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Thursday, 2 February 2012

HSBC Amanah to issue innovative sukuk for retail investors

KUALA LUMPUR: HSBC Amanah Malaysia Bhd, a subsidiary of HSBC Bank Malaysia, plans to introduce an innovative sukuk this year for retail investors to maintain HSBC's position as a leading sukuk house.
"Malaysia is one of the deepest markets for Islamic bonds but we still do not have an active retail market. "We need to launch a retail bond product so that the retail investors could share the sukuk pie," chief executive officer Rafe Haneef told Bernama in an interview.
Rafe said Malaysia made up 60 per cent of the total global sukuk issuance last year but the Syariah bonds were subscribed mostly by institutional investors.
Rafe, who has been at the helm of HSBC Amanah since November 2010, said HSBC Amanah would focus on launching several innovative Syariah-compliant investment-linked products as well as structured funds like Real Estate Investment Trust products.
"Moving forward, we are looking at more investment products. The range of asset products at HSBC Amanah is pretty much complete," he said.
According to Rafe, the bank has almost completed its retail and corporate propositions and has also revamped its leasing products, which are world-class now.
The bank will also continue to add features to its existing products.
"We will always improve the existing products but these are not new products," he added.
Rafe also said HSBC Amanah is in the midst of discussions with Bank Negara on the upcoming locations for the branches that the bank would open by the end of this year.
The central bank has aproved 26 branches for HSBC Amanah, which has so far opened 15 branches since it received its licence in 2008.
Another branch will be opened in Penang this month. "We are still discussing the locations of the remaining new branches with Bank Negara. We are waiting for them to give us the final approval," he said.
HSBC Amanah, which was incorporated as an Islamic subsidiary in 2008, started its Islamic banking operations as a window in 1994.
The bank launched its first two subsidiaries, one each in Bandar Utama, Petaling Jaya and Juru, Penang, during the year.
The bank doubled its capacity from two to four branches in 2009 and opened another four branches in 2010. Last year, HSBC Amanah added another seven branches, bringing the total number of branches to 15.
Rafe said the bank has been receiving tremendous response for its products as they carry a recognised brand with competitive pricing and are structured according to syariah requirements.
"We have an independent syariah committee to review the products. AtHSBC Group, we have strategically mono-lined certain products as Syariah-compliant solutions only.
"For example, for personal financing, we offer Islamic solutions at both HSBC and HSBC Amanah. This has given a huge momentum to HSBC Amanah's business," he said.
Rafe said that the bank's products, though structured according to syariah requirements, have attracted non-Muslims, who make up about 60 per cent of its customers.
"The non-Muslims look at the features of the products and the pricing.
"The fact that they are syariah compliant does not restrain them from taking the products, they are looking at quality products and quality services," he added.
Citing an example, Rafe said the bank's home financing, a leading Islamic product in the market today, has been very successful and is currently the bank's fastest growing asset.
"It offers not only a home financing solution but also combines an overdraft solution.
"As and when you have extra cash, you can deploy it in the home financing capital, reducing your overall rental.
"You can also withdraw the advances when you need cash. It's a very flexible product that is priced attractively and well received in the market," he said. - BERNAMA/10-Jan-2012

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