CASE STUDY – TRANSFORMATION€¦ · CASE STUDY – TRANSFORMATION Hizamuddin Jamalluddin May 2013 . Strictly Private & Confidential . ... •Negative capital adequacy ratios : RWCR

CASE STUDY – TRANSFORMATION

Hizamuddin Jamalluddin May 2013

Strictly Private & Confidential

Managing Director’s Office 2

Background

Transformation Journey

Key Results

Moving Forwards

Sec 1

Sec 2

Sec 3

Sec 4


BACKGROUND

A MONUMENTAL MANDATE


“ To turnaround Bank Islam”, the flag bearer of the country’s Islamic financial services industry”

SIX FEET UNDER THE GROUND


• Loss making – Two consecutive years of record losses (RM1.29 bil as at June 2006 and RM 0.48 bil as at June 2005)

•Heavy provision for bad financings (RM1.5 bil for FYE 2006 and RM774 mil for FYE 2005) – Totaling RM2.3 bil in two years.

•High cost to income ratio – 65.4%

Financial Debacle

•Capital deficits of RM278 mil •Negative capital adequacy ratios : RWCR of -2.84% & Core capital ratio of -2.78%.

Technically, a defunct financial institution Capital Destruction

•Huge delinquent portfolio – consumer financing, in particular automobile financing and house financing

•Weak underwriting standards and business modality Bleeding Portfolio

•Risk of Bank Runs Corporate Outlook … it was a big mess

LOSS BEFORE ZAKAT & TAX


Note : Deficit shareholders’ funds of RM277.8 million as at 30 June 2006, technically a defunct bank or no longer deemed as a going concern entity

SIX FEET UNDER THE GROUND…CONT


•High staff turnover – “Abandon the Bandwagon” •Weak Work Culture - Complacent

People

•Outdated Core Banking System – How to stay competitive? •Absence of key IT Enablers (No Risk Management System, Financial Collection System

and etc) IT Infrastructure

•Plain vanilla with no differentiation •Bureaucratic – Lead to poor customer service & high complaints • Lack of Innovation – Not responsive to marketplace and customer needs

Products & Services

• Limited branch networks & ATMs • Location of premises which is not strategic •Deteriorated physical condition of premises • Limited capability due to IT constraints

Delivery Channels … a mammoth task awaits

ROOT CAUSE OF THE POOR ASSET QUALITY

Absence of robust risk management framework, risk infrastructure, resources and risk culture

Non-robust credit evaluation process

Insufficient depth and breadth in processing loans

Limited restructuring and rehabilitation capability

Suffered huge losses due to non performing financing


…poor working culture and attitude … unable to offload NPF to Danaharta during financial crisis 1997/98


TRANSFORMATION JOURNEY

THE JOURNEY BEGINS

New Managing Director came on board on 9 June 2006

Turnaround Plan was announced in October 2006

Injection of new talents and specialists. Introduction of some non-Muslims in the management team to fill the void in expertise and promote cross culture for key positions such as Risk Management and IT.

Corporate Re-branding as a launching pad for transformation agenda


TURNAROUND PLAN

SUSTAINABLE GROWTH

PLAN

NEW BUILDING BLOCKS


OCT 2006 – JUNE 2009 JULY 2009 – DEC 2012

…in our pursuit to be a “Global Leader in Islamic Banking”

JAN 2013 – DEC 2015

TURNAROUND PLAN


Recapitalization & Balance Sheet

Restructuring IT Infrastructure

Revamp Transformation

Programme Cost

Rationalization Exercise

Human Capital

Development

RE-INVENTING BANK ISLAM


“Corporate Re-branding is not only limited to change our physical appearance i.e. logo, signage & branch model BUT more importantly is the change in our mindset & working culture i.e. to become more professional, knowledgeable, innovative and customer centric as well as to embrace other qualities as required by Islamic teachings”

“We need to have a new strategy and approach in the way we do business. We have to find our niche market. We should bank on our own strengths and capitalize them… and be more focused…on a total solution in the overall turnaround plan”

Dato’ Zukri Samat Bank Islam Malaysia Berhad

- Feb 2007

TURNAROUND PLAN – FINANCIAL RESTRUCTURING


Recapitalization (Fresh cash injection by Dubai

Financial LLC of RM828.22 mil & Lembaga Tabung Haji of RM186.35

mil)

Balance Sheet Restructuring (Explore “Carve Out” Exercise)

New Underwriting Standards & Revamp Business Model

Aggressive Recovery Activities (Focus on “low yielding fruits”)

