CASE STUDY – TRANSFORMATION€¦ · CASE STUDY – TRANSFORMATION Hizamuddin Jamalluddin May 2013...
Transcript of CASE STUDY – TRANSFORMATION€¦ · CASE STUDY – TRANSFORMATION Hizamuddin Jamalluddin May 2013...
CASE STUDY – TRANSFORMATION
Hizamuddin Jamalluddin May 2013
Strictly Private & Confidential
Managing Director’s Office 2
Background
Transformation Journey
Key Results
Moving Forwards
Sec 1
Sec 2
Sec 3
Sec 4
Managing Director’s Office 3
BACKGROUND
A MONUMENTAL MANDATE
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“ To turnaround Bank Islam”, the flag bearer of the country’s Islamic financial services industry”
SIX FEET UNDER THE GROUND
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• Loss making – Two consecutive years of record losses (RM1.29 bil as at June 2006 and RM 0.48 bil as at June 2005)
•Heavy provision for bad financings (RM1.5 bil for FYE 2006 and RM774 mil for FYE 2005) – Totaling RM2.3 bil in two years.
•High cost to income ratio – 65.4%
Financial Debacle
•Capital deficits of RM278 mil •Negative capital adequacy ratios : RWCR of -2.84% & Core capital ratio of -2.78%.
Technically, a defunct financial institution Capital Destruction
•Huge delinquent portfolio – consumer financing, in particular automobile financing and house financing
•Weak underwriting standards and business modality Bleeding Portfolio
•Risk of Bank Runs Corporate Outlook … it was a big mess
LOSS BEFORE ZAKAT & TAX
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Note : Deficit shareholders’ funds of RM277.8 million as at 30 June 2006, technically a defunct bank or no longer deemed as a going concern entity
SIX FEET UNDER THE GROUND…CONT
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•High staff turnover – “Abandon the Bandwagon” •Weak Work Culture - Complacent
People
•Outdated Core Banking System – How to stay competitive? •Absence of key IT Enablers (No Risk Management System, Financial Collection System
and etc) IT Infrastructure
•Plain vanilla with no differentiation •Bureaucratic – Lead to poor customer service & high complaints • Lack of Innovation – Not responsive to marketplace and customer needs
Products & Services
• Limited branch networks & ATMs • Location of premises which is not strategic •Deteriorated physical condition of premises • Limited capability due to IT constraints
Delivery Channels … a mammoth task awaits
ROOT CAUSE OF THE POOR ASSET QUALITY
Absence of robust risk management framework, risk infrastructure, resources and risk culture
Non-robust credit evaluation process
Insufficient depth and breadth in processing loans
Limited restructuring and rehabilitation capability
Suffered huge losses due to non performing financing
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…poor working culture and attitude … unable to offload NPF to Danaharta during financial crisis 1997/98
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TRANSFORMATION JOURNEY
THE JOURNEY BEGINS
New Managing Director came on board on 9 June 2006
Turnaround Plan was announced in October 2006
Injection of new talents and specialists. Introduction of some non-Muslims in the management team to fill the void in expertise and promote cross culture for key positions such as Risk Management and IT.
Corporate Re-branding as a launching pad for transformation agenda
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TURNAROUND PLAN
SUSTAINABLE GROWTH
PLAN
NEW BUILDING BLOCKS
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OCT 2006 – JUNE 2009 JULY 2009 – DEC 2012
…in our pursuit to be a “Global Leader in Islamic Banking”
JAN 2013 – DEC 2015
TURNAROUND PLAN
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Recapitalization & Balance Sheet
Restructuring IT Infrastructure
Revamp Transformation
Programme Cost
Rationalization Exercise
Human Capital
Development
RE-INVENTING BANK ISLAM
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“Corporate Re-branding is not only limited to change our physical appearance i.e. logo, signage & branch model BUT more importantly is the change in our mindset & working culture i.e. to become more professional, knowledgeable, innovative and customer centric as well as to embrace other qualities as required by Islamic teachings”
“We need to have a new strategy and approach in the way we do business. We have to find our niche market. We should bank on our own strengths and capitalize them… and be more focused…on a total solution in the overall turnaround plan”
Dato’ Zukri Samat Bank Islam Malaysia Berhad
- Feb 2007
TURNAROUND PLAN – FINANCIAL RESTRUCTURING
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Recapitalization (Fresh cash injection by Dubai
Financial LLC of RM828.22 mil & Lembaga Tabung Haji of RM186.35
mil)
Balance Sheet Restructuring (Explore “Carve Out” Exercise)
