Marketingoffinancialservices Uum

7/31/2019 Marketingoffinancialservices Uum

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STRICTLY PRIVATE & CONFIDENTIAL

BANK ISLAMs PERSPECTIVEBANK ISLAMs PERSPECTIVE

Practitioner Talk UUM City Campus

10 March 2012


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]25-28:[

O my Lord! expand me my breast; Ease my task for me; And remove the impediment from my speech,

So they may understand what I say

[20:25-28]

Rabbish rahli sadri wa yas-sir li amri wahloul uqdatam mil-lisaani yafqahu qawli


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PRESENTATION OUTLINEPRESENTATION OUTLINE

A Snapshot of Bank Islam

About M

Marketing of Financial Services

Islamic Finance

Page 2

Corporate Branding

Marketing Mix - Bank Islams Perspective

Gen Y

Wrap Up

Q & A Session


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A SNAPSHOT OF BANK ISLAMA SNAPSHOT OF BANK ISLAM

Malaysias Pioneer Islamic Bank 1983

3rd Largest Islamic Bank in Malaysia

Total Assets of about RM32 billion

Total customer base of more than 3.5 mil.

Best Islamic Bank in Malaysia 2011 IFN Award

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Rated A1/P1 with stable outlook by Rating Agency Malaysia

Rated 4th Strongest Bank in Malaysia by The Asian Banker (Part of Financial Times Group)

Ranked 53 Asia Pacific 500 Strongest Bank by The Asian Banker

Since its inception in 1983, Bank Islam has not only become the symbol of Islamic banking in

Malaysia, it has also played an integral role in setting the stage for a robust growth of the

countrys Islamic financial services industry


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KEY OFFERINGSKEY OFFERINGS

Term Financing Trade Financing

Syndication Facility

Debt Capital Market

Corporate Finance & Advisory (i.e.IPOs, M&A, etc)

Cradle to Grave Personal Financing (Profit Rate from3.5% and based on tenure financing)

House Financing (Profit Rate : BFR- CR%,FTV of about 80%)

Vehicle Financing (Profit Rate up to3.3% )

Bank Islam Card (Debit & Credit)

Deposit Products (CA, SA, Al Awfar)

Wealth Management (BancaTakaful,Will Writing, StructuredInvestment, Unit Trusts, etc.)

ConsumerBanking

CorporateInvestment

Banking

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Principal Dealer Islamic PDS

Corporate Deposits (GIA, SIA,Wakalah Deposit, Commodity

Murabahah Deposits, NIDCs) Forex (FX Spot, Islamic FX Forward)

Hedging Solutions (Wiqa ProfitRate Swap, Wiqa Forward RateAgreement, Islamic Options .

Business Premises Financing

Emerging Local Corporate

Contract Financing

SME/I Financing

Bureau de Change

TreasuryCommercial

Banking


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ABOUT MABOUT M

Responsible for corporate transformation, corporate finance, capital andstrategic planning of Bank Islam. Brand Ambassador for Corporate

Rebranding exercise in 2007.

Former Special Assistant to the Managing Director and Corporate Finance

Specialist of Pengurusan Danaharta Nasional Berhad. Previously served asDirector, Corporate Services of Bank Simpanan Nasional, managing 5 core

departments, namely Corporate Planning, Corporate Affairs &

Communications, Organization & Methods, Legal & Compliance).

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Over 15 years of experience in corporate finance. Structured and executednumerous merger & acquisition deals, international ventures, business

advisory, privatization, corporate and debt restructuring, and structured

finance.

Instrumental in setting up of Prudential-BSN Takaful Bhd Project Director.

Not a Subject Matter Expert

some of the presentation materials are taken from public domain

i.e. Wikipedia and publicly available presentation material


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STRATEGIC PLANNING & MARKETING @ BANK ISLAMSTRATEGIC PLANNING & MARKETING @ BANK ISLAM

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formulates corporate and business direction, involves in capital allocation,

risk appetite and biz planning


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MARKETING OF FINANCIAL SERVICESMARKETING OF FINANCIAL SERVICES

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MARKETING OF FINANCIAL SERVICESMARKETING OF FINANCIAL SERVICES

The marketing of financial services is a unique and highly specialized (may require product

knowledge, industry benchmarking, and product risk)

The practice of advertising, promoting, and selling financial products and services is in many

ways far more complex ( intangible and take into consideration product sophistication,

brand equity & past experience )

The environment in which financial services are marketed is becoming more competitive

(homogenous or commodity )

