Bank of Tokyo-Mitsubishi

Japan enters Shariah-compliant corporate financing in Mideast

Bank of Tokyo-Mitsubishi UFJ (BTMU), through its newly established Dubai branch, has become the first Japanese lender to provide Shariah-compliant corporate financing through an overseas branch after respective regulations have been loosened by Japan’s Financial Services Agency last year. The bank said it is issuing a $200mn loan to a unit of Saudi Arabian national mining company Ma’aden. BTMU launched an overseas branch in October last year in the Dubai International Financial Center with an Islamic window after receiving permission from the Dubai Financial Services Authority. The bank is currently preparing a number of Islamic products with an initial focus on commercial loans and trade finance services.

Bank of Tokyo-Mitsubishi UFJ opens Islamic finance business in Dubai

Japan's Bank of Tokyo-Mitsubishi UFJ (BTMU) has launched its Islamic finance business in Dubai, to focus on sharia-compliant loan syndications with later plans to offer project financing. In July, BTMU received approval from the Dubai Financial Services Authority to operate an Islamic window, which it plans to use as a hub for the wider region, said Shichito Tobari, BTMU's regional head for the Middle East. BTMU will initially target commercial loans and trade finance equivalent services, leveraging its existing client base of government-related entities, Tobari said. The next step is to expand the product line to ijara and istisna during the first half of 2016.

Bank of Tokyo-Mitsubishi UFJ Dubai Branch obtains Islamic Finance license

Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU) obtained an Islamic Financial Business endorsement to operate an Islamic Window from the Dubai Financial Services Agency on 8 July, 2015. This approval has enabled its Dubai Branch to offer both conventional and Islamic financial services to customers. BTMU commenced its Islamic finance services in 2008 through its Malaysian subsidiary. Since then, the Bank has accumulated various skill sets and expertise regarding Islamic finance services such as deposits and loans. BTMU opened its Dubai Representative Office (now Dubai Branch) in 2007. It will be the Bank’s central hub of Islamic finance services in Europe, Middle East and Africa region.

Reasons for Islamic financial products are populare outside the Muslim world

There are many reasons that Islamic financial products are popular outside the Muslim world. Britain became the first non-Muslim country to issue sukuk, the Hong Kong Monetary Authority made an issuance, and the governments of Luxembourg and South Africa will follow suit later this year. Last month Goldman Sachs issued an Islamic bond, and before the end of the year, Bank of Tokyo-Mitsubishi and Société Générale, a French bank will probably do the same. All of these entities want to get a piece of the $2 trillion Islamic finance market.

Japan's BTMU to boost Islamic business with first sukuk

The Bank of Tokyo-Mitsubishi UFJ (BTMU) hopes to expand its Islamic finance business across Asia and the Gulf, buoyed by a landmark multi-currency sukuk programme set up in Malaysia. BTMU, part of the Mitsubishi UFJ Financial Group, set up its sukuk programme in June. The programme will allow its wholly-owned Malaysian unit, BTMU Malaysia Berhard, to raise the equivalent of $500 million via sukuk with tenors of up to 10 years. It provides an alternative funding source for BTMU Malaysia to manage its liquidity to match increasing and growing exposures in multi-currency sharia-compliant financing. No timeframe was given for the first transaction, although the bank is increasingly active in the Islamic capital market.

Japanese get into Islamic financing

Several Japanese institutions are establishing and expanding their Islamic finance businesses. Bank of Tokyo-Mitsubishi UFJ and Sumitomo Mitsui Banking for example made a Shariah-compliant deal with Brunei Gas Carriers (BGC). Other financial institutions and insurance companies focus on Malaysia to offer their Islamic products.

Japanese financials offering Islamic products

Japanese financial institutions have started offering Islamic financial services in Muslim countries in the region. The Bank of Tokyo-Mitsubishi UFJ and Sumitomo Mitsui Banking for example arranged a Shariah-compliant deal with a shipping company affiliated with the Brunei government. Meanwhile, other financial institutions are expanding their Islamic banking services. Especially the markets for Islamic financing in Malaysia and Indonesia are expected to grow.

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