ANALYST BRIEFING - DEC 2011
Transcript of ANALYST BRIEFING - DEC 2011
STRICTLY PRIVATE & CONFIDENTIAL
ANALYST BRIEFING ANALYST BRIEFING ‐‐ DEC 2011DEC 2011
Hizamuddin JamalluddinStrategic Planning, Managing Director’s Office
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BANK ISLAM BANK ISLAM
Malaysia is synonymous with Islamic finance, and Bank Islam, as the pioneer of Islamic banking in the country, has been at the forefront in promoting the industry domestically and abroad. Bank Islam has become the symbol of Islamic banking in Malaysia.
Since its inception in 1983, Bank Islam has continued to contribute to the infrastructural and institutional development of an advanced Islamic financial system and helped build Malaysia’s strong global reputation for the Islamic financial services industry (“IFSI”). We have also produced numerous leaders and specialists in the industry. This has helped developed Bank Islam into a well‐established and universally recognized brand.
As the flag‐bearer of the country’s Islamic financial services industry, our vision is to be “The Global Leader in Islamic Banking”.
Today, Bank Islam boasts a comprehensive list of more than 50 innovative and sophisticated Islamic banking products and services, a vast growing network of 115 branches and more than 900 self‐service terminals nationwide.
The Bank has spiraled its growth, presence and repute upwards since its early years. From the seed capital of RM80 million initially, Bank Islam’s shareholder fund swelled to RM2.5 billion as at Dec 2010, a testament to its successful long‐run growth plan.
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CORPORATE INFORMATIONCORPORATE INFORMATION
Shareholders Number of Shares Shareholdings
BIMB Holdings Berhad^ 1,155,400,000 51%
Dubai Financial Group LLC 690,196,000 30.5%
Lembaga Tabung Haji 419,894,000 18.5%
Issued Share Capital 2,265,490,000 100%
Bank Islam was incorporated on 1 March 1983 to become Malaysia’s pioneer bank to operate wholly according to Shariah principles.
Bank Islam was licensed under Islamic Banking Act 1983.
^ Lembaga Tabung Haji (Pilgrimage Funds Board) is deemed as the ultimate controlling shareholder of Bank Islam by virtue of its 51% controlling stake in BIMB Holdings Bhd
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OUR SHAREHOLDERSOUR SHAREHOLDERS
Lembaga Tabung Haji (18.5%)Lembaga Tabung Haji (Pilgrim Fund Board) (TH) is a Government Linked Investment Company (GLIC) holds 51.5% and 18.5% of BIMB Holdings Bhd and Bank Islam respectively. It was established mainly to assist Muslims in saving gradually for the purpose of pilgrimage. TH’s vision is to function as the pillar of economy for the community and provide excellent hajj management services. TH is highly determined to make each business and investment venture a roaring success domestically and abroad. It has also made an impressive mark in its asset management as well as in facilitating various Islamic investment instruments such as sukuk/bonds, corporate notes, Government Investment Certificates, Mudharabah Bank Account and Bill of Acceptance.
BIMB Holdings Bhd (51%)BIMB Holdings Bhd (BHB) is an investment holding company which operates along Islamic principles. BHB was incorporated in Malaysia on 20 March 1997 and was listed on the Main Board of Kuala Lumpur Stock Exchange (now Bursa Malaysia) on 16 September in the same year. The core subsidiaries of BHB are pioneers of various Islamic financial services in the region, namely Bank Islam Malaysia Berhad, Syarikat Takaful Malaysia Bhd, BIMB Securities Sdn Bhd, etc.
Dubai Financial Group LLC(30.5%)Dubai Financial Group is primarily an investment company focusing on banking and financial services. Headquartered in Dubai, Dubai Financial Group either directly or through its subsidiary companies, has active investment interests in conventional and Islamic financing in UAE, GCC, Pakistan and Malaysia. Dubai Financial Group is a subsidiary of Dubai Group.
