Australian Islamic finance provider Hejaz Group has taken one step closer to its goal of offering a holistic range of products and services with its latest investment in the country’s lone fully-fledged Islamic bank.
The company closed a US$10 million investment in a strategic stake (of an undisclosed size) in Islamic Bank Australia (IBA), funded through internal capital. IBA’s CEO Dean Gillespie and other members of its executive leadership team will continue to helm the bank.
IBA had, in July last year, received a restricted authorized deposit-taking institution (ADI) permit from the Australian Prudential Regulation Authority to test their banking services on a select group of users for two years. The bank aims to complete the beta testing phase by the end of this year, and is on track to presenting their findings to the authority and hopefully be all-systems-ready for a July 2024 launch, according to Hejaz.
Meanwhile, Hejaz itself had, in 2021, started looking into the idea of applying for an Islamic banking license, but it will no longer be pursuing this and instead will lean into the partnership with IBA to offer a wider range of Islamic wealth and banking solutions.
Hejaz is also in the process of raising externally to fund its expansion efforts, including into overseas markets.
Muzzammil Dhedhy, the co-founder and COO of Hejaz, told IFN: “We were in Jakarta just last week, opening up our offices as we have just registered our business there; the Hejaz offering is now well and truly a multinational offering. It’s a huge market from an Islamic finance perspective — we have been speaking to various stakeholders and it looks very promising. We’ll be soon initiating a Hejaz proposition in Indonesia.”
The company has also set its eyes on expanding into the UK, having already approached UK regulators. “We find there’s a lot of consistency between Australian regulatory standards and the UK, and discussions are very positive and fruitful. We are confident that by the end of this year, or early next year, we will have an offering available in the UK as well, and it will likely be a joint offering between IBA and Hejaz’s respective propositions.”
Aside from expansion efforts, Hejaz is also busy preparing to launch its third exchange-traded fund (ETF) offering — a Sukuk ETF that it is working on very closely with the Australian Securities Exchange. The product should be available on the exchange within the next two months or so, Muzzammil confirmed.