Stop the Bleeding (“Bad Bank vs Good Bank

Strategy”) Disposal of Non-Core Investment

… moving out from crisis and to return to black

REORGANIZING THE BANK


New Board Composition (Diversified Experienced)

Revamp Management Oversight (Instill more effective decision

making process) Bad Bank vs Good Bank

New Revenue Lines (Established Corporate Investment

Banking, Wealth Management, new Treasury services, etc)

Credit Transformation (Independent credit risk

evaluation. New underwriting standards, Instill credit risk culture)

Dedicated Recovery Specialist (Focus on managing “Bad Bank”)

BUILDING A STRONG & COMMITTED TEAM


Structural Change (Redesign the organization & Redeployment of Resources)

Restoring Core Competencies Injection of New Talents & Retention Strategy

Structured Talents Enrichment Program Cultural Transformation

Building Camaraderie & Sense of Ownership

…flat hierarchies ensured faster decision-making & reduced organizational complexity

REBUILDING THE BANK


•New IT Blue Print and IT architecture • Focus on enhancement of core banking system – “Life Heart Transplant” •Building new IT capability and skill sets

Redesign IT Infrastructure

•Capable & Experience Team •Enhance and redesign risk infrastructure

Risk Management Infrastructure

•New look and feel, to attract younger generation and non-Muslim customers •Relocation to more vibrant marketplace •To change the mindset i.e. general and non-Muslims’ perception and the working culture

Branch Remodeling

• Set up Corporate Investment Banking (Capital Market & Corporate Finance) • Innovate new product offering – “Payment Holiday” & “No Payment During Construction” •Diversify to new business lines i.e. wealth management, bancatakaful, will writing, •Develop and move to new Shariah contracts • Focus on fee – based income or Non fund-based Income

New Business

BUSINESS TRANSFORMATION


• Focus on retail banking – diversified portfolio and higher yielding assets

•Diversified fee-based income

Business Model

•Branches as profit centers rather than service outlets

• Introduction of sales target to branches

Branch Transformation •New Underwriting

Standards •Centralization of

processing •Revamped

procurement process

Process Re-engineering

CHANGE IN MINDSET


•Established Key Performance Indicators •New Performance Rewards Culture – Introduction of Performance Bonus, Reward &

Recognition •Compelling Vision, Goal Orientation, Empowering Climate, Promote Innovation,

Inspirational Leadership & Shared Values

Performance Culture

• Sales Incentives Scheme – First time where top performers were given an incentives trip to Europe, China and other countries

•Cross Selling Culture •Risk-based Target Market

Sales Culture

• Inculcate Credit Culture (from defining target market until managing the portfolio) • “Know Your Customer’s Customer” •Educate operational risk knowledge •Promotes “lessons learned “ capture and communication

Risk Culture

•Customer Centric •Knowledgeable workforce • Service Improvement Process • “Voice of Customer” – Feedback from customer is critical input for further

improvement.

Service Culture

… evolution of mind and spirit toward a performance –based and customer service culture

FRANCHISE DEVELOPMENTS


• From 90 branches in 2006 to 127 branches as at Dec 2012. Ultimately, to have 150 branches by 2015.

• Focus on new township (first mover advantage) as well as matured and vibrant areas. •Customer base increased from 1.7 mil to about 5.0 mil as at end 2012

Branch Expansion

•ATMS: From 301 units as at June 2006 to more than 1100 units as at Dec 2012 • Internet Banking, Mobile Banking, SMS Banking and etc •Greater access and convenience to our customers

E Channel Developments

• Structured Investment Product – An Najah, Al Ziyad • Innovative Deposit Products – Al Awfar, Waheed-i •Attractive financing solutions – Payment Holiday, No Payment During construction •Complete suite of treasury services, trade services, corporate banking solutions

Product Development & New Offerings

•Weekend Banking •Customer Service Outlet •Bureau De Change •Ar Rahnu Bank Islam

Others

ENHANCEMENT SERVICE DELIVERY TOUCH-POINTS


BRANCH NETWORKS INTERNET BANKING

CONSUMER BANKING CENTERS

AR RAHNU OUTLETS

BUREAU DE CHANGE SMS BANKING

CORPORATE DESKTOP BANKING

ELECTRONIC BANKING CENTERS

BRANCH NETWORK


Perlis - 1

Kedah - 10

Kelantan - 11 Pulau Pinang - 5

Perak - 9

Pahang - 9

Terengganu - 5

Selangor – 25 Kuala Lumpur - 17

Negeri Sembilan -5

Melaka - 4

Johor - 14

Sarawak - 6

Sabah - 5

Labuan- 1

Region Total

Central 42

Northern 25

Eastern 25

Southern 23

East Malaysia 12

Total 127 … from 90 branches as at June 2006 …127 branches as at end of 2012 … 6 new branches in 2013 (Sungai Buloh, Bukit Indah (JB), Bandar Baru Tunjung (Kelantan) Sungai Petani (Kedah), Tabung Haji Convention Centre Sepang, & Senawang (N. Sembilan)

