By Farah Saad
It is only ‘a matter of time’ before Malaysia sees the consolidation of its Islamic finance institutions as Islamic banking becomes more varied and accessible, and the need for halal financing in large amounts becomes more apparent.
Malaysia now has 16 locally incorporated Islamic banks, five of which are international banks, according to Bank Negara Malaysia (BNM) statistics.??Smaller banks need to consolidate in order to go head-to-head with bigger banks, and to enable them to provide large financing, according to some industry executives.
“Consolidation has to happen. There are too many small players, and so there is no scale. When you don’t have scale, you cannot do large financing. So, it is is only a matter of time,” HSBC Amanah Bhd chief executive officer Rafe Haneef told The Malaysian Reserve in a recent interview.
Among the outfits that make up the list are Affin Islamic Bank Bhd, Al-Rajhi Banking & Investment Corp (M) Bhd, CIMB Islamic Bank Bhd, Kuwait Finance House (Malaysia) Bhd, OCBC Al-Amin Bank Bhd and Standard Chartered Saadiq Bhd.
BNM, which regulates financial institutions including Islamic banks, has also licensed another five, which it calls the International Islamic banks, including Alkhair International Islamic Bank Bhd (formerly known as Unicorn International Islamic Bank Bhd) and PT Bank Syariah Muamalat Indonesia, Tbk.
In a recent comment, Thomson Reuters global head Islamic finance and Organisation of Islamic Cooperation countries, Rushdi Siddiqui, wrote that size is often the justification for achieving economies of scale, used to access deals for league table prominence, used as a buffer in a challenging environment, and used as defensive measure to ward off unwanted suitors.
There are hundreds of Islamic banks and funds, but the paid up capital and assets under management is too small to be meaningful, he said.
(The Malaysian Reserve, 09 April 2012)
It is only ‘a matter of time’ before Malaysia sees the consolidation of its Islamic finance institutions as Islamic banking becomes more varied and accessible, and the need for halal financing in large amounts becomes more apparent.
Malaysia now has 16 locally incorporated Islamic banks, five of which are international banks, according to Bank Negara Malaysia (BNM) statistics.??Smaller banks need to consolidate in order to go head-to-head with bigger banks, and to enable them to provide large financing, according to some industry executives.
“Consolidation has to happen. There are too many small players, and so there is no scale. When you don’t have scale, you cannot do large financing. So, it is is only a matter of time,” HSBC Amanah Bhd chief executive officer Rafe Haneef told The Malaysian Reserve in a recent interview.
Among the outfits that make up the list are Affin Islamic Bank Bhd, Al-Rajhi Banking & Investment Corp (M) Bhd, CIMB Islamic Bank Bhd, Kuwait Finance House (Malaysia) Bhd, OCBC Al-Amin Bank Bhd and Standard Chartered Saadiq Bhd.
BNM, which regulates financial institutions including Islamic banks, has also licensed another five, which it calls the International Islamic banks, including Alkhair International Islamic Bank Bhd (formerly known as Unicorn International Islamic Bank Bhd) and PT Bank Syariah Muamalat Indonesia, Tbk.
In a recent comment, Thomson Reuters global head Islamic finance and Organisation of Islamic Cooperation countries, Rushdi Siddiqui, wrote that size is often the justification for achieving economies of scale, used to access deals for league table prominence, used as a buffer in a challenging environment, and used as defensive measure to ward off unwanted suitors.
There are hundreds of Islamic banks and funds, but the paid up capital and assets under management is too small to be meaningful, he said.
(The Malaysian Reserve, 09 April 2012)
