Bank Islam working towards third IPO, says MD
Posted on December 19, 2011, Monday
KUALA LUMPUR: Bank Islam Malaysia Bhd (Bank Islam) 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 has been 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.
Bank Islam has been the only commercial bank approved by the Securities Commission of Malaysia (SC) to act as principal adviser to undertake corporate finance work such as IPOs and advisory services for mergers and acquisitions (M&As).
“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,” Zukri told Bernama in an interview.
As at December 31 last year, Bank Islam was ranked at number three in terms of asset, with 11.4 per cent market share behind Maybank Islamic Bhd and CIMB Islamic Bhd.
In terms of deposits, the nation’s first full-fledged Islamic bank maintained its number two position, with 12.3 per cent market share.
According to Zukri, Bank Islam has been very much a retail bank as 74 per cent of the bank’s assets are consumer-based.
“Our competitors are not only Islamic banks, but also conventional banks,” he underlined.
“Apart from capitalising on the competitive advantage as the only Islamic bank on the SC’s approved advisers’ list, Bank Islam has also been 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 disclosed.
He said innovation was another key factor that had helped Bank Islam to stay ahead of the competitive curve, where it had scored many firsts in terms of product innovations.
Its ‘Transact-on-Palm’ (TaP) 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 its launch about a year ago. The bank would be planning to roll out a few more products next year, added Zukri.
“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 would operate 122 branches, with the latest branches in Pasir Tumbuh in Kelantan; and Ara Damansara in 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 would be located in fast-growing townships like Sungai Buloh, Puchong and Ipoh alongside some areas in Sabah and Sarawak as well as new townships.
Zukri also maintained 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 US.
“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 ‘Insya Allah’ (God’s willing), we will be able to perform satisfactorily,” he added. — Bernama
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