Tuesday December 2, 2008

OCBC Islamic banking unit to maintain growth momentum

PETALING JAYA: OCBC Bank (M) Bhd unit OCBC Al-Amin Bank Bhd expects its total outstanding financing value to grow by double digits this year from RM1.9bil at end-2007 and maintain the growth momentum next year.

Director and chief executive officer Syed Abdull Aziz Syed Kechik said the double-digit growth would be supported by new product offerings, new customers and new Islamic banking branches.

“We hope to chart double-digit growth for next year as well,” he told reporters after the launch of the first OCBC Al-Amin branch here yesterday.

“Our Islamic banking base is still small as it contributed only 9% to the total banking assets of OCBC Bank (Malaysia) last year,” he added.

From left: OCBC director and CEO Jeffrey Chew Sun Teong, chairman Tan Sri Nasruddin Bahari and Syed Abdull Aziz Syed Kechik

After operating an Islamic banking window for 13 years, OCBC Bank last year received Bank Negara’s approval to open an Islamic banking subsidiary.

Abdull Aziz said the bank initially would focus on applying three Islamic banking principles – murabahah, mudharabah and ijarah – to develop products that serve individuals and businesses.

“We will launch four Islamic trade financing -related products this month, adding to the 34 products that have been launched by OCBC Bank so far,” he said.

He said the bank would open four more branches in the Klang Valley and cities next year to cater to the market demand.

Abdul Aziz added that Islamic banking accounted for 16.7% of the country’s banking assets currently.

He said the bank would reduce its base financing rate (BFR) from 6.75% to 6.5%, effective tomorrow, following the cut in the overnight policy rate by Bank Negara last week.

Meanwhile, OCBC Bank director and chief executive officer Jeffrey Chew Sun Teong said the bank was looking at total loans growth in the “teens” for this year.

“We will probably still be able to grow next year, although it will possibly moderate a bit due to lower demand for big-ticket items such as houses and cars,” he said.

He said the bank anticipated its total loans next year to grow in the “low teens or high single-digit”.

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