13 Dec 2013 (Reuters) – Mitsubishi UFJ Financial Group’s core banking unit will become the first Japanese bank to provide an Islamic loan in Indonesia, financial sources said, a key step that the bank hopes will help it build up its Islamic financing business.

Rapid economic growth in Muslim-majority countries in Southeast Asia and the Middle East has spurred many non-Muslim institutions to foray into Islamic finance. The top 20 Islamic banks have been growing 16 percent annually in the last three years, far outpacing their conventional rivals, according to Ernst and Young.

Bank of Tokyo-Mitsubishi UFJ (BTMU) joined hands with BNP Paribas, CIMB, Standard Chartered and HSBC to provide a total $50 million in 3.5-year loans to a unit of Indonesia’s largest automotive distributor PT Astra International, the sources said.

They declined to identified as they were not authorised to speak publicly about the matter.

A BTMU spokesman declined to comment.

BTMU set up an Islamic finance team in Malaysia in 2008 and the team now has 25 bankers. In addition to Malaysia and Indonesia, the bank has also provided Islamic finance in Singapore and Brunei.

(Reporting by Taiga Uranaka; Editing by Edwina Gibbs)

*This article was published by Thomson Reuters. Read the original article here.