KUALA LUMPUR: Bank Islam Malaysia Bhd hopes to get loan applications worth RM250mil from small and medium entrepreneurs pursuing overseas projects by the financial year ending June 30, 2008.
To date, it had identified 20 companies for that purpose, for which RM120mil worth of loans were in the processing stage, managing director Datuk Zukri Samat said yesterday.
“Most of the companies are involved in construction, having either secured contracts or in the bidding stage.
“So far, most projects are in the Middle East,” he told reporters after Bank Islam and Exim Bank signed an agreement on an overseas guarantee facility.
Exim Bank, which manages Bank Negara's Overseas Projects Fund worth RM1bil, will provide guarantees up to 80% of the financing extended by Bank Islam to eligible customers under the facility.
It is for Malaysian-owned or controlled companies that are negotiating, bidding or have secured contracts overseas and is open to all economic sectors, except privatisation and concession type of contracts.
Government-linked companies are excluded from this programme.
Bank Islam, which has just undergone a rebranding exercise, also plans to increase its share of corporate loans.
“Of course, we would like to increase our share in the corporate segment ... we have set up a corporate banking division to concentrate on sukuk (but) the business will take a while (to generate),” he said.
Of its total loans portfolio, 63% is in consumer financing and the rest corporate loans.
Exim Bank managing director Datuk Kamal Mohd Ali said the bank had disbursed over RM100mil in loans and another RM100mil were in the pipeline for disbursement by year-end.
“We actually targeted to approve RM300mil to RM400mil, but dealing with cross-border contracts also involves other countries.
“So it takes time, and there are areas that we have to consider before disbursement,” he added.
Bank Islam can finance up to 90% of the contract value in ringgit and major currencies such as the US dollar, sterling, euro and yen with a tenure of up to 10 years.
The maximum financing per application is RM100mil or equivalent, with a competitive financing rate at effective cost of funds plus a maximum spread of 1% a year . – Bernama
http://thestar.com.my/news/story.asp?file=/2007/10/31/business/19326778&sec=business
Wednesday, December 19, 2007
Bank Islam's gateway to Europe (September 18, 2007)
Tie-up paves way for Bank Islam to offer Islamic services in Europe
KUALA LUMPUR: Bank Islam Malaysia Bhd will gain entry into Europe's fast-growing Islamic financial services industry through its newly formed partnership with Britain-based European Islamic Investment Bank Plc (EIIB).
The tie-up would give Bank Islam an immediate presence in Britain and Europe without the need to set up physical infrastructure while providing EIIB with a platform to expand its business to Asia, managing director Datuk Zukri Samat said.
Bank Islam, he said, would be able to boost its fee-based income by drawing on EIIB's expertise and capabilities in corporate finance and advisory services.
“Bank Islam and EIIB will jointly originate, structure and distribute a range of innovative Islamic financial products, particularly in fee income generating areas such as capital market, treasury and wealth/asset management,” he said after the signing of a strategic collaboration accord with EIIB yesterday.
Zukri said as a start, Bank Islam and EIIB would jointly bid to be lead arranger for a US$300mil sukuk to be issued by a Malaysian company.
The outcome of the bid would be known in a month and if successful, both parties would market the sukuk primarily to European foreign investors, he said.
Meanwhile, Bank Islam's medium-term plans would be to develop its human capital by tapping into EIIB's skills in investment banking.
“We will initiate a staff exchange and secondment programme to leverage on each other's expertise,” Zukri said, adding that the initiatives would enable Bank Islam to take advantage of Government incentives to accelerate the development of Malaysia as an international Islamic financial hub.
On the bank's progress in addressing legacy non-performing finances (NPFs), or non-performing loans (NPLs), he said Bank Islam had identified an interested party and was looking to sell more than RM2bil of gross NPFs to it.
“This is our gross NPL, which we have identified to carve out. Our aim is to bring our NPF level below the industry average. Hopefully, it will be finalised by the year-end,” he said, adding that the party was currently carrying out due diligence.
As at June 30, Bank Islam's gross and net NPFs was RM2.15bil and RM943mil respectively. The “carve-out plan” is part of the bank's recapitalisation and restructuring scheme to strengthen its balance sheet.
EIIB managing director John Weguelin said that Malaysia was an attractive gateway to Asia due to its financial, legal, regulatory and syariah infrastructure.
