Philippines: Islamic financing possibilities

ISLAMIC banking and financing as it is introduced in the Philippines opened a lot of inquiries and challenges. Both Muslims and non-Muslims have their own version of apprehension and contesting ideas.

In the previously held Forum on Islamic Banking and Financing by the Mindanao State University–Iligan Institute of Technology, in partnership with Anak Mindanao and National Commission on Muslim Filipinos last September 2 at MSU IIT Campus, Iligan City, participants from different sectors especially the future accountants of the university, both Muslims and non-Muslims, were given the basics of such concepts by the resource persons.

The resource speakers were Ms. Nataliya Mylenko, the Senior Financial Sector Specialist from the World Bank Group, Congresswoman Sitti Djalia A. Tubarin-Hataman of AMIN, Atty. Maisara Dandamun-Latiph, the senior state solicitor of the office of the Solicitor General and Ms. Maharlika Alonto, an expert on Islamic Banking and Finance from University of Reading, United Kingdom.

From the inputs of the resource speakers, many of the usual controversies regarding Islamic Finance were discussed and given further explanations. Among these issues include the concepts of "interest free," "shari’a banking," "no-loan policy," etc.

However, do we really need Islamic Banking and Financing here in the Philippines? Is this for the Muslim communities in the country only?

The answer is No. This is a system that can be adopted by all.

Let us know the basics of Islamic financial system. As a concept, Islamic economic principles offer the individual the freedom to produce and create wealth, while surrounding the individual with an environment controlled, not by human rulers, but by Divine Guidance. The underlying principles that govern Islamic banking are mutual risk and profit sharing between parties, the assurance of fairness for all and that transactions are based on an underlying business activity or asset.

In the website of Islamic Banking and Insurance, the concept was further discussed according to the essential guidance enshrined in the Qur’an and the Sunnahs (practices) of the Prophet Muhammad (pbuh). Among these are "Trusteeship," which introduces a moral and spiritual element as men perform economic engagements, and "Care for others," which introduces the concept of serving others as part of spiritual teachings in Islam.

Another interesting concept is the idea of "productive effort" as a means of serving God. In this concept, Islam requires wealth to be spent in the cause of God. This realization moves Muslims to greater efforts in their economic activities.

Indeed, if Islamic banking and finance will be well established in this country, we will not only be stronger as a nation but we can be at par with other progressive countries around us like Malaysia. This is probably because of the basic practice of mutual risk and profit sharing between parties that assures fairness for all.

In Malaysia, as narrated by one of the resource speakers, the country’s economy became stable because of the Islamic banking and finance system adhered to by most of the country’s banks. There is this Islamic Banking and Takaful in Malaysia that complies with the Islamic law or Shari’a.

They practice the use of various Islamic finance concepts such as ijarah (leasing), mudharabah (profit sharing), musharakah (partnership). As a country of both Muslims (Malays) and non-Muslims (dominantly Chinese), we have witnessed how the country became united on the matters of Islamic banking and financing.

This concept of Islamic Banking and Finance may be new to us Filipinos but it is known already to other countries and is even practiced since the 70’s. Let us give the concept a chance to be understood by laymen and make our people realize that there is advantage in this principle for a better economy.

(Sun Star / 13 September 2015)

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Australia's NAB seals maiden Islamic financing deal

Aug 27 National Australia Bank Ltd has closed its first onshore Islamic financing deal, a A$19.9 million ($14.2 million) arrangement to fund a real estate purchase by Sydney-based asset manager Crescent Wealth.

The funding platform designed by NAB, the country's No.4 lender by market value, could help open Australia to Islamic investors from the Gulf and Southeast Asia that seek to adhere to religious principles such as bans on interest and gambling.

Crescent Wealth used the four-year financing for a A$30.75 million commercial property acquisition in South Melbourne, with plans to build a portfolio of commercial assets across the east coast, said Talal Yassine, managing director of Crescent Wealth.

"It marks a significant moment for the industry in Australia as the funding was supported by an Australian retail bank."

Until know, such deals had to be purely funded by equity, but the sharia-compliant structure would help to significantly remove transaction risk, in particular for foreign investors, said Yassine.

"We plan to secure a second asset by year end and again, will be leveraging the existing structure we have with NAB."

Crescent Wealth, established in 2011, currently has over A$100 million in assets under management across five Islamic funds which include cash, real estate and domestic and international equities.

In April, the firm set up an office in Malaysia and is now considering applying for a boutique fund management license.

