BIMB Integrated Annual Report 2019

DIRECTORS’ REPORT for the financial year ended 31 december 2019 2020 BUSINESS PLAN AND OUTLOOK BUSINESS PLAN, STRATEGY AND FUTURE OUTLOOK ISLAMIC BANKING The Malaysian banking sector is expected to face a very challenging operating environment following the Covid-19 pandemic. Banking institutions earnings are expected to endure a rough tide ahead. Nevertheless, expansionary fiscal policies alongside with a very accommodative monetary policy in 2020 introduced by the Government, financing activities to households and non-households sector are expected to be well supported albeit cautiously. With the current landscape, Bank Negara Malaysia (“BNM”) has announced additional measures to assist financing customers experiencing temporary financial constraints due to Covid-19 outbreak. These measures aim to ensure that the financial intermediation function of the financial sector remains intact, access to financing continues to be available and banking institutions remain focused on supporting the economy during these exceptional circumstances. In supporting BNM’s relief plan, Bank Islam is offering automatic deferment of all financing repayments for six months for individual customers and Small Medium Enterprises (“SME”). The Bank is also implementing SME Special Relief Facility (“SSRF”) to help alleviate the short-term cash flow predicament faced by individuals and SMEs. This initiative is to help bridge the sustenance of Real Economy, by preserving jobs and ensuring continued economic activity during this period of volatility. The Bank perseveres to ensuring service deliverables to the level best. With Sustainability as the overarching theme in the Bank’s strategic direction, the Bank has adopted Value-Based Intermediation (“VBI”) at the heart of its business model. VBI was launched within the Islamic banking sector in 2017, an initiative through which Islamic banking institutions transform their business activities to enable delivery of sustainable and positive impact on the community, economy and the environment. Bank Islam’s strategic intent has been well guided by the concept Triple Bottom Line concept (“TBL”), a principle of VBI advocating for the good of people, planet and prosperity. Premised on these measures in place, along with “Halal” and “Trustworthy” being our key distinctive features, Bank Islam hopes to be able to cushion the impact of the current adversaries for all communities across the society towards continuous prosperity and well-being for our people. TAKAFUL Despite business sentiments remaining cautious in 2020, the Takaful industry is expected to outperform the conventional insurers in view of the strong demand for Takaful products. Takaful Malaysia is poised to further expand its market share in 2020. To sustain its market leading position, the company will continue with its innovative strategies via the implementation of its digital strategy, introduction of online solutions, expansion of its distribution capabilities, strategic partnerships with leading Islamic banks and Brand awareness initiatives. Particularly, the company will further strengthen its distribution capabilities for general takaful business in view of greater potential to enlarge the takaful market share in the general insurance and takaful sector. To support business growth and customer centricity, the company will continue its digital strategy to build the full digital ecosystem and to expand the business focus beyond credit-related business to reach out to the wide retail customer base of major partner banks. It is the commitment of Takaful Malaysia to continue responding to the needs of customers with reliable and better protection solutions and services that they deserve to firmly establish the company as the preferred choice for insurance. 168 Integrated Annual Report 2019 Group Overview Sustaining The Group Management Discussion & Analysis Group Governance