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CORPORATE STRUCTURECORPORATE STRUCTURE
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BOARD OF DIRECTORSBOARD OF DIRECTORS
Zaiton Mohd HassanChairman, Board Risk Committee
Chairman, Nomination & Assessment Committee Chairman, Remuneration Committee
Mohamed Ridza bin Mohamed AbdullaIndependent Director
Zahari @ Mohd Zin IdrisChairman, Audit & Examination CommitteeChairman, Board Financing Review Committee
…INDEPENDENT DIRECTOR
Dato’ Zamani Abdul GhaniChairman
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BOARD OF DIRECTORSBOARD OF DIRECTORS……contcont
Dato’ Sri Zukri SamatManaging Director
Bank Islam Malaysia Bhd
Datuk Ismee IsmailGroup Managing DirectorLembaga Tabung Haji
Johan AbdullahGroup Managing Director
BIMB Holdings Bhd
… NON INDEPENDENT DIRECTOR
Fadhel Abdulbaqi Abu Al Hassan Al ZaedExecutive Chairman, Dubai Holding Group
Marwan Hassan Ali Al KhatibManaging Director,
Dubai Islamic Investment Group
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GOVERNANCE STRUCTUREGOVERNANCE STRUCTURE
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SHARIAH GOVERNANCE FRAMEWORKSHARIAH GOVERNANCE FRAMEWORK
SHARIAH AS OVERARCHING PRINCIPLE IN BANK ISLAM
SHARIAH SUPERVISORY COUNCIL (SSC)
•Oversight accountability on Shariah matters.
BOARD OFDIRECTORS
(Overall oversight on Shariah governance structure & Shariah
compliance) BOARD RISK COMMITTEE
AUDIT & EXAMINATION
COMMITTEE (AEC)
MANAGEMENT•Ensure execution of business & operations are in accordance with Shariah principles.• Provide necessary resources, infrastructure, enablers to the SSC.
Shariah Risk Management Control Function:Identify, measure, monitor, report & control Shariah non‐compliance risk
Shariah Review Function:Review business operation on regular basis to ensure Shariah compliance.
Shariah Research Function:(under Product Development)Conduct in‐depth Shariah research prior to submission to Shariah Committee.
Shariah Audit Function:Provide independent assessment & objective assurance designed to value add & improve Bank Islam adherence to Shariah
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SHARIAH GOVERNANCE FRAMEWORKSHARIAH GOVERNANCE FRAMEWORK……CONTCONT
SHARIAH SUPERVISORY COUNCIL (SSC)
SHARIAH REVIEW COMMITTEE
SHARIAH DIVISIONPRODUCT DEVELOPMENT DEPT
SHARIAH AUDIT DEPT
Notes:•Chairman of Board Risk Committee and Chairman of Audit & Examination Committee are permanent invitees to SSC•Chairman of SSC and a member of SSC are permanent invitees to Board Risk Committee•Head of Shariah is a member of Management Committee, Management Risk Control Committee, Shariah Compliance Risk Control Committee & Product Development Committee.•Shariah Division is also represented in Financing Committees and Operational Risk Control Committee
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INTEGRATED OVERSIGHT FRAMEWORK INTEGRATED OVERSIGHT FRAMEWORK
Board of Directors
Set Risk Appetite & Tolerance Level
Board Risk Committee
Management Risk Control Committees
[Present single view of risks and to ensure adequate policies and control]
MRCC ALCO SCRC ORCC RMC
Risk Management Division
Credit Risk Management Market Risk Management Operational Risk Mgmt
Monitoring & Reporting
Business DivisionConsumer BankingCorporate Inv. BankingCommercial BankingTreasury
Operation DivisionBranchesCash ManagementCorp. Communication
Business Support Div.Credit AdministrationTransaction ServicesTrade Operations
Other Div.Information Tech.Product Dev.Human Resourceetc
Risk Policies & Capital Allocations
Feedback from Audit & Examination Committee
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ORGANIZATION CHARTORGANIZATION CHART
DIVISION DEPARTMENT
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KEY PILLARSKEY PILLARS
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1
