What new initiatives is Maybank Islamic Bank currently involved in?
HISHAM: For us in Maybank Islamic in Malaysia, our key focus is to sustain our leadership, and maintain our growth, our profitability, and our businesses here. For the ASEAN region, we are continuing our growth agenda, particularly our two key markets at the moment, which are Singapore and Indonesia, and which have recorded fantastic growth for us over the last three to four years.
What is Maybank Islamic’s business mix?
HISHAM: We have the best of both worlds. We're a mix of about 55% in terms of the retail market and about, of course, 40 to 45 odd percent in the wholesale market. We also are very active in our investment bank unit on the sukuk market. But more importantly, in our demographic, in our customers in Malaysia, where we are a diversified multi-ethnic country, approximately 50 odd percent of our customers are also non-Muslim. So this is an exciting sort of demographic. But what we believe in is value to our customers and value to our shareholders, so that value proposition is always top priority in any of our businesses in the Maybank group.
What lines or segments in Islamic financial services have the most promising growth outlook?
HISHAM: In key markets like Malaysia, of course the consumer and the wholesale business is still a key area of growth. At Maybank Islamic, we're controlling at least 1/3 of the market share at the moment in Malaysia. However, the growth that we've seen in key markets in ASEAN is the cross border transaction, not only using Islamic finance as a bridge where there is demand, but there is also the opportunity to tap a diversified investor base, diversified liquidity, and facilitate that economic growth in the region using the platform of Islamic finance.
What is Maybank Islamic’s market position?
HISHAM: Maybank Islamic, at the moment, we are the third largest Islamic bank in the world. Also, year-in year-out over the last decade or so, we have been in the top three global arrangers for the sukuk market, or the Islamic bond market. We want to continue doing that. Of course in this region, in ASEAN, we are the largest Islamic bank here so there's a leadership that we want to maintain.
How can Malaysia continue to take a leadership role in the Islamic finance industry globally?
HISHAM: We're blessed that we have the experience of those other policy makers in the market for the growth of Islamic finance. That means that we maintain the best practices that the banking and financing industry has and compliment it with the right and clear regulation to allow market players to understand and to ensure an easier business environment and the growth of Islamic finance. Now, that's number one. I am confident and believe how Malaysia and ASEAN can play a role in the development, not only of Islamic finance, but also the global economy. What I hope is to ensure more reciprocal policies between trading nations, not only just among ASEAN trading nations, but also between ASEAN and the Middle East, Europe, and the United States. So I do hope a lot of the policy makers talk about reciprocal policies among trading nations.
How important is it to facilitate sukuk issuance in a broader base of currencies?
HISHAM: The Ringgit has always been dominant in the sukuk market because that’s where the key value market has been. But we are beginning to also see, because of the success of the Ringgit sukuk, we're beginning to see a lot more dollar issuance and other GCC currency issuance in the market. This is the trend and we are confident we'll be seeing more and more issuance. I think where Malaysia plays a role is showing how the best practices in the bond or the sukuk market can be applied also in the Islamic finance side. So it's a combination of the best practices, and applying the right and clear regulation in Islamic finance in the development of the sukuk market.
Because of the success of the Ringgit sukuk, we're beginning to see a lot more dollar issuance and other GCC currency issuance in the market.
How is Islamic finance more connected to the real economy?
HISHAM: Well, I think that certain parts of the values in Islamic finance are able to address the real economy and are able to put that value in to avoid the potential shocks. But never the less, risks such as credit risks, economic risks, and foreign currency risk are still not immune, be it Islamic finance or any conventional financial sector.
But there are certain, if I may use the word, products and services, in Islamic finance that discipline themselves and do not allow a financial institution to be excessive in terms of it's products and services. One of the best example that we've seen is 2008 and 2009, the key root cause was in asset backed securities or collateral debt obligation. Now, that structure cannot be replicated in Islamic finance because of the over-leveraging of that instrument which is definitely not allowed in Islamic finance.
How would you rate the soundness of Malaysia’s banking system?
HISHAM: We have a very robust and very proactive Central Bank and also strong policies from the government in terms of ensuring a sustainable fundamental in our economy. I'm confident. I'm seeing that continuous policy in place constantly looking at the health check of the economy, be it public debt, household debt, or the growth of our economy. We want to grow responsibly. We want to make sure that we grow on the right pace, at the right context of our economy, and the key part is how do we ensure that sustainability and how do we add that value in that path of our economic growth.