“EIIB gains a footprint in Malaysia with access to the infrastructure to originate and distribute in this market,” he said.
Weguelin said both parties would work together on a non-exclusive basis to increase international awareness of Islamic finance. “This will include the development and distribution of Islamic financial products and the sharing of technical expertise and knowledge through joint ventures.”
Headquartered in London with a representative office in Bahrain, EIIB is the first independent syariah-compliant Islamic investment bank to be authorised and regulated by Britain's Financial Services Authority.
The firm started trading in April last year and reported a pre-tax profit of £1.9mil on revenue of £7.8mil for the year ended Dec 31, 2006.
EIIB is listed on the Alternative Investment Market of the London Stock Exchange.
http://biz.thestar.com.my/news/story.asp?file=/2007/9/18/business/18915302&sec=business
KUALA LUMPUR: Bank Islam Malaysia Bhd will gain entry into Europe's fast-growing Islamic financial services industry through its newly formed partnership with Britain-based European Islamic Investment Bank Plc (EIIB).
The tie-up would give Bank Islam an immediate presence in Britain and Europe without the need to set up physical infrastructure while providing EIIB with a platform to expand its business to Asia, managing director Datuk Zukri Samat said.
Bank Islam, he said, would be able to boost its fee-based income by drawing on EIIB's expertise and capabilities in corporate finance and advisory services.
“Bank Islam and EIIB will jointly originate, structure and distribute a range of innovative Islamic financial products, particularly in fee income generating areas such as capital market, treasury and wealth/asset management,” he said after the signing of a strategic collaboration accord with EIIB yesterday.
Zukri said as a start, Bank Islam and EIIB would jointly bid to be lead arranger for a US$300mil sukuk to be issued by a Malaysian company.
The outcome of the bid would be known in a month and if successful, both parties would market the sukuk primarily to European foreign investors, he said.
Meanwhile, Bank Islam's medium-term plans would be to develop its human capital by tapping into EIIB's skills in investment banking.
“We will initiate a staff exchange and secondment programme to leverage on each other's expertise,” Zukri said, adding that the initiatives would enable Bank Islam to take advantage of Government incentives to accelerate the development of Malaysia as an international Islamic financial hub.
On the bank's progress in addressing legacy non-performing finances (NPFs), or non-performing loans (NPLs), he said Bank Islam had identified an interested party and was looking to sell more than RM2bil of gross NPFs to it.
“This is our gross NPL, which we have identified to carve out. Our aim is to bring our NPF level below the industry average. Hopefully, it will be finalised by the year-end,” he said, adding that the party was currently carrying out due diligence.
As at June 30, Bank Islam's gross and net NPFs was RM2.15bil and RM943mil respectively. The “carve-out plan” is part of the bank's recapitalisation and restructuring scheme to strengthen its balance sheet.
EIIB managing director John Weguelin said that Malaysia was an attractive gateway to Asia due to its financial, legal, regulatory and syariah infrastructure.
“EIIB gains a footprint in Malaysia with access to the infrastructure to originate and distribute in this market,” he said.
Weguelin said both parties would work together on a non-exclusive basis to increase international awareness of Islamic finance. “This will include the development and distribution of Islamic financial products and the sharing of technical expertise and knowledge through joint ventures.”
Headquartered in London with a representative office in Bahrain, EIIB is the first independent syariah-compliant Islamic investment bank to be authorised and regulated by Britain's Financial Services Authority.
The firm started trading in April last year and reported a pre-tax profit of £1.9mil on revenue of £7.8mil for the year ended Dec 31, 2006.
EIIB is listed on the Alternative Investment Market of the London Stock Exchange.
http://biz.thestar.com.my/news/story.asp?file=/2007/9/18/business/18915302&sec=business
Less painful way to own a house (September 8, 2007)
FROM Jan 1 2008, EPF contributors can make monthly withdrawals from their Account 2 balances to pay off their housing loans.
“For many of us, a house is a very important asset. A house not only appreciates in value over time, but also provides security for our future. Housing repayments, however, are a major financial commitment.
“This move will benefit five million active EPF contributors. It will also enable contributors to own better houses and lessen their monthly financial obligations,” said Prime Minister Datuk Seri Abdullah Ahmad Badawi.
