Maybank Islamic Bullish, on Track to Record RM1Bil in Pre-Tax Profit for 2012

By CHOONG EN HAN
han@thestar.com.my

PETALING JAYA: Maybank Islamic Bhd is on track to record RM1bil in pre-tax profit for its financial year 2012 by leveraging on its parent Malayan Banking Bhd's (Maybank) global wholesale business and community financial services to carve its own niche in the market for Islamic finance.
Maybank Islamic chief executive officer Muzzaffar Hisham told StarBiz that healthy deposit levels, coupled with a growth in asset base with a good mixture of deposit and liabilities, would help to fuel the company's growth.

“Maybank Islamic is well on track in achieving the target of one-third Islamic financing contribution to the group's total domestic loans and advances by 2015,” he said.

Last year, the Islamic bank's total group domestic loans contribution expanded by 28.5% from 26.1% a year earlier, while also recording a pre-tax profit of RM567.1mil. “The beauty of Maybank Islamic is that we can cut across the three key pillars of the larger group and embrace a pragmatic approach to venture into different areas of businesses that we don't want to lose out on,” he said.

Riding on the slew of projects under the Economic Transformation Programme, the bank is also excited on the prospects of fund-raising activities arising from these projects. “We have identified many opportunities to tap on, especially with regards to raising funds as private parties are expected to finance most of these projects. For example, it has been announced that the My Rapid Transit project is expected to raise as much as RM30bil for the development,” he said.

He said the sukuk business in Malaysia had grown tremendously well, with more sukuk issuance compared with conventional bonds. “Besides the strong support from the authorities, it is just simple economics where liquidity from Islamic funds would need a home, and these corporate issuance via sukuk would open up opportunities to two sets of investors,” he said.

Besides focusing on the domestic market, Muzaffar said the bank was also looking at key regional markets to expand like Singapore and Indonesia. “We are seeing pockets of expansion, with the region being an obvious growth area for us. Last year, we were able to grow our cross-border financing to Indonesia by about US$500mil to US$600mil from practically zero with the welcome change of ruling in the withholding tax structure,” he said. On reports that Maybank was open to options to buying into Philippines' only syariah-oriented commercial bank Al Amanah Islamic Investment Bank, Muzaffar said the bank was always looking for opportunities to grow pragmatically and that the reports were just an overstatement.

“As what we've mentioned, we are always on the lookout for ventures and not only acquisition. Right now, our immediate opportunities are to leverage on the 50 Maybank branches to grow the Islamic finance business,” he said.

Resource : http://biz.thestar.com.my/news/story.asp?file=/2012/4/20/business/11138664&sec=business

 

The Economic Vision of Egypt's Muslim Brotherhood Millionaires

Hassan Malek lives in Heliopolis, an upper-class neighborhood in Cairo full of high-end shopping malls, Italian restaurants, modern apartment buildings, and ornate villas. Much of Cairo is chaotic, crowded, and poor, and Heliopolis’s broad, manicured avenues create an atmosphere of exclusivity and privilege. It was likely jarring when, early one morning five years ago, policemen barricaded Malek’s street, ransacked his home, and threw him in jail. This was what the Mubarak regime did to men like Malek, who was not only a member of the Muslim Brotherhood but also very rich.

“They allowed me to reach a certain level, but there was a ceiling,” says Malek, 53, who as the chairman of the Malek Group runs the Egyptian branches of a Turkish furniture company, Istikbal, and a clothing brand called Sarar. Mild-mannered and serious in conservative suits, Malek would easily blend in with the Wall Street crowd. 

He calmly recalls how a state security official once told him, “You always come close to the red line.” Malek recounts: “And I said, ‘Okay, what is it so I don’t come near it?’ And he said, ‘That’s why we bring you to prison. To know it.’ ” “But what the country needs now is to look ahead,” he says on a Sunday evening in March. “We don’t want to settle scores. We bear the responsibility now.”Malek is sitting in the same Heliopolis apartment that had once been destroyed by the police. On one wall hangs a large, brown stretch of leather engraved with the 99 names of Allah; the rest of the furnishings are modest, most of them Istikbal, the brand he sells. As Malek talks, his 26-year-old son passes out chocolates; his 16-year-old daughter displays a drawing she’s done of a woman with long hair; Malek’s wife laughs about the family’s two vacations since her husband’s release. Another son plays peek-a-boo with Malek’s tiny granddaughter, who runs around squealing.