SELF SERVICE TERMINALS


ATM – 8 CDM – 4

CQM – 1 SP - 1

Location Type ATM

CDM CQM SP Total

Branch 271 197 109 43 620

Shopping Centers 94 14 4 1 113

Academic Buildings

119 19 4 4 146

Corporate Offices 69 28 11 4 112

Others 132 48 1 0 183

Total 685 306 129 52 1172

ATM – 31 CDM – 12

CQM – 6 SP -1

ATM – 30 CDM – 15

CQM – 6 SP -3

ATM – 2 CDM – 1

CQM – 1 SP - 1

ATM – 57 CDM – 26

CQM – 13 SP -4

ATM – 49 CDM –27

CQM – 10 SP - 4

ATM – 62 CDM – 34

CQM – 11 SP - 4

ATM – 39 CDM – 16

CQM – 6 SP - 1

ATM – 30 CDM – 12

CQM – 3 SP - 1

ATM – 38 CDM – 21

CQM – 7 SP - 2

ATM – 50 CDM – 17

CQM – 10 SP - 7

ATM -148 CDM – 53

CQM – 26 SP - 10

ATM – 31 CDM – 14

CQM – 6 SP -2

ATM – 78 CDM- 37

CQM – 16 SP – 7

ATM – 32 CDM – 17

CQM – 7 SP - 4

ATM – Automated Teller Machine CDM – Cash Deposit Machine CQM – Cheque Deposit Machine SP – Statement Printer

… continue to invest for customer’s convenience

BRAND EQUITY & POSITIONING


• Launched new corporate logo and brand identity •Enhance visibility of Bank Islam brand, both domestically and abroad •New brand entity – Offers universal value propositions

Rebranding

• Introduced and embraced new corporate values • “Bank for All” … moving out from traditional customer base •Elevating its image and work culture to be more efficient, dynamic and up-to-date

Corporate Image

•Remain as “Top of Mind – Brand Recall” •Received various awards and industry recognitions

Brand Equity & Recognitions

• “Pioneering Change” New Tag Line BANKING FOR

ALL BANKING FOR

MUSLIMS

BRAND IMAGE– PRIOR TO 2007


NEW IDENTITY & BANKING EXPERIENCE


“…with the new feel and look, we hope to make Bank Islam more appealing and accessible to all” …Dato’ Zukri Samat

BUILDING A VALUE –BASED ORGANIZATION


•Our Islamic products are the benchmark. Reputed as the pioneer in Islamic banking. Built the Islamic banking industry in Malaysia

Leader

•Progressive and innovative - constantly moving ahead, technologically advanced, with new products & services

Dynamic

•Fast, efficient and responsive service. Knowledgeable and equipped staff to handle global business challenges

Professional

•A supportive partner who is approachable, ever ready to provide solutions to your financial problems

Caring

•100% Shariah-based products, services and principles Trustworthy

“Employer brand is a mirror image of customer/client brand because as an organization, employees deliver the touch-points that define customer’s experience of value proposition and brand. “

KEY DRIVER TO CUSTOMERS’ SATISFACTION


People Basic Shariah knowledge, Ethics, Islamic values, Courtesy and etc

Place/Presentation

Ambiance, Accessibility, Branding, Signage, Marketing etc

Product

Value Proposition, Transparency, Innovative, Differentiation and etc

Process Paper-work, waiting time, hassle free, etc

Price Value, Price Option

TRANSFORMATION STAKEHOLDERS


• Negative • Often says ‘It’ll never work’ • Has a ‘we’ versus ‘them’

mindset • Does not believe in brand

building • Does not see customer

experience as critical factor • Can exert negative influence • Resistant to change • Prefer the status quo

• Influencers within the organisation • Believes in branding • Has a positive and ‘can do’ attitude • Able to motivate and convert mindset of Skeptics and Fence-sitters • Agents of change • Views the customer experience and other key touch points as part of Branding process

• Indifferent towards the change and brand building • ‘Tidak apa’ attitude – Whatever goes-lah! • Does not want to take responsibility • Rather be passenger than driver • Can be influenced

Skeptics Fence-sitters Champions

TRANSFORMATION CHALLENGES


We can win if we help each other

I don’t agree with where we are going, I am changing course

What are they going to do to help me through this? Why am I here

with these people?

