Tuesday, January 8, 2013

HSBC tops list of banks for Islamic bond, loan issuance

By Tanu Pandey

Malaysia’s second-largest lender CIMB Group Holdings Bhd saw its underwriting for global and local sukuk issuance fall in 2012 while HSBC Bank plc’s market share rose substantially in the period, according to data obtained in Bloomberg.

CIMB’s total issuance for global sukuk fell to US$6.21 billion (RM18.82 billion) from US$7.77 billion in 2011, which resulted in its ranking dropping to second place and its market share easing to 12% from 17.7% in 2012.

For local sukuk issuance, CIMB’s market share dropped to 21.4% from 24.1% with total issuance at US$5.94 billion from US$7.24 billion in 2011.

HSBC moves to first place with total global issuance rising to US$11.35 billion from US$4.88 billion in 2011 with its market share almost doubling to 21.9% from 11.1% in 2011.

Other bankers that were heavily riding on booming global sukuk trade last year are Standard Chartered plc, AmInvestment Bank Bhd, Deutsche Bank AG, RHB Banking Group and Citigroup Inc with 6.4%, 5.2%, 5.1%, 5.1% and 3.5% market share respectively.

National Bank of Abu Dhabi, Dubai Islamic Bank, Barwa Bank and Noor Islamic Bank were also among the top underwriters for global sukuk. All banks charge an underwriting commission for such services.

Among the institutions that helped grow HSBC’s to take it to the top position were Saudi Hollandi Bank, Kimanis Power Sdn Bhd and Tanjung Bin Energy Issuer Bhd.

Similarly, the main issues by CIMB were for Cagamas Bhd, UEM Land Bhd and Khazanah Nasional Bhd, which issued a number of bonds in 2012.

With the current trend and growth in the Islamic finance sector, Malaysia could easily achieve its target of RM1 trillion of sukuk issuance by 2020 as part of its capital markets plan for the 2010-2020 period.

Among other Malaysian institutions engaged in the underwriting business for Islamic bonds and loans are Kenanga Investment Bank Bhd, Bank Islam Malaysia Bhd, Affin Investment Bank Bhd and Bank Muamalat Malaysia Bhd.

[The Malaysian Reserve, 4 Jan 2013]