MAYBANK Islamic Bhd is confident demand for its retail portfolio will grow well in Malaysia and it is poised to roll out more products next year as well.
Chief executive officer Datuk Mohamed Rafique Merican said things to watch out for were new products, product enhancement and improved customer experience. The globally-recognised bank is awaiting the green light for some of the regulatory processes.
“We can still grow in Malaysia because demand for Islamic finance products is strong, especially for retail, which makes up 61 per cent of the portfolio,” he said in an interview recently.
Its latest HouzKey, or rent-to-own using Ijarah leasing, is targeted to grow the portfolio by RM1 billion next year when it is opened to first-time house buyers and upgraders.
In Malaysia, the growth of Islamic finance outpaces that of conventional banking by 2:1.
“The products in the retail space are there while more work needs to be done for investment products and those which embrace the Islamic contracts,” said Rafique.
Maybank Islamic, which adopted value-based intermediation, will develop a wakaf fund together with state councils in areas like economic empowerment, education, health and investment.
“The expectations are that Islamic banks adopt principles broader than pure banking and contribute back to the community either through direct funds (zakat) or wakaf,” he said, adding that the potential for wakaf could be sizeable.
Likewise, trade finance needs to be fully tapped and Malayan Banking Bhd (Maybank), as a global lender, is in the right position.
Rafique, who has helmed the bank for 18 months, said the trillion-dollar global halal market was still relying on conventional trade financing.
“We are working in that space based on the products in the halal market. It is a question of acceptance by the players, both exporters and importers.”
For example, global food company Nestle is now using conventional trade financing facilities as well as the Islamic option.
Islamic trade finance has offerings such as letter of credit-i, banking or shipping guarantee-i, inward bills collection-i, murabahah working capital financing and tawarruq trade financing.
Malaysia imports halal beef from Australia, of which some is re-exported to Gulf Cooperation Council member states, which makes it possible for Islamic trade facilities. Ten per cent of halal meat import comes from non-Muslim countries, and Rafique is confident that discussions can be held how to position halal trade and open certification for that purpose.
Maybank is present in 20 countries, and Maybank Islamic has been having engagements with Thailand and the Philippines as well as Kazakhstan, Afghanistan and Turkey.
Apart from growing interest from African regulators, Maybank is also likely to assist Sri Lanka introduce Islamic finance for some products.
In mid-October, Maybank walked away with the Best Global Islamic Financial Institution award at the Global Finance Awards in Washington.
It was also recognised as the Best Global Sukuk Bank and Best Global Provider of Syariah-Compliant Short-Term Investments.
For Maybank Islamic, even if the Islamic finance marketplace has been described as being overcrowded, it would prefer to stick to an organic growth path.
“While having a stronger capitalised financial institution would be a plus for the industry’s growth, choosing an organic or inorganic path is much dependent on where each entity is on its journey. Big for the sake of being big alone may not do it, there must be clarity about being big, what it means,” said Rafique.