MAYBANK, Malaysia's biggest lender, has set up a dedicated Islamic banking hub here as part of a concerted push to expand the business beyond its home market, as it strives to gain an edge over rivals vying to stamp their name on South-east Asia.
MAYBANK, Malaysia's biggest lender, has set up a dedicated Islamic banking hub here as part of a concerted push to expand the business beyond its home market, as it strives to gain an edge over rivals vying to stamp their name on South-east Asia.
'We want to be the No 1 Islamic bank in Asean,' Maybank president and chief executive Abdul Wahid Omar said yesterday. 'Our intention is to grow beyond Malaysia into Singapore and Indonesia.'
As it jostles with rivals such as CIMB Group, Malaysia's second-biggest lender, and the Singapore banks for a bigger share of the South-east Asian market, Maybank has identified Islamic banking as an area where it has an edge on the competition.
Its newly refurbished branch at Geylang Serai - renovated at a cost of $565,000 - will serve as its Islamic banking hub in Singapore. The 3,720 sq ft branch will cater to non-Muslims - who form the bulk of the branch's customers - as well as Muslims. And so will the bank's 21 other branches here, Mr Abdul Wahid said. But its staff will have expertise in Islamic banking, to offer advice on products and services that comply with Syariah, or Islamic principles.
The group already has the biggest share of Islamic financing assets, or loans, in Malaysia, at RM34.7 billion, or 22.7 per cent, of the total RM152.9 billion in Islamic financing at end-June.
Maybank s two biggest domestic rivals in Islamic banking, CIMB and Public Bank, had market shares of 15.6 per cent and 10.4 per cent, respectively, at the end of June, according to BT's calculations based on the banks' financial statements and data from Bank Negara, Malaysia's central bank.
Singapore - although by far the biggest foreign market for Maybank, accounting for two-thirds of its overseas pre-tax profit - contributes only a fraction of its Islamic banking business, with financing assets of just $40 million and deposits of $125 million at end-June.
But both loans and deposits will grow 'significantly' in future, as the bank rolls out new products and services in the next few months, Mr Abdul Wahid said. 'We will focus on the basic products first', such as Syariah-compliant home loans, and trade facilities for businesses, he said. Maybank's main Islamic banking rivals in Singapore are OCBC Bank, HSBC Amanah and DBS Group's Islamic Bank of Asia, he added. 'With our renewed push, we should be able to overtake the rest to become No 1.'
By total assets, Maybank is among the top 20 Islamic banks worldwide - the biggest are in the Middle East - and it aims to enter the top 10. It is targeting growth of 25 per cent a year in Islamic banking assets - now at RM44.5 billion - twice the average growth of its conventional banking assets.
The bank had an estimated 1.3 per cent share of total Syariah-compliant assets worldwide at end-2009, and 10 per cent of such assets in Asia. Some 86 per cent of Maybank's income from Islamic banking for the year to end-June was from customer financing, after deducting funding costs - analogous to conventional banks' net interest income. The rest was mainly income from investments in Syariah-compliant securities and deposits.
About one-third of the bank's Islamic financing portfolio comprises corporate and business loans, while the rest includes home loans, receivables from car and equipment hire-purchase financing schemes, credit cards and personal loans, he said.
In Indonesia, Maybank is converting its subsidiary Bank Maybank Indocorp into a full Islamic bank that will be re-branded Maybank Syariah Indonesia. It will then use the distribution network of Maybank's other subsidiary there, Bank Internasional Indonesia, which has 290 branches, to sell Islamic banking products and services.
Source: business.asiaone.com
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