YBhg Tan Sri-Tan Sri, Puan Sri-Puan Sri, Dato -Dato Datin-Datin, Senior Management of Bank Islam Malaysia Berhad

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1 SPEECH BY YBHG DATO SRI ZUKRI SAMAT MANAGING DIRECTOR OF BANK ISLAM MALAYSIA BERHAD An Afternoon with Corporate Investment Banking ا ل ه و ع ل ى, ي ن ال م ر س ل س يد ع ل ى و ال سلا م و ال صلا ة, ال ع ال م ي ن ر ب ل له ال ح م د ال دي ن ي و م إ ل ى و ص ح ب ه Salam sejahtera and a very good afternoon to YBhg Tan Sri-Tan Sri, Puan Sri-Puan Sri, Dato -Dato Datin-Datin, Senior Management of Bank Islam Malaysia Berhad Distinguished guests Ladies and gentlemen I would like to welcome our esteemed business associates and dear friends who are gathered here today in appreciation of their invaluable support and contribution, without which the success achieved to date by Bank Islam and our Corporate Investment Banking Division would not have been possible. 1

2 Ladies and gentlemen, Bank Islam has embarked on a remarkable journey. In 5 short years we have transformed the Bank from a loss-making entity to the 4 th strongest bank in Malaysia and also 53 rd strongest bank in South East Asia according to the latest Asian Banker report, while the Banker ranked Bank Islam as number 34 in their Global Islamic Strongest Bank rankings. In 2006, the Bank experienced a loss after zakat and tax of RM 1.3 billion ringgit with a negative shareholders equity of RM 289 million. Emergency measures had to be put in place. A new set of management team was brought into the bank along with myself in The Management team with the support of our staff and loyal clients worked diligently to turn around the Bank. A series of transformation strategies were put in place starting with the first one in 2006 which we named The Turnaround Plan. The Turnaround Plan focused on five pillars namely Recapitalisation and Restructuring of the Balance Sheet, IT Structure Revamp, Cost Rationalisation, Human Capital Development and also various Transformation Programs. Alhamdullilah, within the short period of time, the Bank managed to record a remarkable improvement as compared to 2

3 the crisis period. Some of the significant achievements of the Turnaround Plan in 2009 are: A 35% increase in revenue from RM 938 mill to RM 1.27 bill Turning around a loss making Bank into yearly record profit since the implementation of the transformation strategy A 47% increase in fee based income from RM89 mill to RM131 mill A 91% increase in Total Assets from RM 14.4 bill to RM 27.5 bill A reduction of 8.7% reduction in NPF from 13.6% to 4.9% A 75% increase in Deposits from RM14.4 bill to RM 25.2 bill An increase of 53% of the Customer Base from 1.7 mill to 2.6 mill An increase of non Muslim customer base from 5% to 12% Ladies and Gentlemen, Our second strategy was put in place in We called it our Sustainable Growth Plan. This strategy was aimed at strengthening the efforts made 3 years ago by focusing on 3

4 Business Innovation, Strengthening Enabling Infrastructure, Building Capability and Capacity, Franchise Development, Inorganic Growth and Corporate Expansion and also one other key component, a Robust Risk Management philosophy. With the right foundation set in the previous 3 years, Bank Islam grew tremendously. We increased the number of branches from 97 to 113, all carrying the new corporate logo and livery as a result of our rebranding exercise. As of today, Bank Islam has a total of 122 branches. We installed 280 additional Self Service Terminals designed to serve our customers better. Today, Bank Islam has a total of 1091 self serviced terminals. The Bank had also established an Enhanced Risk Management roadmap. The roadmap among others introduced a revamped risk appetite framework, implemented an Enterprise Risk Management system, establishment of an improved credit risk scorecard and also established a Credit Monitoring Unit aimed to reduce delinquency numbers. Alhamdullilah, by the grace of Allah, our efforts have come to fruition. At the completion of the Sustainable Growth Plan, for the 18-month period ending 31 December 2010, Bank Islam achieved a total revenue of RM2.17 billion, grew our total assets to RM 30 billion and posted a record profit before zakat and tax of RM 503 million. Rating Agency Malaysia has also rated the Bank A1/P1 with positive outlook. 4

