National Bank of Abu Dhabi eyes Malaysian Islamic banking license amid aggressive expansion plans (By IFN)

Tuesday 11^th September 2012

GLOBAL: National Bank of Abu Dhabi (NBAD), which launched its Malaysian unit in July this year, is now reportedly eyeing an Islamic banking license in the country as it expands its capabilities outside its home market. The bank, the second largest in the UAE in terms of assets, is also among the Middle East’s most aggressively expanding financial institutions and of late, has shown increasing interest in the Asian region. Just last week, in the first week of September, the bank issued its first offshore Chinese yuan bond, comprising a CNY100 million (US$15.77 million) offering with a one-year tenor. The issuance follows the establishment of the bank’s representative office in Shanghai. NBAD has also applied to set up operations in India, in tandem with its expansion plans which also target growth in the MENA region. The bank already has a strong presence in the region, in addition to a footprint that extends to France, Switzerland, the UK and the US. Its plan to expand its Islamic banking operations in Malaysia could help the bank boost flagging Shariah compliant business at its headquarters. In the six months to the 30th June this year, its net income from Islamic financing contracts declined to AED137.64 million (US$37.47 million) from AED160.46 million (US$43.69 million) a year earlier. However, with stiff competition in the Islamic consumer banking space in Malaysia, the bank would do well to focus its Shariah compliant finance efforts in the wholesale banking segment; and could help provide value-add to the country’s Islamic capital market transactions. According to data from Dealogic, the bank is the 13th top manager of Sukuk in the 12 months to the 5th September; managing six deals worth US$797 million.