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Unexciting nature of financial services makes the task of attracting consumer attention andinspiring consumer desire a difficult one (but more fascinating as it require creative

marketing approach)

There are many predictable behaviors that consumers often exhibit in dealings with

financial services providers. The predictability of these behaviors and the abundance of dataon existing and potential customers enable a uniquely scientific approach to developing and

executing successful strategies for the marketing of financial services, much more so than in

other markets ( data mining based on customers profile and behavior)


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MARKET ENVIRONMENTMARKET ENVIRONMENT

Competitive intensity irrational market

Changing market & regulatory environment - Stringent regulationsemphasize on

customer protection. & market liberalization

Industry consolidation and concentration inorganic growth via M & A (Hong Leong Bankacquired EON Bank quantum leap of hire purchase segment)

Emergence ofnew entrants in the market space (i.e. 2004, Volswagens Home Equity Loan,

-

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,

insurance agents were primarily providers of a pre-defined set of insurance products,todays agents are equipped to sell their clients products related to investments, time

deposits, retirement planning, and other services traditionally provided by bankers, and

emergence of alternative financial providers such as AEON Credits, Courts Mammoth, etc)

Fragmented customer base

Customer trust - Distrust affects resulting global financial 2008/2009 i.e. Lehman Brothers

structured investment & derivatives products and etc

Rapid technological change change in marketing strategies i.e. online, social media & etc


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COMPETITIVE LANDSCAPECOMPETITIVE LANDSCAPE

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UNIQUE ASPECTS OF FINANCIAL SERVICESUNIQUE ASPECTS OF FINANCIAL SERVICES

Brands & Loyalty Banking is about TRUST. Customer defection rates are significantly lower

than they are in most other markets. The tendency of customers to remain with their

current financial services provider has traditionally been quite strong. Even with the

knowledge of competing offers, a customer may still choose to remain with the current

financial services provider once considering the possible inconveniences associated withswitching.

Product Holding Theory Minimum of 3 products.

Channel delivery & convenience

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y g

Awards & Recognition

Subjective Perceptions of Quality Emotional aspect based on customer experience i.e.

corporate responsible, green banking, ethical banking, etc.

Price Complexity Risk base pricing

Market Clustering - Consumers needs for financial services vary significantly from one

customer to the other. Malaysian experience might not be applicable in Indonesia or the

Middle East


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MYTHMYTH

Myth 1 The larger the range of products,

the more customer-centric I am.

Myth 2 Better technology (read CRM)

leads to better customer service

Myth 3 Launch a product and thecustomer will start using instantly

Myth 4 The only way to get a customer is

from competition

The range of products has emerged from

being competition-centric

Technology alone does not deliver, but

require a human touch

Customer need to be educated. Marketing isto engage our customers

Demand can be created Think outside the

box - Blue Ocean Strategy

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Myth 5 Just advertise and - You will sell.

Myth 6 No difference between marketing

& selling

Myth 7 In the absence of relationships,

trust builds financial brand

Advertising will only sell, BUT not to retain

Selling focuses on the need of seller whilst

Marketing is based on the need of buyer

Trust is not a differentiator BUT is the very

minimum that the customer expect


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ISLAMIC FINANCEISLAMIC FINANCE

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Bahrain

Dubai Malaysia

Saudi

Arabia

London

Hong Kong

TokyoCalifornia

Pakistan

France

Hong Kong

Aims to become an Islamic finance hub

Hang Seng Islamic China Index Fund in2007

Shariah Advisory Council formed

UK Govt sets an objective to entrench London as a globalgateway for Islamic finance

5 FSA-approved Islamic banks and 2 Takaful operators

Japan

New law allowing banks tooffer Islamic finance

France

ISLAMIC FINANCIAL LANDSCAPEISLAMIC FINANCIAL LANDSCAPE -- MOVING INTO UNCHARTEREDMOVING INTO UNCHARTERED

TERRRITORIESTERRRITORIES

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Singapore

Australia

u an

rapid expansion is reflected in more than 600 Islamic financial institutions operating in morethan 75 countries, even beyond so-called Muslim nations. Total assets > USD1trillion

Indonesia

Australia

Islamic co-operative finance& mortgage established

Consider to establish Islamic

bank

Dubai, UAE

Fast emerging as a financial centre throughDIFCs aggressive promotion efforts

Passed rules/regulations to support

Islamic finance activities

Considering licensing first Islamicbank

Singapore

Established first Islamic bank

Introduced tax neutrality for

Islamic finance

Aspiring to be centre for Islamicfinance

Issued sukuk

Brunei


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WHAT IS ISLAMIC FINANCE?WHAT IS ISLAMIC FINANCE?

