Standard Chartered Said to Mull Options for Malaysia Islamic Arm
The Edge, Photo Credit to The Edge
clock 09-02-2019
hit 463

Standard Chartered Plc is considering options for its Islamic banking unit in Malaysia, including a potential sale, people with knowledge of the matter said.

news-banner


The London-based lender has been gauging interest from potential buyers for the business, known as Standard Chartered Saadiq Bhd, according to the people. It is weighing an exit from Malaysia’s Islamic banking market as fierce competition from local rivals has limited its growth prospects, the people said, asking not to be identified because the information is private.

Standard Chartered, which became the first international firm to offer Islamic banking products in Malaysia in 1992, is considering selling the unit or winding it down, one of the people said. It isn’t running a formal process, and the bank hasn’t appointed advisers, the person said. Standard Chartered Saadiq had 670 million ringgit (US$165 million) of net assets at the end of September, according to its latest financial statements.

Deliberations are at an early stage, and there’s no certainty they will result in a transaction, the people said. A representative for Standard Chartered declined to comment.

Islamic Hub

Standard Chartered follows other foreign lenders, like Saudi Arabia’s Al Rajhi Bank and Kuwait Finance House, that have been considering exiting their Islamic banking operations in Malaysia. Last year, a consortium including Qatar Islamic Bank completed the sale of its holdings in a local Shariah-compliant lender, Asian Finance Bank Bhd, to Malaysia Building Society Bhd.

Malaysia, which pioneered Islamic finance in the 1980s, aims to have 40% of its banking assets complying with the religion’s ban on interest by 2020. That’s up from an estimated 30% at the end of last year.

In May, Standard Chartered identified Malaysia as one of the large “turnaround” markets, where it wants to improve returns from its retail banking operations. The firm told investors it will shift its approach, accelerating a pivot toward wealth management offerings and Priority Banking services for affluent customers, as well as focusing on clients’ international needs.

Standard Chartered Saadiq’s net income fell 27% in 2017 to 23.5 million ringgit, roughly a third of its profit five years earlier. Profit after tax for the first nine months of last year more than doubled to 45.9 million ringgit.




WHAT DO YOU FEEL ABOUT THIS?

0
LOVE
0
HAPPY
0
SURPRISED
0
SAD
0
ANGRY


COMMENTS
Use a Facebook account to add a comment, subject to Facebook's Terms of Service and Privacy Policy. Your Facebook name, photo & other personal information you make public on Facebook will appear with your comment.

SIGN UP NEWSLETTER

logo
Monthly Column
The staple of your property-related materials. It's all about being ahead of the game and with The Column, you get carefully selected information that will keep you informed and running with the pack. The best news, articles and properties on the market from the Property Hunter portal, conveniently wrapped and ready, just for you.

logo
Weekly Window
Your weekly dose of what's hot and what's not in property. The window is your view into the realm of real estate in Malaysia, curated from our portal based on the most popular pieces over the week. For those who just can't get enough, this is for you. Ain't nobody got time for dailies anymore, weekly is the new daily.