Al Baraka Banking Group Collaborates with Bahrain Bourse and Central Bank to offer Sukuk based Murabaha facility

ABG’s Murabaha service clients will benefit from significant reductions in processing time as well as bolstering Bahrain’s position as the global capital of the Islamic economy.

MANAMA: Al Baraka Banking Group (ABG), as part of its strategy to offer a wide range of services and investment channels for its clientele, has announced the launch of Islamic Commodity Murabaha financing service.

The announcement came as Al Baraka Banking Group and Bahrain Bourse signed an agreement on September 2, 2020. The virtual signing ceremony was attended by the Group’s President & Chief Executive, Mr Adnan Ahmed Yousif, Shaikh Khalifa Bin Ebrahim Al Khalifa, the Chief Executive of Bahrain Bourse and Shaikh Salman Bin Isa Al Khalifa, Executive Director – Banking Operations representing the Central Bank of Bahrain.

“The ABG-Bahrain Bourse agreement is seen as a major boost to Bahrain’s position as an emerging hub for Shari’a-compliant transactions as it adds a new dimension to product development and innovation within the Islamic finance sector. The transactions through this platform will strengthen the Islamic debt market of the Kingdom,” Adnan Ahmed Yousif President and Chief Executive Al Baraka Banking Group, said.

He added that the agreement is in line with the Group’s efforts to expand and diversify the services it provides, and cater to various market segments through a new and unique line of service for its core client base. Having a new Commodity Broker Service in the local market provides more flexible Islamic finance alternatives and helps reduce reliance on International Commodity Brokers as a sole service provider.

On his part, Shaikh Khalifa Bin Ebrahim Al Khalifa, the Chief Executive of Bahrain Bourse stated, “We are pleased to welcome Al Baraka Group on-board our Murabaha Service as we continue to work toward enhancing the Shari’a-compliant initiatives across Bahrain’s capital market, providing a wide spectrum of investment opportunities on both a regional and global level.”

It is noteworthy that the Murabaha platform was established by the CBB and the Bahrain Bourse with the aim of promoting Shari’a-compliant structures as a major financing option across Bahrain by offering customers alternatives to International Commodity Broker services for Murabaha-based financing transactions.

The Murabaha service is provided through the utilisation of Shari’a-compliant Ijara Sukuk, as the underlying asset for all the Murabaha transactions. An online service offering unique advantages to financial institutions and clients seeking Shari’a-compliant solutions and trading opportunities will be used for facilitating Ijara Sukuk-based Murabaha transactions.

Top executives attended the virtual meeting from ABG and Bahrain Bourse.

Al Baraka Banking Group B.S.C. (“ABG”) is licensed as an Islamic wholesale bank by the Central Bank of Bahrain and is listed on Bahrain Bourse and Nasdaq Dubai. It is a leading international Islamic banking group providing its unique services in countries with a population totalling around one billion.

The Group has a wide geographical presence in the form of subsidiary banking units and representative offices in 17 countries, which in turn provide their services through over 700 branches. Al Baraka Banking Group has operations in Jordan, Egypt, Tunis, Bahrain, Sudan, Turkey, South Africa, Algeria, Pakistan, Lebanon, Saudi Arabia, Syria, Morocco and Germany, in addition to two branches in Iraq and representative offices in Indonesia and Libya.

ABG and its Units offer retail, corporate, treasury and investment banking services, strictly in accordance with the principles of the Islamic Shari’a. The authorized capital of ABG is US$ 2.5 billion.

S&P Global Ratings has updated the long-term rating on Al Baraka Banking Group B.S.C. to ‘BB-‘ with a ‘Stable’ Outlook, while affirming the ‘B’ short-term rating of the bank.

ABG has also been rated BBB+ (long term) / A3 (short term) by Islamic International Rating Agency (IIRA). IIRA has also rated ABG on the national scale at A+ (bh) / A2 (bh) with a fiduciary score of 81-85, the highest level amongst Islamic Financial Institutions in the region.

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