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Friday April 20, 2012

Maybank Islamic bullish, on track to record RM1bil in pre-tax profit for 2012

PETALING JAYA: Maybank Islamic Bhd is on track to record RM1bil in pre-tax profit for its financial year 2012 by leveraging on its parent Malayan Banking Bhd's (Maybank) global wholesale business and community financial services to carve its own niche in the market for Islamic finance.

Maybank Islamic chief executive officer Muzzaffar Hisham told StarBiz that healthy deposit levels, coupled with a growth in asset base with a good mixture of deposit and liabilities, would help to fuel the company's growth.

“Maybank Islamic is well on track in achieving the target of one-third Islamic financing contribution to the group's total domestic loans and advances by 2015,” he said.

Muzaffar: ‘We have identified many opportunities to tap on.’

Last year, the Islamic bank's total group domestic loans contribution expanded by 28.5% from 26.1% a year earlier, while also recording a pre-tax profit of RM567.1mil.

“The beauty of Maybank Islamic is that we can cut across the three key pillars of the larger group and embrace a pragmatic approach to venture into different areas of businesses that we don't want to lose out on,” he said.

Riding on the slew of projects under the Economic Transformation Programme, the bank is also excited on the prospects of fund-raising activities arising from these projects.

“We have identified many opportunities to tap on, especially with regards to raising funds as private parties are expected to finance most of these projects. For example, it has been announced that the My Rapid Transit project is expected to raise as much as RM30bil for the development,” he said.

He said the sukuk business in Malaysia had grown tremendously well, with more sukuk issuance compared with conventional bonds.

“Besides the strong support from the authorities, it is just simple economics where liquidity from Islamic funds would need a home, and these corporate issuance via sukuk would open up opportunities to two sets of investors,” he said.

Besides focusing on the domestic market, Muzaffar said the bank was also looking at key regional markets to expand like Singapore and Indonesia.

“We are seeing pockets of expansion, with the region being an obvious growth area for us. Last year, we were able to grow our cross-border financing to Indonesia by about US$500mil to US$600mil from practically zero with the welcome change of ruling in the withholding tax structure,” he said.

On reports that Maybank was open to options to buying into Philippines' only syariah-oriented commercial bank Al Amanah Islamic Investment Bank, Muzaffar said the bank was always looking for opportunities to grow pragmatically and that the reports were just an overstatement.

“As what we've mentioned, we are always on the lookout for ventures and not only acquisition. Right now, our immediate opportunities are to leverage on the 50 Maybank branches to grow the Islamic finance business,” he said.

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