CIMB Islamic Leads Landmark RM1b Sustainable Sukuk With StanChart Saadiq

All transaction proceeds of the CCM will be earmarked to eligible Shariah-compliant assets/projects that fall within the boundaries of CIMB Group’s Sukuk Framework

CIMB Islamic Leads Landmark RM1b Sustainable Sukuk With StanChart Saadiq
(L) Sylvia Wong, Head, Financial Markets Corporate Sales ASEAN, Standard Chartered; Mohd Suhaimi Abdul Hamid, CEO of Standard Chartered Saadiq Malaysia; Adnan Zaylani Mohamad Zahid, Asst Governor, Bank Negara; Ahmad Shahriman Mohd Shariff, CEO CIMB Islamic Bank; Chu Kok Wei, Group Head, Treasury & Markets of CIMB Group

Kuala Lumpur: CIMB Islamic Bank announced today that it has entered into an RM1.0 billion landmark Sustainable Collateralised Commodity Murabahah transaction with Standard Chartered Saadiq Malaysia, further enhancing its market leadership position in sustainable finance, as well as Islamic treasury and capital markets.

CCM is a Shariah-compliant financial instrument to obtain efficient funding secured by high quality Islamic sukuk assets.

The development of liquid secured funding on sukuk has been historically challenged by the inability to have efficient counterparty risk management features, as well as collateral substitution flexibility.

With the CCM, the Islamic financial market is provided with a viable alternative to the conventional Repurchase/Reverse-Repurchase Agreements (Repo/Reverse Repo).

Sukuk Framework

All transaction proceeds of the CCM will be earmarked to eligible Shariah-compliant assets/projects that fall within the boundaries of CIMB Group’s Sustainable Development Goals Bond and Sukuk Framework.

These may include assets/projects that aim to generate positive social impacts for vulnerable segments, such as affordable housing, start-ups and SMEs, public schools, as well as positive environmental impacts via projects such as green mass transit, climate resilient buildings and infrastructure, sustainable forestry and wildlife conservation projects.

“Given Malaysia’s strong global leadership position in Islamic finance and sukuk market development, efficient and liquid secured funding is expected to further enhance the vibrancy and resiliency of the financial markets.

"A secured funding instrument such as the CCM is also crucial for most central banks with open market operations to adjust liquidity in the financial system. CIMB is pleased to be at the forefront in providing sustainable treasury solutions to its clients and to lead this initiative with support from industry groups such as the Financial Markets Association of Malaysia and Association of Islamic Banks in Malaysia.

"We are very happy to partner with Standard Chartered Saadiq Malaysia to enable the landmark sustainable CCM transaction,” said Ahmad Shahriman Mohd Shariff, Chief Executive Officer of CIMB Islamic," says Shahriman.

The successful execution of this transaction is a testament to our expertise in Islamic treasury solutions and commitment towards sustainable finance, aligned with the practices of value-based intermediation.

"We are keen to work closely with our clients to introduce more innovative treasury transactions such as sustainable or sustainability-linked secured funding instruments to the market,” adds Shahriman.

More @BusinessNewsMy