BANKING - Kuveyt Turk epitomizes optimism of participation banking sector

By MUSHTAK PARKER | ARAB NEWS

Published: Mar 28, 2011 00:07 

Kuveyt Turk Participation Bank (KTPB), a subsidiary of the Kuwait Finance House (KFH), one of the pioneers of global Islamic finance, is a leading Turkish participation (Islamic bank). While Turkish participation banks in general are deemed to be conservative and cautious, KTPB has set the tone by venturing abroad into Germany, Dubai, Bahrain and Kazakhstan and by pioneering new products based on physical gold and exporting them to markets in Malaysia and elsewhere through the global network of KFH. These include gold-backed exchange traded funds (ETFs), gold-backed banking accounts and sukuk. Ufuk Uyan, CEO of Kuveyt Turk Participation Bank, a doyen of Turkish Islamic banking, has been at the forefront of the expansion of KTPB, taking it to the top 10 tier of Turkish banks. Here Ufuk Uyan discusses with Arab News the state of the participation banking sector in Turkey, the performance of KTPB in 2010 and the prospects and challenges for the industry in 2011 and beyond. (full story)

BANKING - REGULATIONS - Basel III in support of the Islamic banking principal

The Group of Governors and Heads of Supervision, the oversight body of the Basel Committee on Banking Supervision, announced a substantial strengthening of existing capital requirements and fully endorsed the agreements it reached on 26 July 2010. These capital reforms, together with the introduction of a global liquidity standard, deliver on the core of the global financial reform agenda and will be presented to the Seoul G20 Leaders summit in November.

The Committee's package of reforms will increase the minimum common equity requirement from 2% to 4.5%. In addition, banks will be required to hold a capital conservation buffer of 2.5% to withstand future periods of stress bringing the total common equity requirements to 7%. This reinforces the stronger definition of capital agreed by Governors and Heads of Supervision in July and the higher capital requirements for trading, derivative, and securitization activities to be introduced at the end of 2011.