THAILAND - FINANCE - Islamic Bank's B1bn loan draws scrutiny

The Finance Ministry has launched an investigation into Islamic Bank executives who approved an unusual loan worth one billion baht to eight projects even though their collateral values were less than the amount of the loan, said a senior finance official.

The ministry set up a committee chaired by Amnuay Preemonwong, inspector-general of the Finance Ministry, and representatives from other state agencies, such as the Office of the Attorney General. (source)

OPINION - MALAYSIA - Where is Malaysia's mega Islamic bank?

Industry executives agree in private that there are too many Islamic banks in Malaysia with a population of 27 million. This means that local Islamic banks, ideally, can merge and become bigger entities that can grow across borders.

 

IT LOOKS like we probably have to wait a little bit longer to find out who will win the two licences to set up mega Islamic banks in Malaysia. With a requirement of at least US$1 billion (RM3 billion) in capital, the announcement has been delayed since last year.

The two are set to be foreign-owned. News reports have talked about Bahrain's Al Baraka Banking Group's plan to head a group that will launch a US$10 billion (RM30 billion) Islamic bank.(full story)

ARTICLES - IMF - The Effects of the Global Crisis on Islamic and Conventional Banks: A Comparative Study

Summary: This paper examines the performance of Islamic banks (IBs) and conventional banks (CBs) during the recent global crisis by looking at the impact of the crisis on profitability, credit and asset growth, and external ratings in a group of countries where the two types of banks have significant market share.

Our analysis suggests that IBs have been affected differently than CBs. Factors related to IBs‘ business model helped limit the adverse impact on profitability in 2008, while weaknesses in risk management practices in some IBs led to a larger decline in profitability in 2009 compared to CBs. IBs‘ credit and asset growth performed better than did that of CBs in 2008-09, contributing to financial and economic stability. External rating agencies‘ re-assessment of IBs‘ risk was generally more favorable.

ARTICLE - Depositor Sensitivity to Risk of Islamic and Conventional Banks: Evidence from Indonesia

Depositor Sensitivity to Risk of Islamic and Conventional Banks: Evidence from Indonesia

The International Journal of Business & Finance Research, 2011

Erie Febrian
University of Padjadjaran
Aldrin Herwany
Department of Management, University of Padjadjaran; Centre for Management Studies (LMFE) University of Padjadjaran