bank islam - report card dec 06 (final) · lembaga tabung haji (lth) was completed on 16 october...

MEDIA BRIEFINGMEDIA BRIEFINGMEDIA BRIEFINGMEDIA BRIEFINGMEDIA BRIEFINGMEDIA BRIEFINGMEDIA BRIEFINGMEDIA BRIEFING

Bank Islam reserves all propriety rights to the contents of this Presentation. No part of this Presentation may be used or reproduced in any form without Bank Islam’s prior written permission.

This Presentation is provided for information purposes only. Neither Bank Islam nor the Presenter makes any warranty, expressed or implied, nor assumes any legal liability or responsibility for the accuracy, completeness or currency of the

contents of this Presentation.

MEDIA BRIEFINGMEDIA BRIEFINGMEDIA BRIEFINGMEDIA BRIEFINGMEDIA BRIEFINGMEDIA BRIEFINGMEDIA BRIEFINGMEDIA BRIEFINGHALF YEARLY FINANCIAL HALF YEARLY FINANCIAL HALF YEARLY FINANCIAL HALF YEARLY FINANCIAL HALF YEARLY FINANCIAL HALF YEARLY FINANCIAL HALF YEARLY FINANCIAL HALF YEARLY FINANCIAL

REPORT CARDREPORT CARDREPORT CARDREPORT CARDREPORT CARDREPORT CARDREPORT CARDREPORT CARDAS AT 31 DEC 2006AS AT 31 DEC 2006AS AT 31 DEC 2006AS AT 31 DEC 2006AS AT 31 DEC 2006AS AT 31 DEC 2006AS AT 31 DEC 2006AS AT 31 DEC 2006

1. FINANCIAL REPORT CARD

– Financial Highlights

– Financial Commentary

2. TURNAROUND PLAN – UPDATES

– Recapitalization & Balance Sheet Restructuring

PRESENTATION OUTLINEPRESENTATION OUTLINE

– Recapitalization & Balance Sheet Restructuring

– IT Infrastructure Revamp

– Transformation Programme

– Cost Rationalization Exercise

– Human Capital Development

3. ACHIEVEMENTS

FINANCIAL REPORT CARDFINANCIAL REPORT CARDFINANCIAL REPORT CARDFINANCIAL REPORT CARD(Un(Un(Un(Un----Audited 6 Months)Audited 6 Months)Audited 6 Months)Audited 6 Months)

(Un(Un(Un(Un----Audited 6 Months)Audited 6 Months)Audited 6 Months)Audited 6 Months)

FINANCIAL HIGHLIGHTSFINANCIAL HIGHLIGHTS

Half YearHalf YearHalf YearHalf Year AuditedAuditedAuditedAudited

DecDecDecDec----06060606 JunJunJunJun----06060606 VarVarVarVar

RM millionRM millionRM millionRM million RM millionRM millionRM millionRM million

Revenue 467.8 960.6 (492.8)

Profit Before Zakat & Taxation 165.8165.8165.8165.8 (1,277.2) 1,443.0

Total Assets 17,658.917,658.917,658.917,658.9 14,605.3 3,053.6

Total Assets 17,658.917,658.917,658.917,658.9 14,605.3 3,053.6

Financing, advances & other loans 8,453.6 8,501.4 (47.8)

Customer Deposits 15,794.615,794.615,794.615,794.6 14,386.5 1,408.1

Shareholders' Funds 944.3 (277.8) 1,222.1

Return on Equity (ROE) 17.6%17.6%17.6%17.6% - na - -

Risk Weighted Capital Ratio (RWCR) 11.7%11.7%11.7%11.7% -2.8% 14.5%

PROFIT BEFORE ZAKAT AND TAXATIONPROFIT BEFORE ZAKAT AND TAXATION

Dec 06Dec 06

130.3130.3130.3130.398.398.398.398.3

165.8165.8165.8165.8

(400.0)

(200.0)

-

200.0

400.0

@Jun-03@Jun-03@Jun-03@Jun-03 @Jun-04@Jun-04@Jun-04@Jun-04 @Jun-05@Jun-05@Jun-05@Jun-05 @Jun-06@Jun-06@Jun-06@Jun-06 @Dec-06@Dec-06@Dec-06@Dec-06

RM m

illion

RM m

illion

RM m

illion

RM m

illion

Half Year

Results

(6 months)

Dec 05Dec 05

(1,277.2)(1,277.2)(1,277.2)(1,277.2)

(479.8)(479.8)(479.8)(479.8)

(1,400.0)

(1,200.0)

(1,000.0)

(800.0)

(600.0)

(400.0)RM m

illion

RM m

illion

RM m

illion

RM m

illion

RETURN TO THE BLACKRETURN TO THE BLACK

� Bank Islam has turned around

� Posted a Profit Before Zakat and Tax for the first six monthsof the financial year of RM165.8 mil, up 484% compared to aloss of RM43.2 mil reported in the corresponding periodended 31 Dec 2005.

ended 31 Dec 2005.

