THE best farewell gift outgoing HSBC Bank Malaysia Bhd deputy chairman and chief executive officer Datuk Zarir J. Cama could ask for is an Islamic banking licence for the bank.
“It will be a great farewell present to me from Bank Negara. I am hoping they will give us the licence before I leave in June.
“We have had lots of dialogue with Bank Negara and there is nothing that makes me think the central bank would not look at our application favourably. We can only watch and wait,” Cama told StarBiz.
Cama will be leaving for a more senior posting at the HSBC group headquarters in London. He will report directly to group chief executive officer Michael Geoghegan.
HSBC, the first conventional foreign bank to apply for an Islamic banking licence, announced in March that it had submitted an application to set up a full-fledged Islamic banking subsidiary in the country.
Cama has been a strong advocate and champion of Islamic finance. The banking group has been aggressively building its Islamic business since Cama's posting here over 4½ years ago.
“When I first came here, our Islamic banking business was negligible. We have a great Islamic business right now – almost 14% of our total assets are Islamic versus the industry average of 12% to 13%.
“We are not a small bank. Our total balance sheet is about RM44bil now,” Cama said, pointing out that having an Islamic banking licence would expand the scope of the bank's reach and business.
“Once we have a licence, we would be allowed to have Islamic banking branches and that would increase our reach. We will be able to tap new customer segments and different areas.
“This will make a huge difference to our business, going forward. It will be a big engine of growth and a key strategy going into the future,” he said.
Cama also hopes that there would be no limitation in the opening of new branches for its Islamic banking business once it obtains the licence.
“We do not know if there will be a limit in the number of branches but we hope they will give us the same degree of freedom as other banks.
“Being the first conventional foreign bank to apply for an Islamic banking licence clearly sets a benchmark. It is an important policy decision for Malaysia,” he added.
Restrictions aside, HSBC has done very well for itself in Malaysia. It has grown by leaps and bounds, not only financially but also as a socially responsible corporate citizen, especially under Cama's stewardship.
HSBC was named the best Foreign Exchange Bank in Malaysia by Global Finance this year and Best Foreign Bank in Malaysia by FinanceAsia last year, among others.
“We have a very powerful platform – a wide one in that our businesses today are not reliant on any one method of finance. It is the quality of our earnings and spread which I like,” Cama said, adding that the bank was very strong in its personal banking franchise, commercial banking business, corporate and institutional banking and markets business, as well as Islamic banking.
“All these businesses here and in Labuan plus a strong operational platform are throwing out over a billion ringgit in pre-tax profit. This is quite a remarkable achievement.”
Cama said the bank's Islamic Takaful subsidiary was also doing well. “We started in August and have moved ahead very strongly. In this period of time, we have managed to sign up close to 40,000 policy holders,” he said.
On whether HSBC would be jumping onto the investment banking bandwagon, Cama feels the bank's corporate advisory arm is currently able to add on and supplement its overall corporate banking activities.