Sunday, October 19, 2008

Redza to head Bank Muamalat

BANK Muamalat Malaysia Bhd, the second full-fledged Islamic bank to be established in Malaysia and now part of the diversified DRB Hicom Bhd, is set to get its new CEO early next month. Banking sources said Mohd Redza Shah Abdul Wahid, currently the DRB Hicom group chief operating officer (COO), is expected to take up the position, pending approval from Bank Negara Malaysia.
Mohd Redza, 45, is expected to lead Bank Muamalat in its transformation plan following the conglomerate’s acquisition of a 70% stake in the bank last year. The bank is currently managed by Acting CEO Syed Abdul Aziz Jailani Syed Kechik.
The Malaysian Reserve had reported that the bank saw a change in its top management beginning April this year after its former chairman and CEO vacated their positions in line with the take-over. The two, formerly from Malayan Banking Bhd, came on board Bank Muamalat in 2005.
The bank grabbed headlines late last year when DRB-Hicom got an offer from Bukhary Capital, owned by tycoon Tan Sri Syed Mokhtar Al-Bukhary, to sell its entire stake in the bank. The balance 30% stake is held by Khazanah Nasional Bhd.
Mohd Redza will join Bank Muamalat at a time when competition is heating up and the threat of higher non-performing financing looms in the Islamic banking sector, in light of the global financial crisis and anticipated global recession.
Late last year, HSBC Bank Malaysia Bhd became the first locally-incorporated foreign bank to be awarded a licence to set up an Islamic banking subsidiary. OCBC Bank (Malaysia) Bhd also received approval in-principle to set up such a subsidiary.
They will provide the full range of Shariah-compliant businesses and will compete with other foreign Islamic banks such as Kuwait Finance House (Malaysia) Bhd and Al-Rajhi Bank, further heightening the rivalry in the sector.
Prior to joining DRB Hicom in 2006, Mohd Redza was group CEO of Tradewinds Corp Bhd from 2002 to November 2005 and acting CEO of Tradewinds (M) Bhd from 2004 to 2005. He holds a Bachelor of Science in Economics in Industry and Trade and Master of Science of Economics in International Banking and Finance, and has also served several other companies such as Silterra Malaysia Sdn Bhd and Khazanah Nasional Bhd.
Last month, DRB-Hicom chairman Tan Sri Syed Anwar Jamalullail said the conglomerate was expected to complete the purchase by the end of this year and would spend the next two years building up the bank, adding that he hoped to see contributions to the group by then.
Historically, Bank Muamalat saw deterioration in its net profit of RM18 million in financial year (FY) 2001 to its first-ever net loss in 2004. However, it returned to the black in FY05 and registered a huge improvement in net profit to RM32 million. The strong showing continued in FY06, with its net profit increasing 130% to RM73.9 million.
Established in 1999, the bank absorbed the Islamic banking assets of Bank Bumiputra Malaysia Bhd and Bank of Commerce, following their merger. It was then, one of only two Islamic banks operating in the country, with the other being Bank Islam Malaysia Bhd.
(The Malaysian Reserve, Oct 20, 2008, Page 1)

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