Access to financial services

Islamic finance

In 2008, Standard Chartered established its first 100 per cent, fully-owned Islamic finance subsidiary in Malaysia. Our MYR50 million ($14.5 million) investment in Standard Chartered Saadiq Berhad continues our commitment to extending access to finance by responding to the rising demand for Shariah-compliant products and services in Malaysia.

Establishing this business illustrates our long-term commitment to Islamic banking, to governments supporting the Islamic finance industry and to successfully imparting our knowledge and supporting Malaysia’s economy.

Standard Chartered began providing Islamic finance services in Malaysia in 1993. Our work now extends through the Middle East, Pakistan, Bangladesh, Malaysia and Indonesia. In 2008, we celebrated the first anniversary of our Islamic finance brand, Saadiq, meaning ‘truthful’ in Arabic.

Globally, Islamic finance continues apace – experts estimate that global growth in the industry is between 10 per cent and 15 per cent per annum. Uneven global development has meant that it is yet to reach its full potential.

Our response is tailored to each new market, depending on the level of development of Islamic finance in the country. Our business grows at several times the industry average.

Expanding our Islamic finance business ensures we respond to our customers’ needs by offering innovative products and services. We aim to be a proactive corporate citizen in our markets, and work with governments and regulators to promote Islamic finance by bringing knowledge and expertise to markets.

Inauguration of the largest dealing room in Pakistan

First Shariah-compliant bond issue

In 2008, the Pakistani Government issued its largest Islamic bond – or Sukuk – structured and arranged by Standard Chartered. The transaction ensures Islamic banks have Shariah-compliant security for the first time in Pakistan. This responds to Islamic financial institutions’ need for Shariah-compliant instruments to meet their reserve requirements.

The Sukuk raised funds for the Pakistani Government and provided it with a platform through which to tap the Islamic finance market. We are pleased to have been able to support the government with the structuring of the Sukuk programme. The transaction enabled the government to access the local market through a State Bank of Pakistan auction and to manage money supply in the system. Islamic banks subscribed to a significant portion of the issue. The Pakistani Government will now be able to borrow locally at more attractive rates, having previously been reliant on expensive foreign capital.

Highlights

  • $14.5mfully-owned Islamic finance subsidiary in Malaysia
  • 1stanniversary of our Islamic finance brand, Saadiq
  • 1993when we first started providing Islamic finance in Malaysia