The Global Islamic Economy Summit announces title sponsors

Thomson Reuters and the Dubai Chamber of Commerce & Industry, the organisers of the upcoming ‘Global Islamic Economy Summit’ (GIES), announced their partnership with ADIB and Dubai Islamic Bank, who are taking on the role of Title Sponsors of the event.

The Global Islamic Economy Summit announces title sponsors

The Global Islamic Economy Summit announces title sponsors

In addition, the leading Nutrition, Health and Wellness company, Nestlé Middle East, signs up as Diamond Sponsor, while Emirates NBD, Qatar First Bank and the Global University of Islamic Finance (INCEIF) have also signed on as Gold Sponsors, while the Dubai Multi Commodities Centre (DMCC), Afridi & Angell Legal Consultants, Société Générale and MasterCard have signed on as Silver Sponsors.
GIES is held under the patronage of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai. While in line with Dubai’s Islamic Economy Strategy announced by His Highness on October 5, the conference also seeks to addresses the challenges and opportunities the industry faces and its contribution to the global economy.
Russell Haworth, Managing Director – Middle East & North Africa, Thomson Reuters, said, “The calibre of sponsors supporting GIES is testament to the local and international interest in the opportunities that the Islamic Economy presents. From leading local, regional and Islamic banks that aspire to become international players, to a European bank that sees a huge opportunity in this sector, to a global food producer, education, consumer credit and legal services providers and the largest free zone in the UAE, our sponsors will be invaluable to the success of GIES.”
Tirad Al Mahmoud, CEO at A DIB said, “At A DIB, we hold an unwavering commitment to playing a role in the development of the Islamic finance industry. We are very excited to be lead supporters for The Global Islamic Economy Summit – an ideal platform to share our core values as an expanding Islamic financial services institution with the wider community in the UAE, region and beyond.”
GIES, Dr Adnan Chilwan, Chief Executive Officer of DIB said. “Being the first Islamic bank in the world, Dubai Islamic Bank is proud to play its role in the Global Islamic Economy Summit. As pioneers of Islamic banking, DIB has been at the forefront of developments in the Islamic financial sector over the past four decades. We have consistently added value to the franchise and contributed to the growth and development of all sectors of the UAE economy. Our vision of becoming the most progressive financial institution in the world is fully in line with the vision of the leadership of this great country. Today, with our rich heritage, unrivalled expertise and tradition of innovation, we are perfectly positioned to play a key role in Dubai becoming the global capital of Islamic economy.”
GIES aims to initiate critical dialogue on the development of the integrated sectors of the Islamic Economy, covering Islamic financial services, Halal food, Halal Lifestyle, Halal Travel, SME Development and Islamic Economy Infrastructure such as standardization and research.
Yves Manghardt, Chairman and CEO Nestle Middle East FZE, commented on the company’s role as a sponsor: “As the leading Nutrition Health and Wellness company, Nestlé is proud to be a partner of the Global Islamic Economy Summit. We have been pioneers in providing a wide range of Halal food options for Muslim consumers around the world, and we are delighted to be part of Dubai’s initiatives to highlight the importance of the Halal sector as a key component of the Islamic economy and culture.”
The Summit will also feature ground-breaking market studies and other announcements such as the winners of the ‘Islamic Economy Award’ which recognises a mix of regional and global leaders from 14 Islamic economy sectors.
GIES will take place on 25th – 26th November, 2013 at Madinat Jumeirah in Dubai. GIES will gather leading thinkers, policy makers and stakeholders from around the world to lead a discussion on the future of the Islamic economy.

World Islamic Economic Forum in London shows Islamic finance is a global force

As the first World Islamic Economic Forum outside Asia starts in London on Tuesday, Islamic finance is now a major force in global economics.

World Islamic Economic Forum in London shows Islamic finance is a global force

World Islamic Economic Forum in London shows Islamic finance is a global force

Standard & Poor’s forecasts the industry will double to US$2 trillion from 2011 to 2015, aided in part, by more sukuk issuances by GCC players and the faster growth of Islamic banks.

Once considered an obscure corner of global banking, Islamic finance is now gaining traction. Here, Stuart Anderson, the managing director and regional head of Standard & Poor’s Middle East, and Timucin Engin, an associate director at S&P, talk about the challenges for the industry.



350 experts to discuss Islamic investment issues

 More than 350 key players, regulators and thought leaders in the global Islamic funds and investments industry will gather for key talks in Bahrain later this month 

The 8th Annual World Islamic Funds and Financial Markets Conference (WIFFMC 2012) will be held on May 20 and 21 in strategic partnership with the Central Bank of Bahrain.