TAXES

Islamic financing has struggled to gain traction in Australia due in part to tax issues which can penalise the asset-based nature of such transactions.

Structures such as sukuk, or Islamic bonds, can attract double or even triple tax charges because they require multiple transfers of title of the underlying asset.

The Australian Board of Taxation presented an Islamic finance paper to the government in June 2011 aiming to address such issues, but Canberra has yet to give a response or release the final review.

In the meantime, Britain, Luxembourg, South Africa and Hong Kong have all passed tax amendments to facilitate such transactions. All have issued sukuk over the past year.

The NAB used a structure known as wakala, where one party acts as an agent for another to manage a pool of assets. Wakala is widely used overseas, with Hong Kong using the format for its second issuance of sukuk in May, a $1 billion deal.

(Reuters / 27 August 2015)

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Tecom Investments and Amlak Finance launch off-plan Islamic financing

Dubai: Tecom Investments said on Tuesday it has signed an agreement with Amlak Finance, the UAE’s first specialised real estate finance provider, to offer Sharia-compliant financing options via its Amlak Tatweer programme to all purchasers of freehold Villa Lantana homes, including non-resident and self-employed buyers.

Amlak will offer financing of up to 50 per cent of the property value prior to project handover, with the option to re-finance up to 75 per cent upon completion for tenures of up to 25 years at highly competitive rates, enabling more investors and end-users to become part of the Villa Lantana community, Tecom Investments said in a statement.

The new Villa Lantana development of 440 freehold family villas represents an astute investment opportunity, in part due to its key location in Dubai’s Al Barsha growth corridor in addition to the established reputation of its master developer, Tecom Investments.

The contemporary Villa Lantana community also features a well-planned, beautifully landscaped family neighbourhood. Buyers can choose between 17 different villa designs, 11 floor plans and a range of 3, 4 and 5 bedroom detached and semi-attached family homes. Villas span in square footage from 2,453-square-feet of Built Up Area (BUA), up to 
6,082-square-feet BUA.

(Gulf News Markets / 21 July 2015)

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SECP chief backs Islamic financing

KARACHI: 

Securities and Exchange Commission of Pakistan (SECP) Chairman Zafar Hijazi said on Wednesday the regulator is looking to enhance Shariah compliance in the capital markets by restructuring and reorganising the Islamic capital market.

Speaking at the fourth Islamic Finance Expo and Conference as chief guest, Hijazi discussed in detail the roadmap for the promotion of Islamic finance in Pakistan.

He added that the SECP is centralising the Shariah-related capital market activities besides improving the regulatory framework for Takaful, Modarabas, Islamic mutual funds, Islamic pension funds and Islamic real estate investment trusts (REITs).

Speaking on the occasion, trade and business representative Ateequr Rehman urged the government to directly borrow from the public instead of taking money from the banks. He also called for the development of mortgage financing segment besides highlighting the growth potential of Takaful, green financing and private-sector financing.

In his keynote address, State Bank of Pakistan Executive Director Syed Samar Hasnain called for a shift from debt-based system to an equity-based system. From the current 10% share of Islamic banking in the overall banking system, Hasnain said the central bank aims to increase it to 20% by 2020. The central bank has also made it easy for conventional banks to set up Islamic banking subsidiaries by reducing the paid-up capital requirement, he said.

Meanwhile, addressing the participants, Additional Inspector General of Police Ghulam Qadir Thebo said crime rate has reduced significantly in Karachi. He said each case of the 24 bank robberies in 2014 has now been resolved, and only one such case has surfaced in 2015 so far.

(The Express Tribune / 23 April 2015)

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Islamic financing aiding robust growth in Oman's banking sector

Muscat: Oman is a prime location for the Islamic finance sector to thrive and statistics show that it will do so, was the main conclusion of the Accounting for Islamic Finance event held by ACCA Oman's members' advisory committee (the Association of Chartered Certified Accountants).

Sponsored and held at Bank Muscat Meethaq, Sulaiman Al Harthy, Group General Manager of Islamic Banking at Bank Muscat and Khalid Yousaf, Director of Islamic Finance Advisory Services at KPMG Oman spoke at the event.

Sulaiman Al Harthy said: "Meethaq is proud to host the ACCA member event Accounting for Islamic finance as part of initiatives reflecting the bank's focus on maintaining the leadership role in Islamic banking and finance. Islamic banking in the Sultanate is contributing to the growth and development of the banking sector in Oman and Meethaq is committed to sustaining its contribution to Oman's economy in light of the emerging trends."

