Bank Islam Malaysia

Berhad (BIMB)
ASRI BIN SABRI 237632
MUHAMMAD HIDAYAT BIN SABRI 239159
KU MOHD IMAL DANIEL BIN KU ISHAR 238009
MOHD ARIEF BIN SALIM 239905
Background of Bank
Islam Berhad (BIMB)
 Introduction
Bank Islam Malaysia Berhad (BIMB) was establish on 1 July 1983 and BIMB is the
first banking institution based on Shariah in Malaysia and South East Asia
Bank Islam currently has the widest dedicated Islamic banking network in Malaysia
with 145 branches and more than 1,000 self-service terminals nationwide, more
than 70 innovative and sophisticated Islamic banking product and services.
The vision of BIMB is to be a Global Leader in Islamic Banking. The Global
Leader means as being the ultimate guidance and source of reference for innovative
shariah based product and services.
FINANCIAL
HIGHLIGHT
 FINANCIAL HIGHLIGHT
.Total revenue for that year shows an increasing amount about RM 2, 642 million compared to the year
2014 only obtain RM 2, 431 million.
Profit before zakat and tax shows a little decline for year 2015 rather than on year 2014 about RM 685
million and RM 701 million respectively.
The total asset has shown the highest earning for the year 2015 which is about RM 49, 767 million
same goes to the total financing of Bank Islam Malaysia Berhad (BIMB) also got the highest earning
on that year compared for 2014 which is RM 34, 295 million and RM 29, 525 million respectively.
Bank Islam have a good earning for gross impaired financing on that year about RM 381 million. For
shareholders equity of Bank Islam always increase between year to year for instance at the year 2011
until 2015.
Last but not least, deposit from customer also have increasing between year to year and shows that the
customers are believe on Bank Islam to handle their money.
 FINANCIAL BY CONTRACT
Bank Islam have provided many of their product that are shariah compliant such as At-
Tawarruq, Bai Bithaman Ajil, Murabahah, Bai Al-Inah, Istisna, Ijarah, Ar-Rahnu and Ijarah
Muntahlah Bit-Tamleek.
On the year 2015, At- Tawarruq and Murabah contract shown the increasing percentage
compared on previous year 2014.
But percentage for Bai Bithaman Ajil, Bai Al-Inah, Ijarah and Ar-Rahnu had decline for year
2015 compared to the year 2014.
Luckily, another two Bank Islam product which is Istisna and Ijarah Muntahlah Bit-Tamleek
show a constant percentage between the year 2015 and 2015 respectively.
 FINANCING BY SEGMENT
Financing by segment of business unit comprises consumer, commercial and
corporate.
For consumer, the percentage are decline for year 2015 rather than 2014
which 73.3% and 74.2% respectively.
On commercial shown the little growth percentage about 14.4% on the year
2015 compared 14.1% in 2014.
And the percentage of corporate also increase on year 2015 which 12.3%
compared 11.7% for year 2014.
 CHAIRMAN
STATEMENT
 CHAIRMAN STATEMENT

The year saw the Bank once again leveraging on change to become the first Islamic bank to offer
products that comply with the guidelines set by the Islamic Financial Services Act (IFSA) 2013. IFSA
2013 brought about the need to re-classify existing deposit products based on the underlying Shariah
contracts to differentiate between deposit and investment accounts (IA). Under the IFSA 2013, all
existing Islamic deposit products that apply the Shariah contracts of Mudharabah, Musharakah and
Wakalah are now classified as IA products. As part of a major enhancement exercise of its existing
product line-up, the Bank rolled-out three new IA products on 1 June 2015. These were Special
Investment Account (Mudarabah), Waheed Investment Account (Wakalah) and Al-Awfar Investment
Account. The different Shariah contracts provide different profit payment methods thus expanding
the Banks range of Shariah-compliant investment options with differing risk-return profiles to our
depositors and investors. Within six months since its roll-out, the IA balances stood at RM676.1
million.
 CHAIRMAN STATEMENT
Towards end-October 2015, the Bank was also one of the four founding
Islamic banks to form a consortium to market IAs via the Investment
Account Platform (IAP). IAP is a centralized multi-bank platform which
will be used to match investors (either individual, corporate or institutional
investors) with viable ventures or projects that require financing. The IAP
essentially provides a channel to bring together investors and ventures and
catalyze growth opportunities through IA solutions.
BANKS LIQUIDITY
o CURRENT RATIO
o ACID TEST RATIO
o CURRENT CASH DEBT COVERAGE
 CURRENT RATIO
= current assets/current liabilities

2014 2015

44, 070,650,000 47, 808,507,000

= =
41,481,487,000 45,199,922,000
= 1.0624 = 1.0577
= . = .

