Friday December 7, 2012
Kuwait Finance House bullish about consumer banking segment
By SHARIDAN M. ALI
Consumer banking grows to over 20% of portfolio in 2 years
KUALA LUMPUR: Kuwait Finance House (M) Bhd (KFH), the first foreign Islamic bank in the country, is optimistic of the growth of its consumer banking supported by its partnership with Animonsta Studio Sdn Bhd, an animation content developer, as well as its gold investment products.
Consumer banking business is one of the two components alongside commercial banking business under the umbrella of retail banking.
Chief executive officer Datuk Jamelah Jamaluddin said when the bank re-launched its retail banking in 2010 consumer banking was less than 3% out of the total bank's portfolio.
“In two years, consumer banking has exceeded 20% and we still foresee a lot of room to grow,” she told reporters after the launched of its partnership with Animonsta, on sponsorship of BoboiBoy the series and the new public service announcements series, Apa Kata Yaya? yesterday.
Jamelah added that the bank planned to balance its wholesale and retail banking in equal proportions by 2015.
“From the 50% of retail banking, 20% is expected to be contributed by consumer banking while the remaining 30% would be from commercial banking by 2015,” she said.
KFH head of retail and consumer banking Attar Salleh said he didn't see the 20% portion of the consumer banking that KFH had achieved ahead of its targeted timeline as a ceiling but more like a floor as the prospects were great.
“The consumer segment is a lucrative and high-margin business, apparent from the growth of our gold investment products,” he said.
KFH gold investment products include the recently launched Junior Gold Account-i, the first syariah-compliant gold account for customers below 18 years old in Malaysia as well as its flagship Gold Account-i for customers above 18 years old launched in February 2010.
Attar anticipated 50% growth of the gold investment in terms of weight next year.
“Since we launched the products two years ago, we have sold close to two tonnes of gold and expect 50% growth next year
“And as we all know, gold is a good investment avenue other than the stock market and property. For example, when we first launched our gold investment product in 2010, the price of gold was about RM118 per gram, but now it has appreciated to RM170 per gram.
“The price of gold may fluctuate in the short term but its value would remain stable in the long term,” he said.
On its target to close the financial year in the black this year after three years of losses, Jamelah said it was on track as the bank was in net profit position for the three quarters so far this year.
It was reported that KFH hoped to return to profitability in the current financial year 2012 with a pre-tax profit of at least RM80mil.
On its partnership with Animonsta, Jamelah said it was part of the bank's overall branding strategy to reach out to the retail and and consumer market, in particular children and “the young at heart” segment.
“We believe this high quality animation series are a positive influence to our children with the BoboiBoy character emphasising strong values and commitment to excellence,” she said.