Islamic Finance Daily Brief — Sunday, October 25, 2026
Assalamu alaikum! Today's Islamic finance stories — and what to learn from them.
Today's stories
🇧🇭 1. Bahrain completes its first sustainable collateralised murabaha
The National Bank of Bahrain Group has executed Bahrain's first sustainable collateralised murabaha, valued at over $50 million. The deal combines the conventional bank's structuring and liquidity management with the Islamic treasury expertise of Bahrain Islamic Bank, its Islamic arm. The money raised is allocated against the group's ESG Asset Portfolio under a Sustainable Finance Framework aligned with international capital market and loan market standards.
What to learn: Murabaha is a cost-plus sale. The bank buys an asset and sells it to the customer at a disclosed markup, paid in instalments. The Oct 8 edition covered murabaha as a concept. This deal adds two layers to that structure. The first layer is collateral. Collateral is an asset pledged as security, so the lender has something to fall back on if the borrower cannot pay. A collateralised murabaha is a murabaha deal backed by pledged assets. The second layer is sustainability. A sustainable finance framework is a set of rules a bank publishes for how it labels a deal as green or social. The framework says which projects qualify and how the money is tracked. Here the framework follows standards from the International Capital Market Association and the Loan Market Association. For an ordinary customer of either bank, the deal matters because it shows the two sides of one banking group working in a single deal. The conventional bank brings structuring skill. The Islamic bank brings the Shariah framework. The result is a repeatable structure the group can use again for similar deals.
🔗 Source: BizBahrain
🇦🇪 2. Abu Dhabi's biggest bank and developer launch Shariah-compliant covered cards
Abu Dhabi Islamic Bank and Aldar Properties have launched two co-branded covered cards, the ADIB Aldar Visa Infinite and Visa Platinum cards, announced on October 21. The cards link to Darna, Aldar's digital loyalty programme, and pay up to 10% back in Darna Points on spending at Aldar malls, hotels, golf courses, restaurants, and entertainment venues. Cardholders also earn up to 1.5% back on Aldar property purchases and Aldar Education spending, and up to 2% on international spending. Points are tracked and redeemed through the Live Aldar app, and the top tier carries a welcome reward of up to 20,000 Darna Points, worth AED 1,000.
What to learn: A covered card is the Shariah-compliant version of a credit card. A conventional credit card charges interest on money left unpaid at the end of the month. A covered card charges set fees for the card instead of interest on unpaid balances. The bank still earns from the card, through the annual fee and the commission merchants pay when the card is used. The co-brand part is separate from the card structure. A co-brand card ties a bank to one company's loyalty programme. Every purchase at that company's destinations earns points in its programme, and the points come back as value inside the same destinations. Aldar already had a conventional version of this card with Emirates NBD, launched in February 2025. The ADIB version gives a customer who wants a Shariah-compliant card the same rewards inside the Aldar destinations. For a US reader, the comparison is with a conventional co-brand card, such as an airline or store card, which earns points the same way but charges interest on unpaid balances.
🔗 Source: ADIB
Learn
Waqf: an endowment that keeps giving
A waqf is an endowment. A person sets aside an asset permanently for a charitable purpose. The asset itself is never sold and never given away. Only the income the asset produces is spent, and it is spent on the purpose the founder chose.
The asset can be land, a building, or money. A building set aside as waqf keeps standing and keeps earning rent. The rent pays for the purpose, year after year. A school funded by waqf receives rent from a shop building, and the shop keeps trading. The building stays waqf property even as the rent flows out.
Money can be waqf too. In a cash waqf, many people contribute money into a single fund. The fund is invested in Shariah-compliant assets. The returns from the investment fund the purpose, and the original money stays in the fund. A cash waqf funding a hospital keeps its capital intact and spends only the returns.
The purpose is fixed by the founder at the start. Common purposes are mosques, schools, hospitals, and support for the poor. A waqf for a school cannot later be redirected to a hospital, because the founder's instruction stands. A trustee manages the waqf, keeps the asset in good repair, and distributes the income as instructed.
In the USA, there is no separate waqf law. A waqf is usually set up as a charitable trust under state law, or as an endowment fund inside a registered nonprofit. A nonprofit that qualifies under section 501(c)(3) of the tax code pays no federal income tax, and donations to it are tax-deductible for the donor. The nonprofit must file a public yearly return, Form 990, and the state's attorney general oversees charitable trusts. The founder's instruction controls: the money must be spent on the purpose the founder named, and the fund is treated as permanent unless the founder said otherwise. Spending from the endowment follows a state law called UPMIFA, adopted in almost every state. It requires the nonprofit to spend only what is prudent, weighing the fund's purpose, its duration, economic conditions, and expected returns. If the original purpose becomes impossible, a court can redirect the income to the closest matching purpose.
A simple example shows the whole idea. A shopkeeper sets aside a small shop as waqf for a neighbourhood school. The shop is rented to a trader. The rent arrives every month. The school spends the rent on books and teacher salaries. The shop is never sold. As long as the shop stands and earns rent, the school receives support.
All sources
- BizBahrain — NBB Group executes Bahrain's first sustainable collateralised murabaha transaction (Oct 24, 2026)
- ADIB — Aldar and ADIB launch co-branded Darna covered cards (Oct 21, 2026)