There is also a proposed 50% stamp duty exemption on the transfer of documents for houses costing less than RM250,000.
To promote family values and financial security, full stamp duty exemption will be given on transfer of property from husband to wife.
“In cases where the wife wishes to transfer property to the husband, the same exemption applies,” he said.
To help those without fixed incomes to buy houses, the Government will establish a fund to provide guarantees to banks, which in turn will be asked to give loans to such groups of people.
“These will include farmers and small traders, also those who have the capacity to repay their housing loans but are unable to provide proof of their income stream,” said Abdullah.
For a start, RM50mil will be allocated to Bank Simpanan Naisonal and Bank Islam Berhad to kick-start the scheme, beginning Jan 1.
To help the poor, RM381mil will be given for the implementation of low-cost housing programmes, Abdullah said.
The Syarikat Perumahan Negara Berhad (SPNB) has been directed to rehabilitate 6,000 units of abandoned houses. It will also build 36,000 affordable homes and 4,000 Rumah Mesra Rakyat (homes for the people).
Next year, 13,000 quarters for civil servants are expected to be completed.
The Government has allocated RM887mil in 2008 to build more quarters for civil servants nationwide.
As for the orang asli, from the RM170mil provided to the Department of Orang Asli, RM50mil will go to housing assistance and social amenities for them.
http://thestar.com.my/news/story.asp?file=/2007/9/8/nation/18821072&sec=nation
“For many of us, a house is a very important asset. A house not only appreciates in value over time, but also provides security for our future. Housing repayments, however, are a major financial commitment.
“This move will benefit five million active EPF contributors. It will also enable contributors to own better houses and lessen their monthly financial obligations,” said Prime Minister Datuk Seri Abdullah Ahmad Badawi.
There is also a proposed 50% stamp duty exemption on the transfer of documents for houses costing less than RM250,000.
To promote family values and financial security, full stamp duty exemption will be given on transfer of property from husband to wife.
“In cases where the wife wishes to transfer property to the husband, the same exemption applies,” he said.
To help those without fixed incomes to buy houses, the Government will establish a fund to provide guarantees to banks, which in turn will be asked to give loans to such groups of people.
“These will include farmers and small traders, also those who have the capacity to repay their housing loans but are unable to provide proof of their income stream,” said Abdullah.
For a start, RM50mil will be allocated to Bank Simpanan Naisonal and Bank Islam Berhad to kick-start the scheme, beginning Jan 1.
To help the poor, RM381mil will be given for the implementation of low-cost housing programmes, Abdullah said.
The Syarikat Perumahan Negara Berhad (SPNB) has been directed to rehabilitate 6,000 units of abandoned houses. It will also build 36,000 affordable homes and 4,000 Rumah Mesra Rakyat (homes for the people).
Next year, 13,000 quarters for civil servants are expected to be completed.
The Government has allocated RM887mil in 2008 to build more quarters for civil servants nationwide.
As for the orang asli, from the RM170mil provided to the Department of Orang Asli, RM50mil will go to housing assistance and social amenities for them.
http://thestar.com.my/news/story.asp?file=/2007/9/8/nation/18821072&sec=nation
Bank Islam chalks up highest profit (September 7, 2007)
KUALA LUMPUR: After posting two years of heavy losses, Bank Islam Malaysia Bhd has reported a turnaround for the year ended June 30, 2007 (FY07).
The bank chalked up its highest profit before zakat and tax of RM255.5mil on revenue of RM1.03bil compared with a loss before zakat and tax of RM1.28bil on revenue of RM948.9mil in FY06.
Managing director Datuk Zukri Samat attributed the strong performance to operational turnaround and the bank’s intensive loan-recovery programme.
“Going forward, we would like to grow our profit from operations. We expect contribution from operations to be substantial in the current financial year,” Zukri said after a briefing on its financial results.
On the bank’s progress in addressing legacy non-performing finances, he said a local party was currently conducting due diligence on the loans and a “carve-out plan” was expected to be finalised year-end.
The “carve-out plan” is part of Bank Islam’s recapitalisation and restructuring programme to strengthen the balance sheet.
While treasury and corporate investment banking had been identified as potential avenues to grow fee-based activities, Zukri said fund-based income would continue to be the main revenue contributor to the company.