The Maleks are all the same: humble, idealistic, and self-possessed. With their polished looks and dutiful pledges to rebuild Egypt, the family gives off an earnest, “ask not what your country can do for you” vibe, as if dispatched from a less cynical era. They are part of a generation of religious conservatives ascendant in the Muslim world, whose devotion to God invigorates their determination to succeed in business and politics. As Malek says, “I have nothing else in my life but work and family.” These Islamists pose a formidable challenge to secular governance in countries such as Egypt—not only because of their conservatism but because of their work ethic, single-minded focus, and apparent abstention from sloth and sin. They’re up for winning any contest.

One year since the revolution that toppled Hosni Mubarak’s government, Egypt’s former pariahs have become the country’s newest elite. Last fall the Muslim Brotherhood won 50 percent of the seats in the parliamentary elections. A few weeks ago the Brothers’ political arm, the Freedom and Justice Party (FJP), nominated Khairat el-Shater, the former deputy supreme guide of the Brotherhood and its de facto leader, as the party’s presidential candidate. Malek and el-Shater are business partners who spent more than four years in jail together until their release after the revolution. On April 17, Egypt’s electoral commission permanently disqualified el-Shater and nine other prospective candidates from the race, declaring el-Shater ineligible because of a prior criminal conviction. El-Shater says he will back the candidacy of Mohamed Mursi, FJP’s chairman.

Regardless of the election wranglings, men like el-Shater and Malek, both millionaires, are likely to form the leadership core of the Muslim Brotherhood—acting, in the words of Kent State University political scientist Joshua Stacher, as the organization’s “neoliberal face.” These Brothers of the 1 Percent believe they can empower a new class of businessmen—those Egyptians who didn’t have clout during the Mubarak era—while also improving the lives of poor Egyptians and attracting investment from abroad. Their model resembles that of Turkey, where a religious middle class, encouraged by the country’s Islamic government, has driven a spectacular economic boom. But talking the language of growth is one thing; making it real in a country whose economy is as ravaged as Egypt’s is another. As Ihab el-Fouly, a businessman who isn’t a member of the Brotherhood but works with Malek on economic issues, says: “This is make-it-or-break-it time for Islamists.”

Resource : http://www.businessweek.com/articles/2012-04-19/the-economic-vision-of-egypts-muslim-brotherhood-millionaires

Do Business and Islam Mix? Ask Him

The Aga Khan congratulating graduates of a midwife training course in Afghanistan that was sponsored by the Aga Khan Development Network. 

HE is a moderate Muslim religious leader and a descendant of the Prophet Muhammad. He is also a twice-married jet-setter, and he owns hundreds of racehorses, valuable stud farms, an exclusive yacht club on Sardinia and a lavish estate near Paris. 

HE is a moderate Muslim religious leader and a descendant of the Prophet Muhammad. He is also a twice-married jet-setter, and he owns hundreds of racehorses, valuable stud farms, an exclusive yacht club on Sardinia and a lavish estate near Paris. 

In a rare interview, the Aga Khan, who is chairman of the Aga Khan Fund for Economic Development, a for-profit company based in Geneva, says he is more concerned with the long-term outcomes of his investments than with short-term profits. Rather than fretting daily over the bottom line, he says, he tries to ensure that his businesses become self-sustaining and achieve stability, which he defines as “operational break-even,” within a “logical time frame.”

“If you travel the developing world, you see poverty is the driver of tragic despair, and there is the possibility that any means out will be taken,” he says in a telephone interview from Paris. By assisting the poor through business, he says, “we are developing protection against extremism.”

