KUALA LUMPUR, Aug 30 — Bank Islam Malaysia Bhd (BIMB) will continue to grow its domestic market operation and share its experience and knowledge for the past 40 years with regulators, industries and banking players including from other countries.
Group chief executive officer Mohd Muazzam Mohamed said the bank would focus on contributing towards the growth of Islamic finance globally rather than expanding its business overseas that would entail a different matter as banking is a very much regulated industry.
“It’s not easy to get license to operate, so we don’t have any plan to operate beyond our shores but will continue to share our knowledge,” he told reporters after a briefing on BIMB’s first half 2023 (1H 2023) financial results here today.
On BIMB’s plans moving forward for the remainder of the financial year, Muazzam said the bank would continue to enhance its offering in the retail space as retail banking made up about 75 per cent of its assets.
He said the bank would also develop new capabilities in institutional banking or non-retail space such as cash management solutions to be able to meet the needs of the broader needs of its non-retail, which is the corporate and institutions.
“Both segments are hungry to continue growing and I am hopeful that there are plenty of growth opportunities,” he said.
Group chief financial officer Azizan Abd Aziz said for the remainder of the financial year 2023, BIMB is expected to sustain gross financing growth at seven to eight per cent year-on-year (y-o-y) driven by retail.
For the 1H FY2023, the bank’s gross financing growth stood at 9.3 per cent y-o-y, outperforming the banking industry’s 4.4 per cent.
He said net interest margin (NIM) is expected to be sustained at 2.2 per cent by the end of this year, after recording 2.11 per cent in 2Q 2023 and 2.08 per cent in the 1H 2023, with continuous effort in reasonably pricing its financing while proactively managing its funding mix to ensure favourable NIM.
“Our operating expenditure (Opex) is likely to grow at nine to 10 per cent for FY2023 mainly on investment in our infrastructure and improvements as part of our IT blueprint,” he said.
He said return on equity (ROE) is expected to be maintained between seven to eight per cent after registering 7.1 per cent as at June 30, 2023.
“We hope it will grow between nine to 10 per cent within the next three years,” he added.
Meanwhile, Muazzam said the bank is also playing its role in providing access to the underserved segment, where it supported Bank Negara Malaysia’s initiative in rolling out i-Tekad Micro Financing Programme.
He said BIMB was the first bank to come up with its offering in collaboration with the Federal Territories Islamic Religious Council (MAIWP) and SME Corp Malaysia in March 2020.
Muazzam said the bank has not only provided micro-financing facility but also coaching, mentoring and ongoing monitoring of the impact of their growth.
“We have helped 909 participants since the launching three years ago...Alhamdulillah. As of today, there are 10 other banks that followed suit,” he said.
He said as a commercially driven institution, the bank needed to be profitable but at the same time, needed to be able to serve the underserved segment, especially from a credit perspective.
“That has led us to innovate to find financial solutions where we can provide these kinds of financing facilities without any negative impact to our financial positions that require innovation and we did that.
He said in funding the sources, the bank has structured the programme so that it becomes credit risk absorbent and does not lead to any higher credit risk to the bank but at the same time, benefitted the targeted small and micro entrepreneurs.
Since the launching of BIMB’s i-Tekad Micro Financing Programme, RM14 million of the bank’s initiative and funding escalator was disbursed.
By 2025, the bank targets to disburse RM36 million benefitting 3,000 participants in total. — Bernama
