Published August 19, 2008

Stanchart Malaysia set to launch Islamic unit

Standard Chartered Saddiq will be involved in all segments of banking

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(KUALA LUMPUR) Standard Chartered Bank Malaysia Bhd is making final preparations to open a full-fledged Islamic banking subsidiary, most likely within the next two months, according to a report in Malaysia's Business Times.

Bank Negara Malaysia is understood to have recently granted the global bank a licence to operate the subsidiary. Stanchart currently transacts Islamic banking and finance products through an Islamic window.

Its head of Islamic banking, Azrulnizam Abdul Aziz, declined to comment on the date of the launch, but said that the Islamic banking subsidiary already has a name.

It is called Standard Chartered Saddiq. 'Saddiq' is the Arabic word for 'truthful'.

Mr Azrulnizam said that the Islamic banking subsidiary would complement Stanchart's long and strong presence in the country.

'It's a natural progression,' he said in an interview with Business Times last week.

Stanchart, a pioneer in Malaysia's banking sector, has been studying the Islamic banking market globally for a number of years.

It was the first foreign bank to offer an Islamic banking window in 1993.



In Malaysia, its Islamic operation has charted significant expansion, recording compounded annual growth of some 180 per cent over the past three years, while revenue has grown on average 131 per cent year-on-year.

Offering just 10 Islamic banking products in 2005, Stanchart's Islamic window now transacts about 33 various instruments and leads the market in some.

Standard Chartered Saddiq will be involved in all segments of banking: from consumer and corporate finance to treasury operations.

It is also expected to tap the global banking group's wide international resources for best practices as well as contribute in transferring some of its own to the group's international network.

Stanchart Dubai's director and head of Islamic products, Ghazanfar Naqvi, said that the banking group has observed the rapid emergence of Middle Eastern investors in Malaysia.

'There is enormous potential for us to harmonise products from the different regions into one platform. Our customers can then choose to transact from anywhere,' he said.

Mr Azrulnizam said that Standard Chartered Saddiq would work closely with Malaysian regulators to enhance Islamic financial products which the country can offer.

'Our infrastructure is ready,' he said. However, he declined to indicate the number of branches it would set up.

A Syariah council has been established for the Islamic banking subsidiary. In addition, a team of managers and other supporting staff has been assembled.