The event will focus on “New Growth Horizons: Expanding The Global Footprint of Islamic Funds and Investments.”


Announcing the launch of the event, David McLean, chief executive of the World Islamic Funds and Financial Markets Conference, noted that “with key markets for Islamic finance, especially in Asia and the Middle East, now facing escalating infrastructure and development needs backed by solid economic growth, and the outlook for global lending markets still remaining uncertain, Islamic investments will play a key role in funding these multi-billion dollar projects given the fact that the global liquidity pool continues to shrink.


“Governments in various key markets are making moves to create a more attractive investment climate for Shari’ah-compliant finance and are forging greater co-operation between each other and multilateral agencies to attract investments,” he said.


According to the Ernst & Young Islamic Funds and Investments Report 2011 in the GCC alone, liquid wealth of Shari’ah sensitive investors is expected to add more than $70 billion to Islamic funds by 2013, he said.


“This, along with the fact that Islamic funds industry had registered a growth of 7 per cent in AuM last year – shaking off a period of stagnation – indicates a significant opportunity to harness the full potential of Shari’ah-compliant investments,” he added.


The conference will be inaugurated by an opening address by Abdul Rahman Mohammed Al Baker, executive director – financial institutions supervision, Central Bank of Bahrain.



Al Baker said: “The increasing interest in Islamic finance in major markets across the globe presents a unique opportunity of expanding the global footprint of the Islamic investments industry. It is therefore important to ensure that the Islamic funds and investment industry has solid and strong foundations for future development and growth. In addition to enhancing the innovations of new Islamic instruments and encouraging more spending in research and development, it is also essential that the Islamic financial institutions develop strategic alliances with other financial institutions globally, especially in the area of products structuring and offering.”


The inaugural address will be followed by a keynote plenary session featuring Datuk Noripah Kamso, chief executive, CIMB-Principal Islamic Asset Management Sdn Bhd; Fernand Grulms, chief executive officer, Luxembourg for Finance; and Ken Owens, chairman, Irish Funds Industry Association (IFIA). The session, focusing on assessing dynamic new jurisdictions for Islamic funds will analyze the international reach and scale of Islamic investments and will discuss exciting international growth potential for the industry.


A key highlight of WIFFMC 2012 will be the high profile CEO and Industry Leaders’ Power Debate. The session moderated by Rushdi Siddiqui, global head, Islamic Finance & OIC Countries, Thomson Reuters and featuring Datuk Noripah Kamso, chief Executive, CIMB-Principal Islamic Asset Management Sdn Bhd; Oscar Silva, chief executive officer, Global Banking Corporation (GBCORP); and Dr Salah Addeen A Qadar Saeed, general manager – credit & risk management, Bahrain Islamic Bank, will share critical insights on aligning business strategies with new economic realities and profitably expanding the global footprint of Islamic investments.


WIFFMC 2012 will also feature an exclusive session on Corporate Issuers’ Perspectives led by significant new corporate borrowers. The interactive panel discussions chaired by Raphael de Ricaud, head of Islamic Finance, Rothschild and featuring Daniele Vecchi, senior vice president/head of group treasury, MAF Holding; Paul Gay, chief finance officer, Almarai; and Mona Al-Tawil, head of syndication, HSBC Saudi Arabia, will seek to build further momentum for the increasing importance of various Islamic finance instruments, particularly Sukuk, in the corporate funding mix.


The prestigious WIFFMC Islamic Investment Institution of the Year Award will also be declared at the event.


Islamic finance linked to Saudi resilience during global slump

RIYADH: The culture of Islamic finance contributed mainly to maintain Saudi resilience in the face of global economic downturn, Prince Turki Al-Faisal, chairman of King Faisal Center for Research and Islamic Studies, said.

The prince was delivering the keynote address at the Sixth Global Competitiveness Forum — “The Entrepreneurship Imperative”.

“Saudi Arabia’s success and resilience in the current global economic downturn was due in large part to the Kingdom’s culture of Islamic finance — most notably Islam’s insistence on debt being tied to real equity and real assets,” said Prince Turki,recalling that there was a genuine connection between risk and reward that forced participants to maintain reasonable levels of leverage.

“The same technocrats and wizards who absorbed Smith and Keynes and even Marx, were also driven by their innate Islamic background to be wary of greed and gambling. Some did manage to play the system, of course, and they ended up suffering the same fate as Wall Street.