He also said the company was expected to enter into a strategic partnership with a European bank next month, which was in line with the company’s strategy of becoming a global Islamic banking player.
“It is not necessary that we have physical presence abroad to be a global player. It can be done through strategic tie-ups and offshore deals,” he said, adding that the company would continue to look out for strategic tie-ups.
Bank Islam’s total assets and customer deposits increased 30.9% and 22% to RM19.1bil and RM17.6bil respectively in FY07. Its earnings pre share was 17.4 sen compared with a loss of 175.2 sen in FY06.
http://biz.thestar.com.my/news/story.asp?file=/2007/9/7/business/18807940&sec=business
The bank chalked up its highest profit before zakat and tax of RM255.5mil on revenue of RM1.03bil compared with a loss before zakat and tax of RM1.28bil on revenue of RM948.9mil in FY06.
Managing director Datuk Zukri Samat attributed the strong performance to operational turnaround and the bank’s intensive loan-recovery programme.
“Going forward, we would like to grow our profit from operations. We expect contribution from operations to be substantial in the current financial year,” Zukri said after a briefing on its financial results.
On the bank’s progress in addressing legacy non-performing finances, he said a local party was currently conducting due diligence on the loans and a “carve-out plan” was expected to be finalised year-end.
The “carve-out plan” is part of Bank Islam’s recapitalisation and restructuring programme to strengthen the balance sheet.
While treasury and corporate investment banking had been identified as potential avenues to grow fee-based activities, Zukri said fund-based income would continue to be the main revenue contributor to the company.
He also said the company was expected to enter into a strategic partnership with a European bank next month, which was in line with the company’s strategy of becoming a global Islamic banking player.
“It is not necessary that we have physical presence abroad to be a global player. It can be done through strategic tie-ups and offshore deals,” he said, adding that the company would continue to look out for strategic tie-ups.
Bank Islam’s total assets and customer deposits increased 30.9% and 22% to RM19.1bil and RM17.6bil respectively in FY07. Its earnings pre share was 17.4 sen compared with a loss of 175.2 sen in FY06.
http://biz.thestar.com.my/news/story.asp?file=/2007/9/7/business/18807940&sec=business
RM54m Bank Islam re-branding (August 22, 2007)
SHAH ALAM: Bank Islam Malaysia Bhd is investing about RM54mil to remodel its 90 branches nationwide in line with the bank’s revamped corporate identity.
The branch re-branding exercise is part of the bank’s transformation programme implemented last September following two years of financial difficulties.
Managing director Datuk Zukri Samat said he expected the re-branding exercise to elevate the bank’s corporate image and change perception of the bank as one that catered solely to Muslims customers to one that was meant “for everybody”.
“We are looking to grow our non-Muslim customer base, which currently stands at 10% of the bank’s one million customers,” he said at the launch of Bank Islam’s new corporate identity yesterdayat its first remodelled branch in Shah Alam.
The re-branding exercise, to be completed in 12 months, will see another 20 branches remodelled by year-end.
Minister in the Prime Minister's office Datuk Dr Abdullah Md. Zin and Bank Islam Malaysia Bhd managing director Datuk Zukri Samat at the official launch of Bank Islam's New corporate identity and new remodelled Shah Alam branch opening on Tuesday.
Zukri said the bank had spent about RM1mil on transforming the Shah Alam branch into its flagship outlet. Remodelling the other branches is expected to cost an average RM600,000 per branch.
“We believe this new brand positioning will help Bank Islam stay competitive in the face of growing competition locally and regionally, and help achieve the bank’s vision, which is to be a global leader in Islamic Banking.”
On the bank’s transformation programme, he said it had to be carried out in stages.
“We are fixing a moving aeroplane, so we cannot fix all the engines in one go,” he said.
Zukri also said as part of cost rationalisation, the bank was considering outsourcing some of its non-critical business units like ATM services.
He also said the bank’s information technology system, which had been in place for the past 15 years, was not “robust enough to move the bank forward and compete” and would be upgraded at an estimated cost of RM100mil.
Moving forward, Zukri said the bank expected next month to sign a “mutually beneficial partnership” with a European bank to develop syariah-based products.
http://biz.thestar.com.my/news/story.asp?file=/2007/8/22/business/18661825&sec=business
The branch re-branding exercise is part of the bank’s transformation programme implemented last September following two years of financial difficulties.
