as-Salihin stays positive despite global financial crunch

By Dafizeck Daud
as-Salihin Trustee Bhd, the first "one-stop" Islamic estate planning corporation in Malaysia, expects its business to continue growing despite the present global economic crunch, said its chief executive officer Abdul Aziz Peru Mohamed.
The company, which commenced business barely three years ago, is set to expand its services beyond the Malaysian shores, with its eyes on Singapore. Operations should start within the first half of this year, Abdul Aziz said in an interview with The Malaysian Reserve recently.
In Singapore, the Islamic estate planning products will be distributed through individual agents and tie-up with a "big party there".
However, Abdul Aziz said as-Salihin has not decided whether it should set up its own office in the republic. In addition, the company is exploring opportunities in oil-rich Brunei.
With over 200,000 Muslims and widely known for its wealth, the country represents a potentially good market for as-Salihin. Abdul Aziz disclosed that the company has also tied up with two other banks — Kuwait Finance House (Malaysia) Bhd and United Overseas Bank (Malaysia) Bhd — in addition to RHB Islamic Bank Bhd for the distribution of its Islamic estate planning products.
"We are also waiting for the finalisation of tie-ups with two other banks which will be announced in due course," said Abdul Aziz.
He explained: "What we are doing now is not competing but rather complementing the banks' basket of products. For example, they are already offering deposit, insurance or takaful products and here (with as-Salihin Islamic estate planning instruments) they are looking at the distribution side of it."
Abdul Aziz added that with the challenging investment environment, banks are also looking at how to increase their fee-based income.
The arrangement to distribute as-Salihin's instruments is one way of doing this. According to him, the arrangements with these banks are to serve the local market even though the products can be exported as they are based on the universal Shariah law.
"But we also have to look at each country's civil laws so as to enable the company to administer the estate in accordance to the laws of a specific country," he added.
On the prospects for the company's business, Abdul Aziz noted that last year, as-Salihin's business grew 45% from that of 2007. This year, he expects revenue to grow by another 45%-50%, as the business "is not impacted by the current economic scenario".
Abdul Aziz is optimistic 2009 will be another good year for as-Salihin with the bank tie-ups and steady growth of its agents base.
The number of agents is expected to grow by about 800 to 1,000 people from its current base of 1,300.
Abdul Aziz said "Our main focus will remain the Klang Valley, Johor and Penang as we already have good strongholds in these locations. "While for the banks, we can leverage on their channels of distribution located all over the country."
To cater to its growing operations, as-Salihin will be moving to a new office at the Glomac Business Centre in Kelana Jaya by April or May this year.

(This story appeared in The Malaysian Reserve on Mar 11, 2009 in the Wealth Squared section. 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)