The current ratio does provide investors and analysts about the bank efficiency operating cycle. Higher its current ratio, higher the capable for the
bank to settle its short term obligations.

Compared both of the year 2014 and 2015, the year of 2014 is more efficient compared to 2015 to settle its obligations as the current ratio is more
greater than 2015 year, which is 1.0624 and 2014 is 1.0577.
 ACID TEST RATIO
ca sh , short term investment and receivable
1.1 =
current liabilities

2014 2015
44, 070,650,000 47, 808,507,000
= =
41,481,487,000 45,199,922,000
= 1.0624 = 1.0577
= . = .

This ratio does measures RM amount of liquid assets it has to each RM of current liabilities.

Considered the year 2014, its quick ratio is 1.0624, this means Bank Islam has RM 1.0624 of liquid assets available
for the bank to cover each RM 1 its current liabilities. For this, year of 2014 is more efficient as the quick ratio is
1.0624, which means greater than year 2015, 1.0577.
 CURRENT CASH DEBT COVERAGE
net cash provided by operating activities
=
average current liabilities
2014 2015

2,822,423,000 1,526,692,000
= =
41,481,487,000 45,199,922,000
2 2
2,822,423,000 1,526,692,000
= =
20,740,743,500 22,599,961,000
= 0.1361 = 0.0676
= . = .

This is about to measures the relationship between the net cash given by the operating activities and also about average current liabilities of the company. This
means the bank do able to settle its current liabilities from its operation.

Current cash debt coverage ratio is related to the better liquidity position. Basically ratio with 1:1 is assume very satisfied as it is able to settle all of its current
liabilities from the operation, cash flow.
 BANKS
PROFITABILITY
o PROFIT MARGIN ON SALE
o RATE OF RETURN ON ASSETS
o RATE OF RETURN ON SHARE CAPITAL-ORDINARY
o EARNING PER SHARE
o PRICE EARNING RATIO
o PAYOUT RATIO
PROFIT MARGIN ON SALE
net income
1.1 = net sales

2014 2015

1,503,831,000 1,513,060,000
= =
2,431,396,000 2,641,702,000
= 0.6185 = 0.5728
= . % = . %

Profit margin is about the net profit to sales are evaluate in the percentage (%).

From this result, we see that 2014 is greater its profit margin on sale, 61.85% compared to the year 2015, 57.28%. This
show a declining about 4.57%. This means that Bank Islam do having problem in their performance and profitability.
RATE OF RETURN ON ASSETS
net income
=
average total assets
2014 2015

1,503,831,000 1,513,060,000
= =
45,829,287,000 49,767,067,000
2 2

1,503,831,000 1,513,060,000
= =
22,914,643,500 24,883,533,500
= 0.0656 = 0.0608
= . % = . %

The rate of return on assets is used to determine the banks ability to generate profits from its assets.

In this context, on average every RM invested in the bank for the year 2014 able to generate profit 6.56%, greater
than the year 2015, 6.08% only to generate profit. So, the 2014 is better than the year of 2015.
RATE OF RETURN ON SHARE CAPITAL-ORDINARY
net income prefference dividends
average shareholders

2014 2015

1,503,831,000 2,011,000 1,513,060,000 2,011,000

= =
3,729,590,000 4,032,568,000
2 2
1,501,820,000 1,511,049,000
= =
1,864,795,000 2,016,284,000
= 0.8054 = 0.7494
= . % = . %

It is to measure the profitability of investors investment.

The year of 2014, the rate of return on share capital-ordinary is 80.54%, higher than the year of 2015, 74.94%.
This shows that Bank Islam do used its investors funds effectively. So if given choice to choose from both of the
year to the investors invest, they might choose the year of 2014 as the return is higher
EARNING PER SHARE
net income prefference dividends
=
weighted share outstanding
2014 2015

510,502,000 507,262,000
= =
2,304,002,824 2,337,037,729
= . = .

Amount of money each share of stock should be receive after all of the profits have been distributed to the
outstanding shares at the end of the year.

