Bank Islam to launch new structured product

 

Bank Islam Malaysia Bhd, the country's oldest Islamic lender, will launch a new structured deposit fund with an initial size of RM300 million this fiscal year, to improve its non fund-based income.

Its non-fund based income contributed 10 per cent to its total consumer banking revenue for the financial year ended June 30 2009, from 5.8 per cent a year earlier.

The growth was driven by the launch of An-Najah NID-i, its first capital-protected structured investment product and other wealth management products such as will writing and unit trusts.

Bank Islam general manager of consumer banking, Khairul Kamarudin, said the bank, which is highly dependent on retail income, wants to grow its non fund-based income by double digit year-on-year.

"We will launch a product like An-Najah, if not better, this (fiscal) year," Khairul said at a prize giving ceremony for its Al-Awfar product in Kuala Lumpur yesterday.

He added that the bank will launch a minimum of two products in the current fiscal year. The other is a vanilla-based deposit product.

Bank Islam is awaiting regulatory approval, he said.

"Generally, the products will appeal to retail consumers. Next year, there will be more exciting products from us like Al-Awfar," he said.

Al-Awfar, launched on March 25, is a savings and investment account which enables account holders to save and earn profit and have a chance to win cash prizes of up to RM100,000 every quarter.

It has attracted a total deposit of RM237.7 million, but targets to grow the number to RM300 million by December this year.

Khairul also said Bank Islam is aiming to reduce its non-performing financing (NPF) ratio by a minimum of 2 per cent in the current year.

Its NPF stood at 4.71 per cent as at June 30 2009 and 6.3 per cent in 2008.

Under Islamic banking, non-performing loans are termed NPF given that its loans are based on profit-sharing and no interest is charged.

Khairul said the bank's lending is also improving and he believes 2009 would be another good year for the group.

As at June 2009, Bank Islam's asset size stood at RM7.1 billion.