By SULHI KHALID / Pic By CIMB
MALAYSIAN Islamic banking industry can achieve the 40% total banking assets target by the end of 2020 in tandem with Bank Negara Malaysia’s (BNM) aspiration, as the sector continues to post healthy growth.
CIMB Islamic Bank Bhd CEO Mohamed Rafe Mohamed Haneef said, as of December 2018, CIMB Islamic had a total asset size of RM100 billion and is confident to achieve the target set by the central bank.
“Various Islamic banks have a different status and target, the average is about 35% to 36%, so hopefully by 2020, we could achieve the 40% target,” he said at the bancatakaful partnership with Takaful Ikhlas General Bhd in Kuala Lumpur yesterday.
Credit rating agency, RAM Holdings Bhd, highlighted in its report recently that Islamic banking financing continued to expand at a much faster pace than conventional loans last year, recording an 11% growth compared to the latter’s 3.3%. Islamic financing grew 10.3% in 2017.
As of January this year, Islamic financing comprised 32% of the overall system’s loans.
“There is a lot of migration from conventional to Islamic banking products. We are confident that as our asset-based size is growing, the natural demand for takaful products will follow,” Mohamed Rafe said.
CIMB Islamic’s partnership agreement with Takaful Ikhlas will see it providing general takaful products and solutions to its customers in the retail, small and medium enterprises and commercial segments.
Over the next five years, the partnership’s joint growth target for general takaful business is RM168 million or 11% year-on-year.
“Takaful industry is enjoying good growth despite challenging economic conditions. In 2018, takaful grows about 9% compared to the same period last year and to conventional counterparts,” Takaful Ikhlas president and CEO Eddy Azly Abidin said.
Eddy Azly added that CIMB Islamic’s customers will benefit from its value-based initiative for the community called the Ikhlas Waqf and Endowment (IWE) programme.
Under the IWE, RM1,000 will be endowed under the participant’s name, and upon demise due to an accident, waqaf and endowment institutions selected by Takaful Ikhlas.
Takaful Ikhlas will also extend its upcoming digital platform to promote its product online including Motor, Travel PA and Travel Hajj.
The digitisation initiative is aligned with one of CIMB Group Holdings Bhd’s technology and data pivot objectives (under its mid-term growth plan, Forward23) by providing customers with cost-efficient and convenient access to its products.
CIMB’s Forward23 aims to scale and accelerate growth in Malaysia and Indonesia; reposition and grow in Thailand, Singapore and Cambodia; and incubate and invest in Vietnam and the Philippines.
Takaful Ikhlas is a wholly owned subsidiary of MNRB Holdings Bhd and has 7,000 agents and 13 regional offices.