The company’s main purpose “is to contribute to development,” he adds. “It is not a capitalist enterprise that aims at declaring dividends to its shareholders.” Central to his ethos is the notion that his investments can prompt other forms of economic growth within a country or region that results in greater employment and hope for the poor.

Economic developments experts say the Aga Khan’s activities offer a useful template for others — including philanthropists like Bill Gates and George Soros — who are trying to assist the world’s poorest by marrying business practices to social goals, but whose foundation work usually stops short of owning businesses outright in poor countries. 

Resource : http://www.nytimes.com/2007/07/08/business/yourmoney/08khan.html?_r=1&pagewanted=all

Fair Business Practices

by Christine Huda Dodge

In Islam, business and trade are highly encouraged, as long as they are conducted by lawful means and through lawful channels. It is expected that any earnings be made through decent and honest labor. A Muslim is to be self-supporting and should avoid becoming a liability on any person or the society at large.

Business practices must be conducted with frankness and honesty. Islam encourages that contracts and agreements should be written down and witnessed by two trustworthy persons so neither party can try to take advantage of the other or make false claims in the future.

Muslims are forbidden from cheating, hiding defects in merchandise, and engaging in exploitation, monopoly, and fraud. There is a chapter of the Qur'an called Al-Mutaffifin, or “Dealing in Fraud.” It begins, “Woe to those that deal in fraud. Those who, when they have to receive some measure from men, exact full measure, but when they have to give by measure or weight to men, give less than due” (Qur'an 83:1–3).

In another section, the Qur'an commands that Muslims “Give just measure, and cause no loss to others by fraud. And weigh with scales true and upright. And do not withhold things that are justly due to men, nor do evil in the land, working mischief” (Qur'an 26:181–3). It was common practice in ancient times to “tip the scales” or to hide defective merchandise underneath a pile of quality goods. These practices were strictly forbidden in Islam.

Muslims are prohibited from working with illegal industries or trading in substances that are forbidden in Islam. For example, working in factories that make alcohol, in meat-packing plants that package pork, or in nightclubs that serve alcohol are all forbidden. Muhammad once said, “When Allah prohibits a thing, He prohibits giving and receiving the price of it as well.”

Muslims are encouraged to pay for services as soon as they are performed and not to withhold or delay payment. Muhammad instructed that when Muslims hire laborers to do some work, they should “compensate them before the sweat dries.”

Resource : http://islam.about.com/od/business/a/economics.htm

Economic System of Islam

Islam is an entire way of life, and Allah's Guidance extends into all areas of our lives. Islam has given detailed regulations for our economic life, which is balanced and fair. Muslims are to recognize that wealth, earnings, and material goods are the property of God, and that we are merely His trustees. The principles of Islam aim at establishing a just society wherein everyone will behave responsibly and honestly. The fundamental principles of the Islamic economic system are as follows:

• Muslims are not to deal in interest. "Those who devour usury will not stand....Allah has permitted trade and forbidden usury.... Allah will deprive usury of all blessing, but will give increase for deeds of charity..." (Qur'an 2:275-6). "O you who believe! Devour not usury, doubled and multiplied. But fear Allah, that you may really prosper" (Qur'an 3:130) This prohibition is for all interest-based transactions, whether giving or receiving, whether dealing with Muslims or non-Muslims. It is reported that the Prophet Muhammad (peace be upon him) cursed those who pay interest, those who receive it, those who write a contract based on it, and those who witness such a contract.


• It is forbidden to gain property or wealth by fraud, deceit, theft, or other falsehoods. "...Give just measure and weight, and do not withhold from people the things that are their due. And do not do mischief on the earth after it has been set in order. That will be best for you, if you have faith" (Qur'an 7:85).


• It is particularly hateful for a guardian to take from an orphan's property. "To orphans restore their property (when they reach their age). Do not substitute your worthless things for their good ones, and do not devour their property by mixing it up with your own. For this is indeed a great sin" (Qur'an 4:2).


• Forbidden are earnings from gambling, lotteries, and the production, sale, and distribution of alcohol. "O you who believe! Intoxicants and gambling, sacrificing to stones, and divination by arrows are an abomination of Satan's handiwork. Eschew such abomination, that you may prosper" (Qur'an 5:90).


