The Malaysian subsidiary of Dutch investment bank ABN Amro may launch an Islamic banking unit here as it expands its Islamic finance business, a report said Wednesday.

ABN Amro Bank Berhad managing director Harry Naysmith said the bank will create the subsidiary when its Islamic banking business is "big enough", the Star daily reported.

The bank launched its first Islamic product, aimed at institutional offshore investors, on Tuesday.

"Currently, we have an Islamic window here. When it gets to a certain size, we will apply to have that converted into a subsidiary," he was quoted as saying.

Naysmith said ABN Amro had received approval from Malaysia's central Bank Negara a month ago to conduct Islamic financial activities.

ABN Amro offers corporate and investment banking services through branches in the capital Kuala Lumpur, nothern Penang state and the offshore financial hub of Labuan.