I will help for a while until I see a problem

I am afraid of change and what it may mean to my department

WORKING AS A TEAM


Follow the transformation Strategy!

Wow, Look at us go now!

I feel like I am a contributor!

This is fun!

What a team! What else can we do?

OBSERVED LEADERSHIP STYLE


“Walk the Talk” “Lead by Example”

“Building on Strengths” “Inspirational Motivation”

(Passion, Able to Inspire & Results Oriented)

“Take Time to Listen” (Thereafter, provide solution …

just like a “Medical Doctor”)

Courage, Trust & Skill of Entrepreneurship “Sense of Ownership”

COMMUNICATION STRATEGY


Brand Ambassador Town hall Sessions Employee Engagement

Grapevine Communication

Media Relations

Annual Communication (Regional Tours)

Stakeholders’ Report

Business Innovation

Robust Risk Management

Strengthening Enabling

Infrastructure

Building Capability & Capacity

Franchise Develop-

ment

In-organic

Growth & Corporate Expansion

SUSTAINABLE GROWTH PLAN … ENDED DEC 2012


DRIVING INNOVATION


Prior 2009 2009 2010 2011 2012


KEY RESULTS

MEASURE OF SUCCESS


Financial Results Employer of Choice Brand Equity

Customer Satisfaction Awards & Accreditation

KEY FINANCIAL RATIOS


Audited FY

June 07

Audited FY

June 08

Audited FY

June 09

Actual FYE Dec 2010**

Audited FY Dec 11 **

Actual Dec 12

Islamic Banking System

Banking System

PROFITABILITY

Return on equity (%) – based on PBT 23.3% 26.5% 16.5% 14.4% 18.5% 20.4% ^ 19.6% * 17.5% *

Return on assets (%) – based on PBT 1.4% 1.5% 0.9% 1.2% 1.6% 1.7% ^ 1.4% * 1.6% *

Cost Income Ratio (%) 68.2% 60.8% 56.7% 55.4% 53.8% 51.4% 46.1% * 46.6% *

Non-Fund Based Income Ratio (%) 9.0% 7.8% 10.3% 10.8% 13.8% 13.5% 11.0% * 19.6% *

ASSET QUALITY

Gross Non-Performing/ Impaired Financing Ratio (%) 24.7% 21.2% 16.4% 4.5% 2.6% 1.6% 1.6% # 2.0 % #

Net Non-Performing/Impaired Financing Ratio - Less IA & CA (%) 11.4% 7.8% 6.7% 1.1% -0.2% -0.7% -0.3% # -0.02% #

Financing Loss Coverage Ratio (%) 67.7% 75.8% 80.8% 77.2% 106.2% 142.6% 119.3% # 100.9% #

EFFICIENCY

Financing to Deposits (%) 57.6% 52.0% 43.5% 45.7% 51.5% 61.2% 77.2% # 78.7% #

CAPITALISATION

RWCR (%) – before proposed dividend 12.0% 12.9% 13.6% 16.8% 16.9% 14.1% 14.3% *

# 15.2% *#

…healthy capitalisation

…financing-to deposit ratio inching closer to optimum level

…cost income ratio continue to trend downwards

…commendable post 2006 asset quality

PBZT - CONTINUES TO BREAK NEW RECORDS


Jun 07 Jun 08 Jun 09 Dec 10 Dec 11 Dec 12

236.7 308.3

233.1 342.5

493.0 600.3

Turnaround Plan Sustainable Growth Plan “Stop the bleeding” Focus on recovery and return to

operational profit Transformation (Mindset, Business

Model, Brand Identity, Corporate culture etc)

Building strong foundation (i.e. good credit portfolio and operation)

Rebuilt infrastructure (risk management, IT, delivery network etc)

Enhanced Capability (Skill-set & competency)

RM

mill

ion

+21.7%

TOTAL ASSETS : CAGR OF 12.1% OVER THE LAST 5 YEARS


Turnaround Plan Sustainable Growth Plan Recapitalisation Balance Sheet Restructuring Rejuvenate Bank Islam brand

