Islamic Bank of Asia launches risk-management projects
The Islamic Bank of Asia (IB Asia) has launched two risk-management products to help companies manage their liability risks and limit their exposure to fluctuating funding costs, a published report said Tuesday, dpa reported.
The products include a profit rate swap structure for customers to manage their liability risks, and a foreign exchange forward purchase contract to help clients capitalize on currency market movements.
"These new structures can cut traditional transaction costs by as much as half," The Business Times quoted Kareem Hussaini, IB Asia's vice-president of product development, as saying.
"With rising demand from more companies and investors to conduct their businesses in a Shariah-compliant manner, our sophisticated products are timely."
Headquartered in Singapore, IB Asia is a joint venture between DBS Group Holdings and 34 investors from industrial groups and prominent families based in the Gulf Cooperation Council countries.
A profit rate swap is an agreement to exchange interest rates or profit rates between two counterparties.
A foreign exchange forward purchase contact is an agreement to purchase a fixed amount of foreign currency at a fixed exchange rate on an agreed future date.
The bank is also working on its first Shariah-compliant Asian equities and real estate funds, targeting special opportunities in the region, due later this year.