Bahrain’s Elaf Bank said Sunday it had been granted a license to operate in Malaysia as the closely-held lender seeks to tap into the Asian country’s growing Islamic finance sector.
The licence marks Elaf’s first international branch office and the bank plans to use Kuala Lumpur as its regional hub for Southeast Asia operations.
“Being a wholesale Islamic bank headquartered in the capital of Islamic finance in the Middle East, the logical next step would be to open our first international branch office in the capital of Islamic finance in South East Asia,” Jamil El Jaroudi, CEO of Elaf Bank, said in a statement.
The terms of the licence would allow Elaf Bank to conduct Islamic banking business in international currencies other than the Malaysian ringgit, the country’s central bank said.
Malaysia’s government accounted for 62.5 percent of all Islamic bonds, or sukuk, issuances globally in the first quarter of 2010, valued at $18.4bn. By comparison, not one sovereign sukuk came out of the Gulf Arab region during the same period.
Last year, Malaysian authorities issued conventional banking licenses to five foreign banks, including National Bank of Abu Dhabi and Indonesia’s PT Bank Mandiri.