The term Islamic Financial System is relatively young, appearing only in mid-1980s

Earlier reference to commercial activities conforming to Islamic principles were made to

interest free banking. However, this does not give a true picture as a whole.

Undoubtedly, prohibiting the receipt and payment of interest is the nucleus of the system, but

it is supported by other principles of Islamic doctrine such as advocating risk sharing,

individuals rights and duties, property rights and the sanctity of contracts.

Similarly, the Islamic financial system is not limited to banking but covers venture capital,

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a a u s am c nsurance , cap a mar e s, r a nu s am c pawn- ro ng an a ypes o

financial intermediation.

While the conventional financial system focuses primarily on the economic and financial

aspects of transactions, the Islamic systems places equal emphasis on the ethical, moral, social,

and religious dimensions, to enhance equality and fairness for the good of society as whole.

The system can be fully appreciated in the context of Islamic teachings on the work ethic,

wealth distribution, social and economic justice, and the role of the state. The system promotes

entrepreneurship, discourages speculative behavior and emphasizes the sanctity of contracts.

At Bank Islam, we referred this as Shariah-based banking.


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BASIC TENETS & PRINCIPLES OF ISLAMIC FINANCEBASIC TENETS & PRINCIPLES OF ISLAMIC FINANCE

Prohibition of interest (riba). Prohibition of riba a term literally an excess andinterpretedas any unjustifiable increase of capital whether in loans or sales

Money as potential capital. Money is not a commodity, but a medium of exchange, a store

value and a unit of measurement. Money represents purchasing power and cannot be utilised

to increase the purchasing power without any productive activity. Islamic finance advocates

the creation of wealth through trade and commerce.

Risk sharing. Because interest is prohibited, suppliers of funds become investors, rather than

creditors.

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Prohibition of speculative behaviour. Islamic finance discourages hoarding and prohibitstransactions featuring extreme uncertainties (gharar), and gambling (maysir).

Sanctity of contracts. Islamic finance upholds contractual obligations and the disclosure of

information as a sacred duty. This feature is intended to reduce the risk of asymmetric

information and moral hazard.

Shariah approved activities. Only those business activities that do not violate the rules of the

Shariah qualify for investment. For example, any investment in a business dealing with

alcohol or gambling is prohibited.

Social justice. Any transaction leading to injustice and exploitation is prohibited.

Source: IFGFS


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CHARACTERISTIC OF AN ISLAMIC BANKCHARACTERISTIC OF AN ISLAMIC BANK

Free from Riba(Usury)

Free from Riba(Usury)

Free from Gharar(Ambiguity)

Free from Gharar(Ambiguity)

ProhibitsGamblingActivities

ProhibitsGamblingActivities

Free frommanipulation

Free frommanipulation

Freedom toContract

Freedom toContract

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Free from Dharar(Detrimental)

Free from Dharar(Detrimental)

Promote PublicInterest

(Maslahah)

Promote PublicInterest

(Maslahah)

PromoteEquity

PromoteEquity

Entitlement toEqual, Adequate,

Accurate Info.

Entitlement toEqual, Adequate,

Accurate Info.

A system groundedon moral and ethicsA system groundedon moral and ethics

Entitlement toTransaction at Fair

Price

Entitlement toTransaction at Fair

Price


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A BIT ABOUT RIBAA BIT ABOUT RIBA

Riba or usury or interest is forbidden in Islamic economic jurisprudence fiqh and

considered as a major sin. Simply, unjust gains in trade or business, generally through

exploitation.

There are two types of riba discussed by Islamic jurists: an increase in capital without anyservices provided and risk taking, which is prohibited and clearly stated in the Quran, and

commodity exchanges in unequal quantities, prohibited in the Sunnah.

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Riba is forbidden not only in Islam but by all Abrahamic Religions i.e. in Christianity and Jews

The Qur'an states:

3:130 O you who have believed, do not consume usury, doubled and multiplied, but fear

Allah that you may be successful.

promotion of Islamic finance is mandatory marketing obligation


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WAR AGAINST RIBAWAR AGAINST RIBA

2:275 (Al-Baqarah) - Allah has permitted trade and has forbidden interest

Prophet Mohammad S.A.W. said in his farewell sermon: "God has forbidden you to take Riba,

therefore all riba obligation shall henceforth be waived. Your capital, however, is yours to

keep. You will neither inflict nor suffer inequity. God has judged that there shall be no riba and

that all the riba due to `Abbas ibn `Abd al Muttalib shall henceforth be waived.".

