BIMB Integrated Annual Report 2017

TOP 10 Islamic Finance The Malaysian economy grew at a healthy pace in 2017 with Gross Domestic Product (GDP) posted 5.90% growth during the year. This has surpassed the official range forecast of 5.20% to 5.70% and well above than the 4.20% growth recorded in 2016. However, Malaysia’s inflation rate has picked up to 3.70% for the year of 2017 which is significantly higher from 2.10% in the preceding year. Admittedly, the rise in inflation rate has a taken a serious toll on consumer sentiment. The Consumer Sentiment Index settled at 82.6 points in the 4Q2017 and continues to remain below the 100 points threshold for more than two years, pointing to a more pessimistic view among Malaysians. Despite that, the country continues to be recognised for its leading role in Islamic finance. This was primarily driven by comprehensive market infrastructure, robust regulatory framework and dynamic market participants. The Global Islamic Economy Indicator also placed Malaysia at higher spot followed by the United Arab Emirates (“UAE”) and Saudi Arabia. This indicator ranking focuses on the health of the Islamic finance ecosystem in a country relative to its size, including its related social considerations. The ranking was calculated according to four criteria: • Financial (e.g. size of Islamic finance assets and number of Islamic finance institutions); • Governance (e.g. regulations for Islamic finance and disclosure index score); • Awareness (e.g. number of related news articles, Islamic finance education institutions, research papers, and events); and • Social (e.g. value of zakat and charity and CSR disclosure index score). Developments in domestic Islamic finance sector Compliance to Shariah principle has always been the focus in ensuring legitimacy of the nation’s Islamic financial products and services to the public at large. However, in meeting the rapid changes and dynamism of the industry, more business opportunities could be created if the current paradigm could be shifted to extend beyond compliance, towards delivering value propositions not only to all financial consumers, but to the wider stakeholders. MANAGEMENT DISCUSSION & ANALYSIS THE MARKET LANDSCAPE MALAYSIA 146 Bahrain 86 UAE 67 Saudi Arabia 64 Oman 56 Kuwait 54 Pakistan 51 Qatar 49 Iran 43 Indonesia 42 ISLAMIC FINANCE SECTOR SCORE FINANCIAL SCORE GOVERNANCE SCORE AWARENESS SCORE SOCIAL SCORE GIE RANKING Malaysia 146 280 111 341 41 1 Bahrain 86 54 112 134 53 4 United Arab Emirates 67 63 70 147 71 2 MALAYSIA 50 BIMB HOLDINGS BERHAD Integrated Annual Report 2017