Winners' Profile | Best Islamic Financial Institutions 2015

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Ratings agency Fitch has praised the leading retail bank’s low levels of borrower concentration, making it less susceptible to risk (when loans are not evenly distributed). Other positives include KFH's leading Islamic franchise and strong funding profile. Fitch cited the bank's efforts to restructure and streamline its business and strengthen and integrate risk management. KFH has participated in a number of landmark deals including acting as primary dealer on the International Islamic Liquidity Management's $860 million sukuk issuance. 

The Middle East and North Africa have been plagued by political, economic and social unrest since the onset of the Arab Spring (2011), but Al Baraka's commitment to the region has not wavered, and it has continued to expand into new markets. In 2014, the Al Baraka Banking Group's net income rose by 7% to $275 million. It has opened new branches in Tunisia, Egypt and Algeria and is exploring a move into Morocco.

Maybank Islamic has a presence in Malaysia, Indonesia and Singapore. The bank lays claim to being not only the largest Islamic bank in the Asean region, in terms of assets, but also the most profitable. It had pretax income of $476 million in 2014, up 12% from the year before. It operates a strong network of more than 400 Maybank branches in Malaysia, 459 branches in Indonesia, 22 branches in Singapore, and others in Hong Kong, and is a leading underwriter of global Islamic bonds.

BLME acted as co-lead manager for the Islamic Development Bank's two $1.5 billion, five-year sukuk tranches. Profit of £6.7 million last year was up 55% from the year before. The UK market where it operates has been shoring up its role as Europe's major Islamic finance hub with HM Treasury's 2014 sovereign sukuk issuance. BLME didn’t participate in that landmark deal, but it bodes well for the future of the sector.

In an effort to become a fully-fledged Islamic bank, Afghan United Bank was the first in the country to obtain an Islamic banking license. Total assets stood at 18.3 billion afghani ($315 million) as of December 31, 2014. Profit before tax more than doubled from 2013 levels, to 447 million afghani.

Banque Albaraka D’Algérie was the country's first Islamic bank and is part of the Bahrain-headquartered Al Baraka Banking Group. The bank's local financing and investment increased by 15% in 2014, with gains across the bank's product portfolio. Revenues from banking and other services declined by 27% year-on-year, resulting in a 9% dip in total operating income. The bank aims to have a network of 50 branches by 2019, and it continues to invest in e-banking and mobile services.

Kauthar was the first bank to operate according to Islamic principles in Azerbaijan, although other banks have set up Islamic windows (departments of conventional banks). Azerbaijan is in the process of developing legal and regulatory reforms for its Islamic banking laws.

Operating income and assets continue to grow steadily at the bank. Total operating income for 2014 was $21 million, an increase of 4% from 2013. The bank offers innovative financing and borrowing accounts based on the wakala principle, a range of takaful (bank insurance) solutions and financing to help local SMEs grow.

Established in 1983 by local businessmen in conjunction with Middle East-based Islamic investors, including the Islamic Development Bank, IBB has a long tradition of Islamic banking. In 2014 total operating income of the bank rose slightly, to 27.4 billion taka ($352 million). Pretax profit eased, to 10.5 billion taka, on higher operating expenses.

Brunei's largest Islamic bank benefits from having the government as majority shareholder, as well as from its relationship with minority stakeholder Fajr Capital, based in Dubai. BIBD continues to consolidate its market position with total assets, profit and net income showing double-digit growth in 2014 from the year before. Its strongest areas last year were deposits and mortgages and unsecured consumer lending.

With Egypt's economy appearing to shrug off the sluggishness of the past few years as it wrestled with major political and economic reforms, Al Baraka Egypt saw total assets rise by 19% to $3.1 billion in 2014, with financings and investments growing by the same amount to reach $2.7 billion. Total operating income for 2014 stood at $121 million, an increase of 17%. Al Baraka introduced the first Islamic credit card to the Egyptian market in 2014.

Gambian entrepreneur Muhammed Jah recently acquired a majority stake in the Arab Gambian Islamic Bank. The Islamic Development Bank (IDB) holds a minority stake. AGIB's future strategy is being guided by the recommendations of the Islamic Research and Training Institute, which is an affiliate of the IDB.

Bank Muamalat has played an important role in the development of the country's Islamic banking sector, which, according to Fitch Ratings, constitutes just 1% of total banking system assets in Indonesia. Muamalat raised a significant amount of core capital through a rights issue in 2013 and at 14.2% and 17.6%, respectively, its core and total capital ratios remain well above its peers.

Against the backdrop of a difficult operating environment, Fitch Ratings says JIB's asset quality has improved. The largely domestic bank has managed to contain growth in nonperforming loans as financing levels have increased. Net income for 2014 was flat from the year before at $63.6 million.

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