KUALA LUMPUR: Mizuho Financial Group, Japan’s third largest bank in terms of market capitalisation, plans to make Malaysia as its global hub for the fast growing Islamic finance sector.
“We regard Malaysia as a critical part of Mizuho’s Asia-focused strategy because Malaysia is a strategic hub and gateway to business development in the Asean region,” said Keizo Ohashi, chairman of Mizuho Corporate Bank (M) Bhd (Mizuho Malaysia), after the bank’s opening ceremony yesterday.
Mizuho Malaysia, a subsidiary of Mizuho Corporate Bank Ltd (a unit of Mizuho Financial Group), yesterday started its operations as a commercial bank. It was one of five foreign banks that were awarded a commercial banking licence by Bank Negara Malaysia last June.
Mizuho Malaysia is well-equipped to serve all multinational companies, irrespective of their origin, said Ohashi, adding that the bank has identified five key focus areas: financial solutions aimed at new investments, cross-border business, environment-based business, infrastructure finance and Islamic finance.
Hiroyuki Yoshinari, managing director and CEO of Mizuho Malaysia, said the bank has done a few transactions in Islamic finance but is still new to it. “We are new to this market and need to take it step by step to expand our business in that area,” he said.
He added that the bank has submitted an application for an international currency business unit (ICBU) licence — which is required to conduct business in Islamic banking — to Bank Negara for approval.
Asked if Mizuho plans to work with the local banks on Islamic finance, Yoshinari said it has a strong relationship with Malayan Banking Bhd and as such, would accord Maybank first priority. “Moving forward, we will maintain our close relationship with Maybank,” he said.
Mizuho has had a presence in Malaysia for about 30 years through its representative office in Kuala Lumpur since 1982 and its Labuan branch since 1993.
The start of Mizuho Malaysia’s operations will now allow it to provide financial services denominated in ringgit. Before this, transactions were not done in ringgit, according to Yoshinari.
“We have been here for some time and our customers in Japan were looking forward for us to open business in the ringgit area,” he said.
By year-end, Yoshinari said Mizuho Malaysia expects to have more than 50 corporate client accounts. When its client base increases, the bank may add one or two branches in other cities such as in George Town and Johor Bahru.
Yoshinari said Japanese companies are investing more in growing areas such as healthcare and consumer products. “The Mizuho group has a lot of potential clients willing to invest overseas and Malaysia is one [destination],” he said.
Mizuho group does not currently have plans to go into retail banking in Malaysia, said Ohashi.
Mizuho Malaysia has 61 staff — including seven expatriates — and 19 more in the Labuan branch, according to Yoshinari.
The other banks that were awarded a commercial banking licence by Bank Negara are Japan’s Sumitomo Mitsui Banking Corp, France’s BNP Paribas SA, Indonesia’s PT Bank Mandiri and the United Arab Emirates’ National Bank of Abu Dhabi.
Sumitomo commenced its commercial banking operations in April.
The banking units of all of Japan’s big three megabanks — Mizuho, Sumitomo and Mitsubishi UFJ Financial Group — now have commercial banking licences in Malaysia.
This article appeared in The Edge Financial Daily, September 6, 2011.