• It is unlawful to hoard food and other basic necessities. Everyone should take what they need and no more. "And let those who covetously withhold of the gifts which Allah has given them of His Grace, think that it is good for them. No, it will be the worse for them. Soon it will tied to their necks like a twisted collar, on the Day of Judgment. To Allah belongs the heritage of the heavens and the earth, and Allah is well-acquainted with all that you do" (Qur'an 3:180).


• A Muslim should be responsible in spending money. Extravagance and waste are strongly discouraged. "[The Servants of Allah are] Those who, when they spend, are not extravagant and not stingy, but hold a just balance between those extremes" (Qur'an 25:67). "O Children of Adam! Wear your beautiful apparel at every time and place of prayer. Eat and drink, but waste not by excess, for Allah loves not the wasters" (Qur'an 7:31).


• Muslims must pay Zakat (alms). "And they have been commanded no more than this: to worship Allah, offering Him sincere devotion, being true in faith. To establish regular prayer, and to give zakat. And that is the religion right and straight" (Qur'an 98:5). Every Muslim who owns wealth, more than a certain amount to meet his or her needs, must pay a fixed rate of Zakat to those in need. Zakat is a means of narrowing the gap between the rich and the poor, and to make sure that everyone's needs are met.


• Muslims are encouraged to give constantly in charity. "Your riches and your children may be but a trial. Whereas Allah, with Him is the highest reward. So fear Allah as much as you can, listen and obey, and spend in charity for the benefit of your own souls. And those saved from the selfishness of their own souls, they are the ones that achieve prosperity" (Qur'an 64:15-16). The Prophet Muhammad once said that "nobody's assets are reduced by charity." 
  

Resource : http://islam.about.com/od/business/a/economics.htm

7 Tips for Muslim Businesses

How to Increase Profits and Help The Muslim Economy Grow
“I live in a suburban where there are 3 "Halal" meat stores within a 5 mile area, and another which is about 30 minutes away. I am an "American" Muslimah. In the three stores owned by Pakistani/Indian businessmen, the treatment I receive is terrible. In addition, the stores are filthy and no health code is followed. Blood from the meat is spread from meat counter to checkout counter, hands to money and pens, etc.

In the store that is further away, the owner has argued and almost had fist fights with customers, and will not disclose his meat source. I have gone to great lengths to continue to buy Halal meat, but I feel that doing business with these people is not something I can continue to do." (Comment in the Halal and Healthy forum of the Sound Vision website, July 22, 1999)
Muslim consumers are often criticized for not doing enough to support Muslim businesses, whether it's paying the extra dollar (or two or three or four) to buy products, or to drive the extra mile (or two or three or four) to get to the store.
But what is rarely discussed in the North American context is what obligation Muslim businesses, especially Halal grocery stores, have to the Muslim community. The above-mentioned complaint is not a reflection of all Halal grocery stores. However, the problems outlined in it cannot be ignored.
If Muslim businesses want the support of Muslim consumers, they will have to do more to accommodate them, provide better service and prices. New York-based Muslim social scientist Ilyas Bayunus conducted a study in which he found that Chicago has a Muslim population of about 300,000. The state of Illinois has a population of 400,000.
This indicates the tremendous buying power of Muslims in this city and this state.
In Chicago alone, there are a minimum of 60 retail Halal meat shops that are owned and operated by Muslims.
Currently, the Halal meat business makes close to $5 million a year. But the potential profit could be as high as $60 to $80 million. The market hasn't developed for a number of reasons, some of them can be attributed to Muslim consumers, others to Muslim businesses.
Below are some tips on how you can improve service and profits of your Halal business. This can be applied to all business, not just the meat business:

1. MAKE PROFIT THE SECONDARY AIM
The first goal of a Muslim business should not be cashing in on a Muslim market. It should be pleasing Allah and establishing Halal as a way of life.
Seeking profit is not a bad aim, but it should be secondary.
By making Allah the goal, and implementing Islamic rules of honesty, truthfulness, and good behavior with customers, Insha Allah, any Muslim business is bound to boom.

