OCBC is set to grow its Islamic banking business at a gradual but steady pace, as demand for syariah-compliant financing rises among retail and corporate customers.
OCBC Al-Amin, the bank's Malaysia-based Islamic banking unit, saw loans grow by 16 per cent last year, chief executive Syed Abdull Aziz Syed Kechik told The Straits Times. (source)
It has also enjoyed a double- digit expansion in loans every year over the past five to 10 years, he added, and expects the momentum to continue.
Over the next year, the bank plans to double the number of branches in Malaysia to 10, and will roll out a slew of new products for retail and corporate clients.
'We are looking to add new products to meet customers' demands, especially in the wholesale banking sector. On the retail banking side we'll continue to build our capacity in the mortgage, personal financing and wealth business,' Mr Syed Abdull said.
More Singapore firms are now keen to raise Islamic financing, he said, after two recent landmark deals: the listing of Sabana Reit, Singapore's first syariah-compliant Reit, and the launch of a Singapore-dollar Islamic bond, or sukuk, by Malaysian sovereign wealth fund Khazanah Nasional.
In a separate interview with Reuters, Mr Syed Abdull said that more firms in Singapore are exploring sukuk and Islamic private equity deals as an avenue to reach a broader class of investors, including those who can put their money only in assets that comply with religious principles.
These include Middle Eastern investors and government funds that invest according to Islamic tenets, such as Malaysia's Pilgrims Fund, he said.
'We want to capitalise on that. We can do sukuk, syndication, private equity with these customers who, to them, it's an advantage because it's a new set of investors.'
OCBC Al-Amin is working on Singapore-dollar Islamic financing deals, Mr Syed Abdull told the news agency, but declined to give details.
Separately, the chief executive of Noor Islamic Bank in Dubai, Mr Hussain Al Qemzi, said that Singapore can succeed in growing its Islamic banking sector.
'Singapore will find its way,' he said.
'They are good in conventional asset management, so they will do Islamic asset management very easily. But will we see other things such as Islamic banks operating in streets, or corporate Islamic banking? It is all possible.'
There is also potential for infrastructure funding through Islamic finance between South-east Asia and the Middle East.
Mr Al Qemzi added that Dubai's economy is recovering, with improvements in all sectors, such as retail, finance, logistics and even real estate, which crashed during the recent debt crisis. And there are opportunities for investors in the emirate as many assets are currently undervalued.
His bank manages 20 billion dirhams (S$6.7 billion) in assets and has 17 branches across the United Arab Emirates.
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