Wealth Management SIB Academy

Investment Banking

 

At Sharjah Islamic 
Bank, we aim:

F

airness

I

nitiative

R

eciprocty

S

implicity

T

rust

Money Market/Wakala Deals

The Bank enjoys excellent relationships with other banks in this area and region. To utilize the surplus liquidity of the bank, the Treasury places funds through Money Market & Wakala transactions. The transactions are done keeping in view diversification, risk management and profit parameters.

 

Nostro Account Management

The Bank maintains Nostro accounts in all major foreign currencies to handle its outward/inward remittances. These accounts are used to route all foreign currency transactions i.e. TTs. DDs, Trade and Treasury funding. The Treasury ensures timely and proper management of these accounts, in order to facilitate customers’ transactions in the best possible manner.

 

Profit Rates Analyzing & Updates

The Bank’s professionals analyze the profit rate trend on a daily, weekly and monthly basis. These analyses are used to guide business units to make the right decision while concluding finance/deposit deals with retail, corporate and high net worth clients. The statistics also provide better guidance to our customer for their future projection and cost of funding.

 

Asset & Liability Management

The Bank holds monthly Assets & Liabilities meetings to review and discuss the balance sheet management and Treasury’s activities. The committee decides various policy matters i.e. profit rate structure, liquidity management guide line, limit approvals of banks etc. The committee also reviews various financial parameters of the bank i.e. liquidity ratio, maturity gaps, cost of fund and issue policy guidelines accordingly.

 

FX Trading - Purchase/Sale

The Bank provides services of Foreign currency sale & purchase to its clients through various banking channels. Clients can receive funds in foreign currency accounts and get the F/cy exchange through the bank at prevailing exchange rate. At the same time, the bank sells all the major currencies to its clients, which can be transferred out to any country in the world, through the transactions of TT, DD or Trade. The bank also provides FX purchase/sale through its product ‘SIB FX Investment’ which is an Islamic banking alternate of Margin Trading. This enables clients to purchase major Foreign Currency and take advantage of its fluctuation.

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Foreign Exchange Rates

The bank provides daily foreign exchange rates to its business units/branches for quoting to its clients. These rates are provided before opening of the bank, enabling business units to quote them to their clients throughout banking hours. These rates are updated as and when it fluctuates. For clients of the SIB FX Investment product, the bank quotes exchange rates from 8:00 in the morning until 8:00 in the evening, enabling clients to trade in all international markets i.e. Middle East, London & New York

 

Maintenance/Control of Foreign Currency Positions

The Treasury maintains and controls the overall FX position of the bank (including all the business units/branches). These positions are maintained as per the bank’s policy and according to ALCO’s guidelines. Due to volatile market conditions, the bank takes up most control measures while having open positions to ensure the least possible loss chances.

 

International Murabaha

International Murabaha is one of the very key products for the bank’s liquidity management. This product is widely used in Islamic banking for liquidity management. The product involves the metal transaction Murabaha which is done through the London Metal Exchange. The Treasury arranges the purchase of metal through brokers in London for value spot and sell the same with profit to another counter party on deferred payment basis.

 

Tawfeeq Transactions

The bank uses this product to enable its clients to transfer their debts from conventional banks to Islamic bank. Accordingly, the bank buys metal from LME on spot basis and sell the same to its client on deferred payment basis. The client then sells the same to another broker in London, in order to create cash to settle his outstanding debt with another bank.

 

Special Fixed Deposit

This product is used to offer the best possible profit rate to clients on their deposits. The product is available only for AED 10 million and above deposits and offers competitive profit rates according to market conditions. To avail this, clients have to go through metal Murabaha transaction with the bank, whereby the bank (as an agent) arranges to buy metal from London Metal Exchange for the client on spot basis and then the same metal is purchased from clients on deferred payment basis with profit.