But not dissimilar to political strains elsewhere, the Arab region faces its own backlash — one likely to change the status quo of yesteryear’s policy structures across the region, especially our mechanisms of intra-regional political, security and financial coordination.”

Prince Turki said the GCC remains largely an oil-driven economy.He added: “2012 breakeven oil prices are just 20 percent away from current crude prices. As such, our focus will be on developing our domestic economies, increasing intra-regional trade alongside domestic demand in neighboring economies, and improving primary and secondary education with a focus toward math and  sciences so our youth can better meet the challenges of more competitive labor markets.”

Prince Turki said: “The manner in which the GCC manages all of the above will evolve, and people must not be surprised if they see us do things differently. We are redoubling efforts to evolve the GCC by taking it from a body for cooperation, to a body for unity and coherence in policy at all levels.

As we witness a re-organization of this scale, and given a number of regional and global factors working to our advantage, Gulf countries will be called upon to take a greater role in global financial organizations, through greater representation and involvement in world financial affairs.”

He said: “Better surveillance of the financial system, regulatory reform and the restoration of market discipline will prove elusive if emerging economies, the GCC included, are not adequately represented within these important yet developing institutions. This is inevitable and only fair when considering the role of financiers of last resort that our countries have played in the past few years and will continue to play in the coming years.”

The prince said his reference to Islamic finance might be “toxic” to some in the audience.“I tell them, open your minds to thinking out of the box.”The prince said the world continued to be “a fragile place” and the global downturn had not yet run its full course.

He added: “There is slow fragile growth. The financial crisis was born and developed in the West and yet hit hard throughout the world. The solution lies in going back to the basics, in adopting an approach to keep borrowers and lenders to be in true touch with the economy, but this new economic order is yet to be reflected.”

The prince said the International Monetary Fund (IMF) would look to play a larger role in the economic system, which will require a major increase in its lending resources with the assistance of large emerging economies including China, India or Saudi Arabia.

“What we can be certain of, is that large developing nations will not provide greater funds without more say in the IMF’s affairs.”“From our part of the world it is incumbent what we can secure our future and stability with further tectonic shifts in the global order,” he added.

The Prince recalled the history of Saudi Arabia’s establishment and growth, and said there was a need to reinvent an entrepreneurial spirit that is essential to build a solid base.Speaking about the greatest challenge for Saudi Arabia now, he said: “Our society is one of the youngest in the world with 75 percent of the population under 30 and 60 percent under 21, therefore the challenge is how to succeed in absorbing them into our economy.

We need to train them to be competitive. Competitiveness depends on the creativity of people and this depends on education and entrepreneurship. Only through education can they take their true place in the world.”

It is for this reason, the prince said, 25 percent of this year’s national budget is being spent on education.“The spirit of enterprise has touched a whole new sector of education. Reviewing economic and education policies is not an option, it is an imperative,” he said.

Bangladesh banks have weak cushion against risks

Bangladeshi banks’ strength in terms of capital to losses is the lowest among the major South Asian countries, according to the first-ever Financial Stability Report (FSR) released yesterday.

The capital adequacy ratio (CAR), which sets the minimum cushion of capital a bank must keep to absorb losses and promote stability, was 9.3 percent in Bangladesh at the end of 2010. The CAR of Indian banking industry was 14.6 percent as of end-March 2010, 14 percent in Pakistan and 14.9 percent in Sri Lanka.

“Banks’ CAR must increase from the present level,” SK Sur Chowdhury, executive director of Bangladesh Bank, told reporters at the launch of the report.

The CAR has to go up to 14 percent under Basel-II requirements. The major three South Asian countries have more capacity than the regulatory need under the Basel-II.

The BB released the FSR 2010 yesterday at its office. The FSR has checked the health of the Bangladesh financial system and accordingly, advised the banks and non-banks to enhance capacity to absorb shocks.

The report was based on the data of 2010, but it used stress-tests of 2011 to assess the resilience of the financial system to adverse domestic and global macroeconomic developments.

The FSR observed that the domestic financial system remained stable in 2010 despite an adverse international backdrop. Market participants and stakeholders reposed their confidence in the stability of the domestic financial system and stress testing. The FSR, however, pointed out some weaknesses that need to be addressed.

Though the report found a resilient local financial system supported by congenial macroeconomic environment in 2010, it identified a risk arising from the global economic vulnerabilities and its spillover impacts on the economy.

