Page 76 - Bank-Muamalat_Annual-Report-2023

BANK MUAMALAT MALAYSIA BERHAD

INVESTMENT

BANKING

Fee Income Investment Banking (IB) focuses on Islamic Capital Markets deals
(RM Million)
as well as manages the Bank’s private equity investments via its
1.0 2.7 private equity arm, Muamalat Venture Sdn Bhd (MVSB). In FY2023,

IB’s investment income from MVSB was at RM11 million, while,
170.0% through arranger fees, agency fees and management fees stemming
from managing the investments under MVSB, IB received fee income
of RM2.7 million.

PERFORMANCE REVIEW

Investment income from MVSB continued to contribute significantly to IB despite a slight decrease of
Investment Income
(RM Million) 0.9% due to the Bank’s joint venture partner’s annual capital buyback from a Musharakah Mutanaqisah
investment undertaken jointly with MVSB in an Ar-Rahnu business. As a result, MVSB registered a lower
11.1 11.0 ROI of 14.8% as compared to 16.2% in FY2022. IB also benefitted from a 170% growth in fee income.

Throughout the financial year 2023, IB also successfully arranged and managed the inaugural issue
of the Bank’s RM350.0 million Additional Tier-1 Capital Sukuk Wakalah (AT-1 Sukuk) under the new
-0.9% RM5.0 billion Sukuk Wakalah Programme established by the Bank on 29 September 2023. The AT-1
Sukuk was recognised by the industry journal Islamic Finance News (IFN) as the Regulatory Best Deal
of the Year 2023. IB acted as the Joint Principal Adviser, Joint Lead Arranger and Joint Lead
Manager for the Sukuk Wakalah Programme.

In addition, IB had also successfully managed other Sukuk issuances in the market which includes
the largest local development financial institution subsequent Sukuk issuance in October 2023
MVSB’s Return on
Investment (%) as well as the sukuk issuances for national mortgage corporation in June 2023 and September 2023.
(RM Million)
16.2 14.8 OUTLOOK & STRATEGY

Malaysian capital markets remain resilient in line with the domestic economy. However,
-8.6% the domestic economy will continue to be influenced by key global developments driven
by global monetary policy tightening and geopolitical developments. Notwithstanding
the challenges, IB will continue to focus on its key corporate relationships with potential
Sukuk issuers and other financial institutions or investment advisory firms for deal flows
in debt or capital markets as well as seek opportunities in growing the Bank’s private equity
investments portfolio. As part of its business strategy for 2024, IB has also embarked into
advisory services for its existing and new customers via cross selling and service bundling.

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