STANDARD Chartered Bank Malaysia Bhd (StanChart) is moving into high gear in expanding Islamic banking services in the country as it leverages on the liberalised landscape for this segment.
StanChart, the first foreign bank to offer an Islamic banking window in Malaysia in 1993, expects its Islamic banking operations to contribute 20 per cent of its total assets by 2010.
The bank's Islamic banking assets as at end-2006 stood at RM2.047 billion, or 5.23 per cent of its total portfolio.
StanChart chief executive officer of Islamic banking, Afaq Khan, said that Malaysia is already an international hub for Islamic banking and finance, facilitated by a supportive central bank, incentives, licences for foreign banks, the existence of a sukuk market and open dialogue with the authorities.
"We at StanChart will launch all products in Malaysia before other markets," he told Business Times in an interview.
In 2005 and 2006, StanChart's Islamic banking team in Malaysia, supported by its team in Dubai in the United Arab Emirates, launched more than nine new Islamic products in 12 months.
The bank recently launched its Islamic bank global brand, Saadiq, which means "truthful" in Arabic.
Its Saadiq Account-i - which offers savings, current and general investment facilities - was the first product launched under the Saadiq brand.
StanChart Malaysia Islamic banking division head Azrulnizam Abd Aziz said the year 2005 marked the bank's initial aggressive foray into Islamic banking, while 2006 was the execution stage.
"From now on, we want to grow big. We have done hundreds of training sessions for the staff and come out with innovative products," he said.
He added that in the last 18 months, the bank has built a solid platform to facilitate Islamic banking in Malaysia by emphasising product extension and going in-depth into the market.
The latter was done by enhancing its distribution channel in the country.
"In 2005, we had a small team selling Islamic banking products.
"Today, we have more than 50 people at our branches in Johor Baru and Kuala Lumpur, and we will also recruit more people in Penang," Azrulnizam said.
StanChart has appointed Islamic personnel financial consultants (PFCs) to manage client relationship matters related to its Islamic banking products.
The PFCs are a trained and dedicated team who understand the bank's Islamic banking products well and can communicate with customers on the various offerings.
There are currently four PFCs in selected branches across the country, and the number is growing.
To date, StanChart has Islamic banking operations in Pakistan, Bangladesh, the United Arab Emirates and Malaysia.
"In all these markets, our Islamic banking is growing above the industry. Today, Malaysia is the fastest- growing market for StanChart Islamic banking," Afaq said.
He added that globally, Islamic banking is growing rapidly, driven by central banks, innovative products, syariah scholars and customers' growing knowledge and awareness.
"In Malaysia and other markets, more people are switching their banking needs to Islamic banking. For non-Muslims, they see the product as ethical banking as there are loopholes in conventional products."