Islamic Banking Brochure 2012 Eng
-
Upload
falltalibet -
Category
Documents
-
view
215 -
download
0
Transcript of Islamic Banking Brochure 2012 Eng
-
8/14/2019 Islamic Banking Brochure 2012 Eng
1/32
GLOBAL ISLAMIC BANKING
A rich history,an ambitious future
-
8/14/2019 Islamic Banking Brochure 2012 Eng
2/32
Crdit Agricole CIB offers comprehensive Corporate
-
8/14/2019 Islamic Banking Brochure 2012 Eng
3/32
and Investment Banking services to its clients globally.
-
8/14/2019 Islamic Banking Brochure 2012 Eng
4/32
Coverage & Investment Banking
Retail Banking Regional platform
Branch, Affiliate or Rep. Office
Sao Paulo
HONG KONG
PARIS
LONDON
NEW YORK
MontrealChicago
Mexico
Buenos Aires
Brussels
Frankfurt
Geneva
Madrid
Alger
Tripoli
Dubai / Abu Dhabi
MumbaiAhmadab ad
Bangalore
Chennai
New Delhi
Pune
Stockholm
HelsinkiMoscow
Singapore
Sydney
Taipei
Shanghai
Beijing
GuangzhouTianjin
Xiamen
SeoulTokyoOsaka
Milan
Oslo
Crdit Agricole Grouphas been present in the Middle East and South East
Asia for more than 50 years. Crdit Agricoles in-depth knowledge of these
markets is enhanced through its solid partnerships with local investors and
corporate clients. Through its local and regional branches, Crdit Agricole
offers comprehensive Corporate and Investment Banking services that best
meet its clients requirements.
Crdit Agricole is a major player in the global financial markets, with its high ratings and solid
financial position. It is one of Europes leading financing and investment houses.
Merger ofBanque de Suezand Banque delIndochine to formBanque Indosuez.
Creation of Calyon,the new brand andcorporate name ofthe Crdit Agricolegroups corporateand investmentbanking business,through the partial
transfer of assetsfrom Crdit Lyonnaisto Crdit AgricoleIndosuez.
Acquisition ofBanque Indosuezby Crdit Agricole tocreate its wholesaleinternationalbanking arm.
Successfulcombined friendlytakeover bid forCrdit Lyonnaisby Crdit Agricole.
1975 May 20041996 May 2003
Calyon becomesCrdit Agricole CIB.
February 2010
4
-
8/14/2019 Islamic Banking Brochure 2012 Eng
5/32
Crdit Agricole SA, one of the worlds largest banks, has
leading positions in the following business lines:
Retail Banking;
Specialised Financial Services;
Asset Management; Corporate and Investment Banking;
International Retail Banking.
Source: The Banker, July 2012
Crdit Agricole is the Worlds No. 13
Bank by Tier One Capital... and No. 6 Bank by Total Assets
Top 25 by Tier One Capital2011 (year-end)
Top 25 by Total Assets2011 (year-end)
5
Rank Bank (USD million)
1 Bank of America 159 232
2 JPMorgan Chase & Co 150 384
3 ICBC 140 028
4 HSBC Holdings 139 590
5 Citigroup 131 874
6 China Construction Bank Corp 119 135
7 Mitsubishi UFJ Financial Group 117 018
8 Wells Fargo & Co 113 952
9 Bank of China 111 173
10 Agricultural Bank of China 96 413
11 BNP Paribas 91 858
12 Royal Bank of Scotland (RBS) 88 112
13 Crdit Agricole 80 222
14 Banco Santander 79 897
15 Barclays 78 036
16 Mizuho Financial Group 77 879
17 Sumitomo Mitsui Financial Group 76 377
18 Lloyds Banking Group 68 024
19 Deutsche Bank 63 462
20 Goldman Sachs 63 262
21 UniCredit 55 530
22 Norinchukin Bank 53 837
23 Groupe BPCE 53 175
24 Morgan Stanley 52 352
25 ING Bank 49 973
Rank Bank (USD million)
1 Deutsche Bank 2 800 133
2 Mitsubishi UFJ Financial Group 2 664 171
3 HSBC Holdings 2 555 579
4 BNP Paribas 2 542 880
5 ICBC 2 456 295
6 Crdit Agricole 2 431 932
7 Barclays 2 417 369
8 Royal Bank of Scotland (RBS) 2 329 767
9 JPMorgan Chase & Co 2 265 792
10 Bank of America 2 136 578
11 Mizuho Financial Group 2 012 909
12 China Construction Bank Corp 1 949 219
13 Bank of China 1 877 520
14 Citigroup 1 873 878
15 Agricultural Bank of China 1 853 319
16 Sumitomo Mitsui Financial Group 1 741 213
17 Banco Santander 1 619 349
18 Socit Gnrale 1 528 577
19 UBS 1 508 303
20 Lloyds Banking Group 1 500 561
21 Groupe BPCE 1 472 969
22 Wells Fargo & Co 1 313 867
23 ING Bank 1 243 651
24 Unicredit 1 199 146
25 Crdit Suisse Group 1 115 065
-
8/14/2019 Islamic Banking Brochure 2012 Eng
6/32
Singapore
Dubai
Worldwide Reach
6
Based in the Dubai International Financial
Center, the Global Islamic Banking team
extends its reach globally via the Banks
presence at different geographic locations.
We are therefore able to provide Shariah-
compliant solutions to our customers in allthe countries that Crdit Agricole CIB covers.
Although the Bank has been active in Islamic
Finance for over 15 years, it was in 2004 that
Crdit Agricole CIB set a dedicated Islamic
window (Global Islamic Banking). Capitalizing
on the Groups strength and unique market
position, the Global Islamic Banking team
has been very active in Islamic Finance, as
evidenced by the numerous awards wonover the years. The Global Islamic banking
team continues to positively contribute to
this evolving and growing market, with
leading roles in many landmark transactions.
-
8/14/2019 Islamic Banking Brochure 2012 Eng
7/32
Global Islamic BankingA Rapidly Growing Financial Segment
Islamic Banking has a similar purpose to
ethical banking but operates in accordance
with the rules of Islamic law (Shariah). The
basic principle of Shariah is the sharing of
profit and loss and the prohibition of riba
(interest) and Gharar (uncertainty).
Although Islamic Banking evolved to provide
a viable and Shariah-compliant alternative
to conventional finance, it has now become
the fastest growing segment in financial
markets across Asia, Africa and Europe.
Crdit Agricole has been offering a broad
range of Islamic financial services and
banking activities for many years, and in
2004 set up a dedicated Islamic Banking
team to cater to this important segment.
Crdit Agricole Global Islamic Banking
provides the advantages of an innovative
and effective range of Islamic investment
and risk management products supported
by an A rated international bank with a
historic presence in the Middle East and
Asia. Our Islamic financial instruments are
developed in close cooperation with
our board of Shariah scholars, who are
widely considered to be amongst the leading
and most respected scholars in the industry.
This insures that our products satisfy
Shariah whilst at the same time meeting our
clients objectives.
Headquartered in Dubai at the Dubai
International Financial Center, with global
coverage including Europe, Asia and
North America, our team works across all
business lines in the bank to create financial
instruments that allow our clients to invest
and manage risk using Shariah-compliant
structures.
In addition, by providing Islamic structures
to conventional clients, we facilitate the
flow of capital between these two distinct
financial sectors.
7
The emergence of Islamic financial services is one of the most important
developments in the financial markets, with total invested funds estimated at
$1 trillion globally. Islamic Banking evolved in order to create an alternative
financial system to conventional banking. Islamic Banking is based on an
ethical and equitable mode of finance.
-
8/14/2019 Islamic Banking Brochure 2012 Eng
8/328
Crdit Agricole, a recognized global leader,
has a strong track record in working with its
clients to meet their financing and capital
markets needs within the GCC*, Asia Pacific
and Europe.
Crdit Agricoles Global Islamic Banking
team has been involved in some of the
most prominent projects in the Middle Eastthat have earned it an outstanding reputation
in the market. Our ability to serve our global
client base is unparalleled. Our Islamic team
combines specific financial product expertise
across the range of strategic advice, risk
management and capital raising with a
specialised knowledge of Shariah.
Crdit Agricoles Global Islamic Banking
team is a very active contributor to the Islamic
banking industry, through governing bodies
such as the International Islamic Financial
Market (IIFM). The IIFMs primary focus lies
on the standardization of Islamic financialproducts, documentation and related
processes at the global level. The Global
Islamic Banking team has been an active
participant in the IIFM through our board
membership in the organization since 2006.
Shariah Advisory Board:
Crdit Agricoles Shariah Advisory Board consists of independent Shariah scholars
who advise Crdit Agricole on matters related to Shariah and are committed to the
Bank for the long term. This board is comprised of:
Sheikh Nizam S. Yaquby
Dr. Mohamed Ali Elgari
Dr. Abdul Sattar Abu Ghuddah
The scholars are renowned in the industry for their deep knowledge of both Shariah
law and finance. They work closely with the Global Islamic Banking team to ensure
proper application of Shariah standards.
