Kuala Lumpur, 17 February 2006 - Malaysia's quest to become the Islamic banking hub in the region was given a significant boost when Kuwait Finance House (Malaysia) Berhad (KFH(M)B), a wholly-owned subsidiary of Kuwait Finance House (KFH), was officially opened by Tan Sri Dato' Nor Mohamed bin Yakcop, Minister of Finance II. The Official Opening was also attended by Tan Sri Dato Md Nor Yusof, Chairman of Securities Commission, Datuk Zamani bin Abdul Ghani, Deputy Governor of Bank Negara Malaysia, Mr. Bader Al-Mukhaizeem, Group Chairman and Managing Director of KFH, Mr Jassar Al-Jassar, Chairman of Kuwait Finance House (Malaysia) Berhad and more than 200 guests both local and international.
"With this launch, Kuwait Finance House will be the first fully-licensed foreign Islamic bank to operate in Malaysia.
Currrently, there are eight Islamic banks which have been licensed to operate in Malaysia, including three from the Middle East. The three licences have been granted earlier than expected, reflecting the recognition that Malaysia is fast emerging as a global centre in Islamic banking and finance," said Tan Sri Dato' Nor Mohamed Nor Yakcop, Minister of Finance II who had delivered the Prime Minister's speech.
Just as the ceremony was concluded, The Honourable Dato' Seri Abdullah bin Haji Ahmad Badawi, Prime Minister of Malaysia made a special effort to attend the event on Friday afternoon. Prime Minister Dato' Seri Abdullah bin Haji Ahmad Badawi's commitment to the development to the Islamic financial industry, was reflected by his determination to be present at the Official Opening of Kuwait Finance House (Malaysia) Berhad when he arrived just before 5 p.m. He had surprised the invited guests and employees of Kuwait Finance House (Malaysia) Berhad, when he joined the event, immediately after attending the swearing-in ceremony of the new Cabinet Ministers at the Istana Negara.
After spending 45 minutes having tea with the Chairman and Managing Director of Kuwait Finance House, and the other dignitaries present, the first branch of Kuwait Finance House (Malaysia) Berhad was again officially opened this time, by The Honourable Dato' Seri Abdullah bin Haji Ahmad Badawi, who also signed the commemorative plaque.
Kuwait Finance House (Malaysia) Berhad is among the first three Islamic banks from the Middle East to be issued a licence to operate in Malaysia by the Ministry of Finance, and to be officially opened. The Bank held its soft opening on 8 August 2005 at its first branch located at the ground floor of Tower 2, MNI Twins, Kuala Lumpur. Upon commencement of its first phase of operations, KFH(M)B has introduced basic over the counter services such as current and savings accounts, general investment accounts, and other banking services such as foreign currency exchange, travellers cheques and remittances.
"KFH has been keenly desirous to invest in Malaysia since 1985, when it held the first participation in real estate and other structured deals.
In the mid 1990's, KFH, together with certain local participants, as well as the Islamic Development Bank (IDB), had established the "KFH Ijarah". Today, it is enhancing this presence by opening Kuwait Finance House ¿ Malaysia, upon being honored with the first license for a foreign Islamic bank in Malaysia," said Mr Al-Mukhaizeem in his speech.
Among the transactions that KFH has been in involved in, include a US$ 100 million structured finance deal for Malaysian Airlines and a US$50 million Ijara transaction for the Guthrie Group in the mid-1990's. KFH has also concluded operating leases of two Boeing 777 aircrafts for Malaysian Airlines for a period of 10 years
"Via its strategy, KFH has identified the South East Asian region as one of the world's promising investment areas, and Malaysia as a starting point for its activities in the region, which is witnessing an economic and human development that seldom exists in any area of the world," added Mr Al-Mukhaizeem.
According to Mr Al-Jassar, Chairman of Kuwait Finance House (Malaysia) Berhad, one of the reasons for the setting-up of Kuwait Finance House in Malaysia is to complement the existing financial institutions. KFH is working closely with the financial players operating in Malaysia in order to leverage their knowledge of the local market and blend that with KFH's experience from the Middle East.
Mr Al-Jassar added that apart from Islamic banking, KFH at the same time, intends to encourage businesses from the Middle East to invest in Malaysia. This will further strengthen bilateral relations between Malaysia and the Gulf Cooperation Council (GCC).
The year 2005 was distinctive in terms of KFH's performance. The Bank attained the highest ratings from the international rating agencies. Standard and Poors rated KFH at the highest rating given to an Islamic bank in the region and the world. In its rating of KFH, the agency relied on the distinction and diversification of investment, in addition to the quality of assets, the pioneering position, the expansive customer base, excellent service and high profitability. KFH ended December 31, 2005 with total assets of approximately US$16 Billion, net profit US$ 406 Million, and market capitalisation of US$8.9 Billion.
Last year, Kuwait Finance House through Kuwait Finance House (Malaysia) Berhad teamed up with the Singapore-based Pacific Star Group, a leading real estate investment, fund and asset management company, to set up a US$600 million Islamic real estate fund targeted at customers in Asia. The Baitak Asia Real Estate Fund is slated to be the largest Islamic Real Estate Fund in the Asian Region