BIMB Integrated Annual Report 2019

PROGRESSING WITH YOU I must say here that looking back, I am extremely proud of what we have achieved. All our three operating subsidiaries stand as the first and leading Islamic financial institutions in their own right in Malaysia since they were first established. As the first Islamic Financial Holding Company in Malaysia with an extensive portfolio of diversified Shariah-compliant businesses across the Islamic financial industry encompassing Islamic banking, Takaful business and stockbroking activities, BHB has led the way in demonstrating how an Islamic financial institution can play a successful role in a modern economy. Today, we have grown tremendously, serving millions of customers across the nation while being at the forefront of contributing to the growth of Malaysia’s leading position as a vibrant International Islamic Financial Centre. Over the years, we have certainly gone through our fair share of challenges, but what is inherent in the Group is the willingness to look deepwithin and boldly recalibrate and realign so that we always emerge more robust – by restructuring our business strategy, strengthening risk-and-credit management infrastructure, improving operational processes, and reinvigorating our workforce. Since 2007, when we posted our highest annual profit before tax at that time and surpassed the RM1 billion mark in total revenue, we have continued to be on the path to sustainable growth and profitability. This is driven by the Group’s commitment to always be adaptable and agile to the ever-changing operational landscape, while being anchored to Islamic values that promote sustainability, integrity, responsibility and ethics. It is these values that allow us to constantly progress with our people, our community and our country. As a flagbearer for Islamic finance, sustainability is integral to our business growth and survivability. This has shown to be more important now than ever given the unprecedented challenges posed by the pandemic outbreak of novel coronavirus (“COVID-19”) and the oil price slump, among others. It is during testing times like this that we double our efforts to ensure that we help our community so that we can all progress together. The pandemic has caused a deep impact on our community, their businesses and their livelihood. In putting into practice Bank Islam’s theme Sustainable Prosperity for all in the community , we have expeditiously rolled out multi- faceted relief plans that include a Rescheduling & Restructuring (“R&R”) facility, automatic deferment of all financing repayments for six months for individual customers and Small Medium Enterprises (“SME”) in support of BNM’s relief plan, as well as implementing SME Special Relief Facility (“SSRF”) to help alleviate the short-term cash flow predicament faced by SMEs. BHB and Bank Islam pledged RM1.6 million to be channelled to the various fund- raising programmes such as #MusaadahCOVID19 mission, Ministry of Health and Jabatan Kebajikan Masyarakat. The contribution will be used to assist the underprivileged communities and other affected stakeholders. As the world and Malaysia evolves with conditions that are constantly changing, we too have to adapt and think about how we can do things better to ensure that we continue to deliver sustainable value to our shareholders. I am heartened to note the level of business maturity of our operating subsidiaries. As we move towards realising the potential for each subsidiary, we are looking to transition the operating subsidiaries to be in a position that enables them to pursue opportunities that can unlock strategic values on their own merits. This corporate exercise involves the creation of separate and independent business entities with distinct businesses in Islamic banking, Takaful and securities, allowing for a more efficient utilisation of their balance sheets and capital management so that they can pursue growth strategies that are relevant to their particular businesses. Arising from this planned transitioning exercise, the listing status that is currently held by the holding company, BHB, is expected to be transferred to Bank Islam, paving the way for Bank Islam to emerge as the one and only full-fledged Islamic bank to be publicly listed in the region. BIMB Securities will be part of Bank Islam moving forward, offering a full and complementary suite of Islamic services. Likewise, BHB personnel will be reallocated to Bank Islam seamlessly, delivering the same level of performance with pride. With Takaful Malaysia already a leader in the Islamic Takaful space, this entity is capably ready to stand on its own strengths and reap the potential that the market has to offer. The proposed transition is expected to have a positive impact on potential earnings accretion through the streamlining of resources and infrastructure duplication, as well as reducing the complexity of group risk management. However, this proposed corporate exercise is subject to the approvals of the relevant regulatory authorities as well as shareholders, and market conditions moving forward. 53 BIMB HOLDINGS BERHAD 199701008362 (423858-X) Financial Statements Shareholders’ Information Disclosure Summary Additional Information