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The Qur'an mentions that the person who deals with riba ( ) will stand (on judgement day) as

one who is beaten by Satan into insanity. Here, Qur'an makes it clear that "trade" and "riba"

are not the same and that God forbade "riba" and allowed "trade. It further states that

whoever accepts the guidance of God must immediately stop dealing in riba, and those who

return to riba after God's guidance has reached are dwellers in fire because God destroys

"riba" and will reward those who give to charity.

The crimes of dealing in riba are so serious that God has declared war against those who deal

in it. Prophet Mohammad has cursed anyone who deals with riba, the one who takes it, the

one who pays it and the one who records it, as their sins are considered equal under the

Quran welcome to Islamic banking


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TRANSFORMATION OF THE ISLAMIC FINANCIAL LANDSCAPETRANSFORMATION OF THE ISLAMIC FINANCIAL LANDSCAPE

Bankin for

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Muslims

repositioning of the brand identitygrowing recognition that the inherent tenets of Islamic finance are aligned tosustainable dimensions of ethical banking and responsible financing.


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IslamicFinancing

IslamicDeposits

Takaful

IslamicEquities (unittrust, indexfunds etc.)

IslamicWealth

Investment

ISLAMIC FINANCE PRODUCTS & SERVICESISLAMIC FINANCE PRODUCTS & SERVICES

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IslamicPrivateEquity

Sukuk

TreasuryServices

Real Estates(I-REITs)

IslamicETFs


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WHY CHOOSE ISLAMIC BANKING OFFERINGS?WHY CHOOSE ISLAMIC BANKING OFFERINGS?

20% discount on StampDuty for FinancingDocumentations

Ceiling Rate

(Maximum profit ratebased on BNM Guidelines)

Special Incentives for Sukuk

& Capital Market Products

Selling Value Proposition

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Offerings(Ethical/Responsible

Banking)

Transparency

Diversity of Players &Continuous Awareness

Broad Array ofInnovative Products

Lower Penalty Rate


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COMPETING SUCESSFULLY IN ISLAMIC BANKINGCOMPETING SUCESSFULLY IN ISLAMIC BANKING

Product Development & Innovation

(includes competitive pricing,

structure)

Distribution Channel

(effective and cost efficient delivery

channel)

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Operational Excellence

(includes documentation, turn-around

time, cost efficiency and productivity)

Service Excellence

(customer experience and satisfaction)


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CORPORATE BRANDINGCORPORATE BRANDING

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CORPORATE REBRANDINGCORPORATE REBRANDING KEY MESSAGESKEY MESSAGES

Corporate Rebranding is not only limited to change our

physical appearance i.e. logo, signage & branch model

BUT more importantly is the change in our mindset &

working culture i.e. to become more professional,

knowledgeable, innovative and customer centric as

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We need to have a new strategy and approach in the way we do business. Wehave to find our niche market. We should bank on our own strengths andcapitalize them and be more focusedon a total solution in the overall

turnaround plan

Dato Sri Zukri Samat

Bank Islam Malaysia Berhad - 2007

Islamic teachings


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REJUVENATE BANK ISLAM BRANDREJUVENATE BANK ISLAM BRAND

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Negative

Often says Itll never work

Has a we versus them

mindset

Influencers within the

organisation

Believes in branding

Has a positive and can do

Indifferent towards the change

and brand building

Skeptics Fence-sitters Champions

OUR JOURNEYOUR JOURNEY

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Does not believe in brand

building

Does not see customer

experience related to the

brand

Can exert negative influence

Resistant to change

Prefer the status quo

attitude

Able to motivate and convert

mindset of Skeptics and

Fence-sitters

Agents of change

Views the customer

experience and other key

ouch points as part of

branding process

Whatever goes-lah! Does not want to take

Responsibility

Rather be passenger than

driver

Can be influenced


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BRAND ESSENCEBRAND ESSENCE

An Islamic bankyou can believe in

BRAND PROMISE

BRAND ESSENCE ABSOLUTE

FAITH

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Bank Islam

100% Shariah based products &

services

,

fair Islamic banking system

BRAND

FUNCTIONAL BRAND

ATTRIBUTE

BRAND BENEFIT


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THE STRATEGIC BRAND POSITIONINGTHE STRATEGIC BRAND POSITIONING

Bank Islam inspires faith in its stakeholders and

exceeds their needs and wants, through itscommitment to total Shariah based policies,

principles and practice.