New Underwriting Standards & Revamp Business Model
Aggressive Recovery Activities (Focus on “low yielding fruits”)
Stop the Bleeding (“Bad Bank vs Good Bank
Strategy”) Disposal of Non-Core Investment
… moving out from crisis and to return to black
REORGANIZING THE BANK
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New Board Composition (Diversified Experienced)
Revamp Management Oversight (Instill more effective decision
making process) Bad Bank vs Good Bank
New Revenue Lines (Established Corporate Investment
Banking, Wealth Management, new Treasury services, etc)
Credit Transformation (Independent credit risk
evaluation. New underwriting standards, Instill credit risk culture)
Dedicated Recovery Specialist (Focus on managing “Bad Bank”)
BUILDING A STRONG & COMMITTED TEAM
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Structural Change (Redesign the organization & Redeployment of Resources)
Restoring Core Competencies Injection of New Talents & Retention Strategy
Structured Talents Enrichment Program Cultural Transformation
Building Camaraderie & Sense of Ownership
…flat hierarchies ensured faster decision-making & reduced organizational complexity
REBUILDING THE BANK
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•New IT Blue Print and IT architecture • Focus on enhancement of core banking system – “Life Heart Transplant” •Building new IT capability and skill sets
Redesign IT Infrastructure
•Capable & Experience Team •Enhance and redesign risk infrastructure
Risk Management Infrastructure
•New look and feel, to attract younger generation and non-Muslim customers •Relocation to more vibrant marketplace •To change the mindset i.e. general and non-Muslims’ perception and the working culture
Branch Remodeling
• Set up Corporate Investment Banking (Capital Market & Corporate Finance) • Innovate new product offering – “Payment Holiday” & “No Payment During Construction” •Diversify to new business lines i.e. wealth management, bancatakaful, will writing, •Develop and move to new Shariah contracts • Focus on fee – based income or Non fund-based Income
New Business
BUSINESS TRANSFORMATION
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• Focus on retail banking – diversified portfolio and higher yielding assets
•Diversified fee-based income
Business Model
•Branches as profit centers rather than service outlets
• Introduction of sales target to branches
Branch Transformation •New Underwriting
Standards •Centralization of
processing •Revamped
procurement process
Process Re-engineering
CHANGE IN MINDSET
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•Established Key Performance Indicators •New Performance Rewards Culture – Introduction of Performance Bonus, Reward &
Recognition •Compelling Vision, Goal Orientation, Empowering Climate, Promote Innovation,
Inspirational Leadership & Shared Values
Performance Culture
• Sales Incentives Scheme – First time where top performers were given an incentives trip to Europe, China and other countries
•Cross Selling Culture •Risk-based Target Market
Sales Culture
• Inculcate Credit Culture (from defining target market until managing the portfolio) • “Know Your Customer’s Customer” •Educate operational risk knowledge •Promotes “lessons learned “ capture and communication
Risk Culture
•Customer Centric •Knowledgeable workforce • Service Improvement Process • “Voice of Customer” – Feedback from customer is critical input for further
improvement.
Service Culture
… evolution of mind and spirit toward a performance –based and customer service culture
FRANCHISE DEVELOPMENTS
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• From 90 branches in 2006 to 127 branches as at Dec 2012. Ultimately, to have 150 branches by 2015.
• Focus on new township (first mover advantage) as well as matured and vibrant areas. •Customer base increased from 1.7 mil to about 5.0 mil as at end 2012
Branch Expansion
•ATMS: From 301 units as at June 2006 to more than 1100 units as at Dec 2012 • Internet Banking, Mobile Banking, SMS Banking and etc •Greater access and convenience to our customers
E Channel Developments
• Structured Investment Product – An Najah, Al Ziyad • Innovative Deposit Products – Al Awfar, Waheed-i •Attractive financing solutions – Payment Holiday, No Payment During construction •Complete suite of treasury services, trade services, corporate banking solutions
Product Development & New Offerings
•Weekend Banking •Customer Service Outlet •Bureau De Change •Ar Rahnu Bank Islam
Others
ENHANCEMENT SERVICE DELIVERY TOUCH-POINTS
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BRANCH NETWORKS INTERNET BANKING
CONSUMER BANKING CENTERS
AR RAHNU OUTLETS
BUREAU DE CHANGE SMS BANKING
CORPORATE DESKTOP BANKING
ELECTRONIC BANKING CENTERS
