HSBC Bank Malaysia Bhd is looking at opening as many as 15 Islamic bank branches over the next two years, with at least five to start operations in the first year. Its deputy chairman and chief executive officer Irene M Dorner said its application for an Islamic unit was still with Bank Negara Malaysia and that the bank expected to receive the approval "imminently".
Speaking on the sidelines of the 11th Malaysian Banking Summit yesterday, Dorner told reporters that HSBC was more focused on securing its Islamic banking licence and was not in any merger talks at the moment.
"There is a marvellous opportunity in Islamic banking to leap-frog ahead of conventional banking. Instead of following others, we could emphasise on new products," she said.
Dorner said the Islamic financial services sector had seen amazing growth, increasing 19% and 25% in banking and Takaful services.
"There could be some mergers in the Islamic banking sector as well, either through the merger of banking groups or through foreign banks buying stakes in local players," she said.
Earlier in her presentation entitled "Thriving in the changing landscape of the Malaysian banking industry", Dorner said the consolidation of the banking sector had altered the structure of banking in the country.
She said the more liberalised financial system, the Islamic banking growth, sophisticated consumers, technology advancement, more risk-based regulatory and supervisory approach and a more globalised environment presented more opportunities for banks' growth.
"There are options for banks to further broaden sources of income by providing new products and services to cater to customers' demand. Local banks could also adopt best practices and standards through greater global integration. Malaysia has a well-managed banking system, and the ongoing consolidation and deregulation will make the banking sector more competitive in price and service levels."