Sunday, August 24, 2008

Spore-based IBA to play an active role in Malaysia

By Habhajan Singh
The Islamic Bank of Asia (IB Asia), a unit of Singapore's DBS Bank, intends to play an active role in Malaysia, one of the key international hubs for Islamic finance.
The first Islamic bank to be established in Singapore will certainly play a role in neighbouring Malaysia as it was conceived as a regional bank, said its chief executive officer Vince Cook.
"We cannot be credible as a regional bank unless we are active in the most developed Islamic finance market in the region. So, we have to be active in Malaysia," he told The Malaysian Reserve in a recent interview.
However, he admitted that without a local licence, the bank's activities are limited, but it has "taken a number of equity-based opportunities", including when companies are looking for strategic partners or new business partners, or even new equity investors.
"This is something that we are very happy to do," he said.
IB Asia has the option of following the path taken by Unicorn International Islamic Bank Malaysia Bhd (Unicorn Malaysia), which became the first Islamic bank licensed under the Malaysia International Islamic Financial Centre (MIFC) initiative. It could also collaborate with local partners.
"We are now at the analysis stage," Cook said when asked to elaborate on the bank's plan for its operations in Malaysia. The unit of South-East Asia's biggest bank by assets has been an aggresive player on the Islamic finance front in this region since it was established in May 2007.
In May 2008, IB Asia announced that it had signed over 20 significant cross-border capital transactions worth more than US$500 billion (RM1.62 trillion) in its first year of business. IB Asia has committed US$200 million of deals in the first quarter (1Q) of 2008, DBS Group Holdings Ltd said in a statement. Among the deals inked are for it to act as the mandated lead-arranger in a US$250 million syndicated Mudaraba financing facility for Tamweel PJSC, a United Arab Emirates-based Islamic mortgage company.
Headquartered in Singapore, IB Asia is a joint venture between DBS Bank and 34 investors from families and industrial groups based in the Gulf Cooperation Council (GCC) countries. DBS holds a majority stake of 50% plus one share. The bank opened its representative office in Bahrain in conjunction with its first anniversary in June 2008.
Cook said the bank is now on focusing on building a robust platform in wealth management and structured product activities.
In its first year of operation, IB Asia focused on establishing itself in the wholesale financing markets and developed a platform of financing structures including trade finance and large-scale syndications. It also built a range of treasury services from the provision of foreign exchange to money market activities.
(The Malaysian Reserve, p32, Aug 25, 2008)

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