10
5
8
20
165
4
12
8
105
5
5
WP Labuan
1
LOCATION BY REGION TOTAL
Central 31
Northern 24
Southern 21
Eastern 23
East Malaysia 11
Total 115
BRANCH NETWORK @ APRIL 2010BRANCH NETWORK @ APRIL 2010
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SELFSELF‐‐SERVICE TERMINALS NETWORK @ APRIL 2010SERVICE TERMINALS NETWORK @ APRIL 2010
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CORPORATE MILESTONESCORPORATE MILESTONES
Launched the first‐of‐its‐kind mobile banking service known as “Transact At Palm or TAP Mobile Banking‐i, account owners can perform banking transactions anywhere and anytime without internet access.Launched Waheed‐i, the first fixed term time deposit product based on the Shariah contract of Wakalah that meets local and international Shariah standard.Smart partnership with Tabung Haji (“TH”) or Pilgrimage Funds of Malaysia to offer a uniteller services which enables performance of TH transactions and Hajj registration at any Bank Islam branches.Sole Islamic bank and the only commercial bank that obtained approval from the Securities Commission to act as Principal Advisors for corporate finance activities (public offerings, merger & take‐over, capital/equity raising exercise, and etc)
Appointed as one of Malaysia’s first Islamic Principal Dealers by the Central Bank of Malaysia.
Launhed Al‐Awfar, a first‐of‐its‐kind joint savings‐i and investment‐i account which offers cash prizes.Launched the first Islamic structured and capital protected funds, An Najah NID‐i, the first Shariah based structured product with health care as the investment theme.
First Islamic cross‐currency swap agreement
First bank in South East Asia to introduce an Islamic Platinum MasterCard.
First bank in the Asia‐Pacific region to introduce EMV compliant credit cards with chip‐based system .
Lead arranger for the first Global Sukuk Inc, the world’s first Islamic global corporate sukuk.
First bank to offer zakat (tithe) payment facilities via ATM and credit card.
First bank in Malaysia to introduce chip‐based ATM card (Smart Card).
Lead Arranger for Shell MDS Sdn Bhd, Malaysia’s first ringgit dominated Islamic corporate bond issuance.
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KEY STRENGTHS & COMPETITIVE ADVANTAGESKEY STRENGTHS & COMPETITIVE ADVANTAGES
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OPPORTUNITIESOPPORTUNITIES
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MARKET SCANMARKET SCAN
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KEY DEVELOPMENTS & CHALLENGESKEY DEVELOPMENTS & CHALLENGES
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S.W.O.T ANALYSIS S.W.O.T ANALYSIS –– MALAYSIA ECONOMICMALAYSIA ECONOMIC
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S.W.O.T ANALYSIS S.W.O.T ANALYSIS –– ISLAMIC BANKING INDUSTRYISLAMIC BANKING INDUSTRY
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BUSINESS OVERVIEWBUSINESS OVERVIEW
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OUR OFFERINGSOUR OFFERINGS
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CONSUMER BANKINGKhairul Kamarudin
CORPORATE BANKINGMashitah Hj. Osman
TREASURYNorashikin Mohd
Kassim
COMMERCIAL BANKINGAbdul Rashid Abd Hamid
MANAGING DIRECTORDato’ Sri Zukri Samat
BUSINESS DRIVERSBUSINESS DRIVERS
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IN A NUTSHELLIN A NUTSHELL
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KEY BUSINESS DIRECTIONKEY BUSINESS DIRECTION
Business composition – Retail (70%) : Business (30%)
Consumer banking to remain as our key growth driver, focusing on high yielding assets such as personal financing, with a calculated risk ‐ direct deduction from source. House financing (with good profile, ticket size and location) shall continue as our main thrust to build sustainable long term asset portfolio.