"With strong economic growth projections, significant government expenditure on infrastructure projects and a young, Shari'a-sensitive population, Oman has all the ingredients required for a successful Islamic finance sector. Apart from Islamic liquidity management, the challenge is in tackling long-term funding requirements," he added.

Islamic banking assets

"Islamic banking assets in Oman stood at $2.8 billion in June 2014, or 4.4 per cent of total banking assets, since the launch of Islamic finance less than two years ago in January 2013. This growth is expected to continue and Islamic banking assets are projected to grow to between $5 billion to $7 billion by 2018. The growth is driven by a combination of the enabling environment fostered by regulators and a young, Shari'a-sensitive population."

"Meethaq has adopted the best practices in Islamic banking and finance worldwide to combine a robust model which protects customers and complements the Islamic banking industry. In just over two years of operations, Meethaq has attained a leading position in the Islamic banking industry in Oman with over 50 per cent of financing receivables."

Growing public awareness

KPMG director Khalid Yousaf said: "Growth of Islamic Finance in Oman has been slow but steady. 2015 is likely to see all Islamic Banks and Windows break-even and turn profitable, merely within two years of start-up operations. Growing public awareness will feed further growth in the coming years.

"Though still small compared to conventional finance, Islamic Finance has created its niche space globally. Its transactions being largely participation-based, appeal not only to faith-based investors but also to conservative risk-takers shunning high levels of leveraging."  

Maqbool Al Lawati, chair of ACCA's members' advisory committee in Oman, said: "The event highlighted products available in Oman for Islamic banking and how successful the sector has been in the past few years. 

"More than 60 ACCA members and key employers attended the event which I think proves just how interesting and important this topic is," he added.

(Times Of Oman / 21 February 2015)

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Islamic Financing, alternative investment source to Azerbaijani economy

The International Bank of Azerbaijan, the largest lender and the only state-owned bank in the country remains confident to promote Azerbaijan as an Islamic Banking hub in the region.

Behnam Gurbanzade, Director of the Islamic Banking Department of the IBA, spoke quite positive about the prospects of Azerbaijan’s eventful role in the Islamic finance markets.

“Developing Islamic Financing in Azerbaijan gives us an advantage to set up a center for the development of Islamic Financing in the CIS based in Baku,” Gurbanzade wrote in an e-mail to AzerNews.

“Thus, in 2015 we are planning to increase the amount of Islamic financing in Azerbaijan. To this end, an alternative banking division was set up within Bank IBA-Moscow where the Islamic Banking is also part of new duties,” he said.

The IBA concluded last year with $526 million sharia compliant assets compared to the Islamic Banking assets at the level of $220 million at the beginning of 2014.

Islamic finance has not developed well in Azerbaijan, which has a predominantly Muslim population. The IBA assists the government to draft the relevant regulation. It also plans to convert its Islamic unit into major Shariah-compliant lender after the country OKs the Islamic legislation licenses.

The Baku-based bank actively works in this direction, which is encouraging the development of Islamic Finance here. The bank currently offers Shariah-compliant products through an Islamic window introduced in September 2012, a practice which allows conventional lenders to provide Islamic financial services as long as client money is segregated from the rest of the bank.

Gurbanzada said the IBA Islamic Banking department is working on draft legislation together with consultants. “The initial documents including Islamic Financial Policies and Procedures, Operational procedures and Products and Services are under consideration,” he said.

Laws allowing Azerbaijan to OK Islamic bond offerings is expected to be passed in 2015, and the government may issue securities that adhere to Islam’s ban on interest the next year.

Speaking about the role that the Islamic bank could play in driving the banking sector of the country, Gurbanzada said Islamic Financing is considered as alternative investment sources to the economy of Azerbaijan.

“Azerbaijan and CIS markets are growing and there is a huge demand for direct investments. The IBA realizes that sources of funding should be diversified in order to secure economic safety. All this comes against the backdrop of the world financial crisis in which the liquid capital stands as the primary issue,” he noted.

Gurbanzada said the current Islamic Banking portfolio of the IBA is 386 million manats ($493 million) which is approximately 6.2 percent of the total credit portfolio.

The loan portfolio of the Bank hit 5.868 billion manats as of early January with an increase of 16.6 percent since early 2014.

IBA Islamic presented a new Murabaha card which was set up on MasterCard Gold basis. The card is for retail financing in Azerbaijan and outside of the country. “Furthermore we are also strutting Musharakah refinancing products and unrestricted and restricted Mudarabah financing. Most of products and services will be implemented after legislation development,” he concluded.

