“We like competition,” says CEO Badlisyah Abdul Ghani. “It keeps us on our toes.”
Determination to push the development of Islamic finance is driving CIMB’s business. “Islamic banking and finance is not just a business for us,” says Mr Abdul Ghani. “It is a means for us to [encourage] the financial markets to become better by giving Muslims access to modern financial solutions and enhanced financial choice to everyone.”
CIMB says its business has benefited from the Malaysian government’s support of Islamic finance, which resulted in tax breaks for sukuk issuance based on certain sharia principles and a 10-year income tax exemption granted to both local and foreign fund managers who manage Islamic funds for foreign investors. On the back of this, CIMB managed some groundbreaking transactions, including a new type of hybrid sukuk, featuring a RM600m ($173.6m) in commercial paper and medium-term notes and the RM60bn Islamic and conventional commercial paper for Cagamas, the largest and longest-term financing programme in Malaysia.
In the past year, CIMB has been involved in three successful Islamic IPOs, contributing to the predominant presence of sharia-compliant stocks on the Bursa Malaysia. The bank is also active in the equity-linked market and its asset management division manages a group of 17 Islamic funds in addition to managing sharia-compliant institutional mandates and alternative asset management mandates.
Mr Abdul Ghani says he anticipates convergence between Islamic structures and other products in the coming year. “A lot more Islamic derivative products will be introduced thus allowing greater risk taking by Islamic investors in Islamic capital market instruments.”
