Islamic financial services companies Hejaz Group and Islamic Bank Australia have formed a strategic partnership, with plans to take their businesses global.
Hejaz, an asset manager and lender with A$1.3 billion of funds under management and advice, has invested $10 million in IBA. Pending APRA approval, the investment will give it a holding of more than 20 per cent in the start-up bank.
IBA was granted a restricted authorised deposit taking institution licence last year and aims to launch a range of retail banking products when it moves to a full licence in the middle of next year.
Hejaz Group chief executive Hakan Ozyon said the group had included a banking licence in its long-term plans but came to the view that a strategic investment in IBA made more sense.
“When we had a look at IBA we were extremely impressed by the technology they are developing and the skills of the team. We decided that instead of building our own bank, why not invest in them?”
Ozyon is particularly impressed with the technology platform IBA is building, which will incorporate Islamic finance features.
“For our part, we bring a lot of resources to the partnership and our range of asset management products. And we have the capacity to invest more,” he said.
Hejaz is also in the lending market. It launched a mortgage in 2020 and now distributes the product through a large broker network.
Hejaz has opened an office in Jakarta and is looking for an acquisition to establish the business in Indonesia.
It is looking at expansion into the English market later this year and is considering a dual listing of two exchange traded funds currently listed on the ASX.
Ozyon said: “We are not here to make up the numbers. We want to be the largest Islamic fintech on the planet.”
Hejaz was launched in 2013 and its compliance with sharia law is certified by Global Islamic Financial Services, a South African-based sharia audit, advisory, tax and accounting firm.
According to Global Islamic Financial Services’ Guide to Islamic Finance: “Islamic economic activity is regulated by divine injunctions prohibiting interest, speculative behaviour, obscurity, market monopolisation, gambling and trading in unlawful or prohibited commodities and services.”
Hejaz chief operating officer Muzzammil Dhedhy said Hejaz has an Australian Financial Services Licence and all its products are compliant with APRA and ASIC rules. “Sharia is complementary,” he said.