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CORE BRANDCORE BRAND VALUESVALUES

LEADERLEADEROur Islamic products are the benchmark. Reputed as the pioneer in Islamic banking. Built

the Islamic banking industry in Malaysia

DYNAMICDYNAMICProgressive and innovative - constantly moving ahead, technologically advanced, withnew products & services

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Fast, efficient and responsive service. Knowledgeable and equipped staff to handle globalbusiness challenges

CARINGCARING

A supportive partner who is approachable, ever ready to provide solutions to yourfinancial problems

TRUSTWORTHYTRUSTWORTHY100% Shariah-based products, services and principles


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THE CORE BRANDTHE CORE BRAND VALUESVALUES -- WHATWHAT DO THEY MEAN?DO THEY MEAN?

Our Islamic financial products are the benchmark

We are the undisputed pioneer in Islamic bankingWe built the Islamic banking market

LEADER

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s eman s a we a e e ea n every ng we o.

Leaders stay ahead of the pack, innovate, take the offensiveand are not afraid to do so

This leadership behavior could be from the way we approach

our clients, to product development, to our dealings withexternal stakeholders, including regulators, etc.

We lay down the path for others to follow


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DYNAMIC

This is defined as being progressive and innovative - constantly moving

ahead.

We have to move in the direction of becoming technologically

advanced.

THE CORE BRANDTHE CORE BRAND VALUESVALUES -- WHATWHAT DO THEY MEANDO THEY MEAN?..cont?..cont

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,

products & services

This demands that we innovate in the way we do things. Outside-the-

box thinking is expected. We welcome new technology and methods.

We embrace change and forward movement as a way of life. Our

customers must see, feel and benefit from this dynamism

Together we grow


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PROFESSIONAL

By definition it is providing fast, efficient, responsive

service.

We have to be knowledgeable and equipped to handle

global business challenges


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Our consumer banking customers demand a new paradigmin our service delivery, speed, efficiency and

responsiveness; e.g. in a simple touch point like answering

of the general phone line, faster counter transactions.

Business banking customers demand knowledge and skillsfor us to meet their global business needs

Your gateway to Islamic Banking


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CARING

This is defined as being a supportive partner who is

approachable. Approachable here means staff listen to

requests, problems and complaints non-defensively.

The attitude of our stafffacilitates the solving of customer

roblems


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Our call centers should have the ready answers and

solutions to reasonable requests.

Front line staff do the extra bit to ensure customers have a

more pleasant experience each time they have contact withthem

Giving Back to Society


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TRUSTWORTHY

By definition Bank Islam has a strong record of100% Shariah

based products, services and principles.

Customers do not have any doubts about Shariah compliance

Trustworthiness also demands that at all customer touch oints,


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front line staff with customer contact, can be trusted to Do whatthey say they will do.

This means responding to customer requests in the shortest

possible time. On a macro level, this trust has to be earned by an

impeccable performance/profit record

Trust is essential, it is Amanah,

the first step towards a fruitful relationship


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NEW & REMODELLED BRANCHESNEW & REMODELLED BRANCHES

Putra Heights, SelangorKota Damansara, Selangor Alor Setar II, KedahPutra Square, Pahang

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Batu Pahat, Johor


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NEW PRODUCT OFFERINGS & STRATEGIC PARTNERSHIPNEW PRODUCT OFFERINGS & STRATEGIC PARTNERSHIP

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DRIVERS FOR CUSTOMER SATISFACTIONDRIVERS FOR CUSTOMER SATISFACTION


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DRIVERS FOR CUSTOMERs SATISFACTIONDRIVERS FOR CUSTOMERs SATISFACTION

The core product or service offered

Support services and systems

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Interaction with the Bank and it employee

The emotional connection with customers

BUILDING STRENGTHS TO STRENGTHSBUILDING STRENGTHS TO STRENGTHS


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BUILDING STRENGTHS TO STRENGTHSBUILDING STRENGTHS TO STRENGTHS

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DRIVING CUSTOMER LOYALTY & NET PROMOTERDRIVING CUSTOMER LOYALTY & NET PROMOTER


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DRIVING CUSTOMER LOYALTY & NET PROMOTERDRIVING CUSTOMER LOYALTY & NET PROMOTER

Convenience

(Account security &reliability, timely

statements)

Branch

( Locations, Quantity,Weekend Banking, WaitTime in Line, Cleanliness

& Atmosphere)

Online Banking

(User friendly of mobilebanking & internet

banking)

