BIMB leads Malaysia’s Islamic banking sector

ASIDE from Bursa Malaysia, AllianceDBS Research believed that BIMB Holdings Bhd (BIMB) is the main proxy to ride on the superior growth in Islamic financing.

“Apart from being the only Bursalisted syariah-compliant financial institution, BIMB’s deep-rooted expertise and experience in the industry positions it as the prime candidate to lead the market in product innovation.

“Thus far, investment accounts are the only new product launched, but we see potential for more to come, thanks to regulatory push to move towards the risk-sharing model (vs risk transfer model). The successful deployment of new products could potentially increase financial inclusion, leading to further growth,” it explained.

As BIMB is the oldest Islamic bank in Malaysia, it opined BIMB is primed to ride on the Islamic finance’s expected growth spurt.

“Furthermore, with its deep-rooted expertise and rich experience in the sector, we believe BIMB is poised to be the market leader in product innovation of Islamic banking offerings. This was evident when the Investment Account was first introduced, as BIMB took the lead in providing consumer education on the product. Further aiding this is the support from government-linked companies (GLCs), whose personnel serve as an avenue for BIMB to roll out salary deduction schemes for personal financing,” it said.

Islamic business aside, it added, BIMB’s superior financial metrics in growth, liquidity and asset quality make it a force to be reckoned with in the Malaysian banking space.

“BIMB has an arsenal of tools to lean on to weather the current soft operating environment – a niche in Islamic banking (which supports financing growth momentum), high CASA ratio and liquid balance sheet (to stave off net financing margin compression) as well as high financing loss coverage (to buffer against potential deterioration in asset quality),” it added.