KUALA LUMPUR, July 26: Bank Islam Malaysia Bhd has inked an agreement with Perbadanan Wakaf Selangor’s subsidiary Urus Maju Ehsan (M) Sdn Bhd (UME) to provide RM15.5 million in financing for two waqf land development projects in Klang, Selangor.
Waqf is a voluntary charitable endowment in the form of cash, property or land, for syariah-compliant causes.
Bank Islam will part-finance the projects, which have a gross development cost of RM50 million.
The first project is the development of 164 units of apartment and 12 units of shop lots on 3ha of land on Jalan Kebun, Klang.
The second project is for the building of 13 units of shop offices and 34 units of bazaar on 3ha of land on Jalan Teratai, Klang.
Bank Islam deputy CEO Khairul Kamarudin said the agreement marks its third participation in waqf projects, following its involvement in Menara Bank Islam (built on waqf land) as well as providing end-financing for a housing project in Taman Wakaf Setee Aishah, Penang.
“This is considered a new one for us because it is considered a bridging financing. We’ve done end-financing and we’ve become contributors of waqf rental scheme at our headquarters but this is the first bridging financing for waqf land that the bank has ventured in. We expect to enlarge this relationship with UME,” Khairul told a press conference after the signing ceremony yesterday.
Under the agreement with UME, the bank provides project financing and end-financing for the purchase of the apartment units, shophouses and shop offices through its Al-Waqf Home Financing-i.
UME executive chairman Mohd Azli Md Yusof said the waqf land development projects in Klang is the first phase of a three-phase waqf land development plan in Selangor, which has a total gross development value of RM300 million comprising 30-40ha of land that will take up to six years to complete.
“There are 1,200ha of waqf land in Selangor as at end of 2015, comprising general waqf and special waqf. About 70% is special waqf land, specified for the building of mosques or schools,” explained Azli.
Meanwhile, Khairul said Bank Islam is on track to achieving its low teens financing growth for 2016.
In 2015, the bank achieved net financing growth of 16.1%, mainly from its consumer financing portfolio, as compared with the industry figure of 7.9%.
“We’re still on target with our growth. No changes because all the essential numbers on the dashboard are suggesting that we should be able to manage our targets,” said Khairul.
Following the overnight policy rate (OPR) cut by Bank Negara Malaysia, Bank Islam is expected to announce a downwards revision in its base rate tomorrow.
“It’s a balancing game. For customers, this means lower installments and for customers who deposit money with us, it also means lower returns. It would eventually balance out,” Khairul commented on the impact of a lower OPR to the bank.
He added that the reduction of the OPR would spur the economy and put more disposable income into people’s pockets.
— THE SUN