ATMs/ SSTs

(Locations, Security, Ease Brand Reputation Emotional

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of Use, Features/Service

Offered, Internationalconnection)

(Reliability & Recognition)

(Conviction, Purity, Better

than others)

Product(Wide range of offerings &

innovative solutions)

Rates(Competitive &

Transparent)

Service

(Simplicity, SpeedFriendliness, Helpfulness,Knowledgeable & Wow

Experience)


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MARKETING MIXMARKETING MIX OUR PERSPECTIVEOUR PERSPECTIVE

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MARKETINGMARKETING


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MARKETINGMARKETING

Marketing is the process of planning andexecuting the conception, pricing,promotion, and distribution of ideas, goods,

services to create exchanges that satisfyindividual and or anizational oals

Marketing management is the art andscience of choosing target markets andgetting, keeping, and growing customers

through creating, delivering, andcommunicatin superior customer value

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American Marketing Association

MODERN MARKETING MIXMODERN MARKETING MIX


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MODERN MARKETING MIXMODERN MARKETING MIX

Productelements

Place,cyberspace,

and time

Price

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8 Ps

Turnaround

Productivityand quality

People

Promotionand

education

evidence

While great

devices are invented

in the Laboratory,

great products areinvented in the

Marketing

department.

CRITICAL FACTORS AFFECTING MARKETING STRATEGYCRITICAL FACTORS AFFECTING MARKETING STRATEGY


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CRITICAL FACTORS AFFECTING MARKETING STRATEGYCRITICAL FACTORS AFFECTING MARKETING STRATEGY

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SERVICE DIFFERENTATION TO DRIVE GROWTHSERVICE DIFFERENTATION TO DRIVE GROWTH


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SERVICE DIFFERENTATION TO DRIVE GROWTHSERVICE DIFFERENTATION TO DRIVE GROWTH

Our Core Product is Service

Increased sales do not always result inquality service, but quality service will

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produce increased sales

SIX STRATEGIC PILLAR TO SERVICE TRANSFORMATIONSIX STRATEGIC PILLAR TO SERVICE TRANSFORMATION


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SIX STRATEGIC PILLAR TO SERVICE TRANSFORMATIONSIX STRATEGIC PILLAR TO SERVICE TRANSFORMATION

Consistently meet & exceed customer service expectationCustomer ServiceCustomer Service

Deliver greater value to our customer and stakeholders byhaving efficient and cost effective processesTechnology & ProcessesTechnology & Processes

Assemble the best people and catalyst to spearhead anempowered and motivated customer focused teamPeoplePeople

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Provide simple and cost effective banking solutions that arecompetitiveProductsProducts

Inculcate Walk the Talk Culture, Service Excellence Culture &Sense of Ownership CultureCultureCulture

Optimize channel mix to cross sell our product and serviceofferings. Segmenting customer base based on delivery channelDistributionDistribution

CONSUMER BANKING PORTFOLIOCONSUMER BANKING PORTFOLIO TARGET MARKETTARGET MARKET


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CONSUMER BANKING PORTFOLIOCONSUMER BANKING PORTFOLIO TARGET MARKETTARGET MARKET

Engineers

AccountantsOil & Gas

Mass Affluent

Bankers

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Government

Servants

MedicalPractitioners

KEY INSTITUTIONAL CUSTOMERSKEY INSTITUTIONAL CUSTOMERS


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KEY CORPORATE CLIENTSKEY CORPORATE CLIENTS


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26% of consumer portfolio

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PRODUCT ELEMENTSPRODUCT ELEMENTS


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PRODUCT ELEMENTSPRODUCT ELEMENTS -- UNIQUE SELLING PROPOSITIONUNIQUE SELLING PROPOSITION


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Items Bank Islam Card Industry

Cash Rebate 0.3% to 0.8%on retail purchases,

given on anniversary date

Reward program, Treat Points

Khariat Kematian /

Funeral expenses

Up to RM1,000 Nil (except Bank Rakyat)

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a a u overage overage on utstan ng a ance

(TPD or Death)Up to RM100,000

Takaful Travel Protection

Up to RM1,000,000

ustomer ave to pay or t e

coverage premium.

Inquiry Balance Inquiry balance at i-TAP (mobile

banking)

Nil

Others 40% discount on will writing Not available



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House Financing Bank Islam Industry

20% Stamp Duty

Remission

Islamic financing is entitled for

20% stamp duty remission on

instruments and documents. Thus

savings to customers.

Not applicable

Payment Holiday Customers who opt for Payment Not widely offered. Currently

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the monthly payment on theirfinancing account every

November and December

throughout their financing

tenure. The objective of this

feature is to assist the customersin meeting their financial needs.

