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Saturday, 9 August 2008

Royal Bank Of Scotland Plans To Establish Islamic Subsidiary in Malaysia

KUALA LUMPUR, Aug 8 (Bernama) -- Royal Bank of Scotland Bhd (RBS), formerly known as ABN AMRO Bank Bhd, plans to incorporate an Islamic subsidiary as part of its move to capture the growth potential of Islamic banking in Malaysia.

Its country head and managing director, Harry Naysmith said the bank will offer Islamic banking products to both retail and corporate customers.

"There are plans to incorporate an Islamic subsidiary and the neccessary applications will be made in due course," he said in a statement here Friday.

The bank has already obtained approval from Bank Negara Malaysia (BNM) to undertake Islamic banking products via an Islamic window.

Naysmith said that the bank was confident of the growth potential of Islamic banking here, given BNM's aspiration for Islamic banking to make up 20 percent of the total banking assets by 2010.

Currently, Islamic banking constitute about 12 percent of total banking assets.

"With continued support in terms of regulations and incentives from the government, BNM and other regulators such as the Securities Commission, we expect the Islamic banking business to achieve this growth target," he said.

On another development, RBS said that it has come out with a new structured investment called the Royal Select Series 1 Structured Investment which allows investors to build a well-positioned investment portfolio in volatile market conditions.

It is a three-year ringgit denominated investment that offers 100 percent capital protection at maturity. Its maturity date is 2011.

It is linked to the performance of three diversified sectors and nine fortune 500 companies namely banking/financials, energy/mining and information technology sectors.

The Royal Select Series 1 offers a head start coupon of 22 percent and allocates the highest weightage to the best performing basket.

The offer period of this product will end on August 28.

A minimum investment of RM250,000 is required for the 100 percent principal protected structured investment.

Last year, RBS had launched more than 20 structured investments with complete diversification into various underlying assets and different markets.

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