*GCC: Gulf Cooperation Council, members are United Arab Emirates, Bahrain, Saudi Arabia, Kuwait, Qatar and Oman.
-
8/14/2019 Islamic Banking Brochure 2012 Eng
9/32
Credit and Rates
Rates, Credit & Cross-Asset Derivatives
(Profit Rate Swap, Cross Currency Swap)
Global Debt Markets
Debt Capital Markets (Sukuk)
Securitisation
Foreign Exchange
and Treasury
Foreign Exchange
(FX Waad, Islamic
FX Swap, Islamic FX
Outright Based on
Unilateral Waads)
Treasury
(Murabaha)
Global Sector Groups
Telecom, Media & Technology
Oil & Gas
Metals & Mining
Agribusiness
Financial Institutions& Real Estate
Mergers & Acquisitions
Other Sector Groups
Commercial Banking
& Trade
Commercial Banking
Trade Finance
Export Finance
Aviation & Rail Finance
Global Ship Finance
Global Energy Group
Natural Resources,
Infrastructure & Power
Transactional Commodity
Finance
Crdit Agricole CIBs Islamic Product OfferingThe Global Islamic Banking team offers the Banks customers a wide range of products
and services that meet their requirements. Below is a sampling of our offerings, with
each product being tailored to suit the customers unique needs:
Private BankingCrdit AgricoleSuisse S.A.
Crdit Agricole Group
9
Global Islamic Banking (GISB)
Debt Optimisation &
Distribution (DOD)
-
8/14/2019 Islamic Banking Brochure 2012 Eng
10/32
Global Islamic AwardsCrdit Agricole CIB has been acknowledged through the following awards for landmarktransactions between 2008 and 2011.
10
Best Deal ofthe Year 2011
Islamic Finance
News Awards
Project Finance Dealof the Year 2011
Islamic Finance
News Awards
Saudi Arabia Dealof the Year 2011
Islamic Finance
News Awards
Most ImprovedInternationalIslamic Bank 2011
Euromoney Islamic
Finance Awards 2011
Best Project FinanceDeal 2010
Euromoney Islamic
Finance Awards 2010
Deal of the Year2010
Euromoney Islamic
Finance Awards 2010
Best Islamic ProjectFinance Deal 2009
Asset Asian Awards 2009
Triple A
Best Islamic ProjectFinance House 2009
Asset Asian Awards 2009
Triple A
Most Innovative IslamicFinance Deal 2009
Asset Asian Awards 2009
Triple A
Most Improved IslamicFinance House 2009
Euromoney IslamicFinance Awards 2009
9
Islamic BondAward
2009
IFR Awards 2009
Bahrain Deal ofthe Year 2008
Islamic Finance
News Awards
Project FinanceDeal of the Year 2008
Islamic Finance
News Awards
2008
Project Finance Dealof the Year 2008
IFR Awards2009
2008
2011 2011 2011
Syndicate Deal ofthe Year 2008
Islamic Finance
News Awards
2008
-
8/14/2019 Islamic Banking Brochure 2012 Eng
11/32
pocket
-
8/14/2019 Islamic Banking Brochure 2012 Eng
12/32
Crdit Agricole Global Islamic Banking
Al Fattan Currency HouseTower 2 Level 21, DIFC
PO Box 506611, Dubai, UAETel: +971 (04) 376 1101
Profle
The Crdit Agricole Group is market leader in Universal Customer-Focused Banking in
France and one of the largest banks in Europe.
The Crdit Agricole Group seeks to serve the real economy by supporting its clients
projects in all areas of retail baning and associated specialised business lines.
Emphasising its values and commitment, the Crdit Agricole Group is the bank of common
sense. It puts the satisfaction and the interests of its 54 million customers, 160,000
employees, 1.2 million shareholders and 6.5 million cooperative shareholders at the heart
of its activities.
Crdit Agricole remains true to its co-operative and mutual origins by pursuing a proactive
policy in terms of social and environmental responsibility. As part of this policy, the Group is
making continual progress on behalf of its customers, staff and the environment, as provenby quantitative indicators.
www.credit-agricole.com
54 millionclients worlwide
35.1 billionrevenues
812 millionnet income Group share
160,000employees
370.7 billionshareholders equity
Group share
10.2%Core Tier One Ratio
unfoored
(as of December 2011)
Assessments of rating agencies
Short-term rating Long-term rating
Standard & Poors A -1 AFitch Ratings F1+ A+
Moodys Prime -1 A2
Pictures: shutterstock.com, istock.com
-
8/14/2019 Islamic Banking Brochure 2012 Eng
13/32
GLOBAL ISLAMIC BANKING
Murabaha: Short/Medium TermFinanceMurabaha
Murabahais a Sharia compliant structure where Crdit Agricole CIB purchasesthe goods (as requested by, and on behalf of the Client) and sells the goods at amark-up on deferred credit terms to the Client. This is the most widely usedIslamic structure, and transactions worth billions of USD are conducted daily inthe market.
A Murabaha can take one of two forms: SyntheticCommodity Murabaha(for cash based transactions that are
non-asset-based)
Traditional/Genuine Murabaha(for Trade Finance, asset-based purchases, etc.)
Features Many uses, including inventory financing, asset-based financing
Bridge financing for purchase of equipment, shares, and down payments onaircraft and ship finance, etc.
Financing of commodity purchases (Oil, Metal, etc.)
Tenor based on commercial needs
Credit Enhancement Can be provided through Corporate Guarantees
Can be enhanced through ECA support The structures have been approved by Crdit Agricole CIBs Sharia Board
members composed of Sheikh Nizam Yaquby, Dr. Mohammed Elgari andDr. Abdulsattar Abu Ghuddah.
Purpose of Murabaha Commodity Murabaha is
the purchase and sale ofSharia compliantcommodities, betweenCrdit Agricole CIB andthe counterparty. Theresulting outcome iseither a financing ordeposit.
Under a financingstructure, Crdit
Agricole CIB purchasescommodities at spotrate and sells them at anagreed markup to thecounterparty with spotdelivery and deferredpayment.
Commodity Murabaha isthe main tool for Islamicbanks to manage theirliquidity.
-
8/14/2019 Islamic Banking Brochure 2012 Eng
14/32
Global Islamic Banking
Disclaimer:
This document has been prepared by Crdit Agricole Corporate and Investment Bank or one of its aff iliates (CA-CIB) forinformation purposes only. Nothing in this document is to be construed as an offer for services or products or as an offer orsolicitation for the purchase or sale of securities or any other financial product. This documents has no regard to the specificinvestment objectives, financial situations or individual needs of any recipient. It is not intended to provide legal, tax, accounting orother advice and recipients should obtain independent professional advice from legal, tax, accounting or other appropriateprofessional advisers before embarking on any course of action. While the information in this document is based on sourcesbelieved to be reliable, no guarantee, representation or warranty, express or implied, is made as to its accuracy, correctness orcompleteness. This document contains indicative summaries of the terms and conditions of products described herein and may beamended, superseded or replaced by subsequent summaries. The f inal terms and conditions of the products will be set out in fullin the applicable legal documentation. This document may contain assumptions or include projections, forecasts, yields or returns,scenario analyses and proposed or expected portfolio composi tions. Actual events or conditions may not be consistent with, andmay differ materially from, those assumed. Past performance is not necessarily a guide to future performance. CA CIB shall not beresponsible or liable, directly or indirectly, for any direct or consequential damage or loss caused or a lleged to be caused by or inconnection with the use of or reliance on this presentation.
Crdit Agricole Corporate and Investment Bank, DIFC Branch is authorized by the Dubai Financial Services Authority. CrditAgricole Corporate and Investment Bank is incorporated in France and registered in England & Wales. Registration number:FC008194. Registered office: Broadwalk House, 5 Appold Street, London, EC2A 2DA.
www.ca-cib.com
Murabaha: Short/MediumTerm Finance
Simplified asset-based Murabaha Structure
Payment on adeferred basis ofPurchase Price
plus Profit($X + $Y)
Transfer oftitle to
client
VENDORPayment of
Purchase Price($X)
CRDITAGRICOLE
CIBCLIENT
Transfer oftitle to Crdit
Agricole CIB
Commodity Murabha Mechanism Purchase:Crdit Agricole CIB will purchase the asset from the Vendor (the Purchase Price). The title
is transferred to Crdit Agricole CIB.
Sale with Deferred Payment:Crdit Agricole CIB will immediately thereafter sell the same Asset tothe Client at a Deferred Price (Purchase Price plus the Murabaha Profit Amount ) on deferred credit
terms.
The title is transferred to the Client after the settlement of all obligations towards Crdit Agricole CIBby the Client.
The Murabaha structure has been used in the following landmark transactions:
August2009
Structured Murabha Facility
Kingdom of Saudi Arabia
US$ 2,500,000,000
Mandated Lead Arranger
Bookrunner
O
ctober2008
Commodity Murabaha
United Arab Emirates
US$ 2,250,000,000
Mandated Lead Arranger
Deal of the Year 2010
-
8/14/2019 Islamic Banking Brochure 2012 Eng
15/32
GLOBAL ISLAMIC BANKING
Export & Trade Finance Products Sharia-compliant structures are widely used for Export & Trade Finance transactions. Some of the products
include Murabaha, Ijara, Guarantees, Letters of Credit, Islamic Master Risk Participation Agreement, andExport Credit Agency.