“The financial sector has to make buffer in the wake of a deteriorating global financial condition. The banks should have a liquidity contingent plan,” Chowdhury said.

He cited an example of cash withdrawal during the Eid festivals. “Can a bank remain liquid if it faces 2 percent more withdrawal than that of normal transactions?” he questioned.

He also asked the banks to be more vigilant on the asset-liability mismatch.

The report found banking sector’s balance sheet recorded a sizeable growth in 2010. Assets and loans were not concentrated among a small number of banks. The provision shortfall was also reduced significantly, it said.

Banking industry’s operating and net profit increased by about 47 percent and 54 percent respectively in 2010 than 2009. The return on assets and equity also increased in line with net profit.

Though the non-performing loan ratio has been on a downward trend, the banks have to pay due attention to bring down the ratio to the minimum level, said the report.

The FSR found no big risk in the equity and currency markets during the period under review. However, the local currency was devalued by nearly 15 percent in 2010.

Islamic banks showed a remarkable growth in 2010. Its asset base grew by 27.35 percent, deposits by 25.69 percent and investments by nearly 30 percent in 2010 than 2009. The CAR of five Islamic banks out of seven was higher than the regulatory requirement of 9 percent.

Non-bank financial institutions have also been growing. The total assets of the NBFIs increased by 30 percent in 2010 compared to 2009. The volume of term financing by the NBFIs rose by more than 61 percent in 2010 than the previous year.

However, the non-performing assets (NPA) of the NBFIs increased by over 8 percent in 2010. But provisions maintained against the NPA showed a surplus over required provisions, said the FSR.

The payment and settlement systems in Bangladesh remained resilient and continued to operate smoothly throughout 2010. There was a remarkable shift from paper-based payments to the electronic form, but cash and cheques remain popular, said the report.

On the capital market, the report blamed lower pace of investment activities, reduced interest rates on deposits and savings certificates and over-crowding for the huge flow of capital in the stockmarket in 2010.

Islamic banking faces liquidity risk: Expert

Doha: Islamic banking sector is increasingly facing liquidity risk across all geographical regions. The situation is more challenging in the GCC region, said an expert.

He called for the industry leaders and the regulators to create new instruments and develop fresh policy tools for  the liquidity risk management in the Islamic industry sector.

Dr Salman Syed Ali of Islamic Research and Training Institute, Saudi Arabia, cautioned that the Islamic banking sector might also go the way of conventional banks, unless effective tools are not in place immediately.

Dr Salman, who was in Doha to attend the International Conference on Islamic Economics and Finance, told The Peninsula: “The structure of liquidity of Islamic banks have changed significantly over the years.  From an era of liquidity surplus in the beginning of the decade Islamic banks are now in the era of liquidity shortages. In general, the banks have moved from a position of positive gap to a negative one or from a negative gap to a more negative one.”

The level of liquidity in Islamic banking has been decreasing while liquidity risk has been increasing in all geographical regions over the past decade. The risk has further increased after the global financial crisis.

Contrary to the general perception, the liquidity of Islamic banking industry in the GCC is lowest with highest liquidity risk when measured by liquidity ratio and financing to deposit ratio.

There has been a major structural change in the maturity profile of assets and liabilities of Islamic banks between the years 2000 and 2009 from a position of positive short-term maturity gap to a negative gap.  This, according to Dr Salman, is a strong indication of a liquidity risk.

In comparison with the conventional banks, the Islamic banks, despite downward trend in their liquidity ratio, are holding much higher proportion of liquid assets.  Even during the financial crisis the liquidity in Islamic banks was more than twice the liquidity of conventional banks. This, among other factors, may have helped Islamic banks to ride out of the crisis.  But things are changing in the industry.

For want of updated Islamic instruments for liquidity management, the fully fledged Islamic banks face more difficulties compared to the conventional banks and the Islamic banking windows of conventional banks. A comprehensive review liquidity management practices and policies of Islamic industry is an urgent need.

“Out of the box thinking is needed to come up with solutions.  Researchers and policy makers need not confine their thinking within the present model of commercial banking and the set-up of the existing financial sector”, he said.

Among the GCC countries, Kuwait had consistently low liquidity ratio over the period. UAE is the country where liquidity ratio dropped most and remained lowest during the global crisis.  Among other countries, Jordan has the highest liquidity ratio consistently since 2004 followed by Malaysia.  The liquidity ratio in Sudan has been consistently showing a downward trend since 2004.

