Asian Finance banking on GLCs to meet RM1b loan target

ASIAN Finance Bank Bhd (AFB), a foreign-owned Islamic lender, expects its loan base to touch a record RM1 billion by the end of 2009, driven by clients like government-linked companies (GLCs).

Its chief executive officer Datuk Mohamed Azahari Kamil said the bank is now in talks with several GLCs."We expect several deals to be concluded by year-end, with more in the pipeline," he said.AFB's loan portfolio now stands at RM600 million from RM120 million last year.

The bank is backed by a consortium of Middle East shareholders comprising Qatar Islamic Bank with 70 per cent stake, RUSD Investment Bank of Saudi Arabia with 20 per cent and Financial Assets Bahrain with 10 per cent.

Mohamed Azahari spoke to reporters after signing agreements with TH Indo Industries Sdn Bhd (THII) and Lembaga Tabung Haji, respectively, in Kuala Lumpur yesterday.Under the deal, AFB will give THII a RM65 million loan under a one-year Tawarruq facility.

The money will be used for expansion in Riau, Indonesia.Under Tawarruq, a bank buys an asset and sells it to a customer on a deferred payment basis. The client then sells the same asset to a third party at a lower price and gets the cash it wants.

"By providing this financing to THII, a wholly-owned subsidiary of Tabung Haji, we are at the same time developing our activities in Indonesia, in line with our regional financing participation," he said.

The other agreement signed yesterday is to allow AFB to act as a collection agent for Tabung Haji.Witnessing the ceremony were Tabung Haji group managing director and chief executive officer Datuk Ismee Ismail, AFB director Fouad Hayeel Saeed, Tabung Haji chief operating officer Datuk Kamarudin Mat Ali and THII director Datuk Rashidi Che Omar