CIMB Islamic views RI as prime market
The Jakarta Post
The Jakarta Post
CIMB Islamic has named Indonesia as the market with the most potential for its sharia banking due to the country's large Muslim population, and is therefore, expecting the country to contribute 30 percent to overall business by 2015.
CIMB Islamic is the Islamic banking unit of the CIMB Group, the Malaysian-based bank franchise that provides both conventional and sharia banking services.
CIMB Group operates in Indonesia through its local arm, CIMB Niaga, which similarly provides conventional services and Islamic banking services via CIMB Niaga Syariah.
Badlisyah Abdul Ghani, the CEO of CIMB Islamic, said that CIMB Niaga Syariah contributed 3 percent to the overall assets of the Group's Islamic banking business.
'[CIMB Niaga Syariah] also contributes roughly 6 percent to the Islamic business's profit before tax [PBT],' he added.
In their 2012 full-year financial report, CIMB Group announced that CIMB Islamic's PBT grew 19.8 percent year-on-year to RM535.5 million (US$176.1 million). Meanwhile, CIMB Niaga earned Rp 4.2 trillion (US$432 million) in net profits, with CIMB Group reaping RM4.35 billion.
Ghani added that the group wanted the Indonesian Islamic unit to contribute between 20-30 percent to the group's entire Islamic banking business by 2015. 'It's a tall order and it's an ambitious plan,' he said.
'But we believe that if we put into effect the infrastructure that we already have in Indonesia today, from our office-channeling to our sharia banking branch offices, we should be able to achieve those targets quite effectively,' he added.
As of March 2013, CIMB Niaga Syariah operated through at least 29 sharia banking branches, 554 channeling offices which provide both conventional and sharia banking services nationwide.
Ghani further said that, in order to achieve the 'ambitious' target, CIMB was looking to expand their Islamic banking services in Indonesia to include investment.
'We are going to do a lot more sukuk [Islamic bonds] in the market in the same manner we have done in Malaysia,' he said.
Handoyo Soebali, the director for commercial banking and sharia at CIMB Niaga, added that CIMB Niaga Syariah had largely focused on consumer and commercial funding as well as financing.
'We've been doing conventional banking activities through which we receive and channel funds to and from our Syariah clients,' he said.
CIMB Niaga Syariah currently provides around 50 products and services, such as consumer deposits and home loans, mainly targeting middle class consumers.
In the past three years, the unit has managed to grow its assets by 186 percent to Rp 9.07 trillion (US$933.4 million) as of December 2012 and boost their financing by 317 percent to Rp 7.63 trillion. Meanwhile, third-party funds soared 183 percent in the last three years, reaching Rp 6.99 trillion at the end of last year.
The unit had also extended their market share in the Syariah banking segment to 4.65 percent as of last year, from 3.3 percent at the end of December 2010.
You might also like :
- TV program under fire for showing protected giant clam being cooked
- Group touts Susi Pudjiastuti as Jokowi’s running mate
- New rule no 'carte blanche' for foreign workers: Minister
- Kate, wife of UK's Prince William, taken to hospital to give birth to third child
- Mitsubishi, Honda introduce special edition cars at IIMS
- Government issues revised regulation on tax holidays
- Palm oil exports fall by 14% in February: Gapki
- EDITORIAL: When interests collide
- Astra's financing wing to issue global bond in second half
- Indonesian-made messaging app Callind launches in Jakarta