,

Chartered Bank and Al-RajhiBank offering similar feature.



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House Financing Bank Islam Industry

No Payment During

Construction (NPDC)

NPDC is offered to selected

housing projects which are

under construction developed

by reputable developers. This

feature allows customers to

defer the monthly payment

Not applicable

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for a period of 24 months. The

objective of this feature is to

assist customers who may face

tight budget due to their

obligation to pay house rental

during the construction of their

property.

PLACEPLACE -- BRANCH NETWORKBRANCH NETWORK


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150 branches by 2015

another 12 new branches by end of 2012

SELF SERVICE TERMINALS (ATM,CDM,&ETC)SELF SERVICE TERMINALS (ATM,CDM,&ETC)


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CYBERSPACECYBERSPACE


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PEOPLEPEOPLE


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Back Office Front Office StaffService &

Distribution Customer

End to end customer experience

Customer Service - the real differentiator of customer centricity in a

commoditized financial market

PROMOTIONPROMOTION TACTICAL CAMPAIGNTACTICAL CAMPAIGN


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ABOVE THE LINEABOVE THE LINE


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Advertising to mass market or mass audience Usually done via mass media i.e. TV, radio, newspaper and billboards

Usually used to rejuvenate brand value or establish brand presence or brand

identity

Effective when the target group is large and not well define

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BELOW THE LINEBELOW THE LINE

Advertising to specific target market

Usually done via direct means of communication i.e. SMS blast, Direct Mailing, etc Effective when targeting a specific group with unique value proposition

EDUCATIONEDUCATION


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PROCESS & TECHNOLOGYPROCESS & TECHNOLOGY


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Increased operational efficiency, profitability & productivity

Superior customer service

Multi-channel, real-time transaction processing

Better cross-selling ability

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mprove managemen an accoun a y

Robust risk management

Minimal transaction costs

Improved financial analyses capabilities

PRICINGPRICING


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EMERGENCE OF GEN YEMERGENCE OF GEN Y


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Ethical BankingVirtual Banking

(Branchless banking)Green Banking

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More SophisticatedFacebook as medium forcustomer engagement

Lack of Brand Loyalty

WHAT CHANGED IN MARKETING


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Organize by product units

Focus on profitable transactions

Organize by product units

Focus on profitable transactions

Organize by customer segments

Focus on customer lifetime value

Look also at marketin scorecard

Old Economy New Economy

Page 64 64

Loo primari y at inancia scorecar

Focus on shareholders

Marketing does the marketing

Build brands through advertising

Focus on customer acquisition

No customer satisfaction measurement

Over-promise, under-deliver

Loo primari y at inancia scorecar

Focus on shareholders

Marketing does the marketing

Build brands through advertising

Focus on customer acquisition

No customer satisfaction measurement

Over-promise, under-deliver

Focus on stakeholders

Everyone does the marketing

Build brands through performance

Focus on customer retention

Measure customer satisfaction and retentionrate

Under-promise, over-deliver


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WRAP UPWRAP UP

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SURPASSED HEADLINE KPIs 2011SURPASSED HEADLINE KPIs 2011


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Return on Equity

Above 15%ROE of 17.7%

Return on Asset

Above 1% ROA of 1.5%

Non-Fund Based

Income Above

10%

Non Fund BasedIncome of 13.8%

Cost Income Ratio

Below 55%Cost Income Ratio

of 53.8%

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Net FinancingAsset Growth of

20%

Net FinancingAsset Growth of

19.2%

Net ImpairedFinancing Ratio

Less than 2%

Actual NetImpaired FinancingRatio of Negative

0.3%

Dividend Payout

50% of PATZ

Dividend Payout of25% of PAZT

RWCR > 15%

Core Capital Ratio

> 8%

RWCR* of 16.3%Core Capital Ratio*

of 15.3%

* pre -dividend

PROFIT BEFORE ZAKAT & TAX TRENDPROFIT BEFORE ZAKAT & TAX TREND


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Profit before Zakat and Tax for12 months to Dec 2010

= RM 344.5 m

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* 18 months Financial Period Ended Dec 2010

