Bank Islam non-fund based revenue to rise 5%

KUALA LUMPUR: Bank Islam Malaysia Bhd expects its non-fund based income contribution to revenue to increase by at least 5% for its current financial year ending June 30, 2009.

Non-fund based income contributed 5.8% to revenue during the financial year ended June 30 last year.

The increase would be backed by the newly launched An-Najah NID-i and other wealth management products, managing director Datuk Zukri Samat said.

“Our full year results for the year ended June 30 which will be out soon should already show a significant increase in our non-fund base income contribution,” he said after the launch of the An-Najah NID-i, a capital-protected structured investment product yesterday.

Bank Islam said the new product targeted at the fast-growing global health care sector. “It is the first Islamic structured investment offering in Malaysia that is focused on health care,” he said.

Zukri said the product offered 100% capital protection when held to maturity of three years.

“Simulation of historical back testing showed a potential annualised return of between 5% and 16.4% or an average of 9.3%, which is substantially higher than fixed deposit rates,” he said.

The bank was targeting an initial fund size of RM300mil and the funds would be invested in Islamic negotiable instruments and the Baraka Aging Population Index options.

The index comprises 30 stocks selected from a basket of 2,400 stocks from the Downes Islamic Market World Index.

Malaysia's Bank Islam eyes larger domestic share

KUALA LUMPUR - Bank Islam Malaysia Bhd (BIMB.KL) will focus on boosting its domestic customer base in the next two years, while keeping an eye on possible mergers and acquisitions, a senior executive said on Wednesday.

Bank Islam, Malaysia's oldest Islamic lender, was also eyeing business opportunities in China, Indonesia, Thailand and Vietnam, Managing Director Zukri Samat told reporters after a signing ceremony with a third-party for will writing services.

'In the next one to two years, we are looking to grow domestically, either through organic growth or if there is opportunity for merger, we will certainly look at it,' he said.

Bank Islam wants to increase its fee-based income to at least 10 percent of its bottomline in the financial year starting July, with help from its wealth management arm which will be launched by September this year, Zukri said.

'One of the strategies of the bank is to increase fee-based income, and wealth management is one of the areas that we will be pushing forward,' Zukri said.

Fee-based income, which includes investment banking, currently comprises less than 5-6 percent of Bank Islam's profits.

The lender currently has a fifth of Malaysia's Islamic banking market in terms of deposits and planned to grow its market share by 20 percent annually, Zukri said.

'There's a lot more that can be done in this market.'

Bank Islam, which has 1.5 million retail customers in Malaysia, would add 25 branches to its existing 90 branches in Malaysia over the next three years, he said.

Mostly-Muslim Malaysia, which has a population of about 26 million, has the world's largest Islamic bond market with a 60 percent share of the pie -- worth some $100 billion in outstanding debt.

While the bank was keen on overseas expansion, Zukri said the stringent rules for Islamic banking would be a hurdle.

'First and foremost, you must have a legal system. For example, you must have an Islamic banking act in China, and even if you have the act, you must have a player there,' he said.

Islamic finance bans interest and generally avoid investments in alcohol, gambling and other activities barred for Muslims. Islamic bonds, or sukuk, are typically based on physical assets that pay a rent or dividend to bondholders.

'I must have an outlet to put money in sharia-compliant products,' Zukri said. ($1=3.221 Malaysian Ringgit.

Bank Islam To Spend RM1 Mln For Its PINTAR Programme

Bernama -- Bank Islam Malaysia Bhd (BIMB) expects to spend more than RM1 million for various activities to achieve the objectives set for its PINTAR programme, a corporate social responsibility initiative for government-linked companies (GLCs).

Ultimately, the bank wants to help improve the educational achievements of the children from low income families, BIMB's corporate affairs & business development general manager, Datuk Wan Ismail Wan Yusoh, said today.

PINTAR, the acronym for Promoting Intelligence, Nurturing Talent & Advocating Responsibility, will also be an additional platform for Bank Islam to enhance students' awareness and knowledge of Islamic banking, he said.

The Khazanah Nasional Bhd-initiated PINTAR programme is expected to impact 8,500 school children from Year One to Year Six nationwide.

Speaking to Bernama after the official launch of the programme for Selangor, Wan Ismail said that for its PINTAR programme, BIMB will adopt 13 schools nationwide for three years.

At the launch, officiated by Kajang state assemblywoman Datin Paduka Low Lee Ling, BIMB adopted Sekolah Kebangsaan Kantan Permai as the second school in its PINTAR project. Its first adopted school is Sekolah Kebangsaan Permatang Buloh in Kepala Batas, Penang.

As many as 178 Year Six students of Sekolah Kantan Permai will benefit from the series of activities aimed at improving their academic performance in the Ujian Pernilaian Sekolah Rendah (UPSR) examination.

Among others, PINTAR will focus on academic achievements through motivational programmes and provision of tuition classes in Mathematics, Science and English, added Wan Ismail.

Bank Islam Offers Plan To Reduce Burden On Housing Financing Customers

By Yuri Azhar

KUALA LUMPUR - Bank Islam Malaysia Bhd has introduced an innovative financial plan to reduce the burden on home financing customers whereby they can opt for a payment holiday in November and December every year.

They would no longer need to make compulsory housing financing repayments in the two months under the bank's Payment Holiday Programme.

"This is a first in the country's banking industry," Bank Islam's newly appointed head of Consumer Banking Group, Khairul Kamarudin, said Tuesday.

He said the customers would not have to pay extra for the other months but the financing tenure would be lengthened according to the number of months taken under the payment holiday.

Recognising that financial commitments increase due to back-to-school expenses and year-end holidays, the programme would give families a break from making compulsory home financing payments, he told Bernama here.

This is an added feature to the bank's existing home financing and home refinancing products.

He said the most applications for the programme were expected from families as they were the ones usually facing larger financial commitments during the period.

It was during November and December when families normally incur extra expenses from buying new uniforms, vehicle payments, health insurance premiums as well as family holidays, he said.

He said the programme would put more cash into their wallets as well as give them some peace of mind in not having to worry about keeping up with housing loan instalments at the end of the year.

Launched at the bank's branches last week, he said it was open to all customers keen to purchase residential property, either completed or under construction.

Khairul said the bank would honour the agreed payment holiday provided the customer honours his repayment.

The bank has the authority to retract the payment holiday benefit should the customer defaults on repayments to the bank, he said.

Bank Islam was moving forward with the development of new products to meet customer needs, said Khairul, who is responsible for the development and performance of BIMB retail products.

They include home financing, credit card, personal financing, vehicle financing and many others.

Bank Islam, established in 1983 as the first Islamic bank in Malaysia, has more than 90 branches and 296 automated teller machines nationwide, offering more than 50 Shariah-based banking products and services catering to Muslims and non-Muslims alike.