Sample of Islamic Cross Currency SWAP

[Sapphire Capital]

FOR IMMEDIATE RELEASE
25 July 2006
Standard Chartered Executes First Ever Islamic Cross
Currency Swap for Bank Muamalat Malaysia
The Bank Leads in Islamic Banking Derivatives Solutions in Malaysia
Kuala Lumpur, Tuesday, 25 July 2006 - Standard Chartered Bank Malaysia
Berhad is once again leading the way in Islamic banking by signing the first
Islamic Cross Currency Swap deal with Bank Muamalat Malaysia Berhad in
Malaysia today
Standard Chartered is pleased to achieve a successful derivatives solution
amounting to USD10 million, making this facility for Bank Muamalat Malaysia
Berhad, the first ever Islamic Cross Currency deal in country.
Chief Executive Officer Standard Chartered Bank Malaysia Berhad Shayne
Nelson said the deal is nothing short of landmark in Islamic Hedging Solutions –
not only for Standard Chartered, but for Bank Muamalat Malaysia Berhad in this
deal .”
“The Islamic Cross Currency Swap is a trailblazer – combining the benefits of
managing currency risks and rate differential returns with Syariah Complaint
principles.
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“This is a significant development in broadening the range of Islamic capital
market instruments critical to position Malaysia as an international Islamic
financial hub.
“We are pleased that this effort has once again enabled us to tap our
competency in offering innovative solutions with competitive advantages in
Islamic Derivatives.
“We need innovation in working towards greater integration of the national
Islamic banking system with the international Islamic financial architecture –
including strategic cross border alliances and collaborations that will enable us to
compete better globally.
“Additionally Standard Chartered, as an international bank, financial liberalization
and advancement in technology resulted in greater innovation of products and
services, operational processes and delivery channels.
“At the same, these developments compel greater risk management. In
enhancing risk management, there is a significant need for the Islamic banking
industry and its participants to have access to Islamic financial derivatives
instruments.
“We need innovation to develop greater opportunities for international investors
to tap the Malaysian Islamic capital market, just as we need Malaysian
participants to tap international capital markets to profile Malaysian competencies
and capabilities internationally.
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“As part of the growth and evolution of Islamic banking in Malaysia, innovation in
Islamic financial derivatives instrument should meet the objective of increasing
trading volume and liquidity in order to reduce transaction cost and risk in the
capital market.
At the same time, it is always a fine balance we have to tread - where the
benefits of active trading and robust markets should not be disrupt the fair and
orderly conduct of the market. The primary objective of derivatives instruments
as hedging and risk management tools should be kept intact.” he said.
In November 2005, Standard Chartered Bank Malaysia Berhad was first to
market when the bank launched the Commodity Murabahah Programme-i and
the Commodity Murabahah Financing-i in Malaysia.
Following this, April this year, Standard Chartered first in South East Asia,
complemented this effort with the launch of a comprehensive Islamic Derivatives
Solution based on a globally acceptable Islamic concept, comprising Islamic
Profit Rate Swap, Islamic Cross Currency Swap and Islamic Forward Rate
Agreement.
The Islamic Derivatives Solutions from Standard Chartered ensures that
customers have access to hedge profit rates risks whilst enhancing their balance
sheet management.
The Islamic Cross Currency Swap is an arrangement between two parties to
exchange a series of profit and/or principal payments denominated in one
currency for another series of profit and/or principal payments denominated in
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another currency, based on a notional principal amount, over agreed period. The
arrangement uses Commodity Murabahah transactions as the underlying
transactions
Chief Executive Officer for Bank Muamalat Malaysia Berhad Datuk Abdul Manap
Abdul Wahab said, “We are glad to be the first to sign and once again embark on
this groundbreaking Islamic Cross Currency Swap deal with Standard Chartered.
“The positive growth and developments in the Islamic financial system in
Malaysia and internationally have brought about expanded opportunities.
“Participating in the comprehensive Islamic derivatives solution is clearly the best
option for customers who are keen to stay ahead in the market while having at
the same time similar advance hedging instruments.
”The innovative options in accessing the Islamic capital market, is a significant
development in broadening the range of Islamic capital market instruments
critical to position Malaysia as an international Islamic financial hub,” he said.