ROBUST FINANCING GROWTHROBUST FINANCING GROWTH


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RMM

illion RM2.28b Growth

+ 19.2%

Page 68

1,676.3

311.6 288.3

4.4

RMM

illion

MARKET SHARE AS AT DECMARKET SHARE AS AT DEC 20112011


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22.5% 14.3% 9.6% 8.8% 6.7%

Total Assets

Page 69

RM75.5b RM32.2bRM47.9b RM29.4b

Islamic Banking Assets RM334.9 billion

RM22.4b

MARKET SHARE AS AT DEC 2011MARKET SHARE AS AT DEC 2011

Net Financing


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25.4% 14.7% 9.6% 7.6% 7.0%

Net Financing

Page 70


Islamic Banking Net Financing RM200.3 billion

RM14.1b

MARKET SHARE AS AT DEC 2011MARKET SHARE AS AT DEC 2011

Deposits


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22.1% 11.8% 10.6% 7.5% 6.4%

Deposits

Page 71

RM59.1 RM28.3bRM31.6b RM20.0b

Islamic Banking Deposits RM267.0 billion

RM17.0b

MARKET SHARE AS AT DECMARKET SHARE AS AT DEC 20112011

CASA Deposits


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25.0% 18.4% 11.1% 10.0%5.2%

CASA Deposits

Page 72


Islamic Banking CASA Deposits RM66.7billion

RM3.5b

WINNING NOTEABLE DEAL 2010WINNING NOTEABLE DEAL 2010


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Principal Adviser, Managing Underwriter, Underwriter and Placement Agent for Initial Public Offering inconjunction with Listing on Main Market of Bursa Malaysia. Bank Islam chartered Malaysian corporatehistory by being the first Islamic Bank and commercial bank to advise on a listing exercise

Principal Adviser, Managing Underwriter, Underwriter and Placement Agent for InitialPublic Offering in conjunction with Listing on Main Market of Bursa Malaysia

Joint Lead Manager, Joint Book Runner & Shariah Advisor for RM10 bil Aman MTN Sukuk,for the development of Police facilities.

Senior Manager for RM 800 mil Syndicated Islamic Financing Facility for Aura Bayu Sdn

Page 73

Senior Manager for RM667.5 mil Syndicated Islamic Financing Facility for RanhillPowertron II

Arranger for US$150 mil Syndicated Islamic Financing Facility for Qatar Airways QCSC

Lead Arranger in the syndication of Islamic financing facility of RM330.0 mil for KedahSato Sdn Bhd, a subsidiary of Bina DarulAman Bhd, in relation to the development ofKolej Universiti Insaniah

Lead Arranger in the syndication of an Islamic financing facility of RM327.0 mil forPROLINTAS Expressway Sdn Bhd, the concession holder of Guthrie Corridor Expressway

WINNING NOTABLE CORPORATE MANDATES 2011WINNING NOTABLE CORPORATE MANDATES 2011


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Joint Lead Arranger, Joint Lead Manager for

RM5 bil Sukuk Ijarah Program

Joint Lead Arranger for

RM2.6 bil Syndicated Islamic Revolving Credit Facility

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Co-Manager or RM2.0 bil

10-year and 15-year Islamic Medium Term Notes

RM150 mil Term Financing Facility to undertake

Mandatory General Offer

UNDERWRITER LEAGUE TABLEUNDERWRITER LEAGUE TABLE -- ASEANASEAN


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Page 75

UNDERWRITER LEAGUE TABLEUNDERWRITER LEAGUE TABLE MALAYSIAN ISLAMIC SUKUKMALAYSIAN ISLAMIC SUKUK


77/78

Page 76


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Disclaimer: This presentation material has been prepared by Bank Islam Malaysia Berhad (the Bank) for information purposes onlyand does not purport to contain all the information that may be required to evaluate the Bank or its financial position. Norepresentation or warranty, express r implied, is given by or on behalf of the Bank as to the accuracy of the information or opinionscontained in this presentation. The presentation does not constitute or form part of an offer, solicitation or invitation of any offer,to buy or subscribe for any securities , nor should it or any part of it form the basis of, or be relied in any connection with, anycontract, investment decision or commitment whatsoever. The Bank does not accept any liability whatsoever for any loss howsoever

Page 77

arising from any use of this presentation or their contents or otherwise arising in connection therewith.

BANK ISLAM MALAYSIA BERHAD11th Floor, Wisma Bank IslamJalan Dungun, Bukit Damansara50490 Kuala LumpurTel: 603 2088 8222

www.bankislam.com.my

Hizamuddin JamalluddinGeneral Manager, Strategic Planning

Managing Directors Office

Contact: 602 2088 8077Email: [email protected]

Mujiburrahman Abd RashidAssistant General Manager, Sales & Marketing

Consumer Banking

Contact: 602 2088 8268Email: [email protected]

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