RHB Islamic focusing on SME, trade financing portfolios

KUALA LUMPUR: It is business as usual (BAU) for RHB Islamic Bank Bhd, despite its parent company being in the thick of merger discussions with AMMB Holdings Bhd (AmBank Group).

“It is BAU for us, despite the merger talks. We are still very much focusing on the targets that we have set for ourselves in terms of enlarging our small and medium enterprises (SMEs), as well as trade-financing portfolios,” said RHB Islamic Bank managing director Datuk Adissadikin Ali at the signing of a strategic partnership agreement with Credit Guarantee Corp.

He said SME financing was not just the focus for RHB Islamic, but also for the group in general.

“As of right, SME financing is at 16 per cent of total group financing. Of that, 16 per cent is for Bumiputera financing. This is something that we want to enlarge going forward,” said Adissadikin.

“As you know, Bank Negara had recently put a stress on trade financing and given this push, we, too, had made trade financing as one of our priorities for this year and beyond,” he said, adding that trade financing contribution to RHB Islamic was now in its lower teens but would be enlarged to the double digits within the next two to three years.

In June, Bank Negara had stressed the importance of trade financing vis-à-vis Islamic finance in its latest Financial Stability Report.

Trade financing currently represents some 3.4 per cent of total trade, and less than a third of overall trade finance from the banking system.

Both AmBank and RHB Group had entered into an exclusivity agreement to negotiate and finalise terms and conditions of the proposed merger for submission to the relevant regulatory authorities in June.

If it takes place, the merger would create the country’s fourth largest bank by asset size and the second biggest Islamic bank. Lidiana Rosli