Robust Risk Management Optimising Balance Sheet Mix

RM

mill

ion

+16.2%

June 07 June 08 June 09 Dec 10 Dec 11 Dec 12

19,091.2 23,559.4

27,497.5 30,397.9 32,226.5

37,450.8

ASSETS GROWTH – BENCHMARK


23.5 26.7 30.4 32.2

37.5 31.3

37.9

47.5

75.5

91.4

18.7 27.3

36.0 43.1

51.2

16.5 22.7 23.7 29.4 29.3 13.4 16.7 18.0

22.4 29.6

9.4 11.2 13.1 22.7 27.1

41.7 50.6

61.9

72.5

-

Dec-08 Dec-09 Dec-10 Dec-11 Dec'12

Bank Islam

Maybank Islamic

CIMB Islamic

Public Islamic

AmIslamic

RHB Islamic

Bank Rakyat

Banking industry market share (%) Dec-08 Dec-09 Dec-10 Dec-11 Dec'12 Bank Islam 1.8% 1.9% 2.0% 1.8% 2.0% Maybank Islamic 2.3% 2.7% 3.1% 4.2% 4.8% CIMB Islamic 1.4% 1.9% 2.3% 2.4% 2.7% Public Islamic 1.2% 1.6% 1.5% 1.7% 1.5% AmIslamic 1.0% 1.2% 1.2% 1.3% 1.5% RHB Islamic 0.7% 0.8% 0.8% 1.3% 1.4%

Total Assets (RM’bil)

Islamic banking market share (%) Dec-08 Dec-09 Dec-10 Dec-11 Dec'12

5-year CAGR

Bank Islam 12.2% 11.4% 11.4% 9.6% 9.8% 12.1% Maybank Islamic 16.2% 16.2% 17.8% 22.5% 24.0% 29.6% CIMB Islamic 9.7% 11.7% 13.5% 12.9% 13.4% 41.6% Public Islamic 8.5% 9.7% 8.8% 8.8% 7.7% 16.3% AmIslamic 6.9% 7.1% 6.7% 6.7% 7.8% 25.5% RHB Islamic 4.9% 4.8% 4.9% 6.8% 7.1% 26.4%

ROBUST FINANCING GROWTH



8,472.1 9,061.3 9,661.9 11,857.1 14,160.3

19,508.7

…still primarily a retail bank

“Putting the House in Order” Revamp Business Model

Risk based Target Market Focus on Secured Financing

11,000.2

1,812.8 1,500.5 250.3

14,696.8

2,454.1 2,610.5 187.6

Consumer Commercial Corporate BILOB

Dec 11 Dec 12

Gross Financing by Business Unit

3,696.6 (62.7) 641.3 1,110.0

+37.8%

GROSS FINANCING – BENCHMARK


32.1

39.7

46.6 50.7

-

23.2

31.2

38.7

52.4

62.0

6.1

16.4 22.7

28.4 33.3

12.2 14.6 16.6 19.5 20.4 9.8 12.3 13.1 15.8

20.4

11.0 11.5 12.3 14.6 16.3 5.5 6.1 9.0

13.1 13.1

Dec-08 Dec-09 Dec-10 Dec-11 Dec-12

Bank Rakyat

Maybank Islamic

CIMB Islamic

Public Islamic

AmIslamic

Bank Islam

RHB Islamic

Industry market share (%) Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Maybank Islamic 3.2% 4.0% 4.4% 5.2% 5.6% CIMB Islamic 0.8% 2.1% 2.6% 2.8% 3.0% Public Islamic 1.7% 1.9% 1.9% 1.9% 1.8% AmIslamic 1.3% 1.6% 1.5% 1.6% 1.8% Bank Islam 0.8% 0.8% 1.0% 1.3% 1.5% RHB Islamic 0.6% 0.5% 0.6% 1.2% 1.2%

Islamic banking growth rate (%) Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 5 yr CAGR Maybank Islamic 10.2% 8.5% 7.6% 7.3% 8.4% 26.0% CIMB Islamic 21.6% 23.1% 23.9% 26.1% 26.2% 90.2% Public Islamic 5.7% 12.1% 14.0% 14.2% 14.1% 14.0% AmIslamic 11.4% 10.8% 10.2% 9.7% 8.6% 21.0% Bank Islam 9.1% 9.1% 8.1% 7.9% 8.6% 14.6% RHB Islamic 5.1% 4.5% 5.6% 6.5% 6.9% 29.2%

