Bank Islam to market products in Indonesia

By JASON NG
Bank Islam Trust Company (Labuan) Ltd (BTL) is looking to market Shariah-compliant products to high net worth individuals in Indonesia, the most populous Muslim majority nation in the world.
A memorandum of understanding (MOU) was signed on Tuesday between BTL, a wholly-owned unit of Bank Islam Malaysia Bhd, and Bank Muamalat Indonesia, the first Islamic lender to work towards promotion of Islamic trust products in Indonesia.
"This MOU will enable BTL and Bank Muamalat to consult each other as we share our technical expertise and knowledge to form a platform and establish distribution channels as well as provide and exchange information," said BTL chairman Zahari Idris at the signing ceremony in Kuala Lumpur.
There are about three million customers of Bank Muamalat, of which 10% are classified as high net worth individuals, or prime customers, with savings above 1 billion rupiah (RM302,352), according to the Indonesian lender director Andi Buchari. The two Islamic lenders are expected to sign a formal agreement end of this year.
At the beginning, the two parties will form joint working committee with the aim of distributing the first product within the next six months, Zahari said. Among the range of Islamic trust products to be introduced are, such as Hibah, Gift, Waqf, will writing and estate administration services. "We won't rule out joint product development in the future," Zahari added.
Bank Muamalat, with assets exceeding 13 trillion rupiah (RM302 million ) as of December 2008, presently operates 230 branches nationwide in Indonesia and is represesented by another 3,800 outlets through its collaboration with Indonesian post offices.
The collaboration marks Bank Islam's first foray into Indonesia and will give both BTL and Bank Islam a brand presence in the 250 million population country immediately, Zahari said.
"For a start, it will give the Bank Islam group immediate access to the relatively untapped market for Shariah-based financial products and services," he added.
(This story appeared in The Malaysian Reserve on Feb 13, 2009. The Malaysian Reserve is a daily business/finance newspaper published out of Kuala Lumpur, with a sectoral page on Islamic finance on Mondays, edited by Habhajan Singh)