OVERVIEW OF BUSINESS ENVIRONMENT Increased Competition and Compressed NIM Amidst growing competition, market players are increasingly focusing on high-yield products and reducing profit rates to expand their market share. This trend has led to a compression in Net Income Margin (NIM) across the industry. Recognising this challenge as an opportunity, we have strategically pivoted towards acquiring higher-yield assets while rebalancing our asset-liability portfolio to safeguard our NIM. Beyond NIM optimisation, we are actively intensifying efforts to grow fee-based income and diversify revenue streams. This involves exploring innovative product offerings, introducing advisory solutions tailored to evolving customer needs, and collaborating with partners including BIMB Investment, BIMB Securities, Syarikat Takaful Malaysia Keluarga Berhad, PMB Investment Berhad, Nomura Asset Management, and AHAM Asset Management Berhad. Increasing Wealth and Affluence HNWIs and the emerging affluent seek tailored investment advice, portfolio management and tax optimisation – ideally as a one-stop solution. While digital channels are a key aspect of delivering this, the human element remains critical, as personalised support is highly valued at different stages of the client’s investment journey. We are enhancing our offerings for HNWIs that desire Shariahcompliant solutions which includes establishing Premier Wealth Centres offering personalised, premium services such as wealth management investment solutions, and exclusive credit products. These solutions will also serve to strengthen our fee-based income. Realigning the Business and Nurturing Leaders With the realignment of reporting lines at the regional level effective July 2024, we have established a structure centred around a retail model, with customers as the focal point. Under the new structure, our focus lies in driving financing growth while prioritising deposit and fee-based income, creating a strong foundation for expanding our retail business portfolio. Our customer-centric business model has significantly enhanced our customer acquisition efforts by effectively segmenting clients and deploying targeted marketing strategies. These efforts align with our mission, “To Provide Solutions that Deliver Value.” Additionally, the model fosters accountability and ownership among branch-level leaders while supporting our holistic financial advisory approach. This integrated value proposition not only strengthens our relationships with customers but also builds a lasting foundation for mutual growth. In line with our commitment to excellence, we are reclassifying existing sales personnel; Deposit Marketing Executives and Wealth Consultants, by adopting a new approach for holistic financial advisory services; Personal Bankers aim to create a strong value proposition and build long-term relationships with customers by maximising their financial portfolios. We are also focused on enhancing the knowledge and skills of our team to ensure they become competent financial advisors and effective ambassadors of Bank Islam, capable of meeting customer needs and exceeding expectations. FINANCIAL PERFORMANCE HIGHLIGHTS Group Retail Banking Performance (Growth 2024 vs 2023) Financing Total Outstanding (TOS) Fund-based Income Individual Deposit and Investment Fee-based Income 6% 6% 2% 11% 97 w w w . b a n k i s l a m. c o m 01 02 03 04 MD&A – BUSINESS REVIEW 05 06 07 08 09
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