CIMB opens office in Brunei

CIMB opens office in Brunei

Shanthy Nambiar, Bloomberg, Bangkok

CIMB Bhd., the investment banking unit of Bumiputra-Commerce Holdings Bhd., Malaysia's second- largest bank, has opened an office in Brunei to expand its banking services outside Southeast Asia's third-biggest economy.

CIMB Brunei will provide investment banking and Islamic financial services in Brunei, the bank said in an e-mailed statement. Brunei, a sultanate of about 357,800 people, is the third-largest oil producer in Southeast Asia and Islam is the official religion, according to the government's Web site.

"Our presence in Brunei is a testimony to our commitment to regionalization and in particular the development of regional Islamic banking," CIMB's Chief Executive Nazir Razak said in the statement. "Brunei and Malaysia share a common aspiration in developing Islamic banking."

Malaysia is the biggest issuer of Islamic securities in the world, ahead of Bahrain. Sales of Islamic bonds by Malaysian companies has totaled 21.9 billion ringgit (US$5.8 billion) in the first nine months this year, compared with 9.1 billion ringgit in the whole of 2004, government figures show. About two- thirds of the nation's 26 million people are Muslim.

Islamic law, or Shariah, doesn't allow interest payments and bans investment in businesses such as gambling, alcohol and tobacco. CIMB, Malaysia's biggest investment bank, ranks first among Islamic debt underwriters in the world so far this year, handling $1.2 billion of sales, according to Bloomberg data. Dubai-based HSBC Amanah, a unit of HSBC Holdings Plc in the U.K., was in second place with $1.1 billion in sales.

Bumiputra-Commerce Holdings on Nov. 17 said third-quarter profit surged 70 percent to 245.5 million ringgit after it earned more from lending and reaped the first gains from its Singapore broking unit.

The group has a 63.4 percent stake in Jakarta, Indonesiabased PT Bank Niaga. In June, it bought brokerage G.K. Goh Holdings Ltd. in Singapore to reinforce its domestic operations and expand financial services elsewhere in Southeast Asia. G.K. Goh also gave Bumiputra-Commerce a foothold in the stock broking business in Indonesia, Hong Kong, Thailand, the U.K. and U.S.