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Leading Islamic Banks represented in the global financial disclosure index rankings

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The conveners of the 22nd annual World Islamic Banking Conference (WIBC) revealed today the ranking of the top 15 global Islamic banks rated according to their financial disclosure, subsequent to the announcement of the launch of the WIBC Leaderboard. As per the rankings, Malaysian based Hong Leong Islamic Bank lead the global financial disclosure index rankings with a score of 80. Next, on the ranking charts is Al Baraka bank and Venture Capital bank, both based in Bahrain with a score of 69 and 68 respectively.

Middle East Global Advisors, the organisers of the WIBC for the past 22 years, utilizes the Financial Disclosure Index as one of the sub-indicators of the WIBC Leaderboard, an industry benchmark that will form the basis of the WIBC Performance Awards 2015. The Ceremony for the Awards will be held at the Gala Dinner of the 22nd Annual World Islamic Banking Conference which is taking place on the 1st, 2nd and 3rd December at Gulf Hotel Bahrain.

The financial disclosure rating measures the extent to which customers and stakeholders are protected through disclosure of ownership and financial information. The index ranges from 0 to 100, with higher values indicating more disclosure. First in the series of the WIBC Leaderboard performance indicators, the Financial Disclosure Index chart shows the bank’s name (horizontal axis) and Financial Disclosure Index score (vertical axis) of the top 15 Global Islamic banks ranked on the basis of financial disclosure score.

Leading Islamic Banks represented 2 [qatarisbooming.com].jpgTop 15 Global Islamic Banks ranked according to the Financial Disclosure Index

Name of Financial InstitutionCountryScore
Hong Leong Islamic Bank berhadMalaysia80
Al Baraka BankBahrain69
Venture CapitalBahrain68
Ithmaar BankBahrain66
Bahrain Islamic BankBahrain66
Alizz Islamic BankOman66
Kuwait Finance HouseKuwait64
Meezan Bank LimitedPakistan63
Affin Islamic Bank BerhadMalaysia63
Amana Bank Limited Sri LankaSri Lanka63
Bank AlBiladSaudi Arabia60
Bank Muamalat Malaysia BerhadMalaysia60
Bank AljaziraSaudi Arabia59
Qatar International Islamic BankQatar59
Khaleeji Commercial BankBahrain59

Source: ICD Thomson Reuters Islamic Finance Development Indicator

Highlighting the importance of financial disclosure, Hong Leong Islamic Bank’s Chief Executive Officer, Raja Teh Maimunah said: “In the aftermath of the 2007-2008 financial crises, it was imperative for banks to follow prudential measures to avoid disruptions across all financial markets. Financial disclosures form an integral part of these prudential measures as they serve well in the interest of not only investors but also counterparties and institutions.” She continues on by saying, “Islamic banks’ practice to disclose financial information highlights the seriousness of Islamic banks in adhering to global regulatory requirements.”

Her views were reiterated by the Chairman of AL Baraka Group, Adnan Ahmed Yousif who said, “It is important to understand that increased globalization has been the basis of a highly interrelated economic and financial system. In such a scenario the risks of the unknown and unexpected are fairly high and the only way to downplay such risks is through appropriate disclosure of important information.” “Islamic Banks,” Adnan continues, “are doing well to downplay such risks by disclosing financial information consistently.”

By virtue of its asset-based nature, it is obligatory for an Islamic bank to be transparent to all the engaged parties. This notion was further elaborated by the CEO of Meezan Bank, Irfan Siddiqui, who states that” Islamic banking inherently carries a high level of transparency by virtue of it being asset-based in nature. At Meezan Bank, this fundamental principle drives the ethos and shapes all our policies. Our practices of disclosure and dissemination of information are best exemplified by our Shariah Audit report that is a part of the Bank’s Annual Report and has provided the industry with the best standards to follow.” He continues to comment on the sheer importance of these disclosures to the global financial economy: “In an effort to support the sustainability and stability of the global financial system, Islamic banks have been proactive in implementing a high-disclosure system as obvious by the disclosure scores.”

In a period of high information asymmetry where consumer interests are not wholly protected from spillovers and systemic risks, the financial disclosure index serves as an essential governance metric that can help regulators ensure that a stable and efficient banking system is in place.

To find out more about the 22nd annual edition of WIBC, download the comprehensive brochure at www.wibc2015.com

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