Asian Finance Bank eyes $500 mln Malaysia fund

Reuters - Asian Finance Bank, one of three foreign Islamic lenders in Malaysia, plans to set up an Islamic property fund of up to $500 million in 2009 to tap what it considers an undervalued market.

The bank, owned by Qatar Islamic Bank, RUSD Investment Bank Inc of Saudi Arabia and Global Investment House of Kuwait, also plans to set up a fully-fledged Islamic bank in Indonesia by 2010 as part of its effort to build in-roads into Asia.
Faisal Alshowaikh, chief executive of Asian Finance Bank, told Reuters in an interview the property market was relatively subdued following the global credit crisis, but he saw potential for a property fund in Malaysia.

"Right now the property market has suffered from sub-prime, so it is not something I would pursue aggressively," he said, referring to defaults on low-end mortgages in the United States that have rattled markets worldwide.
"But this is something we have in our minds to set up. When you look at Indochina and other countries like Korea, Singapore, Hong Kong, I think the property market is very much undervalued in Malaysia."

The global Islamic finance market is one of the fastest growing in the world. Islamic assets are growing at an annual pace of 20 percent and are set to hit $2 trillion in 2010 from the current $900 billion, largely thanks to a flood of petrodollars, Ernst & Young said in February.

Asian Finance Bank currently has a representative office in Indonesia, a country analysts say has the potential to become a major player in global Islamic finance because around 85 percent of its population is Muslim.
"It is a big market for Islamic banking which needs to be aggressively explored,"Alshowaikh said on the sidelines of an Islamic banking conference in Jakarta.

"We have plans to make this representative office into a fully-fledged Islamic bank in Indonesia. In this part of the world, with a population at 229 million -- and a relatively small percentage of the market here is Islamic -- I believe we can do more on the retail side and do more on wealth management."

Indonesia's Islamic finance market lags neighbouring countries Malaysia and Singapore because of tax and accounting framework issues.
But analysts expect sharia financing to take off after Indonesia's parliament passed a long-awaited sharia finance law last month.

Indonesia's central bank says the Islamic banking industry in the world's most populous Muslim nation is set to meet its target of a 10-15 percent share of national banking assets by 2015 from less than 5 percent now.

Asian Finance Bank was incorporated in Malaysia in 2005 and aims to develop a regional banking network providing a wide range of services.
The chief executive said it would like to establish representative offices in Singapore, Brunei, China, South Korea, Vietnam, Myanmar, Laos and Cambodia, to expand its Asian presence.

The bank's website says Qatar Islamic Bank is its biggest investor with a 70 percent share in the company. RUSD Investment Bank Inc has 20 percent and Global Investment House has 10 percent.

AFB seeks foothold in Islamic finance

KUALA LUMPUR: Asian Finance Bank Bhd which is on an aggressive expansion programme, believes it is in a strong position to further penetrate the growing local Islamic finance market.

Chief executive officer Faisal Alshowaikh said although the bank was a relatively new player in this market, it was confident of making further inroads by leveraging on its institutional shareholders, distribution capability and product innovation

“Leveraging on the experience and expertise of its established shareholders, as well as its strong distribution capability, AFB acts as a prime Islamic financing link between the Gulf States and Malaysia.

“We offer clients the competitive advantage by being the bridge to channel funds from the Middle East into Malaysia and the region. For companies in Malaysia and the region that are doing business in the Middle East, AFB offers strategic alliances and Islamic financial solutions,” he said during an interview.

The shareholders of the bank are a Middle East consortium comprising Qatar Islamic Bank, Saudi Arabia-based RUSD Investment Bank Inc and Global Investment House of Kuwait.

This year, Faisal said the bank would also be concentrating its efforts in executing deals and beefing up its team of investment bankers to reap more business in the local market.

According to Faisal, AFB was also looking for a number of real estate projects and power plant financing for its Middle East clients as well as teaming up with some local Islamic banks to participate in transactions in the Gulf States.

He added that the bank’s shareholders had a wide distribution network not only in the Middle East but also now in Europe, with the recent opening of its sister bank European Finance House in Britain.

AFB started operations in Malaysia on Jan 19 last year with the opening of its first branch in Kuala Lumpur, making it the third foreign Islamic bank after Kuwait Finance House (M) Bhd and Saudi Arabia’s Al Rajhi Bank.

On product innovation, Faisal said: “We are looking at creating innovative products that are traditionally different from the local market and to us that is important.

“AFB is also looking at products that are widely used in the Middle East but rarely used in the local market, like Istisna.”

The bank would be launching Malaysia and the region’s first RM1bil Islamic Marine Fund next month and hopes to list it on Bursa Malaysia in the next two years.

Asian Finance Bank targets more markets

By DALJIT DHESI

KUALA LUMPUR: Asian Finance Bank Bhd (AFB), the third full-fledged foreign Islamic bank in Malaysia, will continue its aggressive expansion plans in Asia in a bid to garner a slice of the growing Islamic banking sector in the region.

Chief executive officer Faisal Alshowaikh said the bank had been in discussions with some officials in Singapore and Brunei on plans to open up representative offices there, similar to the one recently launched in Indonesia.

“Brunei is looking for syariah-compliant investments and the same can be said for Singapore where the market for Islamic banking has been growing quite rapidly over the years,'' he told StarBiz.

AFB started operation in Malaysia on Jan 19 last year when it opened its first bank branch in Kuala Lumpur, making it the third foreign Islamic bank after Kuwait Finance House (M) Bhd and Saudi Arabia's Al Rajhi Bank.

On the domestic front, Faisal said AFB would in the next two to five years increase the number of branches to between five and seven in major cities in Malaysia.

AFB, he said, was on track to launch its second branch in Johor next month and the third in the northern region before year-end.

Seventy per cent of its business comes from corporate and investment banking, and the balance from retail operations.

The bank would be launching Malaysia's first RM1bil Islamic Marine Fund next month and hopes to list it on Bursa Malaysia in the next two years.

The fund would invest in marine business and about 70% would be invested in fixed-income instruments and 30% in equities.

It recently also moved into consumer banking with the launch of two maiden consumer financing products, Home Financing-i and Personal Financing-i.

The former may be used to buy a new house, or refinance an existing home loan, or for other investment purposes.

The latter offers up to RM150,000 in financing or a minimum RM12,500 with a maximum tenure of up to five years.