Thursday, February 4, 2010

Bank Islam to spend RM24m for expansion

By Jason Ng
Bank Islam Malaysia Bhd, the country’s oldest Islamic lender, is spending RM24.2 million over two years to bolster its branch network nationwide and set up infrastructure to support its expansion.
At present, the bank has 100 branches and it is "on track" to have a total of 115 branches by 2011 as it plans to open 10 new branches this year as well as relocate and refurbish 14 existing branches, according to chief financial officer Malkit Singh Maan.
"We believe that with the establishment of vast branch network and expansion in electronic delivery channels, it would enhance Bank Islam’s reach to customers and its competitive edge," he told The Malaysian Reserve in an interview recently.
Along with the branch expansion which cost RM7.2 million in 2009, Bank Islam plans to spend a further RM17 million in 2010 to put in additional 72 self service terminals including automatic teller machines, cash deposit machines and cheque deposit machines.
The expansion drive is part of a so-called three-year sustainable growth plan after Bank Islam completed its turnaround plan with three consecutive years of growth after suffering a RM1.3 billion loss after tax at the end of fiscal year 2006.
While profit for the fiscal year 2009 at RM161.88 million was lower than a year earlier, Bank Islam attributed the decline partly due to tax credit received when the bank was making losses. Since the bank started to makes profit since 2007, it had to pay as much as RM66 million in taxation last year.
"Operationally, we are doing well and we are looking at several growth areas to improve further," Malkit said.
With the conclusion of its turnaround plan in 2009, Bank Islam plans to focus on non-fund based income generating businesses of the corporate investment banking, treasury, commercial banking and consumer banking divisions to boost growth.

(This story appeared in The Malaysian Reserve on 2 Feb 2010. 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)

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