An important measure of liquidity risk is the Financing to Deposit Ratio – a situation that captures the relationship between changing nature of demand for financing and deposit gathering ability of banks to fund that demand.  This ratio is quite high in the GCC and Mena when compared to other regions,  Dr Salman said.

Benchmark a major step for Islamic finance

Last month, the world’s first Islamic interbank benchmark rate (IIBR) was launched. It was the result of a collaborative approach taken by many Islamic financial institutions, industry associations and Sharia scholars over the course of 24 months to address a decades-old industry challenge:

how to decouple Islamic finance from a conventional western pricing benchmark (Libor) when an “Islamic” alternative was not available. The objective was to support and preserve Islamic finance authenticity.

The IIBR is an interbank benchmark that offers a reliable and realistic standard to better measure the cost of funding for Islamic financial institutions. As contributed pricing for Sharia-compliant funding, it represents the DNA of an Islamic banking industry that is today focused on commercial banking over investment banking.

IIBR brought together more than 20 Islamic finance institutions to create a proprietary Islamic pricing benchmark. It is a major indication to the world that Islamic finance has come of age and can be seen as a sustainable and rapidly developing feature of global financial markets.

The benchmark is designed to be used to price a number of Islamic instruments including common overnight to short-term treasury investment and financing instruments such as murabaha, wakala and mudaraba, retail financing instruments such as property and car finance, and sukuk and other Sharia-compliant fixed-income instruments. It can also be used for the pricing and benchmarking of corporate finance and investment assets.

We expect the benchmark to grow organically as industry use and acceptance increase. As the industry gets used to the idea of its own proprietary benchmark and its scope becomes more global, we expect to see banks use the rate to price their interbank liquidity placements.

As that gains traction, banks will start to use it for their corporate and retail banking facilities. The rate has reached its full potential when we see investment banks providing syndicated Islamic financing (loans) and debt (sukuk) issuance using the rate.

Since the launch of IIBR, it has received much attention around the world for the positive step that it is.

Understandably though, the significance of IIBR and what it means for the Islamic finance industry, indeed the very position of Sharia-finance in Islam and the wider world, means that it provokes strong opinion and debate.

And we must address the critics if we are to achieve the full potential of this initiative. After all, these commentators are important additional stakeholders.

All collaborations start with open minds and transparent dialogue, and so here I hope to address some of the key points raised.

What is the difference between IIBR and Libor – the London interbank offered rate? Put simply, IIBR measures expected profit while conventional benchmarks such as Libor measure interest rates.

The IIBR question for contributors explicitly refers to the cost of raising Sharia-compliant funding and is therefore based on returns generated by Islamic assets.

The IIBR rates represent the aggregate risk profile of Islamic financial institutions, by way of their assets on the balance sheet, and the geographies in which they operate. This is important for two reasons.


On an economic level, now more than ever, conditions in Europe or the US do not necessarily reflect the conditions in the Middle East funding market, although there will inevitably be a connection as global financial markets are always intertwined.

How is IIBR representative and reflective of global Islamic finance treasury funding costs?

This is only a beginning. At present, we have a strong base in GCC countries, we have three major Malaysian banks and are in conversations with others, and we have started conversations with banks in Turkey, Pakistan and other jurisdictions.

How will IIBR address cross-border funding costs?

The precondition for cross-border funding is establishing local rates, and we are starting a dialogue with more countries with established Islamic banking industries. The more important point is that a transparent process or methodology is in place for price contributions, and its integrity is overseen by our benchmark committee with rules that will punish banks, including expulsion, that violate the agreement they have signed.

Why are only murabaha contribution rates used?

Murabaha is the predominant form of funding for Islamic banks. However, the IIBR is instrument-neutral as decided by the Islamic benchmark committee, and in the future, when other instruments such as wakala or mudaraba become more widespread, a higher proportion of contributions could be derived from other rates.

Is IIBR only for Islamic financial institutions?

IIBR, like Islamic finance, is for all people and institutions for all times. As an accurate and transparent measure of market activity, it is suitable for a variety of uses in the modern financial markets of the world. With IIBR, conventional banks will now have more confidence in their counterparty Islamic banks because their rates will be benchmarked and publicly available.

Islamic bonds – SA makes its move A possible sukuk

In a move that could position SA at the forefront of the global Islamic Sharia law-compliant sukuk (bond) market, national treasury has called on banks to submit proposals for the issue by government of a sukuk.

“A sukuk would create a benchmark for other emerging markets and corporates,” says treasury spokesman Bulelwa Boqwana.