The bank, 50.2-percent owned by the Azerbaijani Ministry of Finance, holds over 40 percent of banking assets in the country and enjoys huge importance for Azerbaijan's economy. The IBA‘s reported consolidated total assets of 8.8 billion manats, aggregate capital of 1.008 billion manats and net profit of 64.5 million under audited IFRS as at year-end 2014.

(Azernews / 30 January 2014)

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Third phase of financial innovation fund to focus on Islamic financing

ISLAMABAD: 

The federal government on Friday launched the third round of Financial Innovation Challenge Fund designed to promote Islamic financing, the share of which is rapidly growing in the overall banking industry in the country.

The fund was launched with the assistance of the United Kingdom under the UKAid-sponsored Pakistan Financial Inclusion Programme being executed by the State Bank of Pakistan.

The earlier two rounds focused on promoting innovative agricultural and rural financing in the country.

“The Financial Innovation Challenge Fund will go a long way in promoting an inclusive economic growth through demand-driven innovative financial services for the low-income and unbanked population,” commented Finance Minister Ishaq Dar while inaugurating the fund.

He said the Financial Innovation Challenge Round was designed to encourage competition and introduce a world-class dynamic structure capable of meeting human resource requirements of the industry and act as a research incubator providing innovative products.

Dar pointed out that the Islamic mode of financing was growing at a phenomenal pace across the world and current size of the Islamic finance industry, estimated to be over $1.8 trillion, was almost twice the level a decade earlier.

At present, the Islamic finance industry of Pakistan comprises 19 Islamic banks with a network of 1,200 branches spread across 80 districts, 27 modaraba companies, 15 mutual funds and five takaful companies.

The industry now constitutes over 10% of the country’s financial system and keeps a strong growth momentum.

Dar stressed that the Islamic finance industry was working well below its potential. Only one-fifth of farmers have access to the formal financial system while just 5-6% of small and medium-sized enterprises (SMEs) receive bank financing.

Islamic banks should approach these largely untapped markets through their asset-based and risk-sharing products and contribute to catalysing growth in the real economy, he said.

Similarly, linkages between Islamic banks and microfinance institutions could be instrumental in channelling surplus liquidity of Islamic financial institutions towards meeting financial services needs of the low-income population.

This will help Islamic banks to improve their perception among people and facilitate the government in achieving the Millennium Development Goals, which are largely in line with the basic philosophy of Islamic finance, ie, facilitating development of a fair and equitable economic system and ensuring broad-based welfare and well-being of the masses.

Dar said the government was putting special emphasis on the promotion of Islamic banking and took a number of steps in that regard.

Pakistan’s entry into the international Sukuk market after a gap of nine years through dollar-denominated Sukuk was received well by the investors and is a reflection of its seriousness in exploring Shariah-compliant avenues to finance the state’s needs.

Recommendations

A steering committee constituted to promote Islamic banking has prepared an interim report and its recommendations will help in setting a roadmap and deciding a future course of action for providing an enabling environment for the growth of Islamic finance.

Among the challenges highlighted in the report, the shortage of qualified Islamic finance professionals has emerged as a major issue.

The finance minister stressed that skills development played a crucial role in strategy formulation, product innovation and infusion of global best practices. The proposed Centre of Excellence will play an important role and help in overcoming capacity-building challenges by offering a comprehensive set of educational, training and research programmes.

He said the government would implement recommendations of the committee in order to put more emphasis on Islamic finance in courses starting from higher secondary level to undergraduate and post-graduate levels in business, law, finance and accounting.

(The Express Tribune / 10 January 2014)

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The SME Gap In Islamic Financing

For most parts, the boom in Islamic finance within the GCC and indeed in North Africa and South Asia has been about the retail consumer – the individual who prefers to bank in accordance with his Islamic ideals – and previously, the large corporate sector.

In that rush though, the historically underfunded small and medium enterprise (SME) sector has been overlooked by financial institutions across the region.

A new study by International Finance Corporation (IFC) showed that around 35 per cent of SMEs in the Middle East and North Africa (MENA) are excluded from the formal banking sector because they seek Sharia-compliant products that are not readily available in the market.

The study, which was carried out across nine countries, found a potential market gap of up to $13.2 billion for SME Islamic financing in the region with a corresponding depository potential of $9.71 billion to $15.05 billion across these countries.

“To tap the underlying potential,Islamic banks need to build capacity and develop Sharia-compliant products to cater to this emerging sector,” the report said.

