If you don’t like to feel dizzy, don’t read the story at the link below, because it is the clumsiest example of news spin that we’ve ever seen.
For a few months now, we’ve periodically been pointing out that Islamic (read Shariah-Compliant) banks have turned in disappointing earnings results. All the while, promoters of Shariah-Compliant banking have been proclaiming it as the best remedy for the world economic crisis.
The problem seems to be that those same promoters have a tough time telling the truth. News articles, such as the one linked below celebrate earnings reports, but if one reads carefully, the real story, the truth, the whole truth, is that earnings are declining.
Take this headline for example:
“ABC Islamic Bank net profit hits $6.6 million”
Now check out how that net profit arrived at $6.6 million. As Paul Harvey used to say, and NOW the rest of the story:
“Net profit for the second quarter was $1m compared to $5.6m in the first quarter, primarily due to impact of the economic slowdown in the region, lower fee earnings and prudent impairment provisions taken for regional exposure, a spokesman said.”
Let us translate:
Earnings are declining at ABC Islamic and the bank is suffering in the economic slowdown.
Believe very little of what you read about Shariah-Compliant Finance in the media from Islamic nations.