BRANCH NETWORK
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Perlis - 1
Kedah - 10
Kelantan - 11 Pulau Pinang - 5
Perak - 9
Pahang - 9
Terengganu - 5
Selangor – 25 Kuala Lumpur - 17
Negeri Sembilan -5
Melaka - 4
Johor - 14
Sarawak - 6
Sabah - 5
Labuan- 1
Region Total
Central 42
Northern 25
Eastern 25
Southern 23
East Malaysia 12
Total 127 … from 90 branches as at June 2006 …127 branches as at end of 2012 … 6 new branches in 2013 (Sungai Buloh, Bukit Indah (JB), Bandar Baru Tunjung (Kelantan) Sungai Petani (Kedah), Tabung Haji Convention Centre Sepang, & Senawang (N. Sembilan)
SELF SERVICE TERMINALS
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ATM – 8 CDM – 4
CQM – 1 SP - 1
Location Type ATM
CDM CQM SP Total
Branch 271 197 109 43 620
Shopping Centers 94 14 4 1 113
Academic Buildings
119 19 4 4 146
Corporate Offices 69 28 11 4 112
Others 132 48 1 0 183
Total 685 306 129 52 1172
ATM – 31 CDM – 12
CQM – 6 SP -1
ATM – 30 CDM – 15
CQM – 6 SP -3
ATM – 2 CDM – 1
CQM – 1 SP - 1
ATM – 57 CDM – 26
CQM – 13 SP -4
ATM – 49 CDM –27
CQM – 10 SP - 4
ATM – 62 CDM – 34
CQM – 11 SP - 4
ATM – 39 CDM – 16
CQM – 6 SP - 1
ATM – 30 CDM – 12
CQM – 3 SP - 1
ATM – 38 CDM – 21
CQM – 7 SP - 2
ATM – 50 CDM – 17
CQM – 10 SP - 7
ATM -148 CDM – 53
CQM – 26 SP - 10
ATM – 31 CDM – 14
CQM – 6 SP -2
ATM – 78 CDM- 37
CQM – 16 SP – 7
ATM – 32 CDM – 17
CQM – 7 SP - 4
ATM – Automated Teller Machine CDM – Cash Deposit Machine CQM – Cheque Deposit Machine SP – Statement Printer
… continue to invest for customer’s convenience
BRAND EQUITY & POSITIONING
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• Launched new corporate logo and brand identity •Enhance visibility of Bank Islam brand, both domestically and abroad •New brand entity – Offers universal value propositions
Rebranding
• Introduced and embraced new corporate values • “Bank for All” … moving out from traditional customer base •Elevating its image and work culture to be more efficient, dynamic and up-to-date
Corporate Image
•Remain as “Top of Mind – Brand Recall” •Received various awards and industry recognitions
Brand Equity & Recognitions
• “Pioneering Change” New Tag Line BANKING FOR
ALL BANKING FOR
MUSLIMS
BRAND IMAGE– PRIOR TO 2007
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NEW IDENTITY & BANKING EXPERIENCE
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“…with the new feel and look, we hope to make Bank Islam more appealing and accessible to all” …Dato’ Zukri Samat
BUILDING A VALUE –BASED ORGANIZATION
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•Our Islamic products are the benchmark. Reputed as the pioneer in Islamic banking. Built the Islamic banking industry in Malaysia
Leader
•Progressive and innovative - constantly moving ahead, technologically advanced, with new products & services
Dynamic
•Fast, efficient and responsive service. Knowledgeable and equipped staff to handle global business challenges
Professional
•A supportive partner who is approachable, ever ready to provide solutions to your financial problems
Caring
•100% Shariah-based products, services and principles Trustworthy
“Employer brand is a mirror image of customer/client brand because as an organization, employees deliver the touch-points that define customer’s experience of value proposition and brand. “
KEY DRIVER TO CUSTOMERS’ SATISFACTION
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People Basic Shariah knowledge, Ethics, Islamic values, Courtesy and etc
Place/Presentation
Ambiance, Accessibility, Branding, Signage, Marketing etc
Product
Value Proposition, Transparency, Innovative, Differentiation and etc
Process Paper-work, waiting time, hassle free, etc
Price Value, Price Option
TRANSFORMATION STAKEHOLDERS
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• Negative • Often says ‘It’ll never work’ • Has a ‘we’ versus ‘them’
mindset • Does not believe in brand
building • Does not see customer
experience as critical factor • Can exert negative influence • Resistant to change • Prefer the status quo
• Influencers within the organisation • Believes in branding • Has a positive and ‘can do’ attitude • Able to motivate and convert mindset of Skeptics and Fence-sitters • Agents of change • Views the customer experience and other key touch points as part of Branding process
• Indifferent towards the change and brand building • ‘Tidak apa’ attitude – Whatever goes-lah! • Does not want to take responsibility • Rather be passenger than driver • Can be influenced
Skeptics Fence-sitters Champions
TRANSFORMATION CHALLENGES
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We can win if we help each other
I don’t agree with where we are going, I am changing course
What are they going to do to help me through this? Why am I here
with these people?
