Top lender Malayan Banking Bhd (Maybank) has obtained Indonesian authorities' approval to convert its unit PT Bank Maybank Indocorp into a full-fledged Islamic bank, its chief said.
The move allows Maybank to step up its Islamic banking activities in the world's most populous Muslim nation. It also fits in with the group's plan of becoming the largest Islamic bank in Asean by 2015, president and chief executive officer Datuk Seri Abdul Wahid Omar said.
The group's wholly-owned Islamic unit, Maybank Islamic Bhd (MIB), is already the largest Islamic bank in Southeast Asia with total assets of RM44 billion. It is ranked among the top 20 Islamic banks globally.
"Within the context of Asean, our market share in the Indonesian Islamic banking market is still small. We just started ... we just got the approval yesterday," Abdul Wahid told reporters after Maybank's annual general meeting yesterday.
He said Bank Maybank Indocorp, once converted, would be known as Maybank Syariah Indonesia (MSI).
"We are now in the midst of executing the plan for MSI and the next stage will be to consolidate that with the syariah operations under Bank Internasional Indonesia (BII).
"With that, we hope to be able to increase our (Islamic) asset base in Indonesia and to command a big market share. We are starting from a relatively small base with about US$200 million (RM616 million) of assets in MSI," he said.
BII is an Indonesian bank that Maybank acquired in 2008. There are currently 294 BII branches and Maybank aims to raise this to about 450 by 2012.
The group also hopes that more activities will come out of its joint venture investment bank in Saudi Arabia, known as Anfal Capital, in which it owns 18 per cent. "It could serve as a conduit for business and deal flows between the Middle East and Malaysia," Abdul Wahid said.
In Malaysia, Maybank is implementing a new strategy this financial year that will see it offering customers Islamic banking products over conventional ones as the first choice.
It aims to expand its Islamic financing base so that it accounts for a third of the group's total domestic financing portfolio by 2015 from 24 per cent currently, according to its annual report.
On Basel III global banking rules, Abdul Wahid said the Maybank group should have no problems complying.