading position as a global fintech hub and a center for Islamic finance in the western hemisphere.
Al Rayan Bank announced a partnership with Alexander Hall, one of the UK’s largest mortgage brokers. Alexander Hall is the sister company of Foxtons Estate Agents and has been added to Al Rayan’s panel of mortgage brokers helping Al Rayan increase awareness of its home finance products. Alexander Hall as an intermediary firm will refer domestic Islamic home finance enquiries within the UK, as well as handle enquiries from expats in GCC countries who wish to invest in UK property from overseas.
This article was first published in Islamic Finance news Volume 16 Issue 20 dated the 22nd May 2019.
Suhail Ahmad is a partner at Gateway Islamic Advisory. He can be contacted at [email protected].
“I am at peace. If you see graft and don’t speak out against it, you are part of the system that enables it. I was unable to let it continue to happen and weigh on my conscience.” stated HRH Muhammad Sanusi II, Emir of Kanoand former Central Bank Governor of Nigeria in an extraordinary live on-stage interview at the end of the Global Ethical Finance Forum held last week at the prestigious Balmoral Hotel in Edinburgh, Scotland.
The interview with the Emir of Kano was the perfect culmination for the two-day forum which gathered 300 delegates from across the ethical finance industry including Islamic Finance, Socially Responsible and Impact investing. The delegates included industry leaders, academics, students, and financial service participants from across the Middle East, Africa, East Asia, Europe and North America.
The candid and informal interview with the Emir of Kano describing his own personal experience as the former central bank governor of Nigeria during the credit crisis of 2008. His experience and advice for Islamic bankers was to install safeguards to eliminate corruption and to hold accountable individuals for their irresponsible actions. He feared that we were heading towards another global financial crisis as many of the issues from the previous banking crisis remained unresolved.
The Emir further clarified that ethical finance to fully be a leading part of the future of global finance; it must not only incorporate Islamic finance and other faith groups but also provide a real value proposition that puts the customers and depositors ahead of the equity stakeholders. A key issue in the current financial system as current banking and financial regulations favoured the equity holders of the bank which typically account for only 10% of the assets at the expense of the customers (deposit holders) that have contributed the remaining 90% of the bank’s assets.
The Emir also highlighted an underlying holistic issue for conventional banking which is also shared by most Islamic banks; failure to contribute to the good of the society with emphasis on fairness and social justice.
Almost certainly most of the delegates at forum shared the views of the Emir and even Keith Brown MSP, Scotland’s Cabinet Secretary for Infrastructure, Investment & Cities in his opening remarks stated, “Creating a fairer society is not just a good on its own, it is also essential for long-term prosperity.”
The renowned Dr. Zeti Akhtar Aziz, Governor of Bank Negara Malaysia, the leading voice of emerging markets stressed the need for sustainable economic development saying: “The value of financial intermediation includes mobilize savings, promoting the efficient allocation of resource, reducing informational asymmetry, and manage risks. Emerging markets have benefited from transformative role of finance in the development of emerging markets in the 21st century.”
So indeed the forum provided a great platform for discussion between Islamic finance and conventional finance on a unified platform of “ethical” finance. Panel discussions included investment screening processes, green bonds and sukuks, regulation, technology and the summary of the newly released Responsible Finance Report produced by Thomson Reuters and the Responsible Finance Institute. The forum reaffirmed the similarities between ethical and Islamic finance but also brought to light a key issue for Islamic financial institutions that is often overlooked; is it possible for a product to be “Shariah Complaint” and not ethical?
The answer is yes. One panel discussion highlighted this very issue and discussed ways to incorporate ethical guidelines in Islamic finance products to make the product not just be Shariah compliant on the surface but Islamic to the core.
A simple example helped delegates understand the issue at hand. A clothing manufacturer with no debt and meeting other generally accepted Shariah screening metrics which typically are financial ratios and business or product being of a halal nature would pass as being a Shariah compliant investment. However, the company is using suppliers in Thailand which are employing child labour or have exploitive employment practices. Shariah screening would fail to capture this issue which is clearly against Islamic or Shariah principles.
Socially responsible investing employing Environmental, Social, and Governance screening would be able to capture the issue of child labour as it would extend its screening beyond the surface of the company to look at the supply chain and practices of the company.
Shariah screening in most cases would fail to capture unethical practices of any business and would wrongly pass off businesses as being Shariah compliant despite their un-Islamic business practices. Panellists suggested Shariah scholars be given a broader mandate which would include assessment of the business operations. Perhaps even having Shariah scholars sit on the boards of financial institutions or companies so they can see that board and management decisions are being made in an ethical responsible manner.
