Commerce International Merchant Bankers (CIMB) has tied-up with Saudi Arabia's Dallah Al Baraka group to form an Islamic investment banking alliance, a report said today.

The two parties have signed a memorandum of understanding in Dubai following talks between CIMB and Dallah's subsidiary, Al Tawfeek Co for Investment Funds Ltd, Bernama news agency said citing a CIMB statement.

CIMB group chief executive Nazir Razak was quoted as saying that the alliance was aimed at creating a global Islamic investment banking franchise to link markets in the Middle East and Southeast Asia.

He said Islamic investment banking had been marginalised as a force in international finance because Islamic financial institutions remained regional.

"The synergies unleashed by this proposed alliance could launch Islamic investment banking on to the world stage," he said.

"It will open up investment channels between two dynamic regional economies and give institutionalised access to Middle Eastern investors to Malaysia's huge and prospering Islamic capital markets."

Global network

Islamic banking combines Islamic laws against interest payments with modern banking principles.

Al Tawfeek's president Saleh J Malaikah said both companies aimed to establish a global network to market and distribute Syariah-compliant investment products.

Al Tawfeek is one of the largest conglomerates in Saudi Arabia and the Middle East with total assets in excess of US$16 billion. CIMB is the investment arm of Commerce Asset-Holding Bhd., one of Malaysia's top three banking groups.

The move is seen as part of efforts by predominantly Muslim Malaysia to be a key Islamic financial hub in Asia. - AFP