KUALA LUMPUR: CIMB Islamic Bank Bhd plans to offer Islamic versions for every conventional banking product it markets, said group chief executive officer Datuk Nazir Razak.
“We have a lot of products and for each we want an Islamic version,” he said after the launch of CIMB Islamic's first Islamic equity-linked structured product, the Islamic All-Stars Global Restricted Mudharabah Structured Investment-i (Islamic All-Stars Global).
Nazir said CIMB Islamic Bank had in the pipeline 63 products, of which some would be introduced this year.
“Islamic finance is one of the megatrends of our generation. While it started out as a niche market product worth US$5bil in 1985, the industry has become mainstream, growing at 15% to 20% yearly.
“We hope that Islamic banking will contribute more than 20% to our total revenue in three years,” he said, adding that CIMB's Islamic banking services would be extended to the group's network of over 380 branches from the current 76 in six months.
The Islamic All-Stars Global combines 100% capital protection if held till its five-year maturity with returns linked to the performance of 20 global blue-chip stocks, including Microsoft Corp, Samsung Electronics, Nestle S.A. and Nike Inc.
Nazir said the product, launched simultaneously in Malaysia and Singapore, was aimed at the mass affluent.
He said the minimum investment amount in Malaysia was RM250,000, which was the minimum limit established by Bank Negara for structured investment products, whereas in Singapore the amount was S$10,000.
He said the Singapore dollar version would appeal to a wide range of regional investors, including those in Brunei and Indonesia, and he expected the product with a fund size of RM350mil to be fully taken up in three weeks.
The fund has an indicative gross profit rate of 8% for the first year. Returns for the next four years are estimated at 8.5% to 10% per annum, depending on the performance of the basket of stocks.
On the outlook for the banking industry, Nazir expects more mergers and acquisitions as local banks need to consolidate to become more competitive.
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