BANK Pembangunan & Infrastruktur (M) Bhd (BPIMB) is gearing up to be a full-fledged infrastructure projects lender with the mandate given by the government for the bank to be more involved in nation-building development.
Four years since assuming the current name (the bank was previously known as Bank Pembangunan Malaysia Bhd), it has extended loans worth RM8.7bil to various infrastructure projects, mostly big name priority projects identified by the government.
Last year, BPIMB came under the purview of Bank Negara when it was listed under the Development Financial Institutions Act 2002 (DFIA). The DFIA was to ensure that the roles, objectives and activities of the DFIs are consistent with the government's objectives and that their mandated roles are efficiently and effectively implemented.
Newly appointed managing director Datuk Abdul Rahim Zin said the bank would continue with its traditional role of assisting small and medium enterprises and at the same time focusing its resources on infrastructure financing.
“We aim to be a leading financier in both SME and infrastructure development,” he told StarBiz in an interview.
He said, however, the bank would not be competing with other commercial banks for business, but rather, assist these projects should they be in a difficult position to raise funds.
“It is like a lender of last resort; we would come in when needed. Our rates are as competitive as those offered by other financial institutions,” he said.
In the past four years since venturing into this new area, the bank has seen its profitability grow by leaps and bounds, from RM97mil recorded in the financial year ended Dec 31, 1999, to RM279mil in financial year 2002.
Assets have soared from about RM5bil in 1999 to RM12bil in 2002, and then to more than RM13bil this year.
“We expect to see comparable results for this current financial year,” said Rahim, adding that the bank would strive to generate stable earnings from its activities, and not solely rely on the government for assistance.
On the development bank side, Rahim said the bank would continue helping bumiputra entrepreneurs raise their wealth profile.
As at Dec 31, 2002, the bank had extended loans worth RM1.75bil, with the majority of it going to the manufacturing sector, he said.
Since the bank's inception 30 years ago, it has helped groomed thousands of bumiputra businessmen in various sectors.
Some of the more successful ventures included second board auto components manufacturer Ingress Corp Bhd, Tracoma Bhd, and food-based industry such as Ramly Burger and Zara Foodstuff Industry Bhd.
Rahim, who took over the position from Tan Sri Dr Aris Othman, said the bank would implement a number of strategies in line with the focus to be a leading infrastructure lender.
He said the bank would enhance its risk management system for a more thorough credit rating on the exposure undertaken.
“We are getting technical assistance from JICA (Japan International Co-operation Agency) and also from our in-house programme in collaboration with Standard & Poor's and other external consultants,” he said.
He said such risk management was needed considering the type of projects the bank was lending to.
As the bank's clients are mostly made up of the Muslim community, Rahim said, it was only natural that the bank progress further into Islamic banking.
“Our portfolio of Islamic lending is still quite small, in the region of 20% for development banking and only one or two in infrastructure financing,” he said.
He added that BPIMB would eventually move into corporate finance where it would undertake advisory role for the projects.
“Our involvement in corporate finance is quite small but there is ample room for growth,” he said.
On the development banking side, Rahim said a number of programmes had already been implemented, such as in the areas of training and advisory.
Being responsible for helping the bumiputra small businesses, the bank provides various technical training for start-ups and other businesses in various stages of growth.
“We also provide advisory services, like in what sort of machines or equipment to use in their business,” he said.
The bank has more than 600 lots of factory complexes in all 13 states which it is renting at very competitive rates.
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