I will help for a while until I see a problem
I am afraid of change and what it may mean to my department
WORKING AS A TEAM
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Follow the transformation Strategy!
Wow, Look at us go now!
I feel like I am a contributor!
This is fun!
What a team! What else can we do?
OBSERVED LEADERSHIP STYLE
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“Walk the Talk” “Lead by Example”
“Building on Strengths” “Inspirational Motivation”
(Passion, Able to Inspire & Results Oriented)
“Take Time to Listen” (Thereafter, provide solution …
just like a “Medical Doctor”)
Courage, Trust & Skill of Entrepreneurship “Sense of Ownership”
COMMUNICATION STRATEGY
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Brand Ambassador Town hall Sessions Employee Engagement
Grapevine Communication
Media Relations
Annual Communication (Regional Tours)
Stakeholders’ Report
Business Innovation
Robust Risk Management
Strengthening Enabling
Infrastructure
Building Capability & Capacity
Franchise Develop-
ment
In-organic
Growth & Corporate Expansion
SUSTAINABLE GROWTH PLAN … ENDED DEC 2012
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DRIVING INNOVATION
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Prior 2009 2009 2010 2011 2012
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KEY RESULTS
MEASURE OF SUCCESS
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Financial Results Employer of Choice Brand Equity
Customer Satisfaction Awards & Accreditation
KEY FINANCIAL RATIOS
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Audited FY
June 07
Audited FY
June 08
Audited FY
June 09
Actual FYE Dec 2010**
Audited FY Dec 11 **
Actual Dec 12
Islamic Banking System
Banking System
PROFITABILITY
Return on equity (%) – based on PBT 23.3% 26.5% 16.5% 14.4% 18.5% 20.4% ^ 19.6% * 17.5% *
Return on assets (%) – based on PBT 1.4% 1.5% 0.9% 1.2% 1.6% 1.7% ^ 1.4% * 1.6% *
Cost Income Ratio (%) 68.2% 60.8% 56.7% 55.4% 53.8% 51.4% 46.1% * 46.6% *
Non-Fund Based Income Ratio (%) 9.0% 7.8% 10.3% 10.8% 13.8% 13.5% 11.0% * 19.6% *
ASSET QUALITY
Gross Non-Performing/ Impaired Financing Ratio (%) 24.7% 21.2% 16.4% 4.5% 2.6% 1.6% 1.6% # 2.0 % #
Net Non-Performing/Impaired Financing Ratio - Less IA & CA (%) 11.4% 7.8% 6.7% 1.1% -0.2% -0.7% -0.3% # -0.02% #
Financing Loss Coverage Ratio (%) 67.7% 75.8% 80.8% 77.2% 106.2% 142.6% 119.3% # 100.9% #
EFFICIENCY
Financing to Deposits (%) 57.6% 52.0% 43.5% 45.7% 51.5% 61.2% 77.2% # 78.7% #
CAPITALISATION
RWCR (%) – before proposed dividend 12.0% 12.9% 13.6% 16.8% 16.9% 14.1% 14.3% *
# 15.2% *#
…healthy capitalisation
…financing-to deposit ratio inching closer to optimum level
…cost income ratio continue to trend downwards
…commendable post 2006 asset quality
PBZT - CONTINUES TO BREAK NEW RECORDS
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Jun 07 Jun 08 Jun 09 Dec 10 Dec 11 Dec 12
236.7 308.3
233.1 342.5
493.0 600.3
Turnaround Plan Sustainable Growth Plan “Stop the bleeding” Focus on recovery and return to
operational profit Transformation (Mindset, Business
Model, Brand Identity, Corporate culture etc)
Building strong foundation (i.e. good credit portfolio and operation)
Rebuilt infrastructure (risk management, IT, delivery network etc)