Then we would surely solidify ethical and Islamic finance by ensuring that every Islamic finance product is truly ethical meeting the requirements of responsible Muslims and non-Muslims alike.
Article by Suhail Ahmad, published in the Islamic Finance News – Sep. 09, 2015
Gold prices hit a five year low yesterday. Many gold shares on the other hand hit decade year lows or in the case of one of the largest gold miners in the world, Barrick Gold Corp. of Canada share prices fell to levels not seen since the 1990’s!
Yesterday’s sell-off can conveniently be blamed on the Chinese who revealed less then steller gold holdings on Friday. Followed with an investor dumping $1.7 billion worth of gold shortly after market opening in Asia causing a “flash crash” of a kind in gold prices which dropped 4% in a matter of seconds.
Gold has traditionally been a good hedge against inflation and a weaker U.S. dollar. Unfortunately neither scenarios are at play with the U.S. dollar acting like a runaway train and Europe battling deflation risks.
But you would think the EU/Greek debt crisis and the Chinese stock market sell-off would have diverted some assets to the safety of gold over past few weeks. Especially considering gold prices are 40% off their peak of $1,900 seen in 2011 and represent good relative value.
Could there be a more serious underlying issue for gold? As an equity investor in gold miners and explorers, I’m concerned about the long-term supply demand for gold. I’m been underweight gold in our portfolios but haven’t abandoned the sector (yet). I see a great short-term trading opportunity in gold shares for active investors. But I also see cracks in the long-term viability of gold as a safe-haven.
On thursday The Royal Bank of Scotland (RBS) reported another disappointing earnings and formally took itself off the global stage.
“This is a plan for a smaller, more focused, but ultimately more valuable, bank with the vast majority of its assets in the U.K., and for RBS marks the end of the stand-alone global investment bank model,” stated Ross McEwan, Chief Executive Officer of R.B.S.
I don’t invest in banks or insurance companies.Haven’t worked under a bank since 2004 when I left a member of the Royal Bank of Canada (RBC) group to join an independent. And usually don’t comment on the banks unless it has to do with investment strategies, innovation or ethics. All three of which are often lacking in good measure at banks these days.
However having lived, studied and worked in and around Edinburgh for most part of the past five years. I still scratch my head when driving by the RBS Gogarburn headquarters or walking by the historical RBS offices across St. Andrews Square; How did an iconic institution with almost 300 years of history get it so wrong!?
Here is a glimpse of how the bank went from being at one of the largest financial services group in the world to a small U.K. bank. Erasing tens of billions in shareholder value during the process:
March 6, 2000: RBS offer for NatWest is declared “unconditional”. Fred Goodwin replaces Sir George Mathewson as chief executive and shares close at £2.70.
May 4, 2004: Charter One bought for £5.8bn. RBS launches £2.5bn rights issue to fund takeover of US bank. Deal fails to hit income targets, prompting investor criticism. shares still higher at £4.81.
September 14, 2005: Queen opens new £350m headquarters building at Gogarburn. Yeah!
May 28, 2006: Sir Fred, having been knighted in 2004, is voted most powerful businessman in Scotland for the fourth year in the Scotland on Sunday Power 100 list. Share price hasnt’ move much in two years and sits at £4.74.
April 16, 2007: Consortium led by RBS enters bidding war for Dutch bank ABN Amro, which was already in advanced talks with Barclays for a friendly merger. Shares climb to £5.78.
October 10, 2007: RBS declares takeover of ABN “unconditional”, just as market value of assets plummet in midst of credit crunch.
April 22, 2008: under pressure from Government, RBS announces £12bn rights issue to shore up its weak capital base. shares still holding up surprisingly at £3.
October 13, 2008: a week after accepting emergency funding, RBS receives multi-billion pound bailout as it comes close to collapse, leaving taxpayer as its majority shareholder. Shares hit 65.7p
November 2008: The Government takes a 58pc in RBS for £15bn, with a further £5bn of preference shares.
February 26, 2009: RBS reports a loss of £24.1bn for 2008, the biggest in British corporate history.
February 10, 2009: Sir Fred and former chairman Sir Tom McKillop appear before MPs. Sir Fred and Sir Tom apologise for the near collapse of RBS and the “distress” it caused. Shares 23.8p.
I’d like to get some comments from the bankers out there and particularly with any that may have had the pleasure or pain of working at the bank. How did it RBS. get it so wrong, so many times?
Disclosure: I do not have any position in RBS shares.
Source: RBS Investor Relations, The Telegraph