Could you provide a brief journey of how you arrived where you are today?
I joined Bank Muamalat in 1991, before the bank commenced operations in 1992, as head of the commercial financing department and later became head of the financing division in 1994. In 1999 I was assigned as business director and later in 2009, I was entrusted as the president director.
What does your role involve?
My role involves providing strategic leadership for the bank, which means more than just providing business direction. It is my job to ensure that although the business side of the bank should thrive, the cohesiveness of the team and each employee’s motivation should also be taken care of. This is one of the aspects of the company culture that I am really proud of.
What is your greatest achievement to date?
When I served as the business director in 1999, I was responsible for the financing restructuring as the bank was experiencing losses. However, the bank was able to overcome this without any government bailout as opposed to the national banks in Indonesia. When I was the director in 1999, the bank’s asset was only around IDR650 billion (US$76 million).
By the end of 2010, Bank Muamalat recorded an asset growth of 33 times to IDR21.40 trillion (US$2.50 billion). In 2010, we undertook a rights issue and gained new capital amounting to IDR673 billion (US$78.70 million), the most significant capital rise that we have achieved.
Which of your products/services deliver the best results?
We continue to innovate so that the features of our products and services are more appropriate and compelling to customers. This is why we enhance our products and services relating to cost, flexibility and accessibility.
At the moment, saving accounts is the largest contribution when it comes to quantity of customers. Among the savings, Tabungan iB Muamalat still contributes the largest amount of third party funds which is IDR2.27 trillion (US$265 million), while the second is Tabungan Ummat IDR2.25 trillion (US$263 million) and the third is Hajj Saving Account IDR459 billion (US$53.60 billion). However, in terms of total funding, time deposit products are still number one which amounted to IDR17.40 trillion (US$2 billion) at the end of 2010. Murabahah financing achieved a total amount of IDR6.50 trillion (US$76 billion), while Musharakah achieved IDR6.10 trillion (US$71 billion) and Mudarabah was IDR1.40 trillion (US$16 billion) of the total financing which amounted to IDR15.90 trillion (US$18.60 billion) at the end of 2010.
What are the strengths of your business?
Bank Muamalat has a very strong brand since we are unique as the pioneer of Islamic banking in Indonesia. Since our establishment as a fully fledged Islamic bank, Bank Muamalat is still the only Islamic bank which does not have a conventional bank as a parent company.
What are the factors contributing to the success of your company?
Bank Muamalat continues to expand since accessibility is one of the company’s main concerns in grabbing the market. Besides 400 offices, customers can undertake free cash deposit transactions at 4000 post offices and free money withdrawal at approximately 39,000 ATMs.
Additionally, customers can shop by using Muamalat cards at more than 130,000 merchants. With our rapid expansion, we intend to attract the conventional banking customers for our business growth.
What are the obstacles faced in running your business today?
Bank Muamalat has no parent company. To undertake business expansion, we do not have immediate access to capital support. Nevertheless up to now we have successfully undertaken a number of right issues to strengthen our capital structure.
Where do you see the Islamic finance industry in, say, the next five years or so?
Growth of Islamic banking is still faster compared to conventional banking presently. Islamic banks’ customers have risen to over 6,000,000 people. Referring to the data of the central bank, Bank Indonesia, assets of the Islamic banking industry grew 47.55% last year, while conventional banks only grew about 18.73%.
The Indonesian market is still promising seeing that the Islamic banking assets are around US$11.50 billion and contributes no more than 5% in national banking assets. In the next five years, I believe Islamic banks will grow not less than 35% per year.
Besides Bank Muamalat, there are 10 fully fledged Islamic banks and 23 Islamic units of conventional banks operating in Indonesia. Islamic banks still have huge potential to expand their market share.
Name one thing you would like to see change in the world of Islamic finance.
I would like to see Islamic finance as the primary and all-inclusive financial service for the Indonesian market. Our focus now is to develop new and innovative products and strengthen customer base. In the years to come I expect more public awareness of Islamic finance.