Permata Bank Syariah, the Islamic business unit of publicly listed Bank Permata (BNLI), will launch minor haj (umrah) financing in the first quarter of this year as part of its expansion plan.
Umrah financing will be the unit’s first personal financing segment, according to Permata Syariah head Achmad Kusna Permana. “We have not had any personal financing products before, so right now we are starting with the simplest and the most sharia-based product, which is umrah,” he said in Jakarta on Tuesday.
The new product held bright prospects for the unit, considering the large number of Indonesians leaving for umrah every year, he added. “People do not have to wait for the haj season because they can go on an umrah anytime. They can also go as a family. So if they are not able yet to go on a haj, they can leave for umrah first,” Achmad said.
The average price of an umrah package, which lasts for nine days, ranges between US$3,600 and $3,800 per person. Data from the Religious Affairs Ministry shows that the number of people leaving for umrah has been increasing in the past three years. Last year, the number reached 500,000, much higher than the 295,000 in 2011 and 250,000 in 2010.
Achmad touted Permata Syariah’s umrah financing program as being different from those of other sharia banks, citing its technology and processing features. Besides umrah, Permata Syariah plans to provide personal financing programs in other sectors, including education, this year.
The new personal finance products would hopefully attract new customers, who usually took on non-collateral loans (KTA) to finance their needs, he said. He emphasized that any proposed program would have to be approved first by the unit’s sharia supervisory board.
In 2013, Permata Syariah aims to achieve 70 percent growth in total financing. However, according to Achmad, it does not expect personal financing as a new segment to contribute significantly this year. Instead, the growth target will still be supported by its existing financing segments.
The corporate segment is expected to make up around 30 percent of this year’s financing, followed by small and medium enterprises at 30 percent, mortgages at 25 percent and motorcycles at 15 percent. Its non-performing financing (NPF) ratio, which is its ratio of bad financing, stands at below 1 percent.
As of September 2012, Permata Syariah’s financing amounted to Rp 5.91 trillion ($613.98 million), while its profit margin income reached Rp 126.93 billion. Bank Permata has not submitted its full year 2012 financial report.
In addition to personal financing, Permata Syariah will also launch its wealth management service by offering life insurance products at its offices in the first quarter of 2013. It would partner with a life insurance company, Achmad said, declining to reveal the company’s identity.
Permata Syariah currently serves 140,000 customers. It expects to have 19 branch offices in 16 cities, and operate between 270 and 280 small service outlets by year-end.
Besides opening offices in new areas, Permata Syariah plans to separate some of its offices from Bank Permata’s as well. By September 2012, it reported that its total assets reached Rp 8.64 trillion, making it the fifth-largest sharia bank or unit in the country’s sharia finance industry.