For the year 2014, if Bank Islam distributed every RM of income to its shareholders, each share could gain RM
0.2216. For the year of 2015, also same that each share could gain RM 0.2171. Year 2014 could be better than
2015 as the year its earnings per share do higher compared to the year 2015
PRICE EARNING RATIO
market price of share
=
earning per share
2014 2015

2.90 3.10
= =
0.2216 0.2171
= . = .

Price earnings ratio shows how much investor are willing to pay per ringgit of reported profit,
thus in making it very useful tool for instrument

The price earnings ratio which is the returns earn from the investment made by the investor in
2015 is higher (RM 14.79) than 2014 (RM 13.09). In other words, the investors willing to pay
RM 14.79 in 2015 and RM 13.09 in 2014 for every ringgit of earning.
PAYOUT RATIO
cash dividends
=
net income
2014 2015

67,300,000 60,500,000
= =
1,503,831,000 1,513,060,000
= 0.0448 = 0.0399
= . % = . %

To determine how much dividends should the bank pays to the shareholder.

The dividend is dropped from 4.48% in year 2014 to 3.99% in year 2015. It
shows that Bank Islam pay a higher dividend in 2014 from its net income to
their shareholders.
INTERNAL FACTOR THAT
INFLUENCE BANKS
PERFORMANCE
 1. Bank Size
Considered an internal factor that influence the bank performance that responsible
for expanding their financial operations by obtaining additional assets and liabilities.
Impact of bank size structure is able to contribute to the different stands of the
literature on small business credit, which the effects of banking market size
structure on the size of bank from small business
The higher of the bank size, the higher the chances the bank can increase their bank
operations and bank profitability are used as natural logarithm of total assets
indicator.
 Liquidity Risk
not only affects the performance of a bank but also its reputation.
Liquidity measures the creditworthiness of banks and indicates how fast a bank can meet
debt.
Therefore, higher liquidity ratios indicate better creditworthiness and less risk exposure
Banks face liquidity risk if they are not liquidating their assets at a reasonable price
Liquidity problems may affect a banks earnings and capital and in extreme circumstances
may result in the collapse of an otherwise solvent bank
Banks may have to borrow from the market even at an exceptionally high rate during a
liquidity crisis.
 Asset Quality

Asset quality involves taking account of the likelihood of borrowers paying bank
loans that will affect the performance of banks.
Loan loss provisions over gross loans measure the amount of the total asset quality.
Assets quality could pose a challenge for bank profitability, with some borrowers
continuing to default on loans even after they are restructured.
The evaluation of asset quality is very important in assessing the effectiveness of
credit and transfer risk management and in the event of a possible liquidation of a
branch
External Factor
 Introduction
External factor influence performance of bank indirectly.
economic environment, technology, political environment, socio-cultural, law,
inflation, gross domestic product and many more.
Before bank officer plan the strategy, they need to recognize, analyze and
understand the business environment in advance.
 Factor of Economic
The slow economic growth in 2015 resulting in net interest margins will remain
under pressure and non-interest income will remain decrease.
Bank Islam Berhad stay moderate and maintained because the officer always seek
new creditworthy customer and there is ample liquidity to fund domestic growth
BIMB seek and do continuous diligence in sourcing for revenue defending market
share and optimizing cost
BIMB growth faster more from conventional bank with 16.3 % from December
2014 to December 2015
 Factor of Technology and Innovation.
Technology and innovation development increase rapidly will give impact
directly into banking organization
The effort of BIMB to improve technology in their operation is to improve
the function of the TAP-I with addition features internet banking mobile
fund with allows the customer make payment or many transfer in real time
and faster.
Bill payment service, financial process exchange system, JomPay service,
TAP Mobile banking, Credit and debit cards-I
 Factor of Inflation

The implementation of Goods and Services Tax (GST) in April 2014 result
the price of goods and services increase rapidly.
The inflation rate increased to 4.1% in December 2014
when the purchasing power of people decrease, people will spend their
money rather than save since money no longer serves as a store of value
This situation will give negative impact in operation of Bank Islam start from
GST implemented.
 Factor of Statutory Reserve Requirement

The banking operation of bank Islam Berhad recorded slower activity with
lending growth moderating from 9.3% in December 2014 to 7.9% in the
December 2015
BNM reduction in Statutory Reserve Requirement (SRR) by basis points in
January 2016. Reduction of SRR will give effect to the bank give loans to
customer and will reduce the profit of the BIMB
THANK YOU