Enhanced Capability (Skill-set & competency)
RM
mill
ion
+21.7%
TOTAL ASSETS : CAGR OF 12.1% OVER THE LAST 5 YEARS
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Turnaround Plan Sustainable Growth Plan Recapitalisation Balance Sheet Restructuring Rejuvenate Bank Islam brand
Robust Risk Management Optimising Balance Sheet Mix
RM
mill
ion
+16.2%
June 07 June 08 June 09 Dec 10 Dec 11 Dec 12
19,091.2 23,559.4
27,497.5 30,397.9 32,226.5
37,450.8
ASSETS GROWTH – BENCHMARK
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23.5 26.7 30.4 32.2
37.5 31.3
37.9
47.5
75.5
91.4
18.7 27.3
36.0 43.1
51.2
16.5 22.7 23.7 29.4 29.3 13.4 16.7 18.0
22.4 29.6
9.4 11.2 13.1 22.7 27.1
41.7 50.6
61.9
72.5
-
Dec-08 Dec-09 Dec-10 Dec-11 Dec'12
Bank Islam
Maybank Islamic
CIMB Islamic
Public Islamic
AmIslamic
RHB Islamic
Bank Rakyat
Banking industry market share (%) Dec-08 Dec-09 Dec-10 Dec-11 Dec'12 Bank Islam 1.8% 1.9% 2.0% 1.8% 2.0% Maybank Islamic 2.3% 2.7% 3.1% 4.2% 4.8% CIMB Islamic 1.4% 1.9% 2.3% 2.4% 2.7% Public Islamic 1.2% 1.6% 1.5% 1.7% 1.5% AmIslamic 1.0% 1.2% 1.2% 1.3% 1.5% RHB Islamic 0.7% 0.8% 0.8% 1.3% 1.4%
Total Assets (RM’bil)
Islamic banking market share (%) Dec-08 Dec-09 Dec-10 Dec-11 Dec'12
5-year CAGR
Bank Islam 12.2% 11.4% 11.4% 9.6% 9.8% 12.1% Maybank Islamic 16.2% 16.2% 17.8% 22.5% 24.0% 29.6% CIMB Islamic 9.7% 11.7% 13.5% 12.9% 13.4% 41.6% Public Islamic 8.5% 9.7% 8.8% 8.8% 7.7% 16.3% AmIslamic 6.9% 7.1% 6.7% 6.7% 7.8% 25.5% RHB Islamic 4.9% 4.8% 4.9% 6.8% 7.1% 26.4%
ROBUST FINANCING GROWTH
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June 07 June 08 June 09 Dec 10 Dec 11 Dec 12
8,472.1 9,061.3 9,661.9 11,857.1 14,160.3
19,508.7
…still primarily a retail bank
“Putting the House in Order” Revamp Business Model
Risk based Target Market Focus on Secured Financing
11,000.2
1,812.8 1,500.5 250.3
14,696.8
2,454.1 2,610.5 187.6
Consumer Commercial Corporate BILOB
Dec 11 Dec 12
Gross Financing by Business Unit
3,696.6 (62.7) 641.3 1,110.0
+37.8%
GROSS FINANCING – BENCHMARK
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32.1
39.7
46.6 50.7
-
23.2
31.2
38.7
52.4
62.0
6.1
16.4 22.7
28.4 33.3
12.2 14.6 16.6 19.5 20.4 9.8 12.3 13.1 15.8
20.4
11.0 11.5 12.3 14.6 16.3 5.5 6.1 9.0
13.1 13.1
Dec-08 Dec-09 Dec-10 Dec-11 Dec-12
Bank Rakyat
Maybank Islamic
CIMB Islamic
Public Islamic
AmIslamic
Bank Islam
RHB Islamic
Industry market share (%) Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Maybank Islamic 3.2% 4.0% 4.4% 5.2% 5.6% CIMB Islamic 0.8% 2.1% 2.6% 2.8% 3.0% Public Islamic 1.7% 1.9% 1.9% 1.9% 1.8% AmIslamic 1.3% 1.6% 1.5% 1.6% 1.8% Bank Islam 0.8% 0.8% 1.0% 1.3% 1.5% RHB Islamic 0.6% 0.5% 0.6% 1.2% 1.2%
Islamic banking growth rate (%) Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 5 yr CAGR Maybank Islamic 10.2% 8.5% 7.6% 7.3% 8.4% 26.0% CIMB Islamic 21.6% 23.1% 23.9% 26.1% 26.2% 90.2% Public Islamic 5.7% 12.1% 14.0% 14.2% 14.1% 14.0% AmIslamic 11.4% 10.8% 10.2% 9.7% 8.6% 21.0% Bank Islam 9.1% 9.1% 8.1% 7.9% 8.6% 14.6% RHB Islamic 5.1% 4.5% 5.6% 6.5% 6.9% 29.2%
FROM WORST TO BEST ASSET QUALITY
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11.78%
4.50%
2.61%
1.55%
Dec-09 Dec-10 Dec-11 Dec-12
TotalBankingIndustry
IB Industry
Bank Islam
MIB
CIMB-i
