IslamicFinance.de

The Bank of Tokyo-Mitsubishi UFJ has provided an Islamic syndicated loan to the Malaysian affiliate of Saudi Telecom. The ringgit-based loan amount is about 41.7 billion yen ($353 million). BTMU is the first Japanese bank to act as an agent bank for a syndicated loan in Malaysia. The loan will be provided with HSBC and Standard Chartered Bank of the U.K. Japanese banks in Malaysia mostly provide loans to Japanese companies operating in the country. Now, BTMU aims to expand operations in the country through Islamic finance. BTMU has extended foreign-currency Islamic loans in Malaysia since 2008 and ringgit-based Islamic loans since 2014. The ratio of Islamic finance to total loans in Malaysia rose to about 30% at the end of 2017, from 17% at the end of 2009.

Bank of Tokyo-Mitsubishi UFJ (BTMU) will issue Islamic bonds in two tranches under its debut multi-currency sukuk wakala programme in Malaysia. BTMU will issue US$25 million (RM81 million) in a US dollar tranche and 2.5 billion yen (RM74 million) in a yen tranche on Thursday, a statement said. Both sukuk issues will have maturities of one year; the statement did not give other details such as pricing. Malaysia's CIMB Investment Bank is managing the issues. BTMU, part of the Mitsubishi UFJ Financial Group, set up a US$500 million multi-currency sukuk programme through its Malaysian unit in June.

BTMU has plans to issue Sukuk in Malaysia and hoping to tap the demand in the fast-growing Islamic Capital markets. The bank is considering floating bonds denominated in dollars and yen, with target on Middle Eastern pension funds and Islamic insurance companies. This would mark the first issuance of yen-denominated Sukuk. BTMU expects demand from investors that seek to diversify. A growth in Sukuk could provide a channel for Japan to attract Islamic money.

The Islamic Corporation for the Development of the Private Sector (ICD) and the Bank of Tokyo-Mitsubishi UFJ (Malaysia) Berhad (BTMUM) have signed a memorandum of understanding (MoU) to form a joint strategic collaboration to tap opportunities in the Islamic finance industry. Khaled Al-Aboodi, ICD’s CEO and general manager, and Naoki Nishida, BTMUM CEO, inked the MoU at BTMU headquarters in Tokyo. The parties intend to leverage each other strengths and expertise especially to expand its Islamic finance activities in the ICD member countries. Khaled Al-Aboodi said the agreement will strengthen and deepen the ICD’s relationship with its non-traditional partners from the Pacific region especially to promote cross-border investment in ICD member states.