Islamic Treasury Management (The Financial Academy)

Euromoney Learning Solutions

How long?

  • 5 days
  • in person

What are the topics?

Euromoney Learning Solutions

Disclaimer

Coursalytics is an independent platform to find, compare, and book executive courses. Coursalytics is not endorsed by, sponsored by, or otherwise affiliated with any business school or university.

Full disclaimer.

Reviews

Comprehensive course analysis

Unbiased reviews from past participants
Global companies alumni of this course worked for
Positions of participants who took this course
Countries where most past participants are from
FREE
Individual needs analysis
Order for $20.00

About the course

This program is designed to give participants tools and strategies to better manage their treasury function using Sharia compliant financial products. The objective of the program is to give participants a better understanding of

  • Funding Strategies Using Short and Long Term Islamic Funding Instruments
  • Risk Management Strategies Using Islamic Profit Rate and Currency Products
  • Asset Liability Management in the Treasury as it pertain to Market Risk and Liquidity Risk

Overall, participants will then be able to develop strategies to improve their treasury function and make it “best in class.”

By the end of the program, participants will be able to

  • Identify the key issues concerning Islamic Financial Products
  • Structure and Use Islamic Money Market Funding Strategies to Fund its business
  • Structure and Use Sukuk to Fund its Business
  • Identify the key Issues in Islamic Inter-Bank Financial Documentation
  • Price, Structure and Use Profit Rate Swap to Manage Market Risk of Variable Profit Rate
  • Price, Structure and Use Wa’ad to Manage Market Risk
  • Price, Structure and Use FX Spot, Forward and FX Swaps in Islamic Structures
  • Price, Structure and Use Cross- Currency Murabaha Transactions
  • Price, Structure and Use Arbun Transactions
  • Identify key ALM risk in Treasury
  • Identify Basel 3 Regulations in ALM Market and Liquidity Risk Regulations
  • Develop Tools and Strategies to better Manage Market and Liquidity Risk in Treasury

Agenda

Day 1

Introduction to Islamic Treasury Management

Regulations for Sharia Compliant Financial Products

  • Product, Process and Use of Financial Transactions
  • Prohibitions and Promotion of Public Good:
  • Riba, Riswah, Maisir/Qimar , Gharar
  • Jahl, Darnan,
  • Mudarabah, Maslaha, Ibaha
  • Unethical Goods and Services
  • Issues with Islamic Financial Products

Funding Treasury with Islamic Financial Products

  • Money Market Funding and Repurchase Agreement (with SAMA)
  • Sukuk and Sukuk Structures
  • Islamic Retail Deposit Products

Islamic Money Market Products

  • Understand the money markets
  • Conventions of the money markets: Day count conventions, 360/365 days (MMY/BEY)
  • Structuring for Murabaha structures:
  • Bank buys commodity through broker (1) and sell to borrower
  • Borrower sells commodity through broker (2) and receives money
  • Borrower then pays Money plus profit in the future
  • Using Bloomberg screens for foreign currency money market pricing
  • Understanding international money market rates and screens
  • Current Rates: Libor/Euribor/Saibor
  • Proposed new rates: SOFR, SONIA, ESTR, SARON, TONA
  • Islamic Rates: Islamic Banking Rate
  • Using brokers for Islamic money market funding
  • Variable Profit Curve:
  • Forward profit curve
  • Spot profit curve   Islamic Money Market Products (continue)

  • Using Repo with SAMA for liquidity in KSA

  • Understanding Repurchase Agreement Transactions

  • Using Repurchase Agreement with SAMA

  • Issues in Repo pricing

  • Documentation for Islamic Financing

  • Murabaha and Wakalah documentation for inter-bank transactions

  • International Islamic Financial Market (IIFM) Master Agreement

  • Products: MURABAHA, MUBADALATUL ARBAAH, ARBUN, WA’AD, Etc…

  • Agreements: MTA, MATP, UMWA

  • Standardisation of documentation

  • Enforceability Issues

  • Differences between Islamic documentation and ISDA:

  • Netting Payments and Default

  • Conditions of Default

  • Pricing of outstanding transactions (NPV calculations)

  • Restrictions on Murabaha strcutures

Long Term Funding and the Sukuk Market for Treasury Funding

  • The Sukuk Market for Bank funding
  • Recent Sukuk Transactions: Islamic Development Bank, NCB, Riyadh Bank etc.
  • Covered Sukuk and Collateralized Loan Obligations
  • Covered Sukuk Structures
  • Understanding Sukuk pricing: Rating, Maturity, Currency, Credit risk, Collateral etc…
  • Pricing conventions of Sukuk: Par, discount and premium pricing
  • Duration and convexity of sukuk
  • Types of Sukuk: Murabaha, Ijara etc…
  • Resale limitations of Murabaha sukuk
  • Using Sukuk structures to fund client long term financing needs

Retail Funding for Treasury

  • Retail Murabaha Transactions (AL Rahji Bank)
  • Retail Wakalah Transactions (Kuwait Finance House)
  • Payment and non-payment of profit
  • Profit Calculations

Day 2

Islamic Derivative Products

  • Variable Profit Rate Hedging: Profit Rate Swap, Wa’ad
  • Foreign Exchange Hedging: FX Spot, FX Forward, Arbun

Using and Structuring Profit Rate Swap:

  • What is a PRS?
  • Fixed versus Floating profit rate
  • Structuring for Profit Swap
  • Primary Murabaha
  • Secondary off-setting murabaha
  • Cash flows of PRS
  • Uses of PRS
  • Hedging Floating Profit rate
  • Fund Cheaply
  • Investment and deposits
  • Pricing of PRS
  • Bloomberg screens for swaps
  • Foreign currency PRS
  • Mark to market of PRS
  • Cash flow forecast
  • Discount future cash flow

Using and Structuring Wa’ad Transactions

  • Introduction to Wa’ad transactions
  • Structuring and pricing a wa’ad transaction
  • Cash flow of a wa'ad transaction and murabaha funding
  • Optionality of Wa’ad transaction
  • Strike profit rate
  • Maturity and numbers of promises
  • Volatility of variable profit rates
  • Future for profit rates
  • Using Bloomberg CCF screens to price wa’ad transactions
  • Uses of Wa’ad transactions in managing variable for profit rates

Day 3

Using FX spot and FX forward to Manage Foreign currency transactions

  • Introduction to FX spot market
  • Spot market conventions:
  • Direct Terms: GBP, EUR, AUD, NZD
  • Indirect Terms: USD
  • Using Bloomberg WFX screens for pricing Calculations of foreign exchange spot transactions
  • FX transaction cash flows
  • Islamic restriction on short positions in FX trading
  • Restriction on selling assets the bank does not have
  • Salaam transactions
  • Introduction to FX forwards
  • Structuring FX forwards using back to back murabaha
  • Primary murabaha to invest
  • Secondary murabaha to borrow
  • Pricing FX forwards with FX formula:
  • Forward points and forward pricing
  • Using Bloomberg Forward point screens to price FX forwards
  • Cash flows of FX forwards
  • FX swaps and Uses
  • Structuring Islamic FX swaps
  • Uses of FX swaps

Day 4

Using and Structuring Profit Rate Cross-Currency Swaps

  • What are CCS (Cross-Currency swaps)
  • Structure of a traditional Cross- Currency swaps
  • Pricing of Cross-currency swaps
  • Structuring Cross- Currency swaps with Profit Rate swaps
  • Structuring Islamic Cross-Currency and Fixed Profit Rate Swaps
  • Uses of Islamic Cross-Currency Profit Rate Swaps in funding and investments

Using and Structuring Arbun Transactions

  • What is an Arbun structure?
  • Using Arbun to hedge foreign currency risks
  • Pricing of the down payment and remaining payment
  • Using Bloomberg screens to price currency options
  • Optionality in Pricing of Arbun
  • Strike
  • Maturity
  • Volatiilty
  • Forward pricing
  • Bloomberg currency option pricing model
  • Cash Flow of an Arbun structure
  • Uses of Arbun structures   Day 5

Asset Liability Management in Islamic Treasury

  • Introduction to ALM in Islamic Treasury
  • Managing Market Risk of the Treasury Function
  • Managing Liquidity Risk in the Treasury Function

Basel 3 and new IRRBB

  • Defining Interest Rate of the Bank Book
  • New Basel 3 regulations on IRRBB
  • Forecasting ALM Pricing Gap
  • Pricing Gap of Assets of the bank
  • Pricing Gap of Liability of the Bank
  • Calculating Gap and Cumulative Gap
  • Calculating Earnings at Risk of the Bank with different pricing curve scenarios
  • Pricing Gap adjustment
  • Non Maturity Deposits
  • Early Withdrawal of long term deposits
  • Pro=payments of long term loans
  • Calculating EVE analysis and central bank regulations

Basel 3 and Liquidity Risk

  • What is liquidity risk in Islamic Treasury?
  • Understanding cash flow forecast and liquidity risk
  • Using money market in liquidity risk management
  • Stress testing and ILAAP for an Islamic Treasury
  • Liquidity buffer and liquidity management
  • SAMA and liquidity management
  • Contingent funding Policy for Islamic banks
  • New Regulations in Basel 3 for Liquidity Management
  • Liquidity Coverage Ratio
  • High Quality Liquid Assets and 30 day roll offs
  • Definition and calculations of HQLA
  • Definition and calculations of 30 day roll offs
  • Managing LCR and Liquidity Premium for Islamic Banks
  • Net Stable Funding Ratio
  • Available and Required Stable Funding
  • Definition of Available stable funding
  • Definition of Required Stable funding
  • Calculate NSFR
  • NSFR and bank cost of funds for Islamic banks
  • Liquidity Management Policies and Systems

Experts

Thierry Fuller

Thierry is a highly experienced trainer and consultant in Treasury Management. Since 1997 he has worked as a consultant and trainer with the Top Three Investment Banks in the World (Goldman Sachs, Morgan Stanley, BofA Mer-rill Lynch), most of the largest 20 Banks in the World (Citi, J.P. Morgan C...

Videos and materials

Islamic Treasury Management (The Financial Academy) at Euromoney Learning Solutions

From  $3,732

Something went wrong. We're trying to fix this error.

Thank you for your application

We will contact the provider to ensure that seats are available and, if there is an admissions process, that you satisfy any requirements or prerequisites.

We may ask you for additional information.

To finalize your enrollment we will be in touch shortly.

Disclaimer

Coursalytics is an independent platform to find, compare, and book executive courses. Coursalytics is not endorsed by, sponsored by, or otherwise affiliated with any business school or university.

Full disclaimer.

Because of COVID-19, many providers are cancelling or postponing in-person programs or providing online participation options.

We are happy to help you find a suitable online alternative.