Commercial banking to focus on secured financing via business premises financing program. Special attention to be given on driving utilization from existing emerging local corporate with strong credit profile and from existing contract financing clients with good performance record.
Corporate banking will continue to originate and participate in syndication facility as well as focusing on non‐fund based income such as sukuk, corporate finance and advisory deals, etc. The Bank also aims to enhance on wallet seizing and strengthen relationships with top‐tier Malaysian GLCs. Term financing to spearhead future growth.
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KEY BUSINESS DIRECTIONKEY BUSINESS DIRECTION……contcont
Cash Management to cross sell its offering to existing reputable clients of Corporate, Commercial and Consumer banking (i.e. tapping our Package Employers)
Treasury to enhance our portfolio return and ensure competitive funding profile of the Bank. The bank seeks to expand client‐related FX business. Treasury shall continue to manage asset‐liability gap, profit rate risk as well as displaced commercial risk within the Bank’s prescribed risk appetite.
Branches will act as spear‐point to garner CASA.
Robust collection strategy is critical to success especially for retail business portfolio.
Key emphasis to drive down cost‐to‐income ratio i.e. via business process re‐engineering
Ar‐Rahnu business as our micro‐financing arm of the Bank.
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CONSUMER BANKINGCONSUMER BANKING
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LATEST INNOVATIONLATEST INNOVATION
One of the highlights of our innovation trail was the introduction of Transact at Palm (“TAP”) Mobile Banking‐i – the first truly mobile banking without Internet requirement, not only in Malaysia but also in the Southeast Asian region. This innovation will support the nation’s financial inclusion agenda.
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RM2.2 billionBaIDS
KL International Airport BhdSole Lead Arranger
RM1.0 billionIstisna’
Projekt Usahasama Transit Aliran RinganJoint Arranger & Shariah Adviser
First Istisna’ First Syndicated Ijarah
RM1.50 billionAl-Ijarah Muntahiyah Bit-Tamlik
Kumpulan Guthrie BerhadStructuring & Shariah Adviser
CORPORATE INVESTMENT BANKINGCORPORATE INVESTMENT BANKING
RM570 millionBaIDS
Encorp Systembilt Sdn BhdCo-Arranger & Shariah Adviser
First Sukuk Ijarah
USD150 millionSukuk Al Ijarah
First Global Sukuk IncSole Lead Arranger
RM2.01 billionBaIDS
Sistem Lingkaran Lebuhraya Kajang Sdn BhdCo-Arranger & Shariah Adviser
USD600 millionSukuk Al Ijarah
Malaysia Global Sukuk IncCo Arranger
RM1.28 billionBaIDS
SAJ Holdings Sdn BhdJoint Lead Arranger/ Lead Manager & Shariah Adviser
RM5.6 billionIstisna’ Notes
SKS Power Sdn BhdJoint Lead Arranger & Shariah Adviser
RM200 millionBBA CPs &RM3.0 billion BBA MTNs
Syarikat Bekalan Air Selangor Sdn BhdJoint Lead Arranger &Shariah Advisor
RM500 millionBank Guaranteed Sukuk Ijarah
Aras Sejagat Sdn BhdJoint Lead Arranger &Joint Lead Manager
Akarmas Sdn BhdConditional Take-Over Offer on PK ResourcesBerhad’s SharesPrincipal Adviser
RM752.2 millionMudharabah Sukuk
Manfaat Tetap Sdn Bhd
Shariah Adviser
RM4.0 billionSukuk Musyarakah
Plus SPV BerhadJoint Book Runner
First Commercial Bank as Advisor
RM1.5 billion Islamic Medium Term Notes Program
Malaysia Debt Ventures Berhad
Joint Lead Manager
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RM4.0 billionIjarah Medium Term Notes Programme