FROM WORST TO BEST ASSET QUALITY


11.78%

4.50%

2.61%

1.55%

Dec-09 Dec-10 Dec-11 Dec-12

TotalBankingIndustry

IB Industry

Bank Islam

MIB

CIMB-i

PIBB

Bank Rakyat

Gross Impaired Financing Ratio Net Impaired

Financing Ratio Dec’12: Industry 2.00% IB Industry 1.64%

Dec’12: Industry -0.02% IB Industry -0.32%

3.35%

1.08%

-0.17%

-0.67%



IB Industry

Bank Islam

MIB

CIMB-i

PIBB

BankRakyat

74.1% 76.8%

106.2%

142.6%



IslamicBankingIndustry

BankIslam

MIB

CIMB-i

PIBB

Financing Loss Coverage Ratio

Dec’12: Industry 100.9% IB Industry 119.3%

STRONG DEPOSIT FRANCHISE


17,617 20,763 25,212 26,888 28,305 32,583


Deposits Growth + 15.1%

of which Al-Awfar

703 2.5%

of which Al-Awfar

112 0.4%

of which Al-Awfar 1,121 3.6%

of which Al-Awfar

109 0.4%

CASA DEPOSITS


RM million Dec 2011 Dec 2012 Islamic Banking Industry as at

Dec 2012

Banking System as at Dec 2012

Total CASA 12.3 13.4 82.6 363.1

% of Total Deposits 43.4% 41.2% 26.9% 25.7%

Non CASA RM16,022m

CASA RM12,283m

Demand RM8,420m

Savings Mudharabah RM1,264m

CASA – RM13,426.1m Non CASA – RM19,157.1m

Demand RM8,968.6m

Savings Mudharabah RM1,942.2m

Savings Non-Mudharabah RM2,515.3m

CASA DEPOSIT – BENCHMARK


40.1%

42.2%

22.0%

43.4%

16.3%

31.3%

23.2%

30.2%

28.9%

6.1%

Bank Islam

MIB

CIMB-i

PIBB

AmIslamic

RHB-i

HL-i

Affin-i

Muamalat

Bank Rakyat

Dec-09

39.7%

35.6%

23.9%

39.3%

19.6%

23.4%

21.4%

31.8%

25.0%

6.0%

Bank Islam

MIB

CIMB-i

PIBB

AmIslamic

RHB-i

HL-i

Affin-i

Muamalat

Bank Rakyat

Dec-10

38.9%

28.2%

23.6%

33.5%

21.9%

15.8%

25.4%

30.0%

23.8%

5.0%

Bank Islam

MIB

CIMB-i

PIBB

AmIslamic

RHB-i

HL-i

Affin-i

Muamalat

Bank Rakyat

Dec-11

41.2%

33.1%

26.8%

30.2%

24.6%

16.5%

26.3%

32.8%

24.1%

Bank Islam

MIB

CIMB-i

PIBB

AmIslamic

RHB-i

HL-i

Affin-i

Muamalat

Dec-12

FINANCING TO DEPOSIT RATIO


49.1%

111.1%

93.6%

111.6%

96.5%

74.9%

55.9%

63.8%

50.8%

103.6%

Bank Islam

MIB

CIMB-i

PIBB

AmIslamic

RHB-i

HL-i

Affin-i

Muamalat

Bank Rakyat

Dec-09

45.7%

105.0%

100.3%

108.4%

101.4%

90.8%

56.1%

65.9%

52.4%

96.5%

Bank Islam

MIB

CIMB-i

PIBB

AmIslamic

RHB-i

HL-i

Affin-i

Muamalat

Bank Rakyat

Dec-10

51.5%

86.6%

97.0%

97.3%

92.9%

76.6%

71.5%

59.8%

57.9%

86.7%

Bank Islam

MIB

CIMB-i

PIBB

AmIslamic

RHB-i

HL-i

Affin-i

Muamalat

Bank Rakyat

Dec-11

61.2%

87.3%

94.3%

86.2%

94.2%

87.2%

78.8%

57.7%

62.6%

Bank Islam

MIB

CIMB-i

PIBB

AmIslamic

RHB-i

HL-i

Affin-i

Muamalat

Dec-12

COST-TO-INCOME RATIO - BENCHMARKING


56.5%

45.2%

52.8%

42.7%

49.3%

32.6%

49.3%

Bank Islam

Affin Bank

Alliance

Maybank

CIMB

PBB

AMMBHG

2009

54.3%

45.9%

51.7%

40.5%

42.0%

30.7%

42.0%

Bank Islam

Affin Bank

Alliance

Maybank

CIMB

PBB

AMMBHG

2010

53.8%

46.0%

47.9%

43.5%

39.9%

29.8%

39.9%

Bank Islam

Affin Bank

Alliance

Maybank

CIMB

PBB

AMMBHG

2011

52.6%

45.2%

57.1%

47.5%

43.0%

30.5%

43.0%

Bank Islam

Affin Bank

Alliance

Maybank

CIMB

PBB

AMMBHG

2012

RETURN ON EQUITY - BENCHMARK


26.5%

5.9%

29.4%

17.4%

22.0%

20.5%

15.4%

33.4%

19.1%

17.9%

Bank Islam

Muamalat

Bank Rakyat

Affin Bank

Alliance Bank

Maybank

CIMB

PBB

RHB Bank

AMMBHG

2009

16.5%

11.8%

31.9%

15.0%

11.8%

7.3%

18.6%

30.3%

18.6%

16.1%

Bank Islam

Muamalat

Bank Rakyat

Affin Bank

Alliance Bank

Maybank

CIMB

PBB

RHB Bank

AMMBHG

2010

16.6%

11.1%

30.5%

16.6%

14.9%

19.7%

19.7%

31.4%

20.3%

15.5%

Bank Islam

Muamalat

Bank Rakyat

Affin Bank

Alliance Bank

Maybank

CIMB

PBB

RHB Bank

AMMBHG

2011

20.3%

11.9%

18.2%

18.0%

19.7%

21.8%

29.1%

17.7%

18.4%

Bank Islam

Muamalat

Affin Bank

Alliance Bank

