HSBC Bank Malaysia and OCBC Bank will establish separate Islamic banking subsidiaries following the receipt of licences from Malaysia’s central bank, Bank Negara.
HSBC Bank Malaysia’s new entity will be called HSBC Amanah Malaysia Bhd, while OCBC’s Islamic banking subsidiary has yet to be named. Both are likely to include a marked focus on structured Islamic products as they develop their ranges.“The awarding of the licence is timely, as it falls in line with the HSBC Group's initiative to make Malaysia the regional hub for HSBC Amanah,” said deputy chairman and CEO Irene Dorner in a statement. “We intend to contribute towards the acceleration of the industry's growth and bring HSBC Amanah to the next level.”
HSBC has offered Islamic financial services in Malaysia since 1994. The Amanah brand was established globally in 1998.
In a separate statement, OCBC said the Islamic banking subsidiary, when established, will conduct the full range of Shariah-compliant universal banking businesses. OCBC has more than 20 Islamic banking products and has introduced a range of deposits and structured investments.
“We have been involved in Islamic banking for the past 12 years and are thus not new to the business,” said director and CEO Datuk Albert Yeoh. “The approval from Bank Negara provides us with the opportunity to take our Islamic banking business to the next level and we will be positioned to develop OCBC Bank into a one-stop centre for Islamic banking.”
The granting of licences to foreign banks in Malaysia has broadened the scope of Islamic banking locally. Malaysia has declared its intent to be the regional hub and major global power in the sector. Large Islamic banks from the Middle East have been granted universal Islamic banking licences and many have opened branches locally.
Islamic banking now accounts for 13% of the country’s banking assets. Islamic capital market products have also dominated the capital markets in recent years.
