CIMB BANK Philippines, Inc. (CIMB Bank PH) is in exploratory discussions with the Bangko Sentral ng Pilipinas (BSP) about potentially offering Islamic banking products, its top official said.
The digital-only commercial bank is studying if it would be feasible to offer Islamic products in the Philippine market, CIMB Bank PH Chief Executive Officer Vijay Manoharan told reporters on the sidelines of an event on Tuesday.
“We’re looking into it. Our Islamic banking team is engaging with the BSP in many conversations. They will do an initial review and an exploratory assessment, then we will make a decision. We’re open to it because it’s something we do quite