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ISLAMIC CREDIT AND TAKAFUL
Fully in-gear in our fourth year of Islamic banking operations, we are pleased
to report a surge in performance in 2013, on the back of increasing demand
which had started to gain momentum the previous year.
For the year under review, Islamic banking recorded vibrant asset growth to
achieve RM1.5 billion gross advances and financing against RM534 million
in 2012, representing a growth of 183 per cent. This led the Bank to increase
the share of Islamic financing to total loans to 25.9 per cent, from 14.6 per cent
recorded in 2012. Given this steady growth, we are well positioned to achieve our
target of growing Islamic financing share to 30 per cent of total loans by 2015.
The Bank’s two-year old Credit Takaful business, which provides protection for
exporters against the risk on non-payment resulting from commercial or political
risks, had also recorded commendable growth, insuring exports worth RM862.79
million in 2013, translating into a premium contribution of RM1.2 million.
In expectation of continued robust growth in Islamic banking in 2014, the Bank
had planned for more targeted marketing programmes to be undertaken in the
year under review, while continuing to expand the number and types of facilities
on offer to cater to customers inclined towards Shariah-compliant business.
DIVERSIFICATION OF FUNDING SOURCES
The Bank is fully reliant on capital and bank borrowings to fund our asset growth,
unlike commercial banks that can rely on deposits for this purpose. In an effort to
reduce our reliance on short-term tenured borrowings, as well as to manage the
tenor gap and mitigate foreign exchange risk, the Bank had decided in 2012 to
pursue international capital market financing.
Following the successful launch in 2012 of our Multicurrency Medium Term Notes
(MTN) programme valued at USD1.5 billion, in 2013, the Bank established a US$1
billion Multicurrency Sukuk Issuance Programme under a special purpose vehicle
(SPV) called EXIM Sukuk Malaysia Bhd. We take great pride in being the first
export-import bank in the world to undertake such an exercise.
To begin with, we had successfully priced our USD300 million, five-year, Reg-S
sukuk issuance at 140 basis points over US Treasury (UST) securities, which
resulted in an all-in yield of 2.874 per cent per annum. The successful pricing
of our sukuk indicates strong investor demand and trust in the Bank, especially
Islamic banking recorded
vibrant asset growth to
achieve RM1.5 billion
gross advances and
financing against
RM534 million in 2012
183%
OPERATIONSREVIEW
BYPRESIDENT/CHIEFEXECUTIVEOFFICER
020
EXIM Bank Annual Report 2013