KUALA LUMPUR, Sept 20 Malaysia's Islamic banks
need to expand further into Southeast Asia to play a greater
role in the management of international Islamic bonds, or sukuk,
Malaysia's Central Bank Governor Zeti Akhtar Aziz said on
"We encourage Islamic banks to venture out and participate,
they need to enter into strategic partnerships with other
(regional banks)," Zeti told a media roundtable at the Global
Islamic Finance Forum (GIFF) in Kuala Lumpur.
"They need the distribution channel to investors in Asia,
where the surplus funds (for sukuk) are."
Asian investors have historically taken up substantial
portions of global issuances, but the task of managing these
issuances is dominated by f oreign banks.
"International banks may have an advantage, they have a
presence throughout the world," said Zeti.
Some 12 percent of Turkey's recent $1.5 billion sovereign
sukuk was taken up by Asian investors. Asians comprised the
second-largest group of investors for the sukuk, after the
The sukuk was issued by the Turkish Treasury, with the help
of Citigroup, HSBC and Kuwait Finance House. Zeti said that
Malaysian banks could expand in the region through mergers and
"They can take up stakes in existing partnerships or
alliances, and this is something they are encouraged to do if
they have the capacity. They will need approval from us. This
will further unlock Asia's potential," she said.
Malaysia's two biggest banks boast a strong regional
presence, but their earnings remain anchored in their home
Maybank Islamic, the Islamic arm of Malayan Banking Bhd
, is the largest Islamic bank in Asia with a presence
in Malaysia, Singapore, Indonesia, Hong Kong and the
Philippines. CIMB Islamic, the Islamic arm of CIMB,
derives around 10 percent of its earnings from business in
Indonesia, Singapore and Brunei.
(Reporting By Al-Zaquan Amer Hamzah; editing by Stuart