Following a quiet year in 2011 Al Rajhi Bank Malaysia, which recently saw the emergence of new faces in its top management, is set to pursue growth opportunities more actively this year.
According to Azrulnizam Abdul Aziz, its new CEO, the bank is in “good shape” and on track to achieve its growth targets this year; with an eye to maintaining the balance between its retail and corporate banking portfolios. In addition, the bank is looking at local and international corporate deals, as it emerges as among the few banks in Malaysia with ties to the Middle East that are delivering on their proposition of bridging financing opportunities between home and host markets.
Having also just hired Mudassir Amray, previously the head of Islamic banking for Asia Pacific at Citibank, as its head of wholesale banking, the bank appears to be gearing up for strong growth and a busy pipeline of deals this year.
Active pipeline
Speaking to Islamic Finance news Mudassir, who joined the bank in March this year, said that Al Rajhi Malaysia’s wholesale division is eyeing the arrangement of financing for Malaysian companies looking to raise financing outside Malaysia; or in foreign currencies such as Saudi riyals or US dollars.
“We’ve received positive and overwhelming response from our clients for foreign transactions,” said Mudassir, who also noted that the bank has a pipeline of around RM1 billion (US$325.7 million)-worth of corporate banking deals. Al Rajhi Malaysia could also manage up to US$500 million-worth of Sukuk transactions this year, he said.
The bank itself may also raise debt this year as it mulls over options to finance its expansion. An issuance will likely be denominated in Malaysian ringgit and be benchmark-sized.
On track for growth
Meanwhile Azrulnizam, who also joined Al Rajhi Malaysia earlier this year from Standard Chartered Saadiq in Malaysia, commented that the first 90 days in his new position were “very exciting”. The bank is also on track to achieve its targets of 20% growth in assets and profit this year, he said. “This is reasonable for a five-year-old bank; we have been growing progressively,” he noted.
On its retail side, the bank sees its strengths in its remittance business, wealth management and auto, personal and small and medium-sized enterprise financing; while its corporate banking division focuses on syndication and managing Sukuk issuances.
“We have established ourselves as an innovative player in the Sukuk market; structuring Sukuk which fit with Saudi and Malaysian standards,” said Azrulnizam.
Bridging the gap
Of note is that Al Rajhi Malaysia has taken advantage of its Saudi ties to assist Malaysian companies in Saudi to secure financing – a service that has become increasingly important due to the growing presence of Malaysian companies in the Saudi market.
Al Rajhi Malaysia recently signed an MoU with Malaysia’s Export-Import Bank (EXIM Bank) to provide agency and other financing services to EXIM Bank’s clients in the GCC; particularly in Jordan, Kuwait and Saudi, where the Al Rajhi banking group is present. The partnership is significant as it opens the door for Malaysian companies to access financing in foreign markets, especially in Saudi Arabia where local banks prefer to transact with local companies, noted Adissadikin Ali, the managing director and CEO of EXIM Bank.
The agreement will also allow Al Rajhi to provide financing directly to EXIM Bank’s clients, participate in co-financing deals with EXIM Bank and offer financing to companies based on a guarantee from EXIM Bank.
With its active pipeline of deals and the ability to leverage its parent bank’s Saudi background to tap into the kingdom’s budding Islamic finance market, Al Rajhi Malaysia looks set to grow its business and play a meaningful role in facilitating cross-border deals. — EB