MORE PLANS: Apart from existing fixed and personal loans, Agrobank plans to introduce trade finance and overdrafts as well as launch its own internet banking by the first quarter next year.
KUALA LUMPUR: Agrobank Bhd (Agrobank) is eyeing growth in downstream activities in the agriculture sector as part of its strategy in diversifying loan portfolio for next year.
Its president and chief executive officer Wan Mohd Fadzmi Wan Othman said the bank, formerly known as Bank Pertanian, had for the last 40 years been conventional in its approach to financing.
“We have been traditionally involved mainly in primary agriculture, with the biggest exposure in palm oil at about 28 per cent.
“So, we need to move away from this but still remain within the agricultural space.
“We want to go further downstream.
Anything that involves agriculture now, we would like to become involved,” he told Bernama recently.
Agrobank had been heavily involved in the production side of agriculture and was looking at going more into food services supply involving wholesalers, retailers, manufacturers and food packaging.
The bank which aims to be fully Islamic by 2015, was also looking at introducing more products catering to bigger working capital for small businesses.
Apart from existing fixed and personal loans, the bank plans to introduce trade finance and overdrafts as well as launch its own internet banking by the first quarter next year, said Wan Mohd Fadzmi.
Having joined the bank six months ago, he said internet banking would provide a platform to mobilise funding for the financial institution, which has catered to financing asset.
Currently the bank has 1.3 million customers in terms of deposits with it.
Reviewing the bank’s other loan portfolios, Wan Mohd Fadmi said Ar-Rahnu was a good performer this year, especially outside the Klang Valley and running neck-to-neck with Bank Rakyat, which currently had a bigger share of the segment.
“If you go to our branch in Nibong Tebal, which is the highest performing Ar-Rahnu branch, you will see that 80 per cent of the people indulging in Ar-Rahnu, are actually other than the Malay community.
“They use it for various purposes, including working capital, as well as investment in gold.
“We think of it as a safe business for now.
“But I have also told my team that we should not neglect our main role, which is to provide financing.
“We are very clear about this, and in fact next year, we want to align our portfolio,” he added.
As at end October, Agrobank’s financing asset was close to RM6 billion, including corporate loans, Ar-Rahnu and personal loans, as opposed to last year’s RM5.4 billion.
The financing asset currently makes up two-third of total assets, said Wan Mohd Fadzmi.
On profit, he said the bank expects to touch RM400 million in pre-tax profit by Dec 31, 2011 compared to RM370 million in 2010. — Bernama