DEAR STAKEHOLDERS, 2024 has been an exciting year at Bank Islam. We witnessed strong financial performance and made headway toward key operational advancements that enhance efficiency. We launched upgraded and modernised banking platforms and further deepened our commitment to sustainability within our business and through our financing and investment solutions. These advancements reflect our firm belief in responsible and ethical business practices, fostering trust among our partners and customers as we evolve into a future-ready financial institution. DATO’ MOHD MUAZZAM MOHAMED Group Chief Executive Officer OPERATING ENVIRONMENT Malaysia’s economic landscape in 2024 demonstrated commendable resilience, supported by moderating global inflation and unexpectedly strong Gross Domestic Product (GDP) growth of 4.9%. However, despite these positive indicators, businesses and households struggled with cost pressures. We observed a growing debt service ratio among our retail customers due to decreased net take-home pay. In contrast, non-retail customers faced margin compression due to rising costs, with much of the financing demand channelled towards managing rising operating expenses rather than new investments. In the banking sector, intensifying competition for deposits and the need to sustain Net Income Margins (NIM) led to a more disciplined approach to managing funding costs. Despite these challenges, we exercised financial discipline and strategic foresight to ensure stable asset quality and a prudent funding composition. We maintained a NIM of 2.13%, while achieving growth in retail and commercial banking at 6.3% and 6.7%, respectively. This was achieved by focusing on stable, low-cost deposits and prioritising on Current, Savings and Transactional Investment Account (CASATIA) deposits over term placements. ‘’In the name of Allah, the Most Compassionate, the Most Merciful All praise is due to Allah, the Lord of the Worlds, and peace and blessings be upon the Prophet Muhammad, whom Allah send as mercy to the universe, which Allah make him a guiding and a rightly guided man, and an illuminating lamp. And peace and blessing on his family and companions, and those who followed them benevolently until the Day of Judgment and then after. May Allah’s peace, mercy and blessings be upon you.’’ Bank Islam Malaysia Berhad ◆ Integrated Annual Report 2024 20 From the Desk of the GCEO
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