Murabahacan be described as a purchase contract with a deferred payment obligationconcluded betweenthe Bank (Seller) and the Client (Purchaser).
Ijarais a lease contract where the Bank will buy the goods/equipment and lease them to the Client. Atmaturity, the ownership of the Asset is transferred to the Client. The Client purchases the goods/equipmentas agent for the Bank. The purchase and sale price, other costs, and the profit margin must be clearly statedat the time of the sale agreement.
Sharia-compliant guaranteesfollow the same principals as conventional guarantees. Letters of Credit:Only funded LCs will require an underlying Sharia-compliant structure:
Funded LCs:
A Funded Letter of Credit is where the Client needs funding for imports. Crdit Agricole CIB will use TradeMurabaha as underlying Islamic structure.
Unfunded LCs:
An Unfunded Letter of Credit does not need an Islamic underlying structure as the Issuing Bank willguarantee the payment to the Beneficiary without committing its balance sheet. Conventionaldocumentation can be used.
The Islamic Master Risk Participation Agreement (IMRPA)is a product that offers investors theopportunity to participate in Sharia-compliant trade finance transactions arranged by Crdit Agricole CIB.
Murabaha and Ijara can accommodate structures involvingExport Credit Agency(ECA)structures. IslamicECA transactions are similar to their conventional equivalents framework documentation, and take intoaccount the Islamic nature of the financing structure.
The structures have been approved by Crdit Agricole CIBs Sharia Board members composed of SheikhNizam Yaquby, Dr. Mohammed Elgari and Dr. Abdulsattar Abu Ghuddah.
-
8/14/2019 Islamic Banking Brochure 2012 Eng
16/32
Global Islamic Banking
Disclaimer:
This document has been prepared by Crdit Agricole Corporate and Investment Bank or one of its aff iliates (CA-CIB) forinformation purposes only. Nothing in this document is to be construed as an offer for services or products or as an offer orsolicitation for the purchase or sale of securities or any other financial product. This documents has no regard to the specificinvestment objectives, financial situations or individual needs of any recipient. It is not intended to provide legal, tax, accounting orother advice and recipients should obtain independent professional advice from legal, tax, accounting or other appropriateprofessional advisers before embarking on any course of action. While the information in this document is based on sourcesbelieved to be reliable, no guarantee, representation or warranty, express or implied, is made as to its accuracy, correctness orcompleteness. This document contains indicative summaries of the terms and conditions of products described herein and may beamended, superseded or replaced by subsequent summaries. The f inal terms and conditions of the products will be set out in fullin the applicable legal documentation. This document may contain assumptions or include projections, forecasts, yields or returns,scenario analyses and proposed or expected portfolio composi tions. Actual events or conditions may not be consistent with, andmay differ materially from, those assumed. Past performance is not necessarily a guide to future performance. CA CIB shall not beresponsible or liable, directly or indirectly, for any direct or consequential damage or loss caused or a lleged to be caused by or inconnection with the use of or reliance on this presentation.
Crdit Agricole Corporate and Investment Bank, DIFC Branch is authorized by the Dubai Financial Services Authority. CrditAgricole Corporate and Investment Bank is incorporated in France and registered in England & Wales. Registration number:FC008194. Registered office: Broadwalk House, 5 Appold Street, London, EC2A 2DA.
www.ca-cib.com
Export & Trade FinanceProducts
Select Sharia-based transactions include:
March2008
Trade Finance & Murabaha
Financing Facility
US$ 854,000,000
Mandated Lead Arranger
December2009
TELECOM COMPANY
ECA Financing
EUR 27,000,000
Sole Arranger
-
8/14/2019 Islamic Banking Brochure 2012 Eng
17/32
GLOBAL ISLAMIC BANKING
Sukuk Islamic BondsPurpose of Sukuk
Sukuk is a Sharia Compliant capital market instrument that has similar use to a conventional bond.
The concept of Sukukdates back to the very first days of Islamic civilization. However, only recently has itreemerged to become a commonly used Islamic Finance tool.
Sukuk can be issued under various structures. The most widely used struture by Sovereigns is SukukAl-Ijara, which is a lease-based instrument
The Primary Subscriber can resell Sukuk certificates in the secondary market. The secondary market buyertherefore becomes the new bona fide owner of the Sukuk,and entitled to the income generated from the underlying assets.
Sukuk can be structured as a Regulation S and Rule 144A transaction and rated by an international ratingagency.
Sukuk will enable the issuer to access a new class of investors around the globe.
Although Sukuk are comparable to conventional bonds, there are several key differences, some of which arehighlighted below:
*Example of applicable assets: roads, plants, infrastructure, land, vessels, planes, residential and commercial real estate
The structure has been approved by Crdit Agricole CIBs Sharia Board members composed of SheikhNizam Yaquby, Dr. Mohammed Elgari and Dr. Abdulsattar Abu Ghuddah.
Overview Conventional Bond Sukuk al Ijara
Nature of underlying asset Not necessary Must be unencumbered; balance between
number of assets and value of assets to ease
legal process*
Useful life of asset N/A Subject to normal wear and tear
Payment of Principal and Coupon Coupon 100% Debt, represents asset sale to Issuer,
linked to rent & provisions of usufruct
Investor Acceptability Conventional Sharia compliant investors and conventional
Geographical issues No issues (bar regulatory) Limited to country of assets
Size of issue Investor demand Value of underlying assets
Rating Applicable or non applicable Same
Listing As required Same
Clearing and Format Euroclear and Clearstream, Standalone,
EMTN, PP, Hybrid, Convertible,
Exchangeable
Same
Sharia endorsement Not necessary Necessary
-
8/14/2019 Islamic Banking Brochure 2012 Eng
18/32
Global Islamic Banking
Disclaimer:
This document has been prepared by Crdit Agricole Corporate and Investment Bank or one of its aff iliates (CA-CIB) forinformation purposes only. Nothing in this document is to be construed as an offer for services or products or as an offer orsolicitation for the purchase or sale of securities or any other financial product. This documents has no regard to the specificinvestment objectives, financial situations or individual needs of any recipient. It is not intended to provide legal, tax, accounting orother advice and recipients should obtain independent professional advice from legal, tax, accounting or other appropriateprofessional advisers before embarking on any course of action. While the information in this document is based on sourcesbelieved to be reliable, no guarantee, representation or warranty, express or implied, is made as to its accuracy, correctness orcompleteness. This document contains indicative summaries of the terms and conditions of products described herein and may beamended, superseded or replaced by subsequent summaries. The f inal terms and conditions of the products will be set out in fullin the applicable legal documentation. This document may contain assumptions or include projections, forecasts, yields or returns,scenario analyses and proposed or expected portfolio composi tions. Actual events or conditions may not be consistent with, andmay differ materially from, those assumed. Past performance is not necessarily a guide to future performance. CA CIB shall not beresponsible or liable, directly or indirectly, for any direct or consequential damage or loss caused or a lleged to be caused by or inconnection with the use of or reliance on this presentation.
Crdit Agricole Corporate and Investment Bank, DIFC Branch is authorized by the Dubai Financial Services Authority. CrditAgricole Corporate and Investment Bank is incorporated in France and registered in England & Wales. Registration number:FC008194. Registered office: Broadwalk House, 5 Appold Street, London, EC2A 2DA.
www.ca-cib.com
Sukuk Islamic Bonds
Sukuk Al-Ijara A lease-based instrument
Product
Sukuk Al-Ijara
Description
Islamic Lease-based Securities. Trust Notes or Certificates similar to Equipment Trust Certificates (ETCs)and Unit Trusts
Features
Issuer creates a trust over the leased Assets
Trustee issues Sukuk to the Primary Subscribers in the Primary Market
Sukuk Holders have pro-rata undivided beneficial ownership of the leased assets held in trust
The Primary Subscriber can resell the Sukuk in the secondary market
The following award-winning transactions were Sukuk based:
May2008
Sukuk Al Istithmar
Corporate
Kingdom of Saudi Arabia
SAR 5,000,000,000
Mandated Lead Arranger
Bookrunner
October2011
Project Finance Sukuk
Projected Structural Finance
Kingdom of Saudi Arabia
SAR 3,750,000,000
Joint Lead Arranger
June2009
Sukuk Al-Ijara
Kingdom of Bahrain
US$ 750,000,000
Joint Bookrunner
-
8/14/2019 Islamic Banking Brochure 2012 Eng
19/32
GLOBAL ISLAMIC BANKING
FX Waad(FX Option)Waad
A Waadis a unilateral undertaking from the Promisor to the Promisee. The Waad is a unilateral promise. It is only binding on the Promisor and not on the Promisee. The Promisor can receive a fee for its undertaking.
A Waad can be used to replicate the economics of a conventional FX option.
Structure Mechanics
On the start date of the transaction, Crdit Agricole CIB will undertake to theInvestor to exchange Currency 1 against Currency 2 at a pre-agreed rate on afuture date.