The nature of the possible sukuk has yet to be clarified and banks involved in the tendering process are not permitted to divulge any information.

But a sukuk would differ markedly from a conventional bond. Islamic Finance Resource, an information service, explains that in their purest form sukuk are ownership claims on physical assets.

A sukuk issue would be to domestic and foreign investors and its size dependent on government’s funding requirements, to be unveiled in the next national budget, says Boqwana. That it would be a success seems assured.

“There is a lot of local and foreign interest in it,” she says.

For SA, a sukuk issue would open the door to a source of foreign investment beyond traditional Western funding, finance minister Pravin Gordhan said in a recent speech. Though not on the vast scale of the Western funding machine, the sukuk market is significant, with new issues in 2010 of US$50bn, Ernst & Young (E&Y) says. Sukuk issues hit $63bn in the first nine months of 2011, according to research firm Zawya Sukuk Monitor.

Behind the sukuk market there is also the huge Islamic financial services asset base, which E&Y puts at $1trillion. Deutsche Bank predicts this total could rise to $1,8trillion by 2016 and drive a significant increase in the global sukuk market, which now accounts for a mere 1% of all bonds in issue.

For Gordhan’s strategy to establish SA as the hub for Islamic product development in Africa, a sukuk issue would be a big step forward. But SA cannot afford to drag its feet. Kenya, which has expressed similar ambitions in Africa’s Islamic finance market, aims to issue its first government sukuk in June 2012. A $500m issue is planned.

Also in the running is Nigeria, which is set to issue its first government sukuk within 18 months. Senegal has also expressed interest in tapping into the sukuk market.

ADIB wealth management seminar presents range of investment opportunities

Dhabi Islamic Bank (ADIB), a top-tier Islamic financial institution, hosted its first Wealth Management Seminar for high net worth customers and presented its outlook on global markets.

The seminar provided customers with the knowledge to understand diverse investment options and make effective investment decisions in a rapidly changing environment.

During the seminar, ADIB revealed the results of its customer survey on investor attitudes towards risk which shows that the proportion of ADIB customers who have an enhanced appetite for risk remains low,

while conservative investor numbers have grown continuously and balanced investors with a moderate appetite for risk remains the largest group.

Stuart Crocker, Global Head of Private Banking Group at ADIB said: “UHNW individuals have a unique and individual approach to risk. Significant changes in the global economy have impacted investor attitudes and this is clearly evident in the decline of enhanced risk taking investors and the growth of conservative to balanced investors.

ADIB has responded to this customer trend by announcing a range of capital protected investment instruments.” The seminar was held at the ADIB Headquarters in Abu Dhabi and hosted a well renowned speaker, Mazin Baghdadi, Deputy Head of Mutual Funds at HSBC Saudi Arabia.

He presented updates on local and regional markets as well as reports on the worldwide economic outlook and the unfolding situation in the Eurozone. ADIB presented its views on the various financial instruments that have increased in appeal in today’s investment environment. ADIB offers a complete range of Shari’a compliant investment solutions customised to the needs and risk tolerance of customers.

As part of ADIB’s strategy to update and educate clients, the bank regularly hosts seminars to help clients make the right financial decisions.

Bank Islam eyes M&As in Indonesia and Bangladesh

KUALA LUMPUR: Bank Islam Malaysia Bhd is eyeing opportunities for expansion in Indonesia and Bangladesh, which have sizeable Muslim populations and adequate Islamic banking regulatory policy and supporting infrastructure for syariah-based financing and banking operations.

Managing director Datuk Seri Zukri Samat said as mergers and acquisitions (M&As) were on Bank Islam’s agenda for growth, the bank was on the lookout for suitable candidates but had not initiated any discussions.

While the two countries had been identified as “very interesting” that fit into the bank’s expansion plan, Zukri, however, said that such plans would have to take into consideration the global economic situation and its effect on this region.

“Some economists believe that there could be a double dip with Europe going into recession and growth in Asia decelerating. We are monitoring the situation and because of that, we are adopting a cautious approach towards our agenda.

“Nonetheless, there are always opportunities in a crisis – acquisition may occur when a shareholder wants to exit – and as long as there are synergies and the pricing is right, the opportunity arises,” he told Bernama in an interview.

Zukri said both countries had sound economies which offered opportunities for Islamic banking, and the presence of many Indonesian and Bangladeshi workers in Malaysia also allowed the bank to tap the lucrative remittance business. — Bernama