CIMB in landmark RM1b Islamic transaction with Standard Chartered

CIMB Islamic has inked a deal with Standard Chartered Saadiq Malaysia for a RM1 billion landmark sustainable collateralised commodity murabahah transaction to further enhance the vibrancy and resiliency of the financial markets. (From left) Standard Chartered financial markets corporate sales ASEAN head Sylvia Wong, Mohd Suhaimi, Bank Negara Malaysia assistant governor Adnan Zaylani Mohamad Zahid, Ahmad Shahriman, as well as CIMB Group treasury and markets group head Chu Kok Wei at the signing ceremony.

CIMB Islamic has inked a deal with Standard Chartered Saadiq Malaysia for a RM1 billion landmark sustainable collateralised commodity murabahah transaction to further enhance the vibrancy and resiliency of the financial markets. (From left) Standard Chartered financial markets corporate sales ASEAN head Sylvia Wong, Mohd Suhaimi, Bank Negara Malaysia assistant governor Adnan Zaylani Mohamad Zahid, Ahmad Shahriman, as well as CIMB Group treasury and markets group head Chu Kok Wei at the signing ceremony.

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KUALA LUMPUR (June 20): CIMB Islamic Bank Bhd has entered into a RM1 billion landmark sustainable collateralised commodity murabahah (CCM) transaction with Standard Chartered Saadiq Malaysia.

In a joint statement on Monday (June 20), the banks said all transaction proceeds of the CCM will be earmarked for eligible syariah-compliant assets or projects that fall within the boundaries of CIMB Group’s Sustainable Development Goals (SDGs) bond and sukuk framework, enhancing its market leadership position in sustainable finance as well as Islamic treasury and capital markets.

CIMB Islamic chief executive officer (CEO) Ahmad Shahriman Mohd Shariff said 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 the Association of Islamic Banks in Malaysia.

“We are happy to partner with Standard Chartered Saadiq Malaysia to enable the landmark sustainable CCM transaction,” he said.

Meanwhile, Standard Chartered Saadiq CEO Mohd Suhaimi Abdul Hamid said the deal underpins both banks’ devotion to continue the innovative development in the environmental, social and governance (ESG) space as well as shared objectives to advance the suite of syariah-compliant products further.

“With the Islamic finance industry taking the lead in integrating value-based intermediation into its practices and focusing on syariah-compliant solutions that align with the United Nations’ SDGs and ESG, this inaugural transaction further strengthens Malaysia’s position as an international Islamic financial hub,” he said.

Both CIMB and Standard Chartered share a long history of partnership, having collaborated on many firsts in the market.

These include the landmark RM2.45 billion sustainability-linked derivative transaction, the world’s first ringgit-denominated transaction of its kind and Asia’s largest ESG-linked derivative trade, when it was issued in October 2021.