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Posts Tagged ‘Indonesia

Maybank calls off talks with Indonesia’s Panin

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Points of Essence:

  • The Malaysian banking fraternity is bracing for yet another surprise with Maybank’s latest failed conquest. Reeling from the uncertainty of the BII deal for a banking expansion in Indonesia, this is another setback for Maybank as it sought to venture into Indonesian takaful industry. The proposed joint venture with Indonesian Panin would have given Maybank a 60% stake in Panin’s subsidiary PT Anugrah Life Insurance.
  • Citing circumstances beyond their control for the related parties not to proceed with the partnership negotiations, the bank committed to penetrate into Indonesia’s takaful industry at future opportunities.
  • However, it remains to be seen how this failure will affect Maybank’s future regional  expansion plans.
  • On another note, we have seen a string of faltered Indonesian deals for Malaysian companies lately, raising concerns on the viability of the investment ventures in Indonesia given its unfriendly investment environment.

KUALA LUMPUR: Malayan Banking Bhd (Maybank) has called off its discussions with Indonesia’s Panin on a possible joint-venture partnership to venture into the takaful industry there.

However, despite the setback, Maybank said on Wednesday it was still keen on Indonesia as a target market for its insurance and takaful expansion.

“Maybank would continue to look for possible options in developing its insurance and takaful business in Indonesia,” it said.

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Written by Suapi Shaffaii

September 3, 2008 at 3:39 pm

Malaysian Islamic lender eyes Australia, Philippines

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Points of essence:

  • AmIslamic Bank seeks to venture out outside GCC countries as it is expanding in Indonesia, Australia  Philipines and Vietnam. The third largest Malaysian Islamic lender with $2.94 billion of assets said the GCC market is saturated and it’s much easier to penetrate into non-traditional islamic banking market.
  • The scope of Islamic business is diffrent in those countries where AmIslamic is eyeing Shariah based financing in Indonesia, sukuk market in Australia, Islamic retail and commercial business in the Philippines and the sharia-compliant property market in Vietnam.

By Liau Y-Sing

KUALA LUMPUR, Sept 2 (Reuters) – Malaysian lender AmIslamic Bank may tap Indonesia’s sharia retail market and expand into Australia and the Philippines as it seeks growth in non-traditional Islamic markets, its chief said on Tuesday.

Malaysia’s third-largest Islamic lender with about $2.94 billion of assets, is also considering a move into Vietnam although the country’s recent economic developments have made it slightly wary, AmIslamic CEO Ahmad Zaini Othman said.

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Written by Suapi Shaffaii

September 3, 2008 at 6:14 am

Indonesia passes Shariah banking law

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Points of Essence:

  • Indonesia’s new banking bill allows foreigners to establish Islamic banks in partnership with its citizens or local entities
  • It also offers commercial banks the option of converting their business into Shariah-compliant banks
  • Currently, Islamic banking comprises 2 % of the market share and less than 5% of the total banking assets
  • HSBC is the only foreign bank with Shariah operations

By Reuters  on Wednesday, June 18, 2008

Indonesia’s parliament passed a new banking bill yesterday opening up its Islamic banking sectors for foreign investment in a bid to tap the potential of the Islamic finance sector in the world’s most populous Muslim nation.

The new bill allows foreigners to establish Islamic banks in partnership with its citizens or local entities and offers commercial banks the option of converting their business into Shariah-compliant banks.

Around 85 per cent of Indonesia’s population of 226 million people are Muslim. But Southeast Asia’s largest economy has been slow to tap the fast-growing Islamic finance market.

“We hope this law can increase the turnover of Shariah banking in Indonesia… By 2013, Shariah banking is expected to reach 5-10 per cent of market share, compared to two per cent currently,” said legislator Dradjad Wibowo.

Wibowo, also a well-known economist, said the law would help Shariah banks increase loans to sectors with small collateral that are unable to receive loans from conventional banks, such as small and medium enterprises (SMEs). Shariah, or Islamic law, bans payment of interest, allowing money to be earned only from physical assets. It also bars investment in alcohol, tobacco or gambling.

The country’s Islamic banking industry is still less than five per cent of the total assets of Indonesia’s domestic banks. That compared with a ratio of more than 12 per cent in Malaysia.

Until now, HSBC is the only foreign bank that has Shariah operations in Indonesia, but there are several domestic banks with Shariah-compliant operations, in anticipation of a growing domestic market and to draw investments from oil-rich Middle East countries.

Three local banks – state-owned PT Bank Rakyat Indonesia (BRI), PT Bank Bukopin and PT Bank Negara Indonesia (BNI) – plan to open Shariah-compliant units this year.

Bahrain-based Islamic lender Albaraka Banking Group has also opened an office in Indonesia, as it seeks to stay ahead of rivals in tapping the growing global appeal of Islamic banking.

Global Islamic assets are growing at an annual pace of 20 per cent and are set to hit $2 trillion (Dh7.3trn) in 2010 from the current $900 billion, thanks to a flood of petrodollars, Ernst & Young said in February.

Written by Suapi Shaffaii

June 24, 2008 at 7:37 am