PIBB
Bank Rakyat
Gross Impaired Financing Ratio Net Impaired
Financing Ratio Dec’12: Industry 2.00% IB Industry 1.64%
Dec’12: Industry -0.02% IB Industry -0.32%
3.35%
1.08%
-0.17%
-0.67%
Dec-09 Dec-10 Dec-11 Dec-12
TotalBankingIndustry
IB Industry
Bank Islam
MIB
CIMB-i
PIBB
BankRakyat
74.1% 76.8%
106.2%
142.6%
Dec-09 Dec-10 Dec-11 Dec-12
TotalBankingIndustry
IslamicBankingIndustry
BankIslam
MIB
CIMB-i
PIBB
Financing Loss Coverage Ratio
Dec’12: Industry 100.9% IB Industry 119.3%
STRONG DEPOSIT FRANCHISE
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17,617 20,763 25,212 26,888 28,305 32,583
June 07 June 08 June 09 Dec 10 Dec 11 Dec 12
Deposits Growth + 15.1%
of which Al-Awfar
703 2.5%
of which Al-Awfar
112 0.4%
of which Al-Awfar 1,121 3.6%
of which Al-Awfar
109 0.4%
CASA DEPOSITS
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RM million Dec 2011 Dec 2012 Islamic Banking Industry as at
Dec 2012
Banking System as at Dec 2012
Total CASA 12.3 13.4 82.6 363.1
% of Total Deposits 43.4% 41.2% 26.9% 25.7%
Non CASA RM16,022m
CASA RM12,283m
Demand RM8,420m
Savings Mudharabah RM1,264m
CASA – RM13,426.1m Non CASA – RM19,157.1m
Demand RM8,968.6m
Savings Mudharabah RM1,942.2m
Savings Non-Mudharabah RM2,515.3m
CASA DEPOSIT – BENCHMARK
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40.1%
42.2%
22.0%
43.4%
16.3%
31.3%
23.2%
30.2%
28.9%
6.1%
Bank Islam
MIB
CIMB-i
PIBB
AmIslamic
RHB-i
HL-i
Affin-i
Muamalat
Bank Rakyat
Dec-09
39.7%
35.6%
23.9%
39.3%
19.6%
23.4%
21.4%
31.8%
25.0%
6.0%
Bank Islam
MIB
CIMB-i
PIBB
AmIslamic
RHB-i
HL-i
Affin-i
Muamalat
Bank Rakyat
Dec-10
38.9%
28.2%
23.6%
33.5%
21.9%
15.8%
25.4%
30.0%
23.8%
5.0%
Bank Islam
MIB
CIMB-i
PIBB
AmIslamic
RHB-i
HL-i
Affin-i
Muamalat
Bank Rakyat
Dec-11
41.2%
33.1%
26.8%
30.2%
24.6%
16.5%
26.3%
32.8%
24.1%
Bank Islam
MIB
CIMB-i
PIBB
AmIslamic
RHB-i
HL-i
Affin-i
Muamalat
Dec-12
FINANCING TO DEPOSIT RATIO
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49.1%
111.1%
93.6%
111.6%
96.5%
74.9%
55.9%
63.8%
50.8%
103.6%
Bank Islam
MIB
CIMB-i
PIBB
AmIslamic
RHB-i
HL-i
Affin-i
Muamalat
Bank Rakyat
Dec-09
45.7%
105.0%
100.3%
108.4%
101.4%
90.8%
56.1%
65.9%
52.4%
96.5%
Bank Islam
MIB
CIMB-i
PIBB
AmIslamic
RHB-i
HL-i
Affin-i
Muamalat
Bank Rakyat
Dec-10
51.5%
86.6%
97.0%
97.3%
92.9%
76.6%
71.5%
59.8%
57.9%
86.7%
Bank Islam
MIB
CIMB-i
PIBB
AmIslamic
RHB-i
HL-i
Affin-i
Muamalat
Bank Rakyat
Dec-11
61.2%
87.3%
94.3%
86.2%
94.2%
87.2%
78.8%
57.7%
62.6%
Bank Islam
MIB
CIMB-i
PIBB
AmIslamic
RHB-i
HL-i
Affin-i
Muamalat
Dec-12
COST-TO-INCOME RATIO - BENCHMARKING
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56.5%
45.2%
52.8%
42.7%
49.3%
32.6%
49.3%
Bank Islam
Affin Bank
Alliance
Maybank
CIMB
PBB
AMMBHG
2009
54.3%
45.9%
51.7%
40.5%
42.0%
30.7%
42.0%
Bank Islam
Affin Bank
Alliance
Maybank
CIMB
PBB
AMMBHG
2010
53.8%
46.0%
47.9%
43.5%
39.9%
29.8%
39.9%
Bank Islam
Affin Bank
Alliance
Maybank
CIMB
PBB
AMMBHG
2011
52.6%
45.2%
57.1%
47.5%
43.0%
30.5%
43.0%
Bank Islam
Affin Bank
Alliance
Maybank
CIMB
PBB
AMMBHG
2012
RETURN ON EQUITY - BENCHMARK
Managing Director’s Office 50
26.5%
5.9%
29.4%
17.4%
22.0%
20.5%
15.4%
33.4%
19.1%
17.9%
Bank Islam
Muamalat
Bank Rakyat
Affin Bank
Alliance Bank
Maybank
CIMB
PBB
RHB Bank
AMMBHG
2009
16.5%
11.8%
31.9%
15.0%
11.8%
