Islamic finance is a fast-growing industry that caters to the specific needs of Muslims as well as those seeking the benefits of Shariah-compliant and sustainable banking and financial solutions. CIMB Islamic Bank Bhd is at the forefront in providing innovative solutions — from wealth management to business financing — with the aim of delivering intended outcomes of Shariah that generate positive and sustainable impact on the economy, community and environment.
CIMB Islamic’s position as the second largest Islamic financial services provider in Malaysia puts CIMB Group squarely in the heart of the Islamic finance industry in Malaysia, which is among the biggest and most innovative in the world. Meanwhile, CIMB Islamic’s counterpart, CIMB Niaga Syariah, is the second largest Shariah-compliant bank in Indonesia, the country with the greatest number of Muslims in the world.
As a regional Islamic finance house, CIMB Islamic understands the challenges and opportunities that are present in the markets that it operates in, from wealth management and estate planning for the purpose of managing retirement and inheritance among the Muslim community, to the need for Shariah-compliant financing and business partnerships for businesses to capture the burgeoning global Shariah-compliant or halal market.
The Muslim community in Malaysia has been grappling with wealth management and estate planning for years as the laws on inheritance in Islam are different from conventional ones. Ninety per cent of frozen assets in Malaysia are under Muslim ownership. Solutions that are tailored to the legal and religious needs of the Muslim community are very much needed to ensure that they are able to manage their wealth and grow them according to the requirements of Shariah.
The issue of wealth management and estate planning is something that must be addressed, especially as the wealth of the community continues to grow. According to the Securities Commission Malaysia’s fund management statistics, Islamic assets under management as at December 2021 amounted to RM224.80 billion. While not all of these assets belonged to Muslims, a sizeable portion did.
A major part of the financial assets owned by Muslims in Malaysia is concentrated in asset management solutions managed by Lembaga Tabung Haji and Permodalan Nasional Bhd.
As a premier Islamic financial institution in Malaysia, CIMB Islamic has a complete suite of wealth management and estate planning products and solutions that are tailored to the needs of the Muslim community.
“The biggest problem that the Muslim population in Malaysia faces is regarding estate planning. Banks and solution providers need to step up their offerings of estate planning solutions, especially with a demographic that shows a rapidly ageing population,” says CIMB Islamic CEO Ahmad Shahriman Mohd Shariff. Malaysia’s population is expected to be in the ageing category by 2030, with 15% of the population being above 60 years old.
As the population lives longer, the question of whether they have enough funds to last them through their golden years is imminent. This is another issue that is fast catching up with a lot of people today, as they seek to build up their retirement nest egg.
CIMB Islamic focuses on three aspects of wealth management — protection in the form of takaful, estate planning and diversification of investment opportunities.
Growing halal and green industries
Apart from Islamic wealth management, CIMB Islamic is also focusing on the halal economy, says Shahriman. This is because CIMB Islamic endeavours to do the right thing that has a positive impact on society, he adds.
Four years ago, CIMB Islamic launched CIMB Halal Corridor, an enhanced trade network linking halal businesses in ASEAN and across the globe.
One of the programmes under the initiative is CIMB HalalBizReady, an initiative that provides customers with knowledge of the halal supply chain and access to market opportunities.
“We not only provide financial solutions to our customers, but we also provide business matching through the CIMB Trade Club Alliance to assist our customers to access overseas/international markets,” says Shahriman. The CIMB Trade Club Alliance is an exclusive digital network consisting of business communities in over 50 countries.
With the global halal market estimated at US$2.02 trillion and ASEAN being home to the world’s largest Muslim population, CIMB is able to assist businesses seeking to unlock the potential of these vibrant halal markets via its ecosystem of partners, from certification and supply to logistics and fulfilment across the value chain.
In the halal logistics and warehousing space, CIMB Islamic partners with Northport (M) Bhd, a terminal operator in Port Klang, as well as MASkargo, the air freight logistics provider of Malaysia Aviation Group.
It also partners with Serunai Commerce — a halal centre of excellence that provides new applicants of Malaysian halal certification with a halal training programme and halal consultancy — as well as SIRIM QAS International Sdn Bhd, a leading Malaysian certification body.
CIMB Niaga Syariah taps Indonesian market
The growing Indonesian economy has benefited CIMB Niaga Syariah, the Islamic banking arm of PT CIMB Niaga Tbk, the Indonesian subsidiary of CIMB. According to Shahriman, CIMB Niaga Syariah’s assets make up 20% of CIMB’s total assets in Indonesia.
“CIMB Niaga Syariah has been one of the success stories of our group.
It is now the second largest Islamic banking business in Indonesia with Rp59.25 trillion by assets as at December 2021. It now commands 8.5% of total Islamic assets in Indonesia,” he says.
CIMB Niaga Syariah is focusing on offering more products through its digital channels, says Shahriman, and is the first Syariah bank in Indonesia to provide fully online account opening for savings accounts and fixed deposits via the OCTO Mobile application.—Theedgemarkets.Com