CIMB transformes into a regional universal banking group


AFTER stamping its mark on the local and global Islamic investment banking business, the CIMB group now strives to achieve the same for Islamic consumer banking.  

In a short span of two years, the group has transformed itself from Malaysia's top investment bank into a regional universal banking group.  

CIMB Islamic Bank Bhd executive director and chief executive officer Badlisyah Abdul Ghani said the group aspired to become a regional universal bank and the same objective applied to Islamic banking.  

CIMB Islamic's recent job as sukuk lead managers for the Islamic Development Bank and Tabreed in the Middle East also shows it can transform into a global force from being a regional player.  

To become a significant player in Islamic consumer banking, the bank will utilise the group's expertise and experience in Islamic investment banking.  

Badlisyah Abdul Ghani
In 1996, the group started venturing into Islamic banking and finance, particularly in investment banking (predominantly in the debt capital market).  

In 2002, it restructured and rebranded its growing Islamic operations through the establishment of an independent Islamic investment banking division called CIMB Islamic.  

Following this, he said, the group expanded its product range to include Islamic initial public offerings, Islamic asset management, Islamic derivatives and others.  

“Within a short span of four years, CIMB Islamic has successfully rolled out various innovative and ground-breaking products such as the world's first istisna' sukuk (bond), the world's first musyarakah asset backed securities (ABS) and sukuk, the world's first global US-dollar Islamic commercial papers/medium-term notes programme, and the Islamic profit rate swap, which was the world's first Islamic derivative product in the market,” he said in an interview.  

Since the merger between Commerce Tijari Bank (the Islamic banking subsidiary of Bumiputra-Commerce Bank) and CIMB Islamic (CIMB Investment Bank's Islamic division), CIMB Islamic has transformed into an Islamic universal bank with the inclusion of Islamic consumer banking in its stable of products and services.  

CIMB Islamic, he noted, was making headway in the competitive consumer market and was considered as the fastest growing Islamic bank in the country.  

Badlisyah said that from zero base, CIMB Islamic now had 76 branches nationwide and would expand to 383 branches probably in the next six months.  

He added that apart from the traditional retail products like savings account, current account and fixed deposits, the bank had also, earlier this year, launched other Islamic financing facilities such as property and machinery financing, the full suite of trade financing products as well as treasury services.  

According to Badlisyah, the bank has close to 15 consumer banking products and is looking to have up to 63 Islamic products in total within the next three years, depending on the market demand.  

As a policy, CIMB Islamic plans to have an Islamic version of all conventional banking products that the CIMB Group has.

He said that with Shariah Niaga, the group's Islamic franchise under its Indonesian subsidiary PT Bank Niaga, CIMB Islamic was poised to further strengthen and expand its business regionally.  

At present, CIMB Islamic was already present in Brunei and Singapore, he added.

CIMB Islamic has also expanded to the Middle East. Badlisyah said through the group's Bahrain outfit, CIMB-Kanoo Islamic Investment Co BSC (C), CIMB Islamic was upbeat it would be able to bridge the dynamic markets of the Gulf Cooperation Council (GCC) and the vibrant Far-East economies.  

CIMB Islamic recently launched Malaysia's first Islamic equity-linked structured product known as the Islamic All-Stars Global Restricted Mudharabah Structured Investment-i. The product was its first launched simultaneously in Malaysia and Singapore.

The product provides 100% capital protection if held to its five-year maturity period with returns linked to the performance of 20 global blue-chip multinationals including Nestle, Nike, Colgate-Palmolive, Samsung Electronics, PepsiCo, Procter & Gamble, and Microsoft.  

The bank is targeting to secure RM350mil from investors within the three-week sales campaign (starting from Jan 24) targeted at the mass affluent.  

The indicative gross profit rate in the first year is 8%, while for the second to the fifth year, the gross annual profit rates are estimated at between 8.5 and 10%.

The Securities Commission has set a minimum investment amount of RM250,000 for the product in Malaysia.  

The Singapore government has not set a minimum limit, but the CIMB group has put the limit at S$10,000 (RM22,800).

Source : Daljit Dhesi