7.3%
18.6%
30.3%
18.6%
16.1%
Bank Islam
Muamalat
Bank Rakyat
Affin Bank
Alliance Bank
Maybank
CIMB
PBB
RHB Bank
AMMBHG
2010
16.6%
11.1%
30.5%
16.6%
14.9%
19.7%
19.7%
31.4%
20.3%
15.5%
Bank Islam
Muamalat
Bank Rakyat
Affin Bank
Alliance Bank
Maybank
CIMB
PBB
RHB Bank
AMMBHG
2011
20.3%
11.9%
18.2%
18.0%
19.7%
21.8%
29.1%
17.7%
18.4%
Bank Islam
Muamalat
Affin Bank
Alliance Bank
Maybank
CIMB
PBB
RHB Bank
AMMBHG
2012
CAPITAL ADEQUACY - BENCHMARKING
Managing Director’s Office 51
15.36%
15.21%
17.22%
10.52%
11.34%
13.36%
14.99%
13.78%
21.74%
14.29%
Banking Industry
IB Industry
Bank Islam
MIB
CIMB-i
PIBB
AmIslamic
RHB-i
HL-i
Bank Rakyat
Dec-09
14.77%
14.93%
16.78%
11.19%
17.21%
14.15%
14.00%
13.56%
19.33%
13.32%
Banking Industry
IB Industry
Bank Islam
MIB
CIMB-i
PIBB
AmIslamic
RHB-i
HL-i
Bank Rakyat
Dec-10
15.65%
14.92%
16.86%
12.61%
14.42%
13.27%
13.52%
13.95%
11.34%
16.45%
Banking Industry
IB Industry
Bank Islam
MIB
CIMB-i
PIBB
AmIslamic
RHB-i
HL-i
Bank Rakyat
Dec-11
15.24%
14.30%
14.09%
12.59%
9.00%
13.01%
15.90%
14.74%
13.39%
Banking Industry
IB Industry
Bank Islam
MIB
CIMB-i
PIBB
AmIslamic
RHB-i
HL-i
Dec-12
BUILT A STRONG CUSTOMERS PORTFOLIO
Managing Director’s Office 52
INDUSTRY RECOGNITIONS
Managing Director’s Office 53
2009 2010 2011 2012
EMPLOYER OF CHOICE
Managing Director’s Office 54
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
38. Bank Islam (2011 – 62 place)
38.
42.
44.
49.
61.
Managing Director’s Office 55
“Bank Islam has transformed into a reputable and adequately capitalized banking institution, characterized by a trusted
brand name through excellent service delivery and increased accessibility to its products & services (wide network of
branches and other delivery chanels); continuous product innovation; consistent and sustainable profitability track; dynamic and proactive risk management systems and
mechanisms; strong corporate governance; prudent balance sheet expansion and asset-liability management; favorable credit profile; high quality asset mix and manageable non-
performing financings.
After achieving all the performance targets and having implemented all the pillars set under the three-year
Turnaround Plan and Sustainable Growth Plan, the challenge is to sustain our momentum and continue our journey to place
Bank Islam at greater heights”
Managing Director’s Office 56
MOVING FORWARD
NOT THE TIME TO REST ON OUR LAURELS
Managing Director’s Office 57
Strengthening Market Presence
Building Leaders For Tomorrow
Responsive to Customer Needs
(i.e. Gen Y, Weekend banking, Mobile banking)
Consistency & Reliability of Services
Attractiveness of Value Propositions Productivity & Efficiency
Sustainable Growth Shariah Centre of Excellence Regionalization
… to meet increasingly sophisticated needs of customer and competitive market place
MOVING FORWARD
Managing Director’s Office 58
Robust Organic Growth
Service Excellence
Shariah-led Innovation
Resource Optimization
Employer of Choice
Regional-ization
… transformation as a continuous journey
TRANSFORMING ISLAMIC BANKING
• Risk Taking • Mainly, debt-based
financing
Shariah-compliant financial solutions
• Risk Sharing • Risk Taking • Risk Transfer • Moving towards equity-
based financing, inventory risk and ownership risk.
