Monday, March 30, 2009

Unicorn Malaysia eyes regional opportunities

By Alfean Hardy
Unicorn International Islamic Bank Malaysia Bhd (Unicorn Malaysia), which generated a profit for its first year of operation, is confident of building on this success in 2009 as it seeks to position itself as a hub for its parent's Asia Pacific expansion strategy.
The bank, a unit of Bahrain's Unicorn Investment Bank BSC, was granted an international Islamic bank licence by Bank Negara Malaysia in December 2007 to conduct a full range of nonringgit investment activities under the Malaysia International Financial Centre (MIFC) initiative.
For its fiscal year ended December 2008, the bank posted a net profit of RM812,546 at bank level, while at group level, it posted a net profit of RM777,572.
At a media briefing in Kuala Lumpur on Mar 26, Unicorn Malaysia chairman Datuk Vaseehar Hassan said, although the profit is not big, it is a morale booster given the fact that 2008 was the bank's start-up year.
"We started operations in January 2008 and, for the first eight months to nine months, we were still recruiting people," he said. "In fact, if it wasn't for the financial meltdown, we had some signed mandates on hand and we would have ended 2008 with a much better result. Some of these mandates had to be either deferred or aborted.
"Moving on to 2009, we have some work in the pipeline and we feel our 2009 results will be even better. We're in a resonably good position in spite of the financial crisis," he added.
Vaseehar said Unicorn Malaysia's 2008 performance was driven by its financial advisory, cross-border transactions and placement. This year, he said the bank would be focusing on the medium-sized — US$50 million (RM181.24 million) to US$100 million — sukuk issues and cross-border transactions.
"There's plenty of demand for these kinds of transactions from the SMEs (small-to-medium enterprises) and mediumsized corporations," he said, adding that it was its parent's strategy to make its Malaysian operation as a hub to penetrate the Asia Pacific market.
Unicorn Malaysia CEO Khalid Bhaimia said under the MIFC initiative, international business rather than domestic business was encouraged and that being able to do both cross-border transactions and placements in its first year was encouraging. On whether the current global situation would be a stumbling block to such operations, he said that international transactions were still on-going.
"The scale may be different, there may be not very many large-scale transactions because of the liquidity situation," he said. "However, we're not a very large bank for that purpose but, so far, in our segment of the market we believe that there are opportunities and we're seeing such opportunities now.
"But you won't see the billion US dollar cross-border transaction that you saw in 2007," he added.
Reuters adds: Unicorn expects to do US$400-US$500 million of transactions this year, with a strong market projected for medium-sized deals.
"Treasury is key element for our business here. Without funding support, it's difficult to go out and do business.

(This story appeared in The Malaysian Reserve on Mar 27, 2009. The Malaysian Reserve is a daily business/finance newspaper published out of Kuala Lumpur, with a sectoral page on Islamic finance on Mondays, edited by Habhajan Singh)

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