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Thursday, 20 March 2008

Bank Islam Malaysia eyes 20% share of deposits, financing


KUALA LUMPUR: Bank Islam Malaysia Bhd, a 51% unit of BIMB Holdings Bhd, expects to increase its share of deposits and financing to 20% each from the present 18.4% and 10% respectively, said managing director Datuk Zukri Samat.

“We're close to achieving the target for deposits but achieving the financing target would require a few years. We have a target of three years,” he told a media briefing yesterday on the group's performance in the first six months ended Dec 31, 2007.
The bank's financing to deposit ratio fell to 46% in the first half from 48% in the same period a year ago as deposits from customers grew faster than financing assets growth.

The Bank Islam group, including subsidiaries, unit trust and foreign currency clearing house, reported profit before zakat and tax (PBZT) of RM194.3mil, up 17.4% from RM165.5mil in the previous corresponding period.
Group income rose 35% to RM594mil against RM438.4mil a year ago.
At the bank level, PBZT rose 10% to RM182.3mil from RM165.8mil previously, thanks mainly to consumer banking.
“We intend to grow corporate financing as well as non-fund based income,” Zukri said, adding that the bank planned to introduce several deposit products by July as well as sell unit trusts soon.
The bank's non-performing financing (NPF) declined to RM1.95bil as at Dec 31, 2007 from RM2.16bil at end-June 2007. Its NPF ratio improved to 8.8% from 10.8% as of end-June. Zukri said the bank was likely to continue to see a decline in NPF ratio. The industry average for NPF is about 4%.
Bank Islam's cost to income ratio improved slightly to 54.6% by end-December against 60.2% in June 2007 due to better operating income.
The bank has targeted China, Thailand and Indonesia as prospective regional markets in its expansion plan.
“We want to be near to where we are but if there were opportunities elsewhere, we would look at it,” Zukri said.
The group will continue with its turnaround plan, which is expected to be completed by 2010.
Zukri said the revamp of information technology infrastructure, for which some RM100mil has been allocated, would take longer than the other four components of its restructuring plan.
Bank Islam, which has re-modelled 27 branches so far, intends to refurbish another 20 by middle of this year. It has 90 branches nationwide.
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Alfalah Consulting - KL: www.alfalahconsulting.com 
Islamic finance consultant: www.ahmad-sanusi-husain.com 
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

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