Shariah-based financial solutions
Managing Director’s Office 59
LESSON LEARNT
With the right people, you can move mountains
Change the mindset is the most difficult
Innovation is the key to stay relevant
Be the best in class. “Whatever you are, be a good one” - Abraham Lincoln
The world is full of uncertainty. Change is the only constant
Managing Director’s Office 60
Q & A SESSION
Managing Director’s Office 61
“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 and requirements.”
www.bankislam.com.my
Managing Director’s Office 62
& Thank You
شكرا جزیال
Disclaimer: This presentation material has been prepared by Bank Islam Malaysia Berhad (the Bank”) for information purposes only and does not purport to contain all the information that may be required to evaluate the Bank or its financial position. No
representation or warranty, express r implied, is given by or on behalf of the Bank as to the accuracy of the information or opinions contained in this presentation. The presentation does not constitute or form part of an offer, solicitation or invitation of any offer, to buy or subscribe for any securities , nor should it or any part of it form the basis of, or be relied in any connection with, any contract, investment decision or commitment whatsoever. The Bank does not accept any liability whatsoever for any loss howsoever arising
from any use of this presentation or their contents or otherwise arising in connection therewith.
TRANSFORMATION MANDATES
Managing Director’s Office 63
Dato’ Sri Zukri Samat, Managing Director • Joined Bank Islam on 1 June 2006 and trusted to helm Bank Islam • “Turnaround of Bank Islam & Value Creation to Stakeholders”
Dato’ Wan Ismail Wan Yusof, GM – Strategic Relations • Joined Bank Islam on 16 April 1983 • “Rejuvenating Bank Islam Brand”
Hizamuddin Jamalluddin, GM – Strategic Planning • Joined Bank Islam on 3 January 2007 • “Steering Transformation & Sustainable Growth”
Maria Mat Said, GM – Legal & Secretarial • Joined Bank Islam on 1 August 2005 • “Safeguarding Bank Islam’s Interests & Effective Governance”
Azmir Abdul Malek, Head - Corporate Communications • Joined Bank Islam on 12 March 2012 • “Reenergizing Bank Islam’s Franchise Value”
TRANSFORMATION MANDATES…CONT
Managing Director’s Office 64
Khairul Kamarudin, Director – Business Development • Joined Bank Islam on 1 December 2005 • “Transforming the Consumer Banking Division & Inculcating High-Performance
Culture”
Norashikin Mohd Kassim, Head - Treasury • Joined Bank Islam on 1 July 2006 • “Building Treasury Capability and Driving Innovation”
Mashitah Osman, Director – Corporate Investment Banking • Joined Bank Islam on 6 November 2006 • “Establishment of the Corporate Investment Banking Division & Visibility of Bank
Islam’s Present in the Islamic Capital Market ”
Abdul Rashid Abdul Hamid, Head - Commercial Banking • Joined Bank Islam on 14 October 2005 • “Repositioning the Commercial Banking Division”
Mujibburahman Abd Rashid, Acting Head – Consumer Banking • Joined Bank Islam on 3 January 2007 • “Driving Risk-Based Sales Culture & Net Promoter”
TRANSFORMATION MANDATES…CONT
Managing Director’s Office 65
Jamilah Abdul Salam, GM - Human Resource • Joined Bank Islam on 9 April 2007 • “Growing our Own Timber & Becoming the Employer of Choice”
Wahid Ali Mohd Khalil, Chief Compliance Officer • Joined Bank Islam on 3 May 2007 • “Integrity and Strong Compliance Culture”
Malkiat Singh Delbara Singh, Chief Financial Officer • Joined Bank Islam on 1 January 2008 • “Effective Cost Management & Robust Financial Reporting”
Ryan Choon Ching, Chief Technology Officer • Joined Bank Islam on 30 June 2008 • “IT Infrastructure Revamp & IT as Key Enabler”
Dato’ Norasni Ayub, Chief Operating Officer • Joined Bank Islam on 15 February 2011 • “Service Transformation”
TRANSFORMATION MANDATES…CONT
Managing Director’s Office 66
Jaafar Abu, Head – Business Support • Joined Bank Islam on 1 July 2009 • “Driving Trade Finance & Services”
Mizan Masram, Head – Recovery & Rehabilitation • Joined Bank Islam on 1 July 2009 • “Maximizing Recovery & Sustainability of Strong Asset Quality”
Mohd Nazri Chik, Head - Shariah • Joined Bank Islam on 1 June 2004 • “Shariah Centre of Excellence”
Jeroen Petrus Mergaretha Maria Thijs, Chief Risk Officer Joined Bank Islam on 12 January 2009 “Inculcating Risk Culture & Proactive Risk Management”
Leong David @ Leong Sze Khiong, Chief Internal Audit • Joined Bank Islam on 7 May 2012 • “Risk-based Auditing”