Thursday July 9, 2009

Maybank still keen on overseas takaful ops

This is despite termination of agreement with Jeddah-based firm

KUALA LUMPUR: Malayan Banking Bhd (Maybank) still plans to explore opportunities to expand its takaful business overseas despite the termination of an agreement with Jeddah-based Islamic Corporation for the Development of the Private Sector (ICD) in April.

President and chief executive officer Datuk Seri Abdul Wahid Omar said that in terms of its takaful business expansion, Maybank was looking at countries it was already present and also markets with high Muslim population.

“In some markets, we might be looking at partnering the local entities that can provide the local market knowledge and local distribution. Talks with potential local partners are in the early stages,” he told a press conference after presenting RM7.12mil zakat payment from Maybank group to 39 organisations, comprising 15 state zakat centres and 24 non-governmental organisations and welfare foundations.

Maybank had on April 29 announced the termination of its agreement with ICD, signed in May last year, to jointly explore the feasibility of establishing an international takaful holding company with a view to creating a global leader in the takaful industry.

Datuk Seri Abdul Wahid Omar (left) accompanied by Ibrahim Hassan (second left, partly hidden), with (from left) Pusat Pungutan Zakat chairman Datuk Mustafa Abdul Rahman, Majlis Agama Islam Sabah secretary Amri Suratman and Majlis Agama Islam Johor CEO A. Rahman Jaffar at the zakat presentation on Wednesday.

The parties agreed to not proceed with the establishment of the holding company after the completion of a feasibility study and review of the final report presented by the appointed consultants.

Maybank Islamic Bhd executive vice-president and acting chief executive officer Ibrahim Hassan has said in a previous interview that he expected financing growth to increase by at least 12% for the financial year ended June 30 (FY09), up from RM21.1bil in FY08.

Wahid said growth for the first three quarters in the financial year ended June 30, 2009 (FY09) was due to the overall growth in Islamic loans and the availability of more Islamic financing options.

He said the growth in Islamic banking was higher compared with the group’s commercial banking business.

“We continue to expect Islamic banking to grow by double digits in both financing and deposits moving forward in FY10,” he said.

On Singapore’s central bank banning 10 financial institutions, including Maybank Singapore from selling structured notes after they offered products tied to Lehman Brothers Holdings Inc, Wahid said: “Most banks sell the products but we did not sell any Lehman products in Malaysia.”

“This is actually an industry issue in Singapore. The Association of Banks in Singapore had already issued the press statement on Tuesday to describe the issue and measures taken by banks involved,” he said.

Wahid said member banks of the association had agreed to follow the measures which cover a range of governance and assurance processes, training and compensation of sales personnel, consumer education and enhancements to the sales process itself.

The level of proactiveness displayed by Maybank Singapore had resulted in the bank receiving the lowest fine, he added.

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