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Saturday, 10 November 2007

HLIB plans international currency business unit

KUALA LUMPUR: Hong Leong Islamic Bank Bhd (HLIB) will set up an international currency business unit (ICBU) before year-end, said managing director Khalid Mahmood Bhaimia.
He said the Islamic banking arm of the Hong Leong Bank group had received the licence to operate ICBU and was in the process of evaluating the options and sorting out certain issues. In an interview with StarBiz, Khalid said he believed Bank Negara would issue more licences as the country, which aspired to become an Islamic financial hub, required more players in this segment.
HLIB is one of eight Islamic banking subsidiaries slated to undertake ICBU operations, with most of the players likely to come up with their ICBUs in the next two to three months, Khalid said, adding that the opportunities were “tremendous”.
Under the Malaysian International Islamic Financial Centre (MIFC) initiative, local Islamic banks are allowed to establish ICBUs, a dedicated division to conduct a full range of Islamic banking services for non-residents and residents in international currencies. Under MIFC, ICBUs will enjoy full income tax exemption for 10 years from 2007.
Khalid said ICBUs allowed Islamic banking and takaful players without a presence in Labuan to conduct offshore business transactions.
Khalid, who joined the group in April, takes pride in transforming HLIB into a full-service, full-fledged Islamic bank.
He said among other things, he had assigned a full-fledged team to cultivate additional business, including investment banking and wealth management.
“We are working closely with the group’s takaful arm, Hong Leong Tokio Marine Takaful Bhd, to develop more structured finance products for wealth management,” he added.
Like other Islamic banking players, HLIB has not yet introduced asset management. Khalid said minus Islamic credit card services, HLIB would be a full service bank in “three to five years”.
Khalid, who had initiated the transformation process in the last few months, said: “You will see the results in six months, as the market recognises the difference in our service quality.”
HLIB will continue to achieve double-digit growth in business this year, driven by existing as well as newly developed products.
“We take a lot of pride in our new product development team because we are dedicating some 10% of our resources to developing new products,” Khalid added. - (The Star, 10 Nov 07)

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