A one-day introductory workshop for bankers and credit risk management professionals wishing to better understand Islamic Banking institutions and practices. A structured approach to the credit analysis of Islamic Banks.
Course Objectives
The goal of this one-day workshop is to demonstrate how to evaluate a bank operating under Islamic banking rules.
Specifically, participants will learn to:
- Understand the principles of Islamic Finance, Shariah law and the key Islamic products
- Compare and contrast the components of an Islamic financial institution's balance sheet and income statement to those of a non-Islamic financial institution
- Identify the risks particular to Islamic financial Institutions
- Use a structured approach to assess and benchmark the performance of Islamic Banks.
Target Audience
Credit Risk Management, fixed income and banking professionals. This workshop is targeted at an intermediate level and assumes a basic understanding of bank analysis. This workshop is a follow on from Emerging Market Banks & Sovereigns or Intensive Bank Analysis which offer the core tools of bank analysis.
The majority of Fitch Training programmes are offered at an intermediate and advanced level. There are no specific prerequisite courses to attend our programmes, however some topic knowledge maybe required. Please refer to the target audience to see what level of prior knowledge is required for a specific course.
Content
OVERVIEW OF ISLAMIC BANKING
Principles of Islamic finance
- Riba, the objection to usury or interest
- Exclusive asset backed financing
- Profit and loss sharing
Key lending and investment products
- Musharakah or Shirkah
- Mudarabah
- Ijarah
- Salam, Istisana and Murabaha
- Sukuk
- Takaful
ANALYTIC OVERVIEW
- Structured approach - application of purpose payback model to Islamic banks
- Key differences between Islamic and conventional banks
- Structure and seniority in Islamic structures
- Significance of wadia deposits.
OPERATING ENVIRONMENT
Business growth and the significance of Islamic Finance
- What is driving change
- Banks' Islamic windows
- Growth in Islamic and non Islamic countries
- Innovative product developments and Islamic banking strategies
- Implications for counter-party risk and business
Regulation and supervision:
- Arbiters of what is Islamic compliant
- The Islamic Financial Services Board regulation of capital adequacy and the application of Basel II in Islamic banking countries
- Sharia compliance boards and operational risk
FINANCIAL FUNDAMENTALS
Statement logic
- Sources and quality of disclosure
- Accounting issues for Islamic products
- Reviewing an annual report
Business risk
- Evaluating asset quality
- Commission, a proxy for interest income?
- Ratios to measure overall performance
- How Islamic banks performance compares with conventional banks.
Financial risk
- Funding and treasury management
- Managing liquidity without using the interbank market
- Depositor protection and deposit income
- Equity versus debt concept
- Is limited liability Sharia compliant?
- Types of capital in an Islamic institution and capital adequacy.
CHALLENGES FOR ISLAMIC BANKS
- Managing growth
- Standardisation and regulation of Islamic products
- Product innovation and development
- Skills shortage in Islamic finance and Sharia law.
Workshop Times
Below are typical timings for our courses; upon registration we shall advise you if these have changed.
Breakfast: 8.30am
Course Start: 9.00am
Course End: Between 5.00pm and 5.30pm
Lunch starts between 12.30pm and 1.00pm, and lasts no longer than 1 hour.
Short breaks of 10 - 15 minutes are taken mid morning and mid afternoon.