One area in which both Malaysia and CIMB have excelled in taking an early lead is Islamic finance. Malaysia has the most sophisticated industry, and enabling framework, for Islamic finance anywhere in the world; within it, CIMB is probably the name most closely associated with innovation.
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Badlisyah Abdul Ghani, CIMB |
The man most responsible for building CIMB’s Islamic business, particularly on the investment banking side, is Badlisyah Abdul Ghani, CEO of CIMB Islamic. He made his name being a pioneer of innovative structuring techniques, among them the world’s first ijarah sukuk, and asset-backed deals using the musyarakah structures. Quietly spoken and lacking some of the more outgoing statesmanship that some of his peers assume, he is nevertheless known as one of the most effective and best-connected people in the Islamic finance industry worldwide. Beyond CIMB, he was closely involved in Bursa Malaysia’s launch of a Shariah-compliant commodity exchange, and is also closely involved in attempts to build fund flows from the Middle East to Malaysia (he is, among other things, head of corporate client solutions for the Middle East and Brunei at CIMB at a group level). He’s on the Islamic capital market consultative panel of the stock exchange and chairs the Islamic capital market committee of the Malaysian Investment Banking Association. His involvement in such a wide range of sukuk from Malaysia has helped to shape the country’s distinct approach to Islamic finance, which differs in some crucial ways from the interpretation of the Middle East; but he has always argued that differences in interpretation, rather than needing to be ironed out and standardized, should be welcomed as a spur for innovation.
All of this has helped CIMB to a position of strength in Malaysian Islamic investment banking, but the place it might really pay off is Indonesia. The opportunity here is vast. Indonesia is, like Malaysia, a Muslim nation, but has almost nine times the population. Islamic finance is far less developed in Indonesia than Malaysia, but all the same drivers that spurred it in Malaysia exist there too: a desire to invest in a way consistent with faith; growing sophistication of the investor base; and a rising wealthy middle class. Most of the necessary legislation is in place in Indonesia now, and it’s a question of when, not if, Islamic finance becomes widespread. Through its Niaga presence, CIMB and Abdul Ghani are better placed than most to take the opportunity.
