HSBC Amanah will expand M'sian Islamic banking biz

Young Malaysian Muslims prepare for a religious festival. Malaysia has a proven model of an Islamic financials network, the HSBC Amanah Finance CEO said yesterday. The Islamic finance market in that country could only "get better" with more participation by international players, he added. AFP file

HSBC Amanah Finance - HSBC Bank group's global Islamic finance services division - expects to expand its existing business in Malaysia into a significant entity in the near future, an HSBC Brunei press release stated. Its CEO, Iqbal Khan, said Malaysia has a "proven model of an Islamic financials network", which had steadily improved since the launch of the country's first Islamic bank in 1983, Bank Islam Malaysia Bhd.

"We hope to grow (HSBC) Amanah Finance into the mainstream business from our current boutique operation," Iqbal said in an interview on Wednesday. The Islamic finance market in Malaysia could only "get better" with more participation by international players, he added.

The Malaysian central bank is in the process of short-listing three foreign banks for an Islamic banking licence. Three local banks, namely Bank Islam Malaysia, Bank Muamalat Malaysia and Bank Kerjasama Rakyat Malaysia, already have full-fledged licence, while other conventional banks offer Islamic banking windows, Iqbal disclosed.

With more players, the size of the market would eventually get bigger with players creating more "shelf space" to introduce their products. This would mean "more competitive products to suit the requirements of the consumers."

Islamic banking "would only grow bigger" in tandem with population growth and a higher level of education among them. "Islamic banking thrives in a society where there is a huge middle class and higher education level. These group of people pay much attention to fairness and ethical financial solutions," said Iqbal.

Iqbal stressed that Islamic banking is not just for Muslims exclusively but would serve the needs of non-Muslims as well. Some of the products offered by HSBC Amanah Finance have been well-received by non-Muslims, he said.

Islamic banking is estimated to have an industry size of about US$250 billion from over a billion Muslims worldwide. Islamic banking is a serious business for HSBC, Iqbal emphasised, and the bank paid a lot of attention to ensure that "all the products were guided, supervised and reviewed by an independent Syariah Supervisory Committee, which comprised of four of the most renowned and respected scholars in the field if Islamic finance and investment."

HSBC Amanah Finance has the global resources of the HSBC Group at its disposal, with a dedicated team of professionals in Dubai, London, New York, Riyadh and Kuala Lumpur. "With these strengths, HSBC Amanah is uniquely positioned to understand, structure and deliver Islamic solutions to suit the requirements of the clients," he said.

Courtesy of Borneo Bulletin