Managing director Datuk Zukri Samat said he expected the re-branding exercise to elevate the bank’s corporate image and change perception of the bank as one that catered solely to Muslims customers to one that was meant “for everybody”.
“We are looking to grow our non-Muslim customer base, which currently stands at 10% of the bank’s one million customers,” he said at the launch of Bank Islam’s new corporate identity yesterdayat its first remodelled branch in Shah Alam.
The re-branding exercise, to be completed in 12 months, will see another 20 branches remodelled by year-end.
Minister in the Prime Minister's office Datuk Dr Abdullah Md. Zin and Bank Islam Malaysia Bhd managing director Datuk Zukri Samat at the official launch of Bank Islam's New corporate identity and new remodelled Shah Alam branch opening on Tuesday.
Zukri said the bank had spent about RM1mil on transforming the Shah Alam branch into its flagship outlet. Remodelling the other branches is expected to cost an average RM600,000 per branch.
“We believe this new brand positioning will help Bank Islam stay competitive in the face of growing competition locally and regionally, and help achieve the bank’s vision, which is to be a global leader in Islamic Banking.”
On the bank’s transformation programme, he said it had to be carried out in stages.
“We are fixing a moving aeroplane, so we cannot fix all the engines in one go,” he said.
Zukri also said as part of cost rationalisation, the bank was considering outsourcing some of its non-critical business units like ATM services.
He also said the bank’s information technology system, which had been in place for the past 15 years, was not “robust enough to move the bank forward and compete” and would be upgraded at an estimated cost of RM100mil.
Moving forward, Zukri said the bank expected next month to sign a “mutually beneficial partnership” with a European bank to develop syariah-based products.
http://biz.thestar.com.my/news/story.asp?file=/2007/8/22/business/18661825&sec=business
Risk-based capital deadline by 2009 (October 30, 2007)
KUALA LUMPUR: Insurance companies must implement the risk-based capital (RBC) framework by Jan 1, 2009, Bank Negara deputy governor Datuk Zamani Abdul Ghani said yesterday.
He said the RBC framework, aiming to create a strong risk management culture, started its parallel run in 2007 with a two-year timeframe but insurers who were ready would be allowed by the central bank to implement it next year.
“The implementation of the RBC framework will give more flexibility if the (insurance) operator is good,” he told reporters at the 23rd Pacific Insurance Conference here.
The new requirement is to facilitate more efficient capital structures and provide greater investment flexibility to insurers without compromising on prudential standards.
Under the risk-based regulatory regime, responsibility for the implementation of risk management, market conduct governance and assessment of risks and management of the financial conditions of an insurer, will increasingly rest with its board of directors and senior management.
Earlier, Zamani said the insurance industry, including the takaful sector, recorded a combined premium growth of nearly 10% for both life and general segments to reach RM13bil in the first half of this year.
He said the assets of life and general insurance funds registered a double-digit growth of 14% to RM116bil as at June 30 this year, up from 11% in the previous corresponding period.
On the takaful industry, Zamani said the market penetration level remained low, with less than 5% in many Muslim countries and 6.8% in Malaysia, thus providing significant market potential that remained untapped. – Bernama
http://thestar.com.my/news/story.asp?file=/2007/10/30/business/19314963&sec=business
He said the RBC framework, aiming to create a strong risk management culture, started its parallel run in 2007 with a two-year timeframe but insurers who were ready would be allowed by the central bank to implement it next year.
“The implementation of the RBC framework will give more flexibility if the (insurance) operator is good,” he told reporters at the 23rd Pacific Insurance Conference here.
The new requirement is to facilitate more efficient capital structures and provide greater investment flexibility to insurers without compromising on prudential standards.
Under the risk-based regulatory regime, responsibility for the implementation of risk management, market conduct governance and assessment of risks and management of the financial conditions of an insurer, will increasingly rest with its board of directors and senior management.
Earlier, Zamani said the insurance industry, including the takaful sector, recorded a combined premium growth of nearly 10% for both life and general segments to reach RM13bil in the first half of this year.
He said the assets of life and general insurance funds registered a double-digit growth of 14% to RM116bil as at June 30 this year, up from 11% in the previous corresponding period.
