BIMB allocates RM300m for digitisation effort to improve service and sustain growth

Digital also means improvising our bank office operation, automation and AI for our anti-money laundering activities, says CEO


BIMB Holdings Bhd’s banking arm, Bank Islam Malaysia Bhd, has earmarked RM300 million for its digitisation effort over the next three years to help the Islamic lender improve its service and sustain growth.

CEO Mohd Muazzam Mohamed (picture; right) said the digitisation effort spending will cover hardware, software, data centre and the cyber-security ecosystem.

“When we talk about digital, it’s not just about a new channel to our customers (Internet banking), digital also means improvising our bank office operation, automation and artificial intelligence (AI) for our anti-money laundering activities,” he said during the BIMB half-year financial results briefing in Kuala Lumpur yesterday.

The group will soon be launching a new revised mobile application in November this year.

Last month, BIMB signed an agreement with Green Packet Bhd to offer e-payment and cashless payment services in universities and higher learning institutions in the country.

BIMB’s net profit rose 30% year-on-year (YoY) to RM195 million in the second quarter ended June 30 this year on the back of healthy contribution from its Islamic banking and takaful operations (under Syarikat Takaful Keluarga Malaysia Bhd or Takaful Malaysia).

The Islamic financial institution’s revenue for April to June increased 16% YoY to RM1.15 billion, supported by higher average net financing during the period.

The Bank Islam group reported a profit before zakat and tax (PBZT) of RM437.4 million for the six months ended June 30, an increase of 9.2% YoY or RM36.7 million.

The bank’s customer deposits and investment accounts stood at RM54.7 billion, an increase of 10% YoY or RM5 billion.

Its current and savings accounts and investment accounts (IAs) without maturity, low-cost deposits/IAs stood at RM14.2 billion as of June 30.

Takaful Malaysia recorded a 43.7% YoY jump in PBZT of RM210.4 million for the period, mainly due to stronger growth in the family takaful business.

Takaful Malaysia’s operating revenue of RM1.59 million for the period under review increased by 23.5% YoY or RM302.5 million.

On its outlook, BIMB expects a challenging second half for the banking industry due to thinning margins and a decrease in financing growth.

“Financing growth for the banking sector in Malaysia is expected to decrease to about 5% in 2019 as GDP growth moderates. We expect consumer and business financing growth to taper down in 2019 due to a slowdown in exports,” the lender noted.

Takaful Malaysia anticipates the takaful industry to outperform conventional insurers in view of the strong demand for takaful products.

To complement the growth in the takaful industry, BIMB will continue with its innovative strategies via implementation of digital strategy, introduction of online solutions, expansion of its distribution capabilities, strategic partnerships with leading Islamic banks and brand awareness initiatives.

BIMB’s share price closed unchanged yesterday at RM4.05, valuing the group at RM7.16 billion.

BIMB offers various Islamic financial services including banking, takaful, stockbroking and other related services.