BIBD capitalises on regulatory enhancements to capture retail banking market share
BIBD’s transformation from a gun and barrel bank to a modern retail financial services institution have seen the bank yield increasingly positive results. November 01, 2012 | Durva LakhlaniBrunei’s retail financial services market is a static market which is dominated by Standard Chartered Bank (SCB), HSBC and Baiduri Bank. The market is tiny with a less-than-250,000 bankable population while up to 63% of the country’s working citizens are government workers. Out of the 10 banks operating in the country, only five are international banks. While international banks found business brisk pre-financial crisis, generating strong incomes from their cards and unsecured loan businesses, they failed to take into account risk concentration in their portfolios. When new credit card regulations were imposed in Brunei in 2010, they severely affected the landscape of banks’ credit card businesses and personal loans. For instance, the contribution of SCB’s credit card business to total income was above 65%; the new regulations caused a major reduction in the bank’s revenue contribution to the retail financial services business. In 2011, HSBC, Baiduri Bank and SCB experienced an average a YoY decline of 36% in terms of operating retail profits. High personal debt levels in Brunei led the Ministry of Finance to issue tighter personal loan and credit card rules, such as customers being allowed to possess only one credit card by the bank that keeps their payroll accounts, and stricter minimum salary and repayment requirements. Financial regulator Autoriti Monetari Brunei Darulssalam (AMBD) and a new credit bureau were recently established to enforce such rules. Although heightened regulatory efforts has affected banks’ retail businesses, Bank Islam Brunei Darulssalam (BIBD) is embarking on a run to boost their own retail business, fuelled by two key factors – the appointment of Imran Samee as retail banking head as well as favourable market conditions. The only fully Islamic commercial bank in Brunei with assets totalling $4.7 billion, BIBD was formed by the merging of Islamic Bank of Brunei and Islamic Development Bank of Brunei. T... Please login to read the complete article. If you already have an account, you can login now or subscribe/register.
Categories: Brunei, Consumer Finance, Islamic Banking, Mortgage, Retail BankingBrunei,Consumer Finance,Islamic Banking,Mortgage,retail, Brunei,Consumer Finance,Islamic Banking,Mortgage,Retail Banking, Keywords:BIBD, Imran Samee, SCB, HSBC, Baiduri Bank, AMBD, Corporate Banking BIBD, Imran Samee, SCB, HSBC, Baiduri Bank, AMBD, Corporate Banking
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