On the takaful industry, Zamani said the market penetration level remained low, with less than 5% in many Muslim countries and 6.8% in Malaysia, thus providing significant market potential that remained untapped. – Bernama
http://thestar.com.my/news/story.asp?file=/2007/10/30/business/19314963&sec=business
Tuesday, December 4, 2007
Smooth merger for Allianz (December 4, 2007)
By DALJIT DHESI
PETALING JAYA: Allianz Malaysia Bhd (AMB), which tomorrow marks the 100th day of its acquisition of Commerce Assurance Bhd (CAB), will focus on three main areas to ensure the success of this integration.
Chief executive officer Alexander Ankel said the three core areas were branch relocation, information technology and human resources.
With the completion of the acquisition of CAB on Aug 28, the company now has three subsidiaries – the other two being Allianz General Insurance Co (M) Bhd (AGIC) and Allianz Life Insurance Malaysia Bhd.
With the acquisition, AMB is now the country's second-largest general insurer with about 10% market share and an expected premium income of RM1bil by year-end. It currently has 56 branches: 34 for Allianz and 22 for CAB.
“We have relocated and integrated 10 branches and hope to do (the same for) another seven by the end of January. The entire process is expected to be finalised in six months,'' Ankel said in an interview.
Synergising the IT infrastructure would also offer a uniformed platform for customers in the business and significantly reduce turnaround time for insurance documents and add value to both agents and customers, he added.
He said AMB had introduced electronic agent systems to support its motor business and make its branches one-stop service centres for customers.
Ankel said the company was also streamlining the policy printing and distribution in CAB and AGIC to facilitate the issuance of motor policies on the spot and provide customers with the necessary insurance documents of all other lines of business within 14 days.
On the human resources side, he said AMB placed great importance on communication, transparency and sincerity during the integration, as these were vital factors in any integration exercise.
“That is why I committed myself to visiting each CAB branch to meet all their staff, major agents and some CIMB bank branches.
“This is to clearly communicate one strategy and one direction to all our new colleagues. This whole visiting was done within the first 30 days of the acquisition,” he said.
Ankel said AMB, under a 10-year bancassurance agreement with CIMB Bank, could also tap the bank's 4.5 million customer base and 393 branches nationwide to sell its bancassurance products.
He said with a total agency force of about 8,000, AMB would also continue to grow its broking and bancassurance portfolios.
PETALING JAYA: Allianz Malaysia Bhd (AMB), which tomorrow marks the 100th day of its acquisition of Commerce Assurance Bhd (CAB), will focus on three main areas to ensure the success of this integration.
Chief executive officer Alexander Ankel said the three core areas were branch relocation, information technology and human resources.
With the completion of the acquisition of CAB on Aug 28, the company now has three subsidiaries – the other two being Allianz General Insurance Co (M) Bhd (AGIC) and Allianz Life Insurance Malaysia Bhd.
With the acquisition, AMB is now the country's second-largest general insurer with about 10% market share and an expected premium income of RM1bil by year-end. It currently has 56 branches: 34 for Allianz and 22 for CAB.
“We have relocated and integrated 10 branches and hope to do (the same for) another seven by the end of January. The entire process is expected to be finalised in six months,'' Ankel said in an interview.
Synergising the IT infrastructure would also offer a uniformed platform for customers in the business and significantly reduce turnaround time for insurance documents and add value to both agents and customers, he added.
He said AMB had introduced electronic agent systems to support its motor business and make its branches one-stop service centres for customers.
Ankel said the company was also streamlining the policy printing and distribution in CAB and AGIC to facilitate the issuance of motor policies on the spot and provide customers with the necessary insurance documents of all other lines of business within 14 days.
On the human resources side, he said AMB placed great importance on communication, transparency and sincerity during the integration, as these were vital factors in any integration exercise.
“That is why I committed myself to visiting each CAB branch to meet all their staff, major agents and some CIMB bank branches.
“This is to clearly communicate one strategy and one direction to all our new colleagues. This whole visiting was done within the first 30 days of the acquisition,” he said.
Ankel said AMB, under a 10-year bancassurance agreement with CIMB Bank, could also tap the bank's 4.5 million customer base and 393 branches nationwide to sell its bancassurance products.
He said with a total agency force of about 8,000, AMB would also continue to grow its broking and bancassurance portfolios.
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