Maybank Islamic, the sharia-compliant division of Malaysia’s largest lender Maybank that has $165 billion of assets under management, plans to launch wholesale banking operations in the UAE from next year, to help it service the GCC market and bridge two of the world’s biggest centres for Islamic finance.
"We have a strong footprint in Asia and want to link that with our contemporaries in the GCC in terms of financing infrastructure, looking for a home for funds to invest in and supporting the halal trade. We need to make that linkage," said Mohamed Rafique Merican, chief executive of Maybank Islamic, in an interview with The National on Wednesday.
Maybank Islamic is the fifth largest sharia-compliant bank in the world with total assets of $50bn, ranking one below Dubai Islamic Bank. It is the only non-GCC Islamic bank ranked in the top ten.
The company began talks with regulators in 2017 and hopes to secure a licence from the Dubai Financial Services Authority by the end of this year or early 2019 to set up an office in the emirate’s financial free zone Dubai International Financial Centre (DIFC).
The office would provide sharia-compliant wholesale banking services to clients across the GCC, including sukuk mandates, syndicated loans and Islamic trade facilities to link the Middle East halal industry with that in Southeast Asia, Mr Merican said.
The Islamic banking industry globally is growing at around 10 per cent per year, outstripping growth in conventional banking as more people seek ethical, alternative forms of banking following the global financial crisis. The world’s Muslim population also has been historically underserved for sharia-compliant financing.
The total value of global Islamic finance assets is projected to grow by 72 per cent to $3.78 trillion by 2022, from $2.2trn in 2016, according to the Islamic Finance Development Report published in 2017.
Annual growth in GCC Islamic banking assets has been slower in recent years, reaching 4 per cent in 2017 due to regional economic slowdown. However, this is expected to pick up by the middle of this year, S&P Global Ratings said this week.
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Read more:
Islamic banks set to see improvement in financial health, S&P says
Global sukuk issuance to drop as much as 28% in 2018
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Maybank Islamic parent, Maybank, has a small representative office in Bahrain, but Mr Merican said this may close if the Dubai licence is granted. “In terms of the community, the marketplace, the provision of regulations, it [the preferred location] would be DIFC,” he said.
In particular, the chief executive sees “strong demand” for sovereign and corporate sukuk issuance in the GCC. “For us to be relevant in that space, we need to build a presence here.” The region has a robust investment infrastructure and opportunity for significant “yield pick-up”, as well as latent demand for ‘green bonds’ to finance renewable energy projects, he added.
Global sukuk issuances grew 17 per cent in 2017 to $100bn, driven largely by GCC sovereigns, rating agency Moody’s said in March. It expects a similar level of issuance in 2018.
Maybank Islamic counts Malaysia (where it has a 33 per cent market share), Singapore and Indonesia as its biggest markets, where it offers a mix of retail, SME financing, corporate and sukuk advisory services. It has also conducted sukuk transactions in Hong Kong, the US and the UK.
It recorded year-on-year growth of around 11 per cent last year, in line with that of the Islamic banking industry in Malaysia, the world’s biggest Islamic banking centre where around 31 per cent of total financial assets are Islamic.
Mr Merican forecasts similar growth in 2018 apart from in Indonesia – a young market for financial services – where the company has witnessed far more rapid annual growth of between 20-40 per cent over the last 2-3 years. “This is from a relatively small base,” the chief executive explains.
Usain Bolt's World Championships record
2007 Osaka
200m Silver
4x100m relay Silver
2009 Berlin
100m Gold
200m Gold
4x100m relay Gold
2011 Daegu
100m Disqualified in final for false start
200m Gold
4x100m relay Gold
2013 Moscow
100m Gold
200m Gold
4x100m relay Gold
2015 Beijing
100m Gold
200m Gold
4x100m relay Gold
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
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Engine: Dual-motor all-wheel-drive electric
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The distance learning plan
Spring break will be from March 8 - 19
Public school pupils will undergo distance learning from March 22 - April 2. School hours will be 8.30am to 1.30pm
Staff will be trained in distance learning programmes from March 15 - 19
Teaching hours will be 8am to 2pm during distance learning
Pupils will return to school for normal lessons from April 5
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
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Tips for job-seekers
- Do not submit your application through the Easy Apply button on LinkedIn. Employers receive between 600 and 800 replies for each job advert on the platform. If you are the right fit for a job, connect to a relevant person in the company on LinkedIn and send them a direct message.
- Make sure you are an exact fit for the job advertised. If you are an HR manager with five years’ experience in retail and the job requires a similar candidate with five years’ experience in consumer, you should apply. But if you have no experience in HR, do not apply for the job.
David Mackenzie, founder of recruitment agency Mackenzie Jones Middle East
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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