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Monday, 17 September 2007

Hong Leong Islamic gears up for currency trading

Hong Leong Islamic Bank (HLIB) managing director Khalid Bhamia said the bank received the licence to set up the International Currency Business Unit (ICBU) a few months ago and is now ironing out the technicality issues before it can begin dealing in foreign currencies. The ICBU, which is one of the measures under the Malaysia International Islamic Financial Centre (MIFC) initiative, is a dedicated division to conduct a full range of Islamic banking activities with non-residents and residents. Khalid told Business Times that the bank is now looking at the right markets and businesses to go into using this licence. “Licence is one part, but we must also ensure commercial viability before we decide on what to do next,” he said. Khalid however believes that there are a lot of opportunities for HLIB to do international business. “We will take advantage of this licence, but we must also be mindful of our pricing because it has to be competitive especially in the international market,” he said. He has no timeframe on when the international business of the ICBU will take off as the bank is now focusing on turning itself into a lean organisation in terms of cost structure. Khalid also said that HLIB is developing new Islamic products that meet the standards of the Gulf Cooperation Council (GCC) countries. “It is easier to sell Islamic products in the GCC market and it is equally liquid there too.” He added that the GCC market is one that HLIB is looking at keenly but it does not rule out the possibility of expanding its Islamic banking presence via business deals in Singapore, Hong Kong and China.
“We are already a regional player through the presence of Hong Leong Bank in Singapore and Hong Kong,” he said, adding that it is just the matter of tapping this platform. Khalid, a Pakistani with 17 years of Islamic banking experience in Europe, said the challenge for the local Islamic banks is to stay in pace with the government’s policies which are “ahead of the industry.” He added that the support given by the Malaysian Government to promote Islamic finance growth has been more than sufficient and it is now up to the players to take advantage of it. - (BT, 17 Sep 07)
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Islamic finance consultant: www.ahmad-sanusi-husain.com 
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