denotes premium content | Dec 5 2008 Trade & Forfaiting Review magazine archive
Volume 10 Issue 6
Fuelled by high oil prices, the global wave of liquidity that has swept the Gulf region of late has given rise to unprecedented opportunities for trade financiers in the Islamic finance market. According to published figures, global Sukuk issuances – the most common form of Islamic trade finance – are believed to total around $30bn.
But getting an exact number from Western banks regarding the size of their investments can be tricky. Certainly, many see these figures as a competitive issue – although every banker contacted for our cover story this month (‘Breaking new barriers’) stated that volumes of Islamic finance were clearly increasing within their institution.
David Testa, head of Islamic finance at WestLB, for instance, says its Islamic finance activity has deepened over the past 12 months. He expects to see the bank exceed 2006 volumes this year.
BNP Paribas also adds its voice to the unanimous chorus of institutions that cite Islamic financing as a high growth area. Its regional head of the Gulf within the bank’s ECEP division (Bahrain-based Christophe Mariot) says banks across the board are increasingly using Murabaha structures as well as Sukuks. “We think we will see a lot of development in that area this year,” says Mariot. Indeed, BNP Paribas’ volumes in this niche have already increased 20% over the past year.
Even so, according to Mariot, calculating volumes that are attributable to Islamic deals can be misleading. “We cannot attribute direct revenue from a larger deal that has a smaller Islamic tranche – but that was necessary to get the deal done.” In other words, official growth figures may be understating the product’s actual traction. We hope you enjoy this issue.
Michele Martensen, Editor
Features
Is your customer’s supply chain too tight?
What does an earthquake in Taiwan have to do with stock prices and empty store shelves? Everything, writes Amanda Greene.
Spanish practices
Most global banks tend to cultivate existing customers for new business. Spanish banks, however, have refined this practice into a high art, writes Erika Morphy.
The new Russian front
Global banks have been lending directly to top-tier commodity names in Russia for several years now. As the market becomes ever more stable, are banks getting ready to target new companies and new sectors? Amanda Greene reports.
Breaking new barriers
Not long ago Islamic finance was an afterthought for most Western global banks. What a difference a surge in oil prices and an influx of global liquidity can make. Erika Morphy reports.
Regulars
It is spring in Ukraine and political turbulence is in fashion
Politics in Ukraine remains the game of a privileged minority, while the majority continues to contribute to the country’s economic development, writes Dmitri Fedotkin, economist, VTB Bank Europe.
Export standards
Over the past two decades, globalisation has changed the fundamentals of the world economy and international trade. These changes have led to a restructuring of the entire credit and investment insurance business, writes Lars Kolte, Berne Union president and managing director of Danish export credit agency, Eksport Kredit Fonden.
