CIMB Islamic and MTT Shipping enter into Shariah-compliant Sustainability-Linked Treasury Programme
27 June 2023
The latest instalment in CIMB’s Programme marks a new milestone as the first to utilise Shariah-compliant instruments
Kuala Lumpur: CIMB Islamic Bank Berhad (“CIMB Islamic” or “the Bank”) announced today that it has onboarded MTT Shipping Sdn. Bhd. (“MTT Shipping”) to its Sustainability-Linked Treasury Programme (“the Programme”), with MTT Shipping setting a new milestone as the first client to utilise the Bank’s Programme with Shariah-compliant hedging instruments. MTT Shipping is one of the leading local carriers in Malaysia, providing container shipping services which covers routes from Peninsular Malaysia to East Malaysia as well as regional ports in Singapore, Thailand, Brunei, Indonesia and India.
A signing ceremony was held in conjunction with the announcement, with Dato’ Seri Kenny Ong, Group Executive Chairman of MTT Shipping and Jefferi Hashim, Head, ESG Advisory and Solutions, Group Wholesale Banking of CIMB Group representing the respective organisations.
First launched in December 2022, the Programme continues to attract clients who are looking to embed their environmental, social and governance (“ESG”) aspirations into longer term treasury solutions offered by the Bank. The Programme encompasses recurring flow transactions for clients’ business activity conversion cycles (e.g. imports/exports), as well as more episodic balance sheet hedging and risk management solutions.
Under the Programme, MTT Shipping is entitled to receive a sustainability-linked reward based on the achievement of ambitious Sustainability Performance Targets which are subjected to stringent independent third party verification.
Ahmad Shahriman Mohd Shariff, Chief Executive Officer of CIMB Islamic said, “We are proud to embark on this journey with MTT Shipping to advance their sustainability goals through offering the first Shariah-compliant hedging solution in CIMB’s Sustainability-Linked Treasury Programme in meeting their ongoing business requirements. As a purpose-driven organisation, this exemplifies our commitment to not only prioritise product innovation, but also to generate long-term positive impacts to the economy, community and environment in line with the principles of Value-Based Intermediation (VBI). We look forward to continuing to meet our clients’ varied range of treasury requirements through bespoke treasury solutions that also help further their contributions in the ESG space."
Dato’ Seri Kenny Ong said, “Our sincere appreciation to CIMB Islamic for their support in our sustainability initiatives and we are honoured to be the first client to tap into a Shariah-compliant version of the Sustainability-Linked Treasury Programme. This transaction emphasises our commitment to integrating ESG considerations into our corporate roadmap and generating sustainable long-term value for our stakeholders."
“In recent years, we have seen an increasing number of ESG regulations in the maritime transport industry and we strive to ensure both our operations and decision-making processes are aligned to the policy recommendations and requirements set forth by the relevant regulatory bodies such as the International Maritime Organisation (“IMO”). This includes managing the carbon intensity indicator (CII) ratings of our vessels while aligning our overall emissions reduction trajectory to be in line with the IMO,” added Dato’ Seri Kenny Ong.
In line with its Forward23+ strategic plan, CIMB Group is continuously stepping up on sustainability innovation in order to achieve its ambition to become a leading focused ASEAN bank and a sustainability leader. Over the past two years, CIMB has executed several significant sustainable financing transactions, including its landmark sustainability-linked derivative (“SLD”) in October 2021, the world’s first Malaysian Ringgit denominated SLD transaction. In 2022, the Group doubled its sustainable finance target to RM60 billion by 2024 after having met its original target of RM30 billion two years ahead of schedule.
At the signing ceremony to mark the onboarding of MTT Shipping Sdn. Bhd. ("MTT Shipping") as the first client in CIMB's landmark Sustainability-Linked Treasury Programme utilising Shariah-compliant hedging instruments were (L-R) Ina Hasniza Ibrahim, Regional Head, Corporate & Commercial Sales and Regional Islamic Treasurer of CIMB Group; Jefferi Hashim, Head, ESG Advisory and Solutions, Group Wholesale Banking of CIMB Group; Dato’ Seri Kenny Ong, Group Executive Chairman of MTT Shipping and Mr Ooi Lean Hin, Managing Director of MTT Shipping.
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