BAHRAIN BANK GETS ISLAMIC LICENCE

Bahrain’s Unicorn Investment Bank (UIB) has received a licence from Bank Negara to operate an Islamic bank under the Malaysian International Islamic Financial Centre (MIFC) initiative.

The new Unicorn International Islamic Bank Malaysia Bhd (UIIB) would begin operations tomorrow as a wholly owned subsidiary of UIB, the company said in a statement yesterday.

Speaking to StarBiz from Singapore, UIIB’s newly appointed chairman Datuk Vaseehar Hassan Abdul Razack said the bank would undertake and structure only non-ringgit transactions.

“The licence is very wide as we can create any Islamic banking product and take deposits so long as they are in non-ringgit currency. That distinguishes us from the rest of the local and foreign banks operating in Malaysia,” he said.
The new bank also wants to tap the domestic Islamic banking market and for that it would acquire more companies to grow.

“We are looking at acquiring stakes of 30% or more to make it a meaningful stake in a local Islamic bank. The strategy is to allow us to have a domestic distribution channel so that we can undertake ringgit transactions,” he said. The foreign ownership cap in a local Islamic bank is 49%.

Vaseehar said a stake purchase would be the bank’s next growth strategy as it wanted to focus on establishing a base and expand into the Asean region and even India.

“For now, we are not looking at any particular bank. When we do look at a profitable bank, we would seek Bank Negara approval first,” he said.

He envisages UIIB having a stake in a local Islamic bank in 12 to 18 months, with the funding to be sourced from the US$1bil special acquisition fund set up by UIB and its partners.

The fund would be used to buy stakes in banks within Asean, the Gulf States and even Europe so that UIB can cross sell its products and services in markets across the globe.

“The purchase would be a win-win for both the local bank, which may be wanting a foreign strategic investor, and for us as it would give us a foothold in the domestic Islamic banking market,” he added.

UIB had earlier failed in its bid to buy a stake in Bank Islam Malaysia Bhd.

Vaseehar said although losing the bid was a setback, it was a “blessing in disguise” for UIB as “we now have our own licence and capability to buy stake in a local Islamic bank.”

Its current focus is to structure products that appeal to Malaysian and Middle Eastern investors. UIIB also wants to be the conduit for Malaysian and Middle Eastern investors as well as companies going into Middle East and vice versa.

“By so doing, we will be helping Malaysia to become a truly Islamic banking hub,” Vaseehar said.

For a start, UIIB will have a team of four people. It is on a recruitment drive to get local and foreign talent to establish a bigger team of 12 to 15 people over the next few weeks.

UIB, an investment bank with five core units – asset management, corporate finance, capital markets and treasury, private equity, and strategic mergers and acquisitions, including takaful – was founded in 2004 in Bahrain.

It has since established a presence in the United States, United Arab Emirates, Pakistan, Turkey, and Malaysia since 2005.

According to its website, the bank has advised, structured and placed deals worth about US$3bil.

Yesterday, Vaseehar relinquished his position as chairman of RHB Islamic Bank Bhd, RHB Bank Bhd and RHB Capital to take up the new post, the statement added.