HSBC has signed a memorandum of understanding (MOU) with International Islamic Trade Finance Corporation (ITFC) to facilitate shariah-compliant trade financing for ITFC’s customers.
The MOU, which is the first of its kind in the industry, will allow HSBC to issue letters of credit on behalf of ITFC.
The bank will also cooperate with ITFC in joint trade financing through syndication and co-financing.
Additionally, ITFC will invest its liquidity in HSBC’s shariah-compliant investment assets, such as the overnight commodity murabaha investment product.
Razi Fakih, HSBC’s deputy CEO, Amanah says: “HSBC believes that trade and capital flows between the emerging countries of the world are likely to increase significantly over the next few decades. Given HSBC's footprint in the emerging markets of Middle East and Asia, a partnership between ITFC and HSBC will play an important part in increasing intra-OIC trade.”
Waleed Al-Wohaib, CEO of ITFC says: “Since 2008, we have approved more than US$2bn of trade financing every year. In 2011, ITFC is expected to continue disbursing over US$2bn of trade financing to companies in Asia, the CIS, Mena and Africa.”
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