Mega Islamic bank will boost Islamic finance growth, says expert
The creation of a mega Islamic bank will push Malaysian banks to look beyond local shores should the proposed merger of CIMB Group Holdings Bhd, RHB Capital Bhd and Malaysia Building Society Bhd materialise. While the local market for Islamic finance remains lucrative, banks should not be content to remain in the local market as a market downturn could cause a reversal of fortunes. Low risk tolerance is why local banks are not expanding their reach overseas. Some attempts thus far to go abroad have been on a partnership basis contributing knowledge and technical expertise. In addition, local banks’ issuance of Islamic sukuk in the international arena is still low relative to international banks.
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