The Malaysia unit of Asia-focused lender Standard Chartered Bank Plc hopes to apply for an Islamic banking license in the country within a year, it said on Thursday.
Standard Chartered, like other global lenders such as Dutch bank ABN AMRO, aims to set up an Islamic banking subsidiary in Malaysia, whose government is keen to compete with Dubai, Bahrain and Singapore as a global Islamic banking hub.
We've not yet applied (but) we're hopeful that we will, Standard Chartered Malaysia's Chief Executive Officer, Julian Wynter, said. There are a lot of details we have to work through, especially for a foreign bank.
He added that the bank could submit an application in the next 12 months.
The London-based lender expects to double its Malaysian Islamic banking assets to 10 percent of total assets by end-2007, from 5 percent last year, Wynter said.
That number is expected to climb to a fifth of its total Malaysia assets by 2010, he added.
In 2006, Standard Chartered Malaysia had total assets of $12 billion, Wynter said. The lender was the first foreign bank in Malaysia to offer an Islamic banking window in 1993.
The bank will not grow its Islamic assets by pursuing an acquisition in Malaysia, Wynter added.
Our plan is to grow by organic activities, he said. An acquisition is not something that we're looking at right now.
Islamic finance is offered in more than 60 countries and is worth over a $1 trillion in assets, and accounts for 12 percent of the total banking system, Malaysia's Trade Minister Rafidah Aziz said.
($1=3.4890 Malaysian ringgit)