2. BE TRUTHFUL AND HONEST
The Prophet has said the the honest and truthful businessman will be in Jannah amongst the Prophets the Truthful and the martyrs. Honesty and truthfulness are essential in this business. And when it comes to Muslim businesses, it means building a relationship of trust with customers, which cannot be done with lies and deceit.

3. BE OPEN TO SCRUTINY AND CRITICISM
While this may be a bitter pill to swallow, being ready to have your product or business scrutinized for cleanliness or the “Halalness” of products indicates a willingness to work with the consumer. This serves to build trust.
For those business people who may feel hesitant or downright angry with a Muslim consumer for even asking about the acceptability of a given product in their store, remember that this is the right of the consumer.
Remember, ultimately, we are all responsible to Allah. If a business is cheating Muslims, Allah will eventually expose those involved.
As well, a Halal business is not just one person's profit-making machine. It is also an institution of the Muslim community. Therefore, it must be ensured that it meets not just state and federal standards, but most importantly, the Quran and Sunnah's standards.

4.BE CLEAN!
This is especially important for Halal grocery stores where the presence of animal blood is expected. Not being careful of this means not only lost customers, but also possible sicknesses from the germs in the blood.
The Prophet (peace and blessings be upon him) said: "Cleanliness invites towards faith (Iman) and faith leads its possessor to paradise." (Tabarani)
This cleanliness, by the way, does not just apply to those areas of a store a customer will see. It includes equipment and storage areas as well.

5. AIM FOR A HIGHER GOAL
Don't just aim for one successful Halal grocery shop in your chosen neighborhood. Think big. Improve the inventory of your store, the types of items in it, and strive to find ways to improve service and profit margins.
As well, look into the possibility of pooling resources within the Muslim community or with other shareholders to expand the business. Doing this will also reduce overhead costs and in the long run, the price of products for your consumers.

6. WORK WITH OTHERS IN YOUR MARKET
Yes. This can be very difficult. Finger pointing, accusations and nasty rivalry often characterize Muslim businesses aiming to market the same products. But this is not the way a Muslim economy should work.
Brotherhood in the Ummah cannot be forgotten. Consider forming an association of Muslim meat retailers or distributors that can sit down together share experience, and learn to cooperate. This cooperation could, in the long run, benefit the Muslim consumer, and in turn the Muslim businesses themselves.
One example of where cooperation can take place in the Halal meat industry is by having all grocers or butchers slaughtering the animals in one place, Instead of doing it the way it's been done since the beginning: every individual or couple of retailers slaughtering their own animals.
By slaughtering in one place, costs are reduced, and in turn, the Muslim consumer pays less for the same product.

7. DO NOT SELL THE HARAM
While there are more “Muslim” businesses sprouting up, not everything they sell is Islamic.
It is not difficult to find Muslim owned businesses selling pork, alcohol, pornographic magazines, and renting these kinds of movies on the one hand, while selling Halal meat on the other.
Of a less offensive nature, perhaps, are those businesses which sell Halal products but rent or sell cultural (especially Indo-Pakistani) movies. While these movies may seem harmless in comparison to those of the pornographic variety, what must be remembered is that when Muslim parents and elders indulge in watching such cultural films, their children can very easily find an excuse to watch their own “cultural” films (i.e. American-Hollywood).
This requires efforts on the part of Muslim business owners to wipe out the Haram and ensure the Halal in their businesses.
A telling anecdote about Haram business practices was provided by Imam Siraj Wahhaj of Brooklyn, New York during a Khutbah.
He recounted the case of a Muslim who owned a shop that sold newspapers and magazines-including pornographic magazines. The Imam tried to convince the Muslim brother to stop selling these publications. At one point he agreed, and removed them from his shelves.
But after a while, Imam Wahhaj noticed they were back on the shelves. When he asked the brother about their reappearance, he said he was losing money.
Shortly after that, the entire store was destroyed in a fire.

Resource : http://soundvision.com/Info/halalhealthy/7tipmusbus.asp