On the same date, Crdit Agricole CIB will receive a fee from the Investor for itsundertaking.
On the future date, the Investor might ask Crdit Agricole CIB to fulfill its promiseor might release Crdit Agricole CIB from its undertaking.
In case the Investor asks Crdit Agricole CIB to execute its Waad, the InvestorandCrdit Agricole CIB will exchange the two currencies at the pre-agreed rate
Features
This product can be used only for hedging or cost reduction purposes andcannot be traded for speculative purposes.
The structure has been approved by Crdit Agricole CIBs Sharia Boardcomposed of Sheikh Nizam Yaquby, Dr. Mohammed Elgari and Dr. Abdulsattar
Abu Ghuddah.
The Investor will pay a fee on the start date against Crdit Agricole CIBundertaking.
On the Maturity date, if the Investor wants to execute the Waad, Crdit AgricoleCIB and the Investor will exchange the currencies.
Purposes of FX Waad The FX Waad is mostly
used to managecurrency risk associatedwith investments.
FX Waad allowsinvestors who holdCurrency 1 and need toinvest in Currency 2.
Company A has $100cash and will need theequivalent in EUR in one
year without beingpenalized by the EUR/USD Spot Rate volatility.
Case 1 No protection
Company A owns $100on the start date with acurrent spot rate of 1.45(=70). After one year,spot rate has moved to1.60, and Company Aexchanges its $100resulting in 62.5.
7.5 lossCase 2 FX Waad
protection
Company A owns $100on the start date with acurrent spot rate of 1.45(=70). Company Aenters into a FX Waadto buy EUR against USDat 1.45 in one year for a$2 fee. After one year,spot rate has moved to
1.60 ($100 = 62.5), andCompany A exchangesits $100 resulting in 70.6 saving (7.5-$2)
-
8/14/2019 Islamic Banking Brochure 2012 Eng
20/32
Disclaimer:
This document has been prepared by Crdit Agr icole Corporate and Investment Bank or one of itsaffiliates (CA-CIB) for information purposes only. Nothing in this document is to be construed asan offer for services or products or as an offer or solicitation for the purchase or sale of securi ties orany other financial product. This documents has no regard to the specific investment objectives,
financial situations or individual needs of any recipient. It is not intended to provide legal, tax,accounting or other advice and recipients should obtain independent professional advice fromlegal, tax, accounting or other appropriate professional advisers before embarking on any courseof action. While the information in this document is based on sources believed to be reliable, noguarantee, representation or warranty, express or impl ied, is made as to its accuracy, correctnessor completeness. This document contains indicative summaries of the terms and conditions ofproducts described herein and may be amended, superseded or replaced by subsequentsummaries. The final terms and conditions of the products will be set out in full in the applicablelegal documentation. This document may contain assumptions or include projections, forecasts,yields or returns, scenario analyses and proposed or expected portfolio compositions. Actualevents or conditions may not be consistent with, and may differ materially from, those assumed.Past performance is not necessarily a guide to future performance. CA CIB shall not be responsibleor liable, directly or indirectly, for any direct or consequential damage or loss caused or alleged tobe caused by or in connection with the use of or reliance on this presentation.
Crdit Agricole Corporate and Investment Bank, DIFC Branch is authorized by the Dubai FinancialServices Authority. Crdit Agricole Corporate and Investment Bank is incorporated in France andregistered in England & Wales. Registration number: FC008194. Registered office: BroadwalkHouse, 5 Appold Street, London, EC2A 2DA.
www.ca-cib.com
GLOBAL ISLAMIC BANKING
Islamic FX Outright(Based on Unilateral Waads)Waad
A Waadis a unilateral undertaking from the Promisor to the Promisee. The Waad is a unilateral promise.
It is only binding on the Promisor and not on the Promisee. The Promisor can receive a fee for its undertaking.
A Waad can be used to replicate the economics of a conventional FX option.
Structure Mechanics
On the start date of the transaction:
Crdit Agricole CIB will undertake to the Investor to exchange Currency 1against Currency 2 at a pre-agreed rate at a future date.
Through a second and independent Waad, the Investor will undertake to CrditAgricole CIB to exchange Currency 2 against Currency 1 at a pre-agreed rate ata future date (similar to Crdit Agricole CIBs undertaking).
On the future date, the Investor and Crdit Agricole CIB agree to execute oneWaad and to give up the other one.
Using this structure, we enable the Investor to receive Currency 2 against Currency1 on a future date.
Features
This product can be used only for hedging or cost reduction purposes andcannot be traded for speculative purposes.
The structure has been approved by Crdit Agricole CIBs Sharia Board composedof Sheikh Nizam Yaquby, Dr. Mohammed Elgari and Dr. Abdulsattar Abu Ghuddah.
The Investor and Crdit Agricole CIB are undertaking unilaterally and independentlyto exchange two currencies.
On the Maturity date, one promise will be given up (since it will be out of themoney) and the other one will be executed in order to exchange the twocurrencies.
Purposes of Islamic FXOutright
The Islamic FX Outrightis mostly used tomanage currency riskassociated withinvestments.
Islamic FX Outrightallows investors whohold Currency 1 toexchange it into Currency2 at a future date at a
pre-agreed rate. Company A has $100
cash and will need theequivalent in EUR in oneyear without beingpenalized by the EUR/USD Spot Rate volatility.
Case 1 No protection
Company A owns $100on the start date with acurrent spot rate of 1.45(=70). After one year,spot rate has moved to1.60, and Company Aexchanges its $100resulting in 62.5.7.5 loss
Case 2 Islamic FX
Outright protection
Company A owns $100on the start date with acurrent spot rate of 1.45(=70). Company Aenters into an Islamic FXOutright to buy EUR
against USD at 1.45.After one year, spot ratehas moved to 1.60($100 = 62.5), andCompany A exchangesits $100 resulting in 70.7.5 saving
GLOBAL ISLAMIC BANKING
-
8/14/2019 Islamic Banking Brochure 2012 Eng
21/32
GLOBAL ISLAMIC BANKING
Islamic FX Swap(Murabaha/Reverse Murabaha)Murabaha
A Murabahais the purchase and sale of Sharia compliant commodities, betweenCrdit Agricole CIB and the Investor, to result in either a deposit or a financing.
In order to achieve a deposit, Crdit Agricole CIB purchases commodities asAgent for the Investor at spot and sells those commodities to Crdit Agricole CIBon deferred payment terms, such deferred profit reflecting the return on thedeposit. Crdit Agricole CIB sells the commodities at spot in order to obtain thecash reflecting the Investors deposit.
The deferred sale price is always higher than the purchase price, reflecting thereturn on the deposit, and must be known at the time of the Murabahatransaction.
Structure Mechanics
The Islamic FX Swapis a Murabaha in Currency 1 against another Murabaha inCurrency 2 where both Murabahas are paying fixed rate profits.
Economically, through this structure, we aim to replicate the economic effects ofanFX swap.
On the start date: The Investor will enter into a Murabaha in Currency 1 with Crdit Agricole CIB
where the Investor will pay a fixed profit to Crdit Agricole CIB.
Concurrently, Crdit Agricole CIB will enter into a Murabaha in Currency 2 withthe Investor where Crdit Agricole CIB will pay a fixed profit to the Investor.
The tenor of each Murabahas is the same.
On the deferred payment date, Crdit Agricole CIB will receive a fixed profit inCurrency 1 and the Investor will receive a fixed profit in Currency 2.
Features
The transaction is funded and the notional amounts are exchanged on the startdate. At maturity, the notional amounts are returned.
Commodity trading costs are significant (up to 5 bps per annum) and are borneby Crdit Agricole CIB.
This product is only for hedging or cost reduction purposes and cannot betraded for speculative purposes.
The structure has been approved by Crdit Agricole CIBs Sharia Boardcomposed of Sheikh Nizam Yaquby, Dr. Mohammed Elgari andDr. Abdulsattar Abu Ghuddah.
Purpose of IslamicFX Swap
The Islamic FX Swap ismostly used to managecurrency risk associatedwith investments. It willallow Investor whoholds Currency 1 toinvest in Currency 2 fora defined period of timeto mitigate currency risk
Company A has $100
cash and wishes toinvest in EUR for oneyear.
Case 1 No protection
Company A converts its$100 on the start date @1.50 and will receive66.66. After one year,Company A exchangesback the 66.66 to USDollars. Spot rate hasmoved to 1.20, and
Company A receives$80 resulting in $20loss
Case 2 Islamic FX swap
protection
Company A enters intoan Islamic FX swap withCrdit Agricole CIB.Through the Murabahaand Reverse Murabaha,Company A will receive66.66 against $100.
