Sunday, December 18, 2011

Bank Islam working towards third IPO, says MD

KUALA LUMPUR (Dec 18): Bank Islam Malaysia Bhd is working towards its third initial public offer (IPO) in sync with efforts to increase its non-fund based income.

Managing Director Datuk Seri Zukri Samat said the bank completed listing of two companies on Bursa Malaysia earlier this year and was working hard in getting more mandates to increase its non-fund based income.

"We have submitted the application for the third IPO candidate and are waiting for approvals," he said.

He said Bank Islam was the only commercial bank approved by the Securities Commission to act as principal adviser to undertake corporate finance work such as initial public offerings and advisory services for mergers and acquisitions.

"This is our niche and it gives us a competitive edge in an industry where competition is getting stiffer, with 17 domestic and foreign Islamic banks in the country," he told BERNAMA in an interview.

As at Dec 31, 2010, Bank Islam was ranked No. 3 in terms of asset, with 11.4 per cent market share, behind Maybank Islamic and CIMB Islamic.

In terms of deposits, the bank maintained its No. 2 position, with 12.3 per cent market share.

Zukri said Bank Islam was very much a retail bank as 74 per cent of the bank's assets were consumer-based.

"Our competitors are not only Islamic banks but also conventional banks," he said.

Apart from capitalising on the competitive advantage as the only Islamic bank on the SC's approved advisers' list, Bank Islam is also leveraging on its strong branding.

"The brand name of Bank Islam is very strong, especially in the east coast. It's an open secret that whenever we open a branch in the east coast, the breakeven period is shorter than usual", Zukri said.

He said innovation was another key factor that had helped Bank Islam stay ahead of the competitive curve and it had scored many firsts in terms of product innovations.

Its "Transact on Palm" mobile banking service, said to be Malaysia's first mobile banking service that does not require internet access, has recorded close to 160,000 subscribers since it was launched about a year ago.

The bank plans to roll out a few more products next year.

"According to a study undertaken by an independent party, a customer who has more than three products with a particular bank, would likely stay with the bank.

"We are working hard to cross-sell our products to our existing customers and ensure that they will have more than one Bank Islam's products," he said.

By end-December, Bank Islam will operate 122 branches, with the latest branch in Pasir Tumbuh, Kelantan, and Ara Damansara, Selangor.

"The bank will open 28 more branches over the next three years. By 2014, we target to have 150 branches. By then, we will be operating at our optimum size," he said.

The new branches will be located in fast-growing townships like Sungai Buloh, Puchong, Ipoh and some areas in Sabah and Sarawak and new townships.

Zukri also maintains his confidence in the bank's financial performance for the current year.

"This year, we expect to record a good performance. The numbers for the January-September period are already equivalent to the 12 months of last year." he said.

Zukri, however, cautioned that the bank's next financial year would be a challenging one due to the economic uncertainties in Europe and the United States.

"The government has projected five to six per cent growth, which is good compared with other countries, but we have to be mindful of what is happening in Europe, the US and around the world.

"Given the current scenario, if the world's economy is going to perform as what many believe, we reckon that next year is a challenging year, but InsyaAllah (God willing), we will be able to perform satisfactorily," he added. - Bernama

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