Syarikat Prasarana Negara BerhadCo-Manager
RM330.0 millionSyndicated Islamic Financing Facility
Kedah Sato Sdn BhdLead Arranger
RM327.0 millionSyndicated Islamic Financing Facility
Prolintas Expressway Sdn BhdLead Arranger
CORPORATE : NOTABLE TRANSACTIONS FYE DEC 2010CORPORATE : NOTABLE TRANSACTIONS FYE DEC 2010
USD150.0 million*Syndicated Islamic Financing
Facility
Qatar Airways Q.C.S.C.Arranger
Rights IssueRM540 mil Islamic
Convertible Redeemable Non-Cumulative Preference
Shares (Tier 1- Capital)
Acquisition of 20% equity interest in
Amana Bank Limited, Sri Lanka By Bank Islam Malaysia Bhd
RM668 millionSyndicated Islamic Financing Facility
Ranhill Powertron IILead ArrangerLead Manager
RM70 millionBusiness Financing Facility
Blossom Time Sdn Bhd
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CORPORATE FINANCECORPORATE FINANCE
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COMMERCIAL BANKINGCOMMERCIAL BANKING
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TREASURY SERVICESTREASURY SERVICES
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SUSTAINABLE GROWTH PLANSUSTAINABLE GROWTH PLAN
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RECOVERY MODERECOVERY MODEMoving out of crisis & return to the black
PHASE 1PHASE 12006 2006 ‐‐ 20072007
STABLE MODESTABLE MODEBuilding solid foundation for a sustainable
growth
PHASE 2PHASE 22008 2008 ‐‐ 20092009
HIGH GROWTH MODEHIGH GROWTH MODEOperational excellence &
market leader
PHASE 3PHASE 32010 2010 ‐‐ OnwardsOnwards
CORPORATE PLANCORPORATE PLAN
TURNAROUND PLAN (JUNE 2006 – JUNE 09)
SUSTAINABLE GROWTH PLAN1st pillar : Recapitalization & Balance Sheet Restructuring
2nd pillar : IT Infrastructure Revamp3rd pillar : Transformation Program4th pillar : Cost Rationalization5th pillar : Human Capital Development
1st pillar: Business innovation2nd pillar: Robust risk management3rd pillar: Strengthening enabling
infrastructure4th pillar : Building capability &
capacity5th pillar: Franchise development6th pillar: Inorganic growth and
corporate expansion
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KEY RESULT AREAS (JAN 2011 KEY RESULT AREAS (JAN 2011 –– DEC 2013)DEC 2013)
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SUSTAINABLE GROWTH PLAN SUSTAINABLE GROWTH PLAN ‐‐ GOALSGOALS
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SUSTAINABLE GROWTH PLANSUSTAINABLE GROWTH PLAN
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SUSTAINABLE GROWTH PLANSUSTAINABLE GROWTH PLAN……contcont
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SUSTAINABLE GROWTH PLANSUSTAINABLE GROWTH PLAN–– ACHIEVEMENTS @ JUNE 2010ACHIEVEMENTS @ JUNE 2010
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SUSTAINABLE GROWTH PLANSUSTAINABLE GROWTH PLAN……contcont
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SUSTAINABLE GROWTH PLANSUSTAINABLE GROWTH PLAN……contcont
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SUSTAINABLE GROWTH PLANSUSTAINABLE GROWTH PLAN……contcont
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CORPORATE AGENDACORPORATE AGENDA
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HEADLINES KPIs 2011HEADLINES KPIs 2011
Return on Equity15%
Return on AssetsAbove 1%
Net Financing Asset Growth of 20%
Net Impaired Assets Below 2%
Cost‐to‐Income ratio : Below 55%
RWCR > 15%Core Capital >8%
Dividend Payout50% of PAZT
Non‐ Fund Based Income Above 10%
Financing Assets Composition 70:30
Growth of Secured Assets Portfolio ‐ 30%
