Friday March 30, 2007
By SUSAN TAM
KUALA LUMPUR: Kuwait Finance House (M) Bhd (KFH) is currently
focused on its organic growth strategy and does not plan to bid
for another local financial institution.
Managing director K. Salman Younis said KFH had “a lot to do
here”.
“We are just finalising this strategy for Malaysia and the
region,” he told reporters after delivering a talk on “Business
Operations and Risk Management in Islamic Banking” held on the
sidelines of the Global Islamic Finance Forum here yesterday.
Salman said there had been no discussions with the Employees
Provident Fund (EPF) about buying a stake in the RHB group.
EPF was a “good partner” and had good ties with KFH, adding
that if EPF approached KFH, the bank “would take it from there,”
he said in response to recent media reports quoting the EPF as
stating that KFH would make a good partner to help Malaysia
become an Islamic finance hub.
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Daud Vicary Abdullah
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Earlier, Salman said Islamic banks must formulate robust risk
management policies to ensure that the unique risks in Islamic
banking were mitigated.
He said some Islamic finance institutions in the past had not
thoroughly thought about risk management but with work being
done under the Islamic Financial Services Board, these concerns
would be addressed.
“Even the basic IT architecture provided under risk
management policies for conventional banking can be used as a
model or reference for Islamic players to formulate their own
policies,” he added.
Hong Leong Islamic Bank chief executive officer Daud Vicary
Abdullah said there were specific risks to Islamic banking
compared to conventional banking.
“These include legal and syariah compliance risks, equity
position risks and commodities and inventory risks,” he said.
Daud also said risks involving financial contracts and
instruments might give rise to other risks, besides credit
risk.
Thus there was a need for Islamic banking players to
identify, monitor and mitigate these unique risks, he added.