5 Bank Islam also garnered numerous prestigious awards. In 2011, Bank Islam won the BrandLaureate Award for the second year running, the Readers Digest Trusted Brand Platinum Award for the third year running and the MOSTI and Jakim award for Islamic Innovation Award for our ground breaking consumer banking tool, Transaction at Palm or TAP. Insyaallah, I am hopeful that the Bank s success story shall continue through 2012 and onwards. For the financial period ending 31 December 2011, the Bank is expecting another record-breaking year of profitability. Ladies and Gentlemen, The Corporate Investment Banking or CIB s journey started in November 2006 when the Bank decided to establish the CIB Division to spearhead the provision and development of total Islamic financial solutions for our corporate clientele. The existing Capital Markets Department was reorganised to become the Debt Capital Markets Department, specialising in Sukuk advisory and fund-raising services. Not long after, the Corporate Finance Department was set up in January 2008 to capitalise on the tremendous opportunities emanating from the Capital Markets and Services Act 2007, thus extending CIB s 5

6 offerings to cover corporate advisory services for the equity capital market. To complete the loop, the Corporate Banking Department was carved out from the Business Division and put under CIB in June With these three complimentary departments housed under the same division, CIB became a one-stop centre with the ability to offer the full spectrum of Shariahbased financial products and services for the corporate sector, ranging from advisory and fundraising in both the equity and debt capital markets to syndicated financing and the traditional banking and financing facilities. The final piece of the puzzle was put in place in August 2009, when Bank Islam created history by gaining admission to the Securities Commission s Approved List of Principal Advisers, thus allowing CIB to undertake submissions of specific corporate proposals, such as initial public offerings or IPOs, for our clients. Bank Islam was the only Islamic commercial bank that qualified to be admitted, and we remain as the sole Islamic commercial bank on the Approved List. 6

7 Ladies and gentlemen, In this short period of time, CIB has managed to more than hold their own in the extremely competitive investment banking arena. CIB has successfully achieved numerous notable transactions since its inception in Some of the more notable transactions undertaken by CIB include the following: Joint Lead Manager for the RM1.5 billion Islamic Medium- Term Notes Programme for Malaysia Debt Ventures Berhad; Co-Manager for the RM4 billion Ijarah Medium-Term Notes Programme for Syarikat Prasarana Negara Berhad; Joint Book Runner for the RM4 billion Sukuk Musyarakah for PLUS SPV Berhad; Joint Lead Manager and Shariah Advisor for the RM10 billion Islamic Medium-Term Notes Programme for Aman Sukuk Berhad; and Joint Lead Arranger, Joint Lead Manager and Joint Shariah Advisor for the just recently concluded RM5 billion Islamic Securities Programme for Manjung Island Energy Berhad. CIB also acted as the Main Adviser for: 7

8 the IPO and listing of APFT Berhad and Focus Lumber Berhad on the Main Market of Bursa Malaysia Securities Berhad; the conditional mandatory takeover offer by Akarmas Sdn Bhd for PK Resources Berhad; and TH Plantations Berhad s acquisition of plantation assets, bonus issue and employee share option scheme or ESOS. During that time, CIB has also landed a host of awards for Bank Islam, including: Ijarah Deal of the Year 2009 and Qatar Deal of the Year 2009 by Islamic Finance News as well as Best Islamic Structured Financing by The Asset Triple A Islamic Finance Awards 2010 for the USD150 million Syndicated Islamic Financing Facility for Qatar Airways, where Bank Islam was an Arranger; and Asia-Pacific Bond Deal of the Year 2011 by Project Finance International and Ijarah Deal of the Year 2011 by Islamic Finance News for the RM5 billion Islamic Securities Programme for Manjung Island Energy Berhad jointly lead arranged by the Bank. 8

9 These awards and accolades serve as a testament to CIB s strengths and capabilities and public confidence in Bank Islam in general. This is further evidenced by Bank Islam s rise in ranking in Bloomberg s Malaysia Capital Markets Underwriter League Table for 2011 in both the debt and equity capital market categories. We are also proud to announce that, with the success and contribution of CIB as part of the 5 pillars of the bank, Bank Islam has just been voted Malaysia s Best Islamic Bank in Islamic Finance News Best Banks poll for Ladies and gentlemen, The success story of Bank Islam and CIB would never have been achieved without your invaluable support and the faith and confidence you have placed in us to deliver efficient and cost-effective solutions to satisfy all your corporate and financial needs. For that, we are extremely grateful, and trust that we have met and hopefully exceeded all your expectations. In conclusion, allow me to take this opportunity to thank you once again for taking time out of your busy schedule to be here with us today. 9

10 On behalf of Bank Islam, let me reiterate how fortunate we are to have loyal and supportive friends and business associates such as yourselves. Our deepest appreciation to all of you for standing by us through thick and thin all these years. May we continue to share many more impressive milestones with you in the future. On that note, please enjoy yourselves today and we look forward to working even more closely with you in this new year ahead and beyond. 10