Latest from GIFC

Sunday, 11 May 2008

Asian Finance Bank plans to set up bank in Indonesia and a $500 million property fund

Reuters, 7 May 2008

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

The bank, owned by Qatar Islamic Bank, RUSD Investment Bank 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 expansion effort in Asia.

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 reach $2 trillion in 2010 from $900 billion now, largely because of a flood of money from the oil industry, according to Ernst & Young.

Faisal Alshowaikh, chief executive of Asian Finance Bank, said in an interview that although the property market was relatively subdued as a result of the global credit crisis, he saw potential for a property fund in Malaysia.

"Right now, the property market has suffered from subprime, so it is not something I would pursue aggressively," Alshowaikh said, referring to defaults on higher-risk 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."

Asian Finance Bank has a representative office in Indonesia, a country that analysts say has the potential to become a major player in global Islamic finance because about 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 behind those of Malaysia and Singapore because of tax and accounting framework issues.

But analysts expect Shariah financing, which does not involve charging interest, to take off after the Indonesian Parliament passed a long-awaited Shariah finance law last month.

Indonesia's central bank says the Islamic banking industry is set to meet its target of a 10 percent to 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.

Alshowaikh said Asian Finance Bank 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 Web site says Qatar Islamic Bank is its biggest investor, with a 70 percent share.

RUSD Investment Bank has 20 percent and Global Investment House has 10 percent.

Alfalah Consulting - Kuala Lumpur:
Consultant/Speaker/Motivator : 
Islamic Investment Malaysia:

No comments:

Upcoming Events on Islamic Finance, Wealth Management, Business, Management, Motivational Alfalah Consulting, KL-Malaysia:


Register Online . Register Today

Islamic Financial Planning & Wealth Management by Ahmad Sanusi Husain