Despite the rising demand for Islamic financing among SMEs, the study reported that of the 36 per cent of banks in the MENA region that offer SME products, only 17 per cent offer Islamic options.

This is not all their doing though. The study pointed out that apart from a high level of risk aversion that banks in the region have, poor regulatory environments, differing perceptions of Islamic finance, and a lack of relevant products were hindering the growth of Islamic SME banking.

“The Islamic banking industry is not adopting measures that would grow the market. They don’t have a strategic outlook and there is a lack of product innovation,” said Attiq ur Rehman, partner, Israa Capital, a bespoke consultancy firm in the Islamic finance industry.

NEW-TO-BANK’ OPPORTUNITY

The IFC study also noted a significant variation across countries; demand for Islamic banking is as high as 90 per cent in Saudi Arabia while falling as low as four per cent in Lebanon. The study was carried out in Iraq, Pakistan, Yemen, Saudi Arabia, Egypt, Lebanon, Morocco, Tunisia and Jordan, and according to the IFC, the key findings from the study apply these the GCC region.

“What we see in Saudi will be applicable to the rest of the GCC region as these markets are very similar,” said Mouayed Makhlouf, regional director for IFC, MENA.

“But more importantly, the study reveals a significant, untapped ‘new- to-bank’ funding opportunity, as banks and other financial institutions lack adequate strategic focus on this segment to offer Sharia-compliant products. It also highlights the measures they need to take to overcome this.”

Tariq Muhammad, partner and head of Islamic Finance at auditing and consulting firm KPMG Lower Gulf, agreed and added that Islamic finance products tailored to the needs of the SME sector and delivered in a cost-effective manner represent a huge opportunity.

“Traditionally, Islamic banks have focused on large corporates looking for product structuring and legal documentation, while issues around enforceability made the SME proposition slightly unattractive,” said Muhammad.

“However, over time, tailored products have emerged that suit the SME sector complexities and ticket size. Most banks in the UAE have already spotted this opportunity and are aggressively working towards bridging this gap.”

Several conventional banks in the UAE have launched Islamic windows that offer various financing options for SMEs. Picking up the trend, some financial institutions in the GCC have also been mulling Sharia-compliant products for SMEs.

Oman Development Bank (ODB) announced last year that it is considering launching an Islamic window which would also provide Sharia-compliant funds for SMEs. Meanwhile, Standard Chartered Saadiq recently launched its first Islamic banking centre in the UAE with an aim to step up its product offerings in the space.

RIDING THE BOOM

According to the IFC report, the Middle East’s manufacturing sector was the most attractive sector for Islamic funding due to its capital intensity, export potential and the ability to value- add to the economy.

The report also noted that there is a huge potential for the conversion of an existing SME portfolio that avails of finance from the formal conventional banking channels to Islamic finance. This is an opportunity worth an estimated $4.1 billion and constitutes eight per cent of the existing SME lending portfolio, the study said.

Despite such potential, Islamic financing for SMEs faces a number of challenges that could obstruct it from going mainstream.

“There is a lack of awareness of how Islamic finance products are structured and operate among SME players. This would require significant effort from the banking sector to educate the participants,” said KPMG’s Muhammad.

“Excessive documentation required under Sharia-compliant financing is also a barrier and would require simplification and adaptation of documentation to suit SME needs.”

“The nature of financial information, collaterals, ownership structures and customer relations of SMEs require in-depth knowledge of each sub sector within SMEs. This would require the banks to create an SME research center before accepting this risk,” he added.

However, there is hope that as the Islamic banking industry develops significantly over the next few years, SMEs will find apt partners to fund their growth in the region. “Islamic banking has a compound annual growth rate of 15 per cent whereas conventional banking in these countries is not more than seven per cent,” said Israa’s Rehman.

Fuelled by economic growth in core Islamic financial markets, global Islamic banking assets are set to exceed $3.4 trillion by 2018, according to a report released earlier this year by auditing and consulting firm, whose Global Islamic Banking Centre also reported that the combined profits of Islamic banks broke the $10 billion mark for the first time at the end of 2013.

(Gulf Business / 16 August 2014)

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MENA SMEs Turn To Islamic Financing For Funding

Around 35 per cent of SMEs in the MENA region are excluded from the formal banking sector because they are seeking shariah compliant products that are not readily available in the market, according to a new study by International Finance Corporation (IFC).

The study, which was carried out across nine countries, found a potential market gap of up to $13.2 billion for SME Islamic financing in the region.