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KEY DIRECTION KEY DIRECTION –– REVENUE GENERATORREVENUE GENERATOR
““RESHAPING THE FUTURERESHAPING THE FUTURE””
SUSTAINABLE GROWTH PLAN
ASSET
COMPO
SITION
OF 70
:30
(CONSU
MER
: OTH
ERS)
BALA
NCING ASSET
MIXED
BETWEEN
SECU
RED & UNSECU
RED
INTENSIFYING
NON FUND BASED
INCO
ME
PRODUCT
OFFER
ING TO
FOCU
S ON
FLOATING RATE
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KEY DIRECTION KEY DIRECTION –– COST CENTRECOST CENTRE
““RESHAPING THE FUTURERESHAPING THE FUTURE””
SUSTAINABLE GROWTH PLAN
OPE
RATIONAL
REORG
ANIZATION
BUSINESS PR
OCE
SS RE‐
ENGINEERING
COST M
ANAGEM
ENT
DISCIPLINES
OPE
RATIONAL
EFFICIEN
CY
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KEY DIRECTION KEY DIRECTION ––INFRASTRUCTUREINFRASTRUCTURE
““RESHAPING THE FUTURERESHAPING THE FUTURE””
RISK MANAGEMENT INFRASTRUCTURE
PROSPEC
TING &
ACC
OUNT PLANNING
(VIA FINANCING ORIGINATION
SYSTEM
)
RISK
ASSESSM
ENT &
CRED
IT M
ANAGEM
ENT
(VIA RISK MANAGEM
ENT SYSTEM
, ASSET
LIABILITY
MANAGEM
ENT SYSTEM
&
INTERN
AL RA
TING SYSTEMS)
COLLEC
TION & REC
OVER
Y (VIA FINANCING COLLEC
TION SYSTEM)
DOCU
MEN
TATION &
DISBU
RSEM
ENT
(VIA STA
NDARD
FINANCING
DOCU
MEN
TATION , CO
LLATERA
L MANAGEM
ENT & LIM
IT M
ONITORING
SYSTEM
)
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ACHIEVEMENTSACHIEVEMENTS
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INDUSTRY & BRAND RECOGNITIONSINDUSTRY & BRAND RECOGNITIONS
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CORPORATE RESPONSIBILITYCORPORATE RESPONSIBILITY
Annual Zakat Presentation
Bank Islam’s PINTAR ProgramZakat for MARA Students
Contribution to Sahabat Korporat TH 30 houses for Needy Families in Kedah ( RM1 mil)
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11stst QUARTER 2011QUARTER 2011
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LOOKING AHEADLOOKING AHEAD
Striking the right balance between capital, growth, profitability
Positive out look for FYE Dec 2011, as pipeline of high yielding consumer assets and corporate activity remains good coupled with steady growth in CASA.
Healthy economic outlook in our key markets, underpinned by rising affluent.
Broaden relationships with our existing customers, and increase cross‐sell, and customer referrals across the group and key stakeholders.
Leveraging on synergistic relationship with Lembaga Tabung Haji.
Enhance operational effectiveness via business process re‐engineering, development and deployment of common corporate resources i.e. technology, risk management and human talent.
Maintain capital prudence in expectation of Basel III and in compliance with new financial reporting standard (FRS 139).
Balance organic growth with selective acquisitions that fit our overall franchise.
Promote innovation, service excellent and competitive offering.
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Q & A SESSIONQ & A SESSION
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“Bank Islam wishes to register its appreciation to all its stakeholders especially regulators, shareholders and customers for their unwavering commitment and continuous support especially in
transforming Bank Islam into a viable, sound, adequately capitalized and competitive banking institution, in line with its
vision to become a “global leader in Islamic banking”.
Bank Islam seeks the recognition as an integrated financial solutions provider with a panoply of innovative Shariah-based
financial products & services that respond to customer needs andrequirements.” ش شك ك
ر را اج ز جي ز ي ال ال
و ولا لاس سال ال م م