� Registered a Profit After Zakat and Tax of RM149.1 mil for thefirst six months ended 31 Dec 2006

� This translates to:-

� Return on Shareholders Equity of 17.6%

TURNAROUND STRATEGY

UPDATES

THE TURNAROUND PLANTHE TURNAROUND PLAN

The Turnaround Plan comprises the following:-

� 1st Component : Re-capitalization & Balance Sheet Restructuring

� 2nd Component : IT Infrastructure Revamp

� 3rd Component : Transformation Programme

� 4th Component : Cost Rationalisation Exercise

� 5th Component : Human Capital Development

11STST COMPONENT : COMPONENT : RERE--CAPITALIZATION EXERCISECAPITALIZATION EXERCISE

� Re-capitalization by fresh injection of funds

� Capital injection of RM1.014 bil from Dubai Investment Group (DIG) & Lembaga Tabung Haji (LTH) was completed on 16 October 2006

� Resulted in positive shareholders’ funds of RM944.3 million @ Dec-06 (pre re-capitalization was a deficit of RM277.8 million @ June-06)

� The Risk Weighted Capital Ratio improved to 11.7% as at 31 Dec 2006from negative 2.84% as at 30 June 2006. ( Minimum capital requirement

from negative 2.84% as at 30 June 2006. ( Minimum capital requirement is 8.0%)

� The new shareholding structure is reflected below:-

51% 40% 9%

� To address our legacy NPFs, Bank Islam has formulated a Carve Out Plan

� As at 31Dec 2006,

� Gross NPF is RM2.5 bil

� Net NPF is RM1.0 bil

11STST COMPONENT :COMPONENT :BALANCE SHEET RESTRUCTURING BALANCE SHEET RESTRUCTURING

� Net NPF is RM1.0 bil

� Pending conclusion of the Carve Out Plan, aggressive recovery efforts are being undertaken by the Special Asset Management Division.

� An IT Consultant has been appointed in February 2007

� A new IT Blueprint for bank-wide IT System has been approved bythe Board

22NDND COMPONENT COMPONENT ––IT INFRASTRUCTURE REVAMPIT INFRASTRUCTURE REVAMP

� The IT System to be put in place shall be modular as well asscalable

� The full implementation of the project is expected by June 2008

33RDRD COMPONENT COMPONENT --TRANSFORMATION PROGRAMMETRANSFORMATION PROGRAMME

� Organizational Restructuring

� Recruitment of new talents for vacant key positions

� New strategies are being put in place at business and operational levels to reflect the Bank’snew strategic direction:-

� Merger of Corporate & Commercial Div to become Business Banking Div.

� Establishment of the Corporate Investment Banking Div.

� Beef up Treasury Management Div & Cash Management Div.

� Fruits of labour expected to be fully reaped during FYE June 2008

� Board Composition

� Effective January 2007, the Board now comprises the following:-

� three (3) representatives from DIG

� three (3) representatives from BIMB Holdings

� three (3) independent directors

� one (1) representative from LTH

� As such, Board Committees have also been reconstituted to reflect the new composition


� Re-branding Exercise

� Branding consultant was appointed in February 2007 to enhance the bank’s image

� Expected completion by July 2007

� Branch Re-modeling

� To introduce a fresh look and feel to the branch

� First new model branch is expected to be launched by July 2007


� Enhancement of Customer Service

� Business Process Re-engineering Unit

� Established to enhance the internal business processes

� Customer Satisfaction Index (CSI)

� Developed to measure the current level of customers’satisfaction to enable the Bank to further improve itsdelivery system

� An on-going effort to manage cost effectively

� Initiatives taken and to be taken for a better cost efficiency, include amongst others:-

� Outsourcing of non-critical operations

44THTH COMPONENTCOMPONENT––COST RATIONALISATION EXERCISECOST RATIONALISATION EXERCISE

� Outsourcing of non-critical operations

� Relocation of branches to more strategic locations

� Disposal of non-core assets

55THTH COMPONENT COMPONENT ––HUMAN CAPITAL DEVELOPMENT HUMAN CAPITAL DEVELOPMENT

� To attract & retain high quality talent via theimplementation of performance-linked reward system

� Initiated more structured training programmes

� Succession Planning

� Succession Planning

� Personal & Career Development

ACHIEVEMENTSACHIEVEMENTSACHIEVEMENTSACHIEVEMENTS

ACHIEVEMENTSACHIEVEMENTSACHIEVEMENTSACHIEVEMENTS

ACHIEVEMENTS IN 2006ACHIEVEMENTS IN 2006

� First Bank to issue Islamic Platinum Card in the South EastAsian region

� Best e-commerce Award from MasterCard Asia/Pacific

� Our wholly-owned subsidiary, BIMB Unit Trust, has been

� Our wholly-owned subsidiary, BIMB Unit Trust, has beenawarded the 3 year Best Performance for Balance FundsCategory by the Edge-Lipper Malaysia Fund Awards

MOVING FORWARDMOVING FORWARD

� Going forward, Bank Islam will

� focus on fee based income such as treasury and corporate investment banking activities

reposition to take advantage of the incentives given under

� reposition to take advantage of the incentives given under the Malaysia International Islamic Financial Centre Incentives by the Government

� Bank Islam will continue to strive to provide better services to its customers

Q & A SESSIONQ & A SESSIONQ & A SESSIONQ & A SESSION

Q & A SESSIONQ & A SESSIONQ & A SESSIONQ & A SESSION

For further information, kindly visit out website

www.bankislam.com.my

bank islam - report card dec 06 (final) · lembaga tabung haji (lth) was completed on 16 october...

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