After one year,Company A receivesback $100 (+ $ profitrate) against thepayment of 66.66(+ profit rate).$0 loss
Investor
Metals Supplier
Crdit Agricole
CIB Agent
(1) $100
(2) $100 (3) Metals
(4) Metals
(7) ($100+Profit)paid deferred
Metals Purchaser
(6) $100 (5) Metals
Crdit Agricole
CIB Principal
-
8/14/2019 Islamic Banking Brochure 2012 Eng
22/32
Global Islamic Banking
Disclaimer:
This document has been prepared by Crdit Agricole Corporate and Investment Bank or one of its aff iliates (CA-CIB) forinformation purposes only. Nothing in this document is to be construed as an offer for services or products or as an offer orsolicitation for the purchase or sale of securities or any other financial product. This documents has no regard to the specificinvestment objectives, financial situations or individual needs of any recipient. It is not intended to provide legal, tax, accounting orother advice and recipients should obtain independent professional advice from legal, tax, accounting or other appropriateprofessional advisers before embarking on any course of action. While the information in this document is based on sourcesbelieved to be reliable, no guarantee, representation or warranty, express or implied, is made as to its accuracy, correctness orcompleteness. This document contains indicative summaries of the terms and conditions of products described herein and may beamended, superseded or replaced by subsequent summaries. The f inal terms and conditions of the products will be set out in fullin the applicable legal documentation. This document may contain assumptions or include projections, forecasts, yields or returns,scenario analyses and proposed or expected portfolio composi tions. Actual events or conditions may not be consistent with, andmay differ materially from, those assumed. Past performance is not necessarily a guide to future performance. CA CIB shall not beresponsible or liable, directly or indirectly, for any direct or consequential damage or loss caused or a lleged to be caused by or inconnection with the use of or reliance on this presentation.
Crdit Agricole Corporate and Investment Bank, DIFC Branch is authorized by the Dubai Financial Services Authority. CrditAgricole Corporate and Investment Bank is incorporated in France and registered in England & Wales. Registration number:FC008194. Registered office: Broadwalk House, 5 Appold Street, London, EC2A 2DA.
www.ca-cib.com
Islamic FX Swap (Murabaha/
Reverse Murabaha)
Illustration
1 Year EUR/USD Islamic FX Swap (Murabaha/Reverse Murabaha)
Features:Notional amount: USD 14,500,000
Tenor: 1 year
Underlying: EUR/USD Spot
Initial Spot Rate: 1.45
Maturity Spot Rate: 1.43 The Maturity Spot Rate will be determined according to EUR
and USD Interest Rates
USD Profit Rate: 1bp p.a.
EUR Profit Rate: 1.40874% p.a.
Profit payment: At maturity Structure:
The Investor enters in a Murabaha for USD 14,500,000 with Crdit Agricole CIB where Crdit Agricole CIBwill pay 1bp profit.
Crdit Agricole CIB enters in a Murabaha for EUR 10,000,000 with the Investor where the Investor will pay1.41% profit.
Sequences:
Investor Cash Flow Crdit Agricole CIB Cash Flow
Trade Annualizedreturn
PurchasePrice
SalePrice Start date End date Start date End date
USD
Murabaha 1bp 14,500,000 14,501,450 -14,500,000 +14,501,450 +14,500,000 -14,501,450
EUR
Murabaha 1.40874% 10,000,000 10,140,874 +10,000,000 -10,140,874 -10,000,000 +10,140,874
Spot Rate 1.45 1.43
-
8/14/2019 Islamic Banking Brochure 2012 Eng
23/32
GLOBAL ISLAMIC BANKING
Profit Rate Swap(Waad Based)Waad & Musawamah
A Waadis a unilateral undertaking from the Promisor to the Promisee. The Waad is a unilateral promise. It is only binding on the Promisor and not on the Promisee. The Promisor can receive a fee for its undertaking.
The Musawamahis an ordinary contract sale in which the price of a commodity to betraded is negotiated between the seller and the buyer without any reference to theprice paid or cost incurred by the former.
A Musawamah trade between promisor and promisee under the Waad is the
mechanism through which the profit on the promise is paid to the Investor. All other conditions relevant to Murabaha apply to Musawamah.
Structure Mechanics
TheProfit Rate Swap (Waad based)involves two independent Waad promiseswhere, for example:
Crdit Agricole CIB undertakes to the Investor to enter into a series of Musawamahtransactions paying a fixed profit over a defined time period.
The Investor undertakes to Crdit Agricole CIB to enter into a series of Musawamahpaying a floating profit over the same time period.
Economically, through this structure, we aim to replicate the economic benefits of anInterest Rate Swap.
On the start date, Crdit Agricole CIB and the Investor:
enter into the unilateral Waad promises. define the number of Musawamahs to be entered into by each party. agree the mechanics for determining the fixed and floating rate profit payable in
respect of each time period.
On each Musawamah trade date: Crdit Agricole CIB buys spot commodities from the Investor, and pays the full
notional price plus the fixed profit to the Investor.
The Investor buys spot commodities from Crdit Agricole CIB , and pays the fullnotional price plus the floating profit to Crdit Agricole CIB .
As the Musawamah notional amounts are similar, the fixed and floating rate profitpayments are netted off, so that only one cash flow occurs.
Features
There is no exchange of notional involved in these transactions. The only flows rising inthis transaction are the net amounts to be paid by one party to the other at the time ofthe profit payments (Musawamah trade dates).
Crdit Agricole CIB acts as Agent for the Investor and conducts the purchase and saleof the commodities on behalf of the Investor in fulfilling both Waad undertakings.
Commodities trade costs are limited as the Musawamah are intraday transactions,making the Waad based profit rate swap attractive in term of pricing.
This product can be used only for hedging or cost reduction purposes and cannotbe traded for speculative purposes.
The structure has been approved by Crdit Agricole CIB s Sharia Boardcomposed of Sheikh Nizam Yaquby, Dr. Mohammed Elgari andDr. Abdulsattar Abu Ghuddah.
Structured ProfitRate Swap
The Waad based profitrate swap allows CrditAgricole CIB to structureswaps with reference toa profit formula.
Therefore, this structurecan be expanded tocover a range of marketrisks beyond theclassical vanilla swap
(currencies, commodities,indexes etc).
Consequently, CrditAgricole CIB can tailorhedging solutions forthe Investor in order tooffer an extensive rangeof protections.
-
8/14/2019 Islamic Banking Brochure 2012 Eng
24/32
Global Islamic Banking
Disclaimer:
This document has been prepared by Crdit Agricole Corporate and Investment Bank or one of its aff iliates (CA-CIB) forinformation purposes only. Nothing in this document is to be construed as an offer for services or products or as an offer orsolicitation for the purchase or sale of securities or any other financial product. This documents has no regard to the specificinvestment objectives, financial situations or individual needs of any recipient. It is not intended to provide legal, tax, accounting orother advice and recipients should obtain independent professional advice from legal, tax, accounting or other appropriateprofessional advisers before embarking on any course of action. While the information in this document is based on sourcesbelieved to be reliable, no guarantee, representation or warranty, express or implied, is made as to its accuracy, correctness orcompleteness. This document contains indicative summaries of the terms and conditions of products described herein and may beamended, superseded or replaced by subsequent summaries. The f inal terms and conditions of the products will be set out in fullin the applicable legal documentation. This document may contain assumptions or include projections, forecasts, yields or returns,scenario analyses and proposed or expected portfolio composi tions. Actual events or conditions may not be consistent with, andmay differ materially from, those assumed. Past performance is not necessarily a guide to future performance. CA CIB shall not beresponsible or liable, directly or indirectly, for any direct or consequential damage or loss caused or a lleged to be caused by or inconnection with the use of or reliance on this presentation.
Crdit Agricole Corporate and Investment Bank, DIFC Branch is authorized by the Dubai Financial Services Authority. CrditAgricole Corporate and Investment Bank is incorporated in France and registered in England & Wales. Registration number:FC008194. Registered office: Broadwalk House, 5 Appold Street, London, EC2A 2DA.
www.ca-cib.com
Profit Rate Swap
(Waad Based)
Illustration
5 Year USD Profit Rate Swap (Waad Based)
Features:Notional amount: USD 100,000,000
Tenor: 5 years
Fixed rate payer: The Investor
Floating rate payer: Crdit Agricole CIB
Profit payment: Semiannually
Floating rate benchmark: USD 3M Libor
Fixed rate: 5%
Profit Rate Assumptions:
Profit Y1 S1 Y1 S2 Y2 S1 Y2 S2 Y3 S1 Y3 S2 Y4 S1 Y4 S2 Y5 S1 Y5 S2Date Musawamah
1Musawamah
2Musawamah
3Musawamah
4Musawamah
5Musawamah
6Musawamah
7Musawamah
8Musawamah
9Musawamah
10
Fixed Rate 5% 5% 5% 5% 5% 5% 5% 5% 5% 5%
FloatingRate
4.75% 4.90% 5.05% 5.10% 4.95% 5.05% 5% 5.10% 5.15% 5.25%
Sequences:
Dates Musawamah Floating Rate Fixed Rate Floating Amount Fixed Amount Investors Net Amount
Y1 S1 1 4.75% 5% 2,375,000 2,500,000 (125,000)
Y1 S2 2 4.90% 5% 2,450,000 2,500,000 (50,000)
Y2 S1 3 5.05% 5% 2,525,000 2,500,000 25,000
Y2 S2 4 5.10% 5% 2,550,000 2,500,000 50,000Y3 S1 5 4.95% 5% 2,475,000 2,500,000 (25,000)
Y3 S2 6 5.05% 5% 2,525,000 2,500,000 25,000
Y4 S1 7 5.00% 5% 2,500,000 2,500,000 -
Y4 S2 8 5.10% 5% 2,550,000 2,500,000 50,000
Y5 S1 9 5.15% 5% 2,575,000 2,500,000 75,000
Y5 S2 10 5.25% 5% 2,625,000 2,500,000 125,000
The Profit Rate Swap helped the Investor saving USD 120,000 by hedging
the floating rate of its underlying transaction.
