Islamic banking on track to make up 40% of Malaysia's banking sector assets

KUALA LUMPUR: Malaysia’s Islamic banking assets are on track to make up 40% of the country’s total banking sector assets by 2020 from about 25% now, said Standard Chartered Saadiq Bhd chief executive officer and global head of Standard Chartered’s Islamic consumer banking Wasim Saifi.

“The aspiration is that by 2020, Islamic banking assets will comprise 40% of the banking sector, from 24% to 25% now.

“We are hopeful that this momentum will continue,” Wasim told journalists after the launch of Standard Chartered Saadiq’s dedicated Islamic banking counters.

Standard Chartered Saadiq is the Islamic banking arm of Standard Chartered Bank.

Islamic banking has grown twice as fast in Malaysia as its conventional counterpart at a compounded annual growth rate of 22%, it said.

Syariah-compliant solutions are currently offered at 10 Standard Chartered Saadiq branches, but will now also be available via the Islamic banking counters at Standard Chartered Bank Malaysia’s conventional branches.

The Islamic banking counters, or “windows”, offer various syariah-compliant products and services, including deposits, investments, takaful, financing and small and medium enterprises (SME) banking.

They will feature dedicated teller counters and personal finance consultants to offer one-on-one services to customers.

Standard Chartered Saadiq is also targeting to penetrate further into the SME market, with its Islamic banking products for SMEs now on par with its conventional products.

“We remain bullish on growing the SME segment on the Saadiq platform, which is achieving wider acceptance with a larger number of products,” Wasim said.

Standard Chartered was the first international bank to set up an Islamic banking subsidiary under Standard Chartered Saadiq in 2008.

In 2012, it established Kuala Lumpur as its global hub for Islamic consumer banking. Other countries on Standard Chartered Saadiq’s radar are emerging African nations such as Nigeria, Tanzania and Uganda, according to Wasim.

The Islamic banking entity, which has been expanded to seven countries, ventured into Africa this year with the opening of its Kenyan branch.