Maybank

CIMB

PBB

RHB Bank

AMMBHG

2012

CAPITAL ADEQUACY - BENCHMARKING


15.36%

15.21%

17.22%

10.52%

11.34%

13.36%

14.99%

13.78%

21.74%

14.29%

Banking Industry

IB Industry

Bank Islam

MIB

CIMB-i

PIBB

AmIslamic

RHB-i

HL-i

Bank Rakyat

Dec-09

14.77%

14.93%

16.78%

11.19%

17.21%

14.15%

14.00%

13.56%

19.33%

13.32%

Banking Industry

IB Industry

Bank Islam

MIB

CIMB-i

PIBB

AmIslamic

RHB-i

HL-i

Bank Rakyat

Dec-10

15.65%

14.92%

16.86%

12.61%

14.42%

13.27%

13.52%

13.95%

11.34%

16.45%

Banking Industry

IB Industry

Bank Islam

MIB

CIMB-i

PIBB

AmIslamic

RHB-i

HL-i

Bank Rakyat

Dec-11

15.24%

14.30%

14.09%

12.59%

9.00%

13.01%

15.90%

14.74%

13.39%

Banking Industry

IB Industry

Bank Islam

MIB

CIMB-i

PIBB

AmIslamic

RHB-i

HL-i

Dec-12

BUILT A STRONG CUSTOMERS PORTFOLIO


INDUSTRY RECOGNITIONS


2009 2010 2011 2012

http://web/promo/events/041212-AnugerahZakat2012.htm

http://web/promo/events/290512-readerdigest.htm

http://web/promo/events/080512-TheBrandLaureateAwards.htm

http://web/promo/events/260412-The9thRAMLeagueAwards.htm

EMPLOYER OF CHOICE


1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

38. Bank Islam (2011 – 62 place)

38.

42.

44.

49.

61.


“Bank Islam has transformed into a reputable and adequately capitalized banking institution, characterized by a trusted

brand name through excellent service delivery and increased accessibility to its products & services (wide network of

branches and other delivery chanels); continuous product innovation; consistent and sustainable profitability track; dynamic and proactive risk management systems and

mechanisms; strong corporate governance; prudent balance sheet expansion and asset-liability management; favorable credit profile; high quality asset mix and manageable non-

performing financings.

After achieving all the performance targets and having implemented all the pillars set under the three-year

Turnaround Plan and Sustainable Growth Plan, the challenge is to sustain our momentum and continue our journey to place

Bank Islam at greater heights”


MOVING FORWARD

NOT THE TIME TO REST ON OUR LAURELS


Strengthening Market Presence

Building Leaders For Tomorrow

Responsive to Customer Needs

(i.e. Gen Y, Weekend banking, Mobile banking)

Consistency & Reliability of Services

Attractiveness of Value Propositions Productivity & Efficiency

Sustainable Growth Shariah Centre of Excellence Regionalization

… to meet increasingly sophisticated needs of customer and competitive market place

MOVING FORWARD


Robust Organic Growth

Service Excellence

Shariah-led Innovation

Resource Optimization

Employer of Choice

Regional-ization

… transformation as a continuous journey

TRANSFORMING ISLAMIC BANKING

• Risk Taking • Mainly, debt-based

financing

Shariah-compliant financial solutions

• Risk Sharing • Risk Taking • Risk Transfer • Moving towards equity-

based financing, inventory risk and ownership risk.

Shariah-based financial solutions


LESSON LEARNT

With the right people, you can move mountains

Change the mindset is the most difficult

Innovation is the key to stay relevant

Be the best in class. “Whatever you are, be a good one” - Abraham Lincoln

The world is full of uncertainty. Change is the only constant


Q & A SESSION


“Bank Islam wishes to register its appreciation to all its stakeholders especially regulators, shareholders and

customers for their unwavering commitment and continuous support especially in transforming Bank Islam into a viable,

sound, adequately capitalized and competitive banking institution, in line with its vision to become a “global leader in

Islamic banking”.