-
8/14/2019 Islamic Banking Brochure 2012 Eng
25/32
GLOBAL ISLAMIC BANKING
Profit Rate Swap(Murabaha Based)Murabaha
A Murabahais the purchase and sale of Sharia compliant commodities, betweenCrdit Agricole CIB and the Investor, to result in either a deposit or a financing.
In order to achieve a deposit, Crdit Agricole CIB purchases commodities as Agent forthe Investor at spot and sells those commodities to Crdit Agricole CIB on deferredpayment terms (cost price + profit), such deferred profit reflecting the return on thedeposit. Crdit Agricole CIB sells the commodities at spot in order to obtain the cashreflecting the Investors deposit.
The deferred sale price is always higher than the purchase price, reflecting the return onthe deposit, and must be known at the time of the Murabaha transaction.
Structure Mechanics
The Profit Rate Swap (Murabaha Based)is a series of Murabahas paying a fixed profitagainst another series of Murabahas paying a floating profit (benchmarked to a varietyof rates, including but not limited to, Libor, Sibor, etc.).
Economically, through this structure, we aim to replicate the economic effects of aninterest rate swap.
On the start date: The Investor will enter in a series of Murabahas with Crdit Agricole CIB where the
Investor will pay as a profit to Crdit Agricole CIB a fixed amount.
Crdit Agricole CIB will enter in a series of Murabahas with the Investor whereCrdit Agricole CIB will pay as a profit a floating amount (Libor for example) fixedbefore the beginning of each Murabaha.
The tenors of the Murabahas and the Murabaha amounts are similar. On each deferred payment date, Crdit Agricole CIB will receive a fixed profit and
the Investor will receive a floating profit, with the two amounts netted off forpayment purposes.
Features
There is no exchange of notional involved in these transactions. The only flows arisingin this transaction are the net amounts to be paid by one of the parties at the time ofthe profit payments.
Crdit Agricole CIB acts as Agent for the Investor and will conduct the purchase andsale of the commodities on behalf of the Investor.
The commodity trade costs are significant (up to 5 bps per annum), and are borne byCrdit Agricole CIB but are taken into account in the pricing.
This product can be used only for hedging or cost reduction purposes and cannotbe traded for speculative purposes.
The structure has been approved by Crdit Agricole CIBs Sharia Boardcomposed of Sheikh Nizam Yaquby, Dr. Mohammed Elgari and
Dr. Abdulsattar Abu Ghuddah.
Purpose ofProfit Rate Swap
The Profit Rate Swap isa key instrument inmanaging investmentand funding risk.
Any Investor with anoutstanding loan or adeposit linked to afloating rate of returncan eliminate the raterisk by entering into a
profit rate swap andfixing the cost or return.
Company A has$100Mln Islamicfinancing where it paysa profit rate equal toLibor to the Financier.Initial Libor level: 4.50%
Case 1 No protection
Libor rises to 5.50%.After one year, CompanyA will have paid $5.5Mln
as a profit rate insteadof $4.5Mln.$1,000,000 additionalcost
Case 2 Profit Rate swap
protection
Company A enters intoa Profit Rate Swap withCrdit Agricole CIB.Crdit Agricole CIB paysa rate equal to Libor andCompany A pays a rate
of 4.75%. Libor rises to5.50%. Company Apays $4.75Mln andreceives $5.5Mln fromCrdit Agricole CIB.$750,000 saving
Investor
Metals Supplier
Crdit Agricole
CIB Agent
(1) $100
(2) $100 (3) Metals
(4) Metals
(7) ($100+Profit)paid deferred
Metals Purchaser
(6) $100 (5) Metals
Crdit Agricole
CIB Principal
-
8/14/2019 Islamic Banking Brochure 2012 Eng
26/32
Global Islamic Banking
Disclaimer:
This document has been prepared by Crdit Agricole Corporate and Investment Bank or one of its aff iliates (CA-CIB) forinformation purposes only. Nothing in this document is to be construed as an offer for services or products or as an offer orsolicitation for the purchase or sale of securities or any other financial product. This documents has no regard to the specificinvestment objectives, financial situations or individual needs of any recipient. It is not intended to provide legal, tax, accounting orother advice and recipients should obtain independent professional advice from legal, tax, accounting or other appropriateprofessional advisers before embarking on any course of action. While the information in this document is based on sourcesbelieved to be reliable, no guarantee, representation or warranty, express or implied, is made as to its accuracy, correctness orcompleteness. This document contains indicative summaries of the terms and conditions of products described herein and may beamended, superseded or replaced by subsequent summaries. The f inal terms and conditions of the products will be set out in fullin the applicable legal documentation. This document may contain assumptions or include projections, forecasts, yields or returns,scenario analyses and proposed or expected portfolio composi tions. Actual events or conditions may not be consistent with, andmay differ materially from, those assumed. Past performance is not necessarily a guide to future performance. CA CIB shall not beresponsible or liable, directly or indirectly, for any direct or consequential damage or loss caused or a lleged to be caused by or inconnection with the use of or reliance on this presentation.
Crdit Agricole Corporate and Investment Bank, DIFC Branch is authorized by the Dubai Financial Services Authority. CrditAgricole Corporate and Investment Bank is incorporated in France and registered in England & Wales. Registration number:FC008194. Registered office: Broadwalk House, 5 Appold Street, London, EC2A 2DA.
www.ca-cib.com
Profit Rate Swap(Murabaha Based)
Illustration
5 Year USD Profit Rate Swap (Murabaha Based)
Features:Notional amount: USD 100,000,000Tenor: 5 yearsFixed rate payer: The InvestorFloating rate payer: Crdit Agricole CIBProfit payment: SemiannuallyFloating rate benchmark: USD 3M LiborFixed rate: 5%
Profit Rate Assumptions:
Profit Y1 S1 Y1 S2 Y2 S1 Y2 S2 Y3 S1 Y3 S2 Y4 S1 Y4 S2 Y5 S1 Y5 S2Date Musawamah
1Musawamah
2Musawamah
3Musawamah
4Musawamah
5Musawamah
6Musawamah
7Musawamah
8Musawamah
9Musawamah
10
Fixed Rate 5% 5% 5% 5% 5% 5% 5% 5% 5% 5%
FloatingRate
4.75% 4.90% 5.05% 5.10% 4.95% 5.05% 5% 5.10% 5.15% 5.25%
Sequences:
Dates Musawamah Floating Rate Fixed Rate Floating Amount Fixed Amount Investors Net Amount
Y1 S1 1 4.75% 5% 2,375,000 2,500,000 (125,000)
Y1 S2 2 4.90% 5% 2,450,000 2,500,000 (50,000)
Y2 S1 3 5.05% 5% 2,525,000 2,500,000 25,000
Y2 S2 4 5.10% 5% 2,550,000 2,500,000 50,000
Y3 S1 5 4.95% 5% 2,475,000 2,500,000 (25,000)
Y3 S2 6 5.05% 5% 2,525,000 2,500,000 25,000
Y4 S1 7 5.00% 5% 2,500,000 2,500,000 -
Y4 S2 8 5.10% 5% 2,550,000 2,500,000 50,000
Y5 S1 9 5.15% 5% 2,575,000 2,500,000 75,000
Y5 S2 10 5.25% 5% 2,625,000 2,500,000 125,000
The Profit Rate Swap helped the Investor saving USD 120,000 by hedging
the floating rate of its underlying transaction.
-
8/14/2019 Islamic Banking Brochure 2012 Eng
27/32
GLOBAL ISLAMIC BANKING
Cross Currency Swap(Murabaha Based)Murabaha
A Murabahais the purchase and sale of Sharia compliant commodities, betweenCrdit Agricole CIB and the Investor, that result in either a deposit or a loan.
In order to achieve a deposit, Crdit Agricole CIB purchases commodities asAgent for the Investor at spot. Investor sells the commodities to Crdit AgricoleCIB on deferred payment terms (cost price + profit), such profit reflecting thereturn on the deposit. Crdit Agricole CIB then sells the commodities at spot inorder to obtain the cash reflecting the Investors deposit.
Note: The deferred sale price is always higher than the purchase price, reflectingthe return on the deposit, and must be known at the time of the Murabahatransaction.
Structure Mechanics
The Cross Currency Swapinvolves one series of Murabahas in Currency 1paying a floating profit against another series of Murabahas in Currency 2 alsopaying a floating profit.
On the start date:
The Investor enters into the first of a series of Murabahas in Currency 1 withCrdit Agricole CIB where the Investor will pay a floating profit to CrditAgricole CIB.
