RHB aims to be among top three in Islamic banking

KUALA LUMPUR: RHB Bank Bhd is eyeing the top three spot in the Islamic banking space for its syariah complaint unit, with a three-year aim to rapidly boost its profits and asset size.

RHB Islamic Bank managing director and chief executive officer Datuk Adissadikin Ali said growth in the recent past years had been strong and that the bank could continue riding on this growth.

“We would like to boost our position within the group and the contribution of the Islamic banking division to overall assets and profitability.

“We want to position ourselves to be more significant in the market,” Adissadikin told StarBiz in conjunction with his first 100 days in office.

Adissadikin was appointed CEO of RHB Islamic effective Aug 1.

“We are now ranked fifth but we want to climb up to the top three in four years,” he said.

Adissadikin said that before 2014, the Islamic banking division had seen much growth in the number of branches from 14 to more than 200 today.

“This is for physical branches. We are also able to tap on the existing customers in the group. Meantime as the (RHB) group is moving towards digitalisation, we are riding on this wave as well,” he said.

He said the contribution of Islamic banking assets to the group’s total assets is 25% and that the aim was to grow this figure to 40% by the year 2020.

“This is in line with Bank Negara’s aspirations and we are supporting this.

“We are confident of being able to achieve this. The cumulative annual growth rate (CAGR) has been growing year-on-year (yoy) at 24% and in the next three years we should be there. Next year we can achieve 30%,” he said.

On the outlook for the Islamic banking business, Adissadikin said things are tough at the moment.

“We are mindful of the headwinds but there are still pockets of growth in terms of the Islamic debt market.

“Big banks are becoming more worried of the risks so they would not like to lend long but there are infrastructure and long gestation projects which needs funding so the debt market is attractive for this,” he said.

“There is room for growth though the rate may not be as high as it used to be. Growth can be tapped from the corporate, business and retail segments,” he added.

The group syariah business is identified as one of RHB’s key growth areas under its Ignite 2017 transformation programme and to drive Islamic banking growth via innovative product offerings and an enhanced distribution model.

The Ignite 2017 transformation programme aims to strengthen the group’s value propositions by segments by launching differentiated capabilities to scale its regional businesses to achieve 30% revenue contribution from international operations by 2017.

Earlier reports also said that the programme is aimed at pushing the bank into becoming the top three banks in Malaysia and one of the top eight banks in Asean by 2017.

Some key targets the bank intends to achieve by 2017 is to have a return on equity of more than 14%, double contributions from Singapore to 10%, have 30% in overseas contribution, scale growth in small and medium enterprises, and have Islamic banking accounting for 30% of its assets.

RHB Bank is currently the fourth largest bank in Malaysia by asset size.

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 3
Join our Telegram channel to get our Evening Alerts and breaking news highlights

Business , RHB Islamic , banking , growth , Islamic , yop , three , adissadikin , ali , RHB ,


Next In Business News

Ringgit opens lower against greenback on FOMC's upbeat assessment
Quick take: Vizione rises after securing RM500mil GDV project
Bursa gets a lift from positive global sentiment
Quick take: Opcom shares hit highest in six years
Trading ideas: Sedania, IOI Properties Rhone Ma, Vizione, SCIB
JHM to see further lockdown impact in 3Q
Fed's Powell: 'no one' happy with fellow policymakers' trading
Fed signals bond-buying taper coming 'soon,' rate hike next year
Malaysia deals fresh blow to global copper scrap trade
Exxon, Chevron conceal payments to some governments

Stories You'll Enjoy