EXIM BANK LOOKING TO FINANCE RM5B PROJECTS

Exim Bank of Malaysia Bhd, wholly owned by the Ministry of Finance, plans to offer trade financing for overseas projects worth about RM5 billion this year and hopes to clinch a fair share of them.

"We are looking at projects worth RM5 billion this year. We may not get all, but probably some of them," said its managing director and chief executive officer Mohd Fauzi Rahmat.

The bank approved loans amounting to RM850 million last year and some RM300 million in the first quarter of 2009. Out of the RM850 million loans, 40 per cent will be drawn down this year.

"Our exposure is mostly overseas. When dealing with overseas parties, there are bound to be a lot of legalities and regulatory matters that need to be sorted out. In such cases, most of the projects will run between 18 months and three or five years, so the drawdown will be done gradually, as and when the project requires," Mohd Fauzi said.

Overall, Exim Bank's lending last year, including in the insurance sector, was RM5 billion, he said. In view of the encouraging performance, the bank is expected to be back in the black in fiscal 2008.

"Of course, our non-performing loan (ratio) is affected and expected to be slightly higher. But we cannot reveal the numbers as they are yet to be finalised," he told reporters after the signing of a RM55 million Murabahah Term Financing-i agreement between Exim Bank and Asian Finance Bank (AFB) in Kuala Lumpur yesterday.

Mohd Fauzi said Exim Bank was affected by losses of RM43 million last year, but is expected to improve slightly this year as there is still demand for trade financing despite the economic slowdown.

"Trade will not stop. It will still continue. The only thing is that the volume will be smaller. We expect smaller growth of 10-15 per cent from last year. For the whole year, we expect a 20 per cent drop in global trade."

AFB is backed by a consortium of Middle Eastern shareholders comprising Qatar Islamic Bank (70 per cent), RUSD Investment Bank Inc of Saudi Arabia (20 per cent) and Financial Assets Bahrain WLL (10 per cent).