Bank Muamalat Malaysia Berhad as a full-fledged domestic Islamic bank,
operating under the Islamic Banking Act 1983, envisage to play its role in
providing Syariah-compliant banking products and services to Malaysians,
irrespective of race or religious beliefs, thus contributing to the development of
modern Malaysia .
Standard Chartered Bank Malaysia was the first international bank to offer
Islamic Banking Window in 1993. Since then, the bank scored many firsts in
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Islamic banking including becoming the first to offer Islamic joint venture capital
raising in ringgit and variable rate financing.
To date, Standard Chartered is amongst the leading banks in Malaysia offering a
comprehensive range of Islamic Banking products and services - including
property financing, personal financing, corporate term financing, revolving credit,
leasing, launch of the first Commodity Murabahah Programme-i and the
Commodity Murabahah Financing-i in Malaysia and also to add, the recent
launch of Islamic Derivatives Solutions in Malaysia.
As an international bank with core competencies in consumer and wholesale
banking based on the conventional system, the effort to expand such capabilities
in Islamic banking has been a key focus for Standard Chartered.
In the Middle East and South Asia which includes countries like Saudi Arabia,
United Arab Emirates and Kuwait, Standard Chartered has been strengthening
Islamic banking since 2003.
-End-
For more information, please contact:
Nimmi Kamal
Manager, Corporate Affairs Malaysia
Standard Chartered Bank Malaysia Berhad
Tel: [phone]
Fax: [phone]
Email: Nimmi. [e-mail]
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Standard Chartered – leading the way in Asia, Africa and the Middle East
Standard Chartered PLC is listed on both the London Stock Exchange and the Stock
Exchange of Hong Kong and is ranked in the top 25 among FTSE-100 companies, by
market capitalisation.
Standard Chartered has a history of over 150 years in banking and is in many of the
world’s fastest growing markets. It has an extensive global network of over 1,200
branches (including subsidiaries, associates and joint ventures) in 56 countries in the
Asia Pacific Region, South Asia, the Middle East, Africa, the United Kingdom and the
Americas. As one of the world’s most international banks, Standard Chartered employs
almost 44,000 people, representing 89 nationalities, worldwide.
Standard Chartered’s strengths lie in its breadth, diversity and balance and is trusted
across its network for its standard of governance and corporate responsibility. The Bank
is committed to all its stakeholders by living its values in its approach to managing its
people, exceeding expectations of its customers, making a difference in the communities
that we operate in and working with its regulators.
Standard Chartered uniquely derives 95% of profits from Asia, Africa and the Middle
East. Serving both Consumer and Wholesale Banking customers, the Bank combines
deep local knowledge with global capability to offer a wide range of innovative products
and services as well as award winning solutions.
Some of the major awards won in 2005 by the Bank include:
1. IFR Asia’s Domestic Bond House of the Year
2. Finance Asia’s Best Local Currency Bond House & Best Securitisation House
3. Asia Risk’s Interest Rates Derivatives House of the Year
4. Trade Finance’s Best Trade Finance Bank in Sub Saharan Africa
5. Global Custodian’s Best Agent Bank in Asia
6. The Asset’s Best Cash Management Bank for South Asia
7. Retail Banker International’s Best Retail Bank in Asia Pacific.
For more information on Standard Chartered, please log on to
www.standardchartered.com
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Standard Chartered in Malaysia
Standard Chartered Bank Malaysia Berhad is a member of the Standard Chartered
Group and was locally incorporated on 1st July 1994. The Bank has been operating in
Malaysia for over 130 years. As Malaysia‘s first bank, established in 1875, it has a
network of 31 branches across Peninsular and East Malaysia. Standard Chartered’s core
businesses in Malaysia are in Consumer Banking and Wholesale Banking.
In 2001, the Group established one of two of its global shared service centers in Kuala
Lumpur, Malaysia. The other location is in Chennai, India. The Kuala Lumpur hub
provides IT Support and processing services to the Bank’s operations in over 20
countries. In addition, the Group has also established a wholly owned subsidiary
company, Price Solutions Sdn. Bhd. in Malaysia to promote and market Standard
Chartered’s financial products.
Standard Chartered employs nearly 4,000 employees in its Malaysian operations.