Q4 2018 New Markets Investor
The magazine targets an audience of corporate and private investors, but its lucid voice makes it intelligible and essential reading for anybody who wants to understand investment strategies and markets in the 21st century.
The magazine targets an audience of corporate and private investors, but its lucid voice makes it intelligible and essential reading for anybody who wants to understand investment strategies and markets in the 21st century.
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Q3 2016<br />
Islamic Banking<br />
A case study of Jordan’s pioneering<br />
Banking Industry with Jordan Islamic Bank<br />
Having spread the values of Islamic<br />
banking throughout the Middle East,<br />
Jordan Islamic Bank now has its sights<br />
set further afield<br />
People around the world are becoming<br />
more receptive to the idea that Islamic<br />
banking, more so than traditional banking,<br />
is a safe and ethical option. With<br />
approximately 400 banks spread across<br />
60 countries, Islamic banking is fast filtering<br />
into the mainstream, and commentators<br />
are confident that the sector will<br />
continue to flourish.<br />
Proof of Islamic banking’s recent success<br />
lies in the fact that the total number<br />
of assets under management, as of 2015,<br />
numbered around $2.5trn, having grown<br />
10 to 20 per cent in each of the past five<br />
years, and the figure is forecast to reach<br />
an impressive $3.25trn by 2020. Clearly,<br />
the demand for Islamic banking is<br />
on the rise, and observers needn’t look<br />
much farther than Jordan for proof of its<br />
ability to improve economic and social<br />
wellbeing.<br />
Origins of prosperity<br />
In 1978, three years on from when<br />
Islamic banking was first established in<br />
Dubai, Jordan Islamic Bank (JIB) started<br />
the country’s first Islamic bank in Amman,<br />
and laid the foundations for what is<br />
today a major economic driver. Speaking<br />
at a recent conference, Musa Shihadeh,<br />
CEO and GM of JIB, said the bank not<br />
only put Islamic banking on the map, but<br />
has also contributed to the consolidation<br />
of the sector in Jordan and the surrounding<br />
region.<br />
In the years since 1978, the bank has<br />
consolidated and deepened the values<br />
of the Islamic sharia by means of<br />
dealing with all people according to the<br />
teachings and principles of Islamic law.<br />
Committed to serving all parts of society<br />
equally and with the latest innovations in<br />
banking, JIB numbers among the country’s<br />
most trusted companies, and an important<br />
part of the economic landscape.<br />
In keeping with its status as a pioneer<br />
in Islamic banking, JIB commits to<br />
new products and services as customers<br />
demand them, keeping to the latest innovative<br />
advances in banking.<br />
Important decision makers across the<br />
globe have publically backed Islamic<br />
banking, owing to its ability to post<br />
positive results in times of a crisis. On<br />
average, Islamic banks have racked up<br />
growth rates of between 15 and 20 per<br />
cent as a result of prudent policy decisions,<br />
and, at the last<br />
G20 Economic Summit, policymakers<br />
recommended the use of Islamic financing<br />
instruments as a mean of improving<br />
performance.<br />
The sector, according to Islamic law,<br />
offers services with a commitment to<br />
ethical purposes and refuses to deal in<br />
any transactions involving<br />
interest. Islamic banks refrain from<br />
financing any service that causes harm<br />
to people, society and the environment,<br />
which means they will not<br />
deal in derivatives, speculation or gambling.<br />
The growth of the sector therefore,<br />
is closely in keeping with the growth of<br />
real economy and benefits<br />
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the many as opposed to the few in<br />
society.<br />
JIB, has a sharia supervisory board consisting<br />
of three expert scholars, and their<br />
job is to review any transaction in order<br />
to make sure no interest is involved,<br />
and that the banks products and services<br />
comply with Islamic law. Likewise, it’s<br />
the priority of JIB management to keep<br />
adequate liquidity in order to meet the<br />
requests of customers in serving both<br />
the public and private sector.<br />
With a 60 percent share of the local<br />
Islamic banking market and strong assets<br />
JIB operates in excess of 9O branches<br />
and 160 ATMs, in addition to its I-Banking<br />
system, and presides over an experienced<br />
staff of 2,000. Of all the banks in<br />
Jordan, JIB has the best ROE and one of<br />
the best NPL percentages.<br />
Proud of its recognition in local and<br />
global circles as a pioneer of Islamic<br />
banking, JIB has received a long list of<br />
awards for its contributions to<br />
the industry not to mention distinguished<br />
ratings from international rating agencies.<br />
S&P gave JIB a BB-/Stable/B<br />
rating, whereas Fitch awarded the<br />
bank a BB- for its long-term obligation<br />
in foreign currencies and a B for its<br />
short-term obligations in foreign currencies<br />
with a negative outlook.<br />
Socially responsible programmes<br />
Going beyond financial performance,<br />
JIB’s contributions to society and the<br />
environment number among the most
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