Maybank Islamic Bhd, the Islamic unit of Malaysia’s largest bank, is turning to what it considers its home markets for growth, in particularly Indonesia where it manages $2 billion worth of assets and is aiming to compete head-on with domestic Islamic banks.
The bank could grow beyond its core markets of Malaysia, Singapore and Indonesia, but expansion in other markets would be opportunistic, chief executive officer Mohamed Rafique Merican told Reuters.
He said that the bank will focus on domestic growth in the three core markets “while drawing liquidity and funding from opportunistic markets such as the Middle East, Turkey, and other ASEAN markets…such as Brunei and the Philippines”.
Presently, Maybank Islamic has not tapped the Philippines market although its parent, Malayan Banking Bhd (Maybank) already has a presence there.
We expect ASEAN’s growth will generate significant demand for sharia-compliant products and services especially within the core economies of Indonesia and Malaysia in which we are present and are leaders in this industry,” he added.
Indonesia remains a key market for the bank, after Malaysia which accounts for 90 percent of the bank’s business.
“We see quite a number of positive developments for the sharia banking industry there,” Rafique said, noting that the Indonesian government intends to grow Islamic assets in the banking industry from a five percent share to about 15 percent.
“We already have representation there, and we feel that we have a compelling proposition, so we would want to have the ability to compete as if we are a local player,” Rafique said.
As part of wider integration efforts through the ASEAN banking integration framework (ABIF), Indonesia and Malaysia have agreed in August to give their banks greater access to each other’s markets.
The move would give Malaysia’s Islamic banks a potential lead to tap into the world’s biggest Muslim-majority country, and one that continues to restrict to foreign lenders.
Rafique said the bank has also had discussions with regulators around ASEAN, who are keen to promote Islamic banking products in specific regions where the communities are largely Muslim.—Agencies