ISLAMIC BANKING | Cesar Tordesillas, Australia

CIMB to push for sukuk deals in Australia

CIMB starts Australian operations this week.

To distinguish itself from the competition in Australia, CIMB will use its expertise in Islamic finance.

That may include bringing Australian companies to the Malaysian sukuk market as issuers for the first time.

“We are very keen to do an Islamic finance transaction as soon as possible, but we also have to be realistic, working on a 12-month time frame,” said Michael Forde, head of capital markets at CIMB Australia.

“It is an excellent source of new liquidity for issuers from this part of the world, and we want to utilise the competitive advantage we have to bring these Australian issuers to this market,” Forde added.

CIMB expected to officially launch its Australian investment banking franchise on Nov 5, upon completing all regulatory procedures, with over 100 staff in its Sydney and Melbourne offices combined, a company spokesman said.

The bank said it was able to retain most RBS senior staff. This could help CIMB when it contacts Australian companies to try to interest them in sukuk structures, which unlike many conventional bonds were directly based on income from real assets.

“Australian firms will be very new entrants to this market it will require educating institutions who invest in this market. It is not as straight-forward from an Australian point of view, because you are buying and selling assets, instead of direct borrowing,” Forde said.

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