Turkey set out on the road to EU accession some 60 years ago but the goal remains elusive. Turkish bankers consider the journey worthwhile. But, they muse, if the country keeps on being spurned it should look east rather than west to apply its new-found expertise and dynamism. Eric Ellis reports.

Outstanding contribution to finance: Dr Sri Mulyani Indrawati, Indonesia

Standard Chartered Bank has relaunched the Shariah-compliant version of its online treasury FX trading and hedging platform under its global brand for Islamic products, Standard Chartered Saadiq. The bank says it is the first to launch online services in Islamic FX utilizing the wa’ad structure, which enables Islamic companies and institutions to hedge forward FX exposures under a Shariah-compliant structure.

The financing for Peru’s biggest ever project is in the final stages after a $3.8 billion package was signed last month.

While the build-up of a portfolio of diversified assets overseas is one key pillar of the government’s economic strategy, another is a commitment to a broad range of service-based industries domestically.

Opinions are divided on quantifying the vastly important market for Shariah-compliant investment products, leaving institutions about how what resources to devote to them.

Dubai, Bahrain and Qatar are vying to be the Gulf’s financial hub and the battle is by no means over, with each centre adopting a very different approach.

Standard Chartered Bank has relaunched the Shariah-compliant version of its online treasury (OLT) FX trading and hedging platform under its global brand for Islamic products, Standard Chartered Saadiq. OLT integrates into Stan Chart’s Straight2Bank trading platform. The bank says it is the first to launch online services in Islamic FX utilising the Wa’ad structure; this allows Islamic companies and institutions to hedge forward FX exposures under a Shariah-compliant structure.

With a return on assets of 3.6% and a return on equity of 32.6%, Doha Bank had one of the best performance ratios in the region in 2007. The bank’s development as one of the Middle East’s finest is a result of continuous improvement over a number of years. For example, it has posted a four-fold growth in shareholder equity and a seven-fold increase in annual net profit over the past five years.

Getting to the top is easy, it’s staying there that’s difficult. Not that it seems to be a problem for National Bank of Kuwait. The firm is universally recognized as one of a handful of Middle Eastern banks that sets the standard for others to follow.

Public Bank is Malaysia’s largest bank by market capitalization and, by some distance, the country’s best-performing lender. It offers excellent financial ratios, the steadiest yields in the country and, most pertinently in these turbulent times, a steady institution focused on maintaining growth while minimizing risk.

Goldman Sachs

Despite the turbulence in global financial markets and growing political noise at home, Garanti Bank has continued to exhibit strong growth, which has secured it the best bank award in a fiercely competitive field. Thanks to its strong client focus, the bank secured the top spot in the cash and non-cash lending fields, extending a total of TL50 billion ($40 billion) of loans. Backed by the rapid expansion of its branch network – Garanti opened 105 new branches in 2007 – it attained the highest growth in total deposits, 30%, among its domestic peers and became the sector leader in foreign currency deposits. Garanti is firmly established as Turkey’s leading consumer and mortgage lender. Increased lending at healthy margins fed into a strong bottom line performance, with Garanti delivering the highest growth in net interest income as well as ordinary banking income. In 2007, Garanti more than doubled its net income to TL2.3 billion, giving it a 40% return on equity, almost twice the sector average of 22%. As well as impressing its nearly 6 million retail customers the bank has demonstrated the trust of international investment banks, recently securing a €600 million loan at a tightly priced all-in level of 67.5 basis points over Euribor.

The 2008 Global Awards for excellence

Muslim Commercial Bank is again nominated best bank in Pakistan. Moreover, MCB has proven itself to be one of the best-performing banks in Asia, and garners our award this year for best overall regional bank in Asia. The award is well deserved. MCB posted a 26% rise in full-year 2007 profits, to PRs15.3 billion ($242 million). Analysts attribute the strong performance to an aggressive foray into consumer finance and low administrative charges. MCB is well placed geographically and financially. Its return on assets at March 31 2008 stood at 5.69% – one of the highest rates in the world – and its solid financial performance continued this year, with profit after tax rising to PRs4.1 billion in the first quarter of 2008, up more than 10%. MCB’s financials have hardly been ruffled by the challenging global environment. "Pakistan is very non-correlated to the US economy – rather, it is strongly connected to the Gulf region, which is driving the investment in Pakistan stocks," says a Hong Kong-based investment banker. "Moreover, Pakistan has one of the best and strongest banking sectors in the world, with MCB the strongest bank in the country. They’re a class act." MCB has been further boosted by the sale of a 15% stake to Maybank of Malaysia this year for $680 million. Maybank’s acquisition, at 5.1 times book, shows how highly MCB is valued – Maybank has the right to boost its stake to 20% by May 2009. The Pakistan bank said the alliance enabled Maybank to join forces with a lender with a strong consumer and Islamic banking franchise.

RBS abandons project finance

Credit crunch? What credit crunch? This could be the Middle East’s favourite mantra. But for bad as well as good, bankers in the region are acutely aware of events in the rest of the world.

Despite commercial property values having plummeted some 12% since the start of the credit crunch, London’s lure is still strong for some investors, particularly Middle Eastern sovereign wealth funds.

2007 Best Project Finance House: Royal Bank of Scotland

Reaz Islam, head of Citi’s Falcon Strategies hedge funds, is leaving the bank.

Malayan Bank, Malaysia’s biggest lender, has acquired 15% of Pakistan’s MCB Bank, Pakistan’s fourth-largest bank by asset value. This is the Malaysian bank’s third acquisition in Asia in two months and the largest banking acquisition in Pakistan.

Rasmala was created by one man: Ali Al Shihabi. The firm and its founder encapsulate the cultural fusion for which their home, Dubai, is famed. Dominic O’Neill profiles a company that specializes in the world’s fastest-growing financial market.

There are complaints that investors are being misled by funds.

In the first few weeks of April, the Tadawul, the Middle East’s most liquid equity exchange, had returned to form and bucked the downward trend of developed global markets. But until then, 2008 seemed to be the year of recoupling with western markets, rather than decoupling, as far as the Saudi stock market was concerned.

While elsewhere the mortgage market is drying up and securitization is quiescent, the biggest economy in the Gulf is trying to expand both. The finishing touches are being applied to laws on the Saudi mortgage market but it’s uncertain they will provide enough flow to meet demand for funding. Dominic O’Neill reports from Riyadh.

"Who is this?"

The Kingdom of Bahrain’s Real Estate Finance company (Reef) has secured $150 million in warehouse financing to bolster its local mortgage lending activities. The facility, provided by Calyon Crédit Agricole CIB, enables Reef to diversify its funding sources. Ultimately, the mortgage portfolio could be used to back a residential mortgage-backed securitization in either an Islamic or standard format.

Far from turning a corner in 2008, the market looks set for a few tough months yet.

Dow Jones boasts nearly 70 Islamic indices that cover a variety of Shariah-compliant equities and fixed-income securities around the globe. Now the group can lay claim to the largest, most visible and widely used set of Shariah-compliant indices in the world.

Maybank tier 2 capital