Crdit Agricole CIB enters into the first of a series of Murabahas in Currency 2with the Investor where Crdit Agricole CIB will pay a floating profit to theInvestor.
The tenors of the Murabahas and the Murabaha amounts are identical.
Consequently, on any deferred payment date, Crdit Agricole CIB will receive a
floating profit in Currency 1 and the Investor will receive a floating profit inCurrency 2.
Features
The transaction is funded and the notional amounts are exchanged on the startdate. At maturity, the notional amounts are returned.
Commodity trading costs are significant (up to 5 bps per annum) and are borneby Crdit Agricole CIB.
This product is only for hedging or cost reduction purposes and cannot betraded for speculative purposes.
The structure has been approved by Crdit Agricole CIBs ShariaBoard composed of Sheikh Nizam Yaquby, Dr. Mohammed Elgari
and Dr. Abdulsattar Abu Ghuddah.
Purposes ofCross Currency Swap
The Cross CurrencySwap is mostly used tomanage currency andrate risks associatedwith investments.
Cross Currency Swapsallow investors who holdCurrency 1 to invest inCurrency 2 for a definedperiod of time to
mitigate currency risk. Company A has $100
cash and wishes toinvest in EUR for oneyear.
Case 1 No protection
Company A converts its$100 on the start date @1.50 and will receive66.66. After one year,Company A is changingback the 66.66. Spot
rate has moved to 1.20,and Company Areceives $80 resulting in$20 loss
Case 2 Cross currency
swap protection
Company A enters intoa cross currency swapwith Crdit Agricole CIBand receives 66.66against $100. After oneyear, Company A
receives back $100(+ $ profit rate) againstthe payment of 66.66(+ profit rate).$0 loss
Investor
Metals Supplier
Crdit Agricole
CIB Agent
(1) $100
(2) $100 (3) Metals
(4) Metals
(7) ($100+Profit)paid deferred
Metals Purchaser
(6) $100 (5) Metals
Crdit Agricole
CIB Principal
-
8/14/2019 Islamic Banking Brochure 2012 Eng
28/32
Global Islamic Banking
Disclaimer:
This document has been prepared by Crdit Agricole Corporate and Investment Bank or one of its aff iliates (CA-CIB) forinformation purposes only. Nothing in this document is to be construed as an offer for services or products or as an offer orsolicitation for the purchase or sale of securities or any other financial product. This documents has no regard to the specificinvestment objectives, financial situations or individual needs of any recipient. It is not intended to provide legal, tax, accounting orother advice and recipients should obtain independent professional advice from legal, tax, accounting or other appropriateprofessional advisers before embarking on any course of action. While the information in this document is based on sourcesbelieved to be reliable, no guarantee, representation or warranty, express or implied, is made as to its accuracy, correctness orcompleteness. This document contains indicative summaries of the terms and conditions of products described herein and may beamended, superseded or replaced by subsequent summaries. The f inal terms and conditions of the products will be set out in fullin the applicable legal documentation. This document may contain assumptions or include projections, forecasts, yields or returns,scenario analyses and proposed or expected portfolio composi tions. Actual events or conditions may not be consistent with, andmay differ materially from, those assumed. Past performance is not necessarily a guide to future performance. CA CIB shall not beresponsible or liable, directly or indirectly, for any direct or consequential damage or loss caused or a lleged to be caused by or inconnection with the use of or reliance on this presentation.
Crdit Agricole Corporate and Investment Bank, DIFC Branch is authorized by the Dubai Financial Services Authority. CrditAgricole Corporate and Investment Bank is incorporated in France and registered in England & Wales. Registration number:FC008194. Registered office: Broadwalk House, 5 Appold Street, London, EC2A 2DA.
www.ca-cib.com
Cross Currency Swap(Murabaha Based)
Illustration
1.5 Year EUR/USD Cross Currency Swap
Features:Spot rate: EUR/USD: 1.50
Swap notional: USD 100,000,000 / EUR 66,666,666
Tenor: 1.5 years
Currency 1: EUR
Currency 2: USD
Currency 1 rate payer: The Investor
Currency 2 rate payer: Crdit Agricole CIB
Profit payment: Quarterly
Number of Murabahas: 6 (1.5 year/quarter) Profit Rate Assumptions:
Y1 Q1 Y1 Q2 Y1 Q3 Y1 Q4 Y2 Q1 Y2 Q2
Profit Date Murabaha 1 Murabaha 2 Murabaha 3 Murabaha 4 Murabaha 5 Murabaha 6
EUR Rate 4.25% 4.30% 4.35% 4.30% 4.30% 4.25%
USD Rate 4.75% 4.90% 5.05% 5.10% 4.95% 5.05%
Cash Flows:
Y1 Q1 Y1 Q2 Y1 Q3 Y1 Q4 Y2 Q1 Y2 Q2
Profit Date Start Date Murabahas 1 Murabahas 2 Murabahas 3 Murabahas 4 Murabahas 5 Murabahas 6 End Date
EUR Rate 4.25% 4.30% 4.35% 4.30% 4.30% 4.25%
USD Rate 4.75% 4.90% 5.05% 5.10% 4.95% 5.05%
Crdit
Agricole CIB
Cash Flows
( 66,666,666) 708,333 716,667 725,000 716,667 716,667 708,333 66,666,666
Investor
Cash Flows($100,000,000) $1,187,500 $1,225,000 $1,262,500 $1,275,000 $1,237,500 $1,262,500 $100,000,000
-
8/14/2019 Islamic Banking Brochure 2012 Eng
29/32
GLOBAL ISLAMIC BANKING
Structured Murabaha DepositMurabaha
AMurabahais the purchase and sale of Sharia compliant commodities, betweenCrdit Agricole CIB and the Investor, to result in either a deposit or a financing.
In order to achieve a deposit, Crdit Agricole CIB purchases commodities asAgent for the Investor at spot and sells those commodities to Crdit Agricole CIBon deferred payment terms, such deferred profit reflecting the return on thedeposit. Crdit Agricole CIB sells the commodities at spot in order to obtain thecash reflecting the Investors deposit.
The deferred sale price is always higher than the purchase price, reflecting thereturn on the deposit, and must be known at the time of the Murabahatransaction.
Structure Mechanics
TheStructured Murabaha Depositis a series of commodity Murabahas andoffers a return linked to the performance of an underlying, according to a pre-agreed formula.
It is intended to replicate the economics of a Structured Deposit.
The 1st Murabaha will pay a fixed profit because the return on the underlying willnot be known until the end of the period. Starting from the 2nd Murabaha untilthe nth Murabaha, each Murabaha will pay as a profit the n -1th underlyingperformance reflecting the return of the previous period.
In respect of each Murabaha transaction, the Investor will receive:
Part of the sale price (profit) on the trade date; and
The balance of the sale price on a deferred basisplease refer to theillustration overleaf.
The last Murabaha will be a short Murabaha (2 or 3 days) where, on the deferredpayment date, the Investor will receive his initial investment plus the profit on theunderlying for the final period
Features
On the start date, the Investor funds the deposit by purchasing commodities andselling them to Crdit Agricole CIB on deferred terms, reflecting a fixed return forthe first reference period, and payable to the Investor at the end of the firstreference period.
For all subsequent Murabaha, the Investor receives as a profit the performanceof the underlying from the previous period.
The profit must be known at the time of the Murabaha transaction.
The capital is guaranteed at maturity only. If the Investor decides to terminate theinvestment before maturity, a loss could be incurred.
The structure has a cost of 2.5bps per annum (commodities brokerage cost)carried by Crdit Agricole CIB i.e. for a 4 year structure, Crdit Agricole CIB willpay 10bps.
The structure and the pay-offs have been approved by Crdit AgricoleCIBs Sharia Board composed of Sheikh Nizam Yaquby,
Dr. Mohammed Elgari and Dr. Abdulsattar Abu Ghuddah.
Benchmarks AvailableUnderlying
Indices
Equities
Commodities
Currencies
Rates Indices (Libor,CMS)
Hybrids (mixture of twounderlying or more)
Calculation types:
Bull: full performance ofthe underlying
Barriers: knock in/out,ranges, wedding cake
Early redemption: call,target
Crdit Agricole CIB canprovide bespoke solutionsby creating benchmarks orasset groups in accordance
with Investor requirements.
-
8/14/2019 Islamic Banking Brochure 2012 Eng
30/32
Global Islamic Banking
Disclaimer:
This document has been prepared by Crdit Agricole Corporate and Investment Bank or one of its aff iliates (CA-CIB) forinformation purposes only. Nothing in this document is to be construed as an offer for services or products or as an offer orsolicitation for the purchase or sale of securities or any other financial product. This documents has no regard to the specificinvestment objectives, financial situations or individual needs of any recipient. It is not intended to provide legal, tax, accounting orother advice and recipients should obtain independent professional advice from legal, tax, accounting or other appropriateprofessional advisers before embarking on any course of action. While the information in this document is based on sourcesbelieved to be reliable, no guarantee, representation or warranty, express or implied, is made as to its accuracy, correctness orcompleteness. This document contains indicative summaries of the terms and conditions of products described herein and may beamended, superseded or replaced by subsequent summaries. The f inal terms and conditions of the products will be set out in fullin the applicable legal documentation. This document may contain assumptions or include projections, forecasts, yields or returns,scenario analyses and proposed or expected portfolio composi tions. Actual events or conditions may not be consistent with, andmay differ materially from, those assumed. Past performance is not necessarily a guide to future performance. CA CIB shall not beresponsible or liable, directly or indirectly, for any direct or consequential damage or loss caused or a lleged to be caused by or inconnection with the use of or reliance on this presentation.