Bank Islam seeks the recognition as an integrated financial solutions provider with a panoply of innovative Shariah-

based financial products & services that respond to customer needs and requirements.”

www.bankislam.com.my


& Thank You

شكرا جزیال

Disclaimer: This presentation material has been prepared by Bank Islam Malaysia Berhad (the Bank”) for information purposes only and does not purport to contain all the information that may be required to evaluate the Bank or its financial position. No

representation or warranty, express r implied, is given by or on behalf of the Bank as to the accuracy of the information or opinions contained in this presentation. The presentation does not constitute or form part of an offer, solicitation or invitation of any offer, to buy or subscribe for any securities , nor should it or any part of it form the basis of, or be relied in any connection with, any contract, investment decision or commitment whatsoever. The Bank does not accept any liability whatsoever for any loss howsoever arising

from any use of this presentation or their contents or otherwise arising in connection therewith.

TRANSFORMATION MANDATES


Dato’ Sri Zukri Samat, Managing Director • Joined Bank Islam on 1 June 2006 and trusted to helm Bank Islam • “Turnaround of Bank Islam & Value Creation to Stakeholders”

Dato’ Wan Ismail Wan Yusof, GM – Strategic Relations • Joined Bank Islam on 16 April 1983 • “Rejuvenating Bank Islam Brand”

Hizamuddin Jamalluddin, GM – Strategic Planning • Joined Bank Islam on 3 January 2007 • “Steering Transformation & Sustainable Growth”

Maria Mat Said, GM – Legal & Secretarial • Joined Bank Islam on 1 August 2005 • “Safeguarding Bank Islam’s Interests & Effective Governance”

Azmir Abdul Malek, Head - Corporate Communications • Joined Bank Islam on 12 March 2012 • “Reenergizing Bank Islam’s Franchise Value”

TRANSFORMATION MANDATES…CONT


Khairul Kamarudin, Director – Business Development • Joined Bank Islam on 1 December 2005 • “Transforming the Consumer Banking Division & Inculcating High-Performance

Culture”

Norashikin Mohd Kassim, Head - Treasury • Joined Bank Islam on 1 July 2006 • “Building Treasury Capability and Driving Innovation”

Mashitah Osman, Director – Corporate Investment Banking • Joined Bank Islam on 6 November 2006 • “Establishment of the Corporate Investment Banking Division & Visibility of Bank

Islam’s Present in the Islamic Capital Market ”

Abdul Rashid Abdul Hamid, Head - Commercial Banking • Joined Bank Islam on 14 October 2005 • “Repositioning the Commercial Banking Division”

Mujibburahman Abd Rashid, Acting Head – Consumer Banking • Joined Bank Islam on 3 January 2007 • “Driving Risk-Based Sales Culture & Net Promoter”



Jamilah Abdul Salam, GM - Human Resource • Joined Bank Islam on 9 April 2007 • “Growing our Own Timber & Becoming the Employer of Choice”

Wahid Ali Mohd Khalil, Chief Compliance Officer • Joined Bank Islam on 3 May 2007 • “Integrity and Strong Compliance Culture”

Malkiat Singh Delbara Singh, Chief Financial Officer • Joined Bank Islam on 1 January 2008 • “Effective Cost Management & Robust Financial Reporting”

Ryan Choon Ching, Chief Technology Officer • Joined Bank Islam on 30 June 2008 • “IT Infrastructure Revamp & IT as Key Enabler”

Dato’ Norasni Ayub, Chief Operating Officer • Joined Bank Islam on 15 February 2011 • “Service Transformation”



Jaafar Abu, Head – Business Support • Joined Bank Islam on 1 July 2009 • “Driving Trade Finance & Services”

Mizan Masram, Head – Recovery & Rehabilitation • Joined Bank Islam on 1 July 2009 • “Maximizing Recovery & Sustainability of Strong Asset Quality”

Mohd Nazri Chik, Head - Shariah • Joined Bank Islam on 1 June 2004 • “Shariah Centre of Excellence”

Jeroen Petrus Mergaretha Maria Thijs, Chief Risk Officer Joined Bank Islam on 12 January 2009 “Inculcating Risk Culture & Proactive Risk Management”

Leong David @ Leong Sze Khiong, Chief Internal Audit • Joined Bank Islam on 7 May 2012 • “Risk-based Auditing”

Documents

CASE STUDY – TRANSFORMATION€¦ · CASE STUDY – TRANSFORMATION Hizamuddin Jamalluddin May 2013 . Strictly Private & Confidential . ... •Negative capital adequacy ratios : RWCR