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Malaysia’s assent as Islamic Banking Powerhouse: Meet the ventures leading the charge

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In January 2024, Maybank Islamic Berhad launched the Shariah-compliant portfolio financing solution, thereby becoming the first Malaysia-based Islamic bank to do so

Malaysia’s financial landscape has been undergoing a significant transformation, with Islamic Finance emerging as a decisive force behind the phenomenon.

“Islamic Banking institutions have not only grown in number but have also been at the forefront of embracing digital technologies to enhance their services and reach a wider customer base,” reported IBS Intelligence on the matter.

“This digitisation drive has not only streamlined operations but has also enriched customer experiences, fostering financial inclusion and innovation within the Islamic Finance sector,” it added further.

In fact, as per the reports, AEON Bank is all set to become Malaysia’s first Islamic digital bank. The subsidiary of AEON Credit Service and AEON Financial Service received approval from Bank Negara Malaysia and the Minister of Finance in January 2024 to initiate its operations in the Southeast Asian nation.

Through the digital route, AEON Bank is looking to expand its Islamic Finance-related operations, while enhancing its solutions for both retail and wholesale members, encompassing ecosystem partners like auto dealers, merchants, tenants and suppliers.

As AEON Bank adds a glorious chapter to Malaysia’s financial landscape, through today’s article, let’s meet some of the key players of Southeast Asia’s growing Islamic Banking ecosystem.

AmBank Islamic Berhad

AmBank Islamic Berhad (AmBank Islamic) is known as the Islamic Banking arm of AmBank Group. The division offers a comprehensive range of Shariah-compliant retail and non-retail banking products and services, including treasury and trade solutions. The bank, which also provides Islamic fund management solutions, enhances its digital banking experience through the AmOnline app.

Recently, the venture hit the headlines by tying up with the Northern Corridor Implementation Authority (NCIA) to facilitate business seed capital distribution of RM200,000 to the latter’s “empowerNCER” entrepreneurs in the Northern Corridor Economic Region (NCER) via the iTEKAD programme.

The iTEKAD programme, initiated by Bank Negara Malaysia (BNM) in 2020, aims to empower micro-entrepreneurs to generate sustainable income for these individuals in line with the goals of the Southeast Asian nation’s “Budget 2024.”

Alliance Bank Malaysia Berhad

Alliance Bank and its subsidiary Alliance Islamic Bank Berhad, is another dynamic and integrated financial services group leading Malaysia’s assent as South East Asia’s “Islamic Banking Powerhouse.” The venture offers digital banking and financial solutions through its consumer banking, SME banking, corporate and commercial banking, and Islamic Banking businesses.

The lending body has established fame for providing fast, simple and responsive banking services that meet the needs of its customers via multi-pronged delivery channels, including retail branches, “Privilege Banking Centres” and “Business Centres” at branches located nationwide, apart from mobile and internet banking.

The venture’s share price and its earnings per share (EPS) have grown at 16% per year over the last three years, thereby sending the Alliance Bank’s share price higher. Its shareholders have received returns of 10% over the last twelve months (even including dividends). The venture, the smallest banking group by asset size in Malaysia, is also poised to see healthy loan growth in 2024, backed by the small and medium enterprises (SME) and commercial segments.

Bank Muamalat Malaysia Berhad

Bank Muamalat offers its customers a broad range of services, meeting the needs of both individuals and business institutions.

Recently the bank hit the headlines by entering into a multi-year collaboration with Google Cloud to accelerate its transformation into a “Digital Islamic Bank.” Both parties will leverage Google Cloud’s integrated capabilities in Bank Muamalat’s existing infrastructure, while exploring opportunities in data analytics, online security, and generative AI to deliver personalised and inclusive digital banking services to Malaysians.

Bank Muamalat’s holistic cloud transformation will also encompass the adoption of solutions from Mambu, a Google Cloud industry solutions partner, while underscoring its commitment towards delivering Shariah-compliant digital banking solutions.

Maybank Islamic Berhad

Maybank Islamic Berhad, the Islamic Banking arm of the Maybank Group, is another leading provider of Islamic financial products and services. The venture is spearheading the broader Islamic Banking and finance industry through cross-border businesses in retail and investment banking and the development of new, innovative and competitive propositions.

Maybank Islamic Berhad, as of March 2024, is offering a wide range of products and services across more than 354 of its touch points in Malaysia, as well as international operations in Dubai, Indonesia, Singapore, Hong Kong, London and Malaysian federal territory of Labuan.

Maybank Islamic Berhad has also put the Southeast Asian country in a prominent place, when it comes to the discussion of Malaysia being the “Islamic Banking Powerhouse,” as the venture has carved out a special place for itself within the ASEAN bloc.

In January 2024, Maybank Islamic Berhad launched the Shariah-compliant portfolio financing solution, thereby becoming the first Malaysia-based Islamic bank to do so.

Building upon the momentum further, in February 2024, the venture joined hands with Telekom Malaysia (TM) to deliver Malaysia’s first Islamic Banking-As-A-Service (BAAS) solution powered by 5G, by launching the “Go Niaga” mobile business banking bundle.

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