Crdit Agricole Corporate and Investment Bank, DIFC Branch is authorized by the Dubai Financial Services Authority. CrditAgricole Corporate and Investment Bank is incorporated in France and registered in England & Wales. Registration number:FC008194. Registered office: Broadwalk House, 5 Appold Street, London, EC2A 2DA.
www.ca-cib.com
Structured Murabaha
Deposit
Illustration
2 Years Libor Range Accrual
Features:Investment amount: USD 10,000,000
Tenor: 2 years
Underlying: USD 3M Libor
Range: 0-6%
Profit Rate: 1st Murabaha: 3%
Thereafter: 7% x n/N
n/N = number of days of the previous period where USD 3M Libor is
within the range divided by the total number of days of the same period
Profit payment: Quarterly
Profit Rate Assumptions:Profit Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 End Q8Date Murabaha 1 Murabaha 2 Murabaha 3 Murabaha 4 Murabaha 5 Murabaha 6 Murabaha 7 Murabaha 8 Murabaha 9
n/N 90/90 90/90 84/90 64/90 0/90 39/90 90/90 90/90 N/A
Profit Rate 3% 7% 7% 6.5% 5% 0% 3% 7% 5.15%
Sequences (for the Investor):
Legend: Flows on the Trade Date Flows on the Deferred Payment Date
Sale Price
Dates Murabaha # Annualized return Purchase Price Profit Cost Price
D0-D90 1 (90 days) 3% - 10,000,000 + 75,000 + 10,000,000
D90-D180 2 (90 days) 7% - 10,000,000 + 175,000 + 10,000,000D180-D270 3 (90 days) 7% - 10,000,000 + 175,000 + 10,000,000
D270-D360 4 (90 days) 6.5% - 10,000,000 + 162,500 + 10,000,000
D360-D450 5 (90 days) 5% - 10,000,000 + 125,000 + 10,000,000
D450-D540 6 (90 days) 0% - 10,000,000 - + 10,000,000
D540-630 7 (90 days) 3% - 10,000,000 + 75,000 + 10,000,000
D630-D720 8 (90 days) 7% - 10,000,000 + 175,000 + 10,000,000
D720-D723 9 (2/3 days) 7% - 10,000,000 + 75,000 + 10,000,000
There will be no movement of principal between the Investor and Crdit Agricole CIB except on D0 and D723
deferred payment date of the nth Murabaha = n+1th Murabaha trade date
-
8/14/2019 Islamic Banking Brochure 2012 Eng
31/32
GLOBAL ISLAMIC BANKING
Structured Waad(Islamic Structured Option)Waad & Musawamah
A Waad is a unilateral undertaking from the Promisor to the Promisee. The Waad is a unilateral promise.
It is only binding on the Promisor and not on the Promisee. The Promisor can receive a fee for its undertaking. The Musawamahis an ordinary contract sale in which the price of a commodity
to be traded is negotiated between the seller and the buyer without any referenceto the price paid or cost incurred by the former.
A Musawamah trade between promisor and promisee under the Waad is themechanism through which the profit on the promise is paid to the Investor.
All other conditions relevant to Murabaha apply to Musawamah.
Structure Mechanics
The Structured Waadis a promise from Crdit Agricole CIB to an InvestorwhereCrdit Agricole CIB undertakes to enter into a series of Musawamahs in order topay a benchmark return to the Investor.
This profit will always be equal to the performance of the underlying benchmark. On the start date, Crdit Agricole CIB undertakes to the Investor to enter into a
defined number of Musawamah transactions based on an agreed profit formula.
On every Musawamah trade date, the Investor and Crdit Agricole CIB enter intoa Musawamah transaction where Crdit Agricole CIB purchases commodities
from the Investor at a price equal to the cost price of the commodities plus aprofit (equal to the underlying performance).
All the Musawamah flows are intraday, with no deferred payment.
Features
Crdit Agricole CIB is entitled, on the start date, to a non-refundable fee from theInvestor for giving its Waad.
The Musawamahs (purchase and sale of the commodities) are intradaytransactions with no deferred payment.
In respect of all Musawamahs, the Investor receives as a profit the performanceof the underlying for a defined period.
The benchmark return, and hence the profit, will be known at the time of eachMusawamah transaction.
There is no capital guarantee given by Crdit Agricole CIB. Any profit on theMusawamah depends on the underlying performance.
The structure has a limited cost of commodities brokerage, to be borne by CrditAgricole CIB, as all transactions are intraday.
The Investor does not have to fund the Musawamah. All funding is provided byCrdit Agricole CIB.
The structure has been approved by Crdit Agricole CIBs Sharia Boardcomposed of Sheikh Nizam Yaquby, Dr. Mohammed Elgari andDr. Abdulsattar Abu Ghuddah.
Benchmarks AvailableUnderlying
Indices
Equities
Commodities
Currencies
Rates Indices (Libor,CMS)
Hybrids (mixture of twounderlying or more)
Calculation types:
Bull: full performance ofthe underlying
Barriers: knock in/out,ranges, wedding cake
Early redemption: call,target
Crdit Agricole CIB canprovide bespoke solutionsby creating benchmarks orasset groups in accordance
with Investor requirements.
-
8/14/2019 Islamic Banking Brochure 2012 Eng
32/32
Global Islamic Banking
Disclaimer:
This document has been prepared by Crdit Agricole Corporate and Investment Bank or one of its aff iliates (CA-CIB) forinformation purposes only. Nothing in this document is to be construed as an offer for services or products or as an offer orsolicitation for the purchase or sale of securities or any other financial product. This documents has no regard to the specificinvestment objectives, financial situations or individual needs of any recipient. It is not intended to provide legal, tax, accounting orother advice and recipients should obtain independent professional advice from legal, tax, accounting or other appropriateprofessional advisers before embarking on any course of action. While the information in this document is based on sourcesbelieved to be reliable, no guarantee, representation or warranty, express or implied, is made as to its accuracy, correctness orcompleteness. This document contains indicative summaries of the terms and conditions of products described herein and may beamended, superseded or replaced by subsequent summaries. The f inal terms and conditions of the products will be set out in fullin the applicable legal documentation. This document may contain assumptions or include projections, forecasts, yields or returns,scenario analyses and proposed or expected portfolio composi tions. Actual events or conditions may not be consistent with, andmay differ materially from, those assumed. Past performance is not necessarily a guide to future performance. CA CIB shall not beresponsible or liable, directly or indirectly, for any direct or consequential damage or loss caused or a lleged to be caused by or inconnection with the use of or reliance on this presentation.
Crdit Agricole Corporate and Investment Bank, DIFC Branch is authorized by the Dubai Financial Services Authority. CrditAgricole Corporate and Investment Bank is incorporated in France and registered in England & Wales. Registration number:FC008194 Registered office: Broadwalk House 5 Appold Street London EC2A 2DA
Structured Waad(Islamic Structured Option)
The Structured Waad is a very convenient structure that provides the opportunity to white label capital guaranteed investmentproducts to clients. The Investor receives the investment amount from his client and places with Crdit Agricole CIB:- the equivalent of a zero-coupon amount in a Murabaha Deposit in order to guarantee the investment at maturity
- the balance amount in purchasing a Structured Waad from Crdit Agricole CIB
$100
Structured WaadX $
Zero-couponMurabaha
Illustration
5 Years EUR/USD Structured Waad
Features:Notional amount: USD 10,000,000Tenor: 5 yearsUnderlying: EUR/USD SpotProfit rate: 100% of the annual positive performance of EUR/USDProfit payment: AnnuallyUndertaking fee: 6% of the notional amountPromisor: Crdit Agricole CIBPromisee: The Investor
Profit Rate Assumptions (based on the EUR/USD annual performance):
Profit Date Y1 Y1 Y3 Y4 Y5Musawamah 1 Musawamah 2 Musawamah 3 Musawamah 4 Musawamah 5
Profit Rate 12% -5% 7% 2% 5%
Sequences:Sale Price
Dates Musawamah # Annualized return Purchase Price Profit Cost Price
Year 1 1 12% - 10,000,000 +1,200,000 + 10,000,000
Year 2 2 -5%If there is no profit payable, the Investor and Crdit Agricole CIB
will enter into a trade with no profit to be paid
Year 3 3 7% - 10,000,000 + 700,000 + 10,000,000
Year 4 4 2% - 10,000,000 + 200,000 + 10,000,000
Year 5 5 5% - 10,000,000 + 500,000 + 10,000,000
On every profit payment date, the Investor receives the underlying performance from Crdit Agricole CIB and passes it to his client.At maturity, the Investor is receiving $100 back form the Murabaha Deposit that he can return to his client.