Despite the rising demand for Islamic financing among SMEs, the study reported a gap in Shariah complaint offerings among regional lenders. Of the 36 per cent of banks in the MENA region that offer SME products, only 17 per cent offer Islamic options.

The study also noted a significant variation across countries; demand for Islamic banking is as high as 90 per cent in Saudi Arabia while falling low as four per cent in Lebanon.

A high level of risk aversion by banks, poor regulatory environments, differing perceptions of Islamic finance, and a lack of relevant products were found to be hindering the growth of Islamic SME banking.

“The Islamic banking industry is not adopting measures that would grow the market. They don’t have a strategic outlook and there is a lack of product innovation,” added Attiq ur Rehman, partner, Israa Capital.

The study was carried out in Iraq, Pakistan, Yemen, the Kingdom of Saudi Arabia, Egypt, Lebanon, Morocco, Tunisia and Jordan.

But figures are not widely different in other GCC countries, experts noted.

“What we see in Saudi will be applicable to the rest of the GCC region as markets are very similar in that sense,” said Mouayed Makhlouf, regional director for IFC, MENA.

“But more importantly, the study reveals a significant, untapped ‘new to bank’ funding opportunity, as banks and other financial institutions lack adequate strategic focus on this segment to offer Shariah-compliant products. It also highlights the measures they need to take to overcome this.”

The Islamic banking industry is expected to develop significantly over the next few years.

“Islamic banking has a compound annual growth rate of 15 per cent whereas conventional banking in these countries is not more than seven per cent,” said Rehman.

“Islamic banking grew even during the crisis period of 2008 to 2010 when conventional banking slowed. It maintained that growth pattern after that as it saw a phenomenal growth in 2013.”

Rehman attributed the growth in Islamic finance in the region to lower non-performing ratio (NPR) of loans compared to conventional banking.

“The reason is that there are real transaction and people’s tendency to default is low because willful defaulters are less in Islamic banking as compared to conventional banking,” he said.

Fuelled by economic growth in core Islamic financial markets, global Islamic banking assets are set to exceed $3.4 trillion by 2018 according to a report released earlier this year by Ernst & Young (EY).

EY’s Global Islamic Banking Centre said the combined profits of Islamic banks broke the $10 billion mark for the first time at the end of 2013.

(Gulf Business / 14 June 2014)

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Malaysia: PMB to go into Islamic financing

KUALA LUMPUR: Pelaburan Mara Bhd (PMB) will go into a joint venture with Saudi Arabian-based Islamic Development Bank and inject RM100mil into just-acquiredKFH Ijarah House (M) Sdn Bhd to conduct syariah-compliant financial services, targeting the commercial sector.

KFH Ijarah House will be renamed PMB Tijari Bhd and will be 80:20 owned by PMB and Islamic Development Bank.

“The Islamic finance house would manage PMB’s financial services activities,” PMB group CEO Nazim Rahman said at a press conference.

Nazim said PMB Tijari would specialise in commercial leasing and musharakah and mudarabah services. (Musharakah and mudarabah services include short, medium and long-term project financing, import financing, export financing and working-capital financing.)

In the area of commercial leasing, PMB Tijari would focus on equipment financing, particularly in the oil and gas sector as well as government-related contracts.

“There is a huge market for commercial leasing in Malaysia,” PMB chief executive officer for financing business Tengku Ahmad Badli Shah Raja Hussin said, adding that PMB Tijari already had a good track record in the business.

PMB would continue to explore opportunities to invest in other financial institutions.

“It is a natural progression for us, but we cannot reveal the details due to regulatory sensitivity,” Nazim said.

PMB currently has about RM700mil worth of assets under its management. It expected the value of its assets under management to expand to RM1.5bil by the second quarter of this year.

“We will introduce new funds including a corporate education fund to achieve that goal,” Nazim said.

PMB, the investment and asset management arm of Majlis Amanah Rakyat (Mara), has completed the takeover of KFH Ijarah House for “slightly over RM1mil” since the middle of this month.

The completion of the acquisition of KFH Ijarah House – a subsidiary of Malaysia KFH Capital Ltd – in mid-March 2014 is part of PMB’s agenda to transform itself into a leading investment and fund management institution in the country, PMB group CEO Nazim Rahman said.

Nazim revealed that PMB had acquired KFH Ijarah House at “slightly over RM1mil” on a cash-free, debt-free basis. The price PMB paid represented a slight premium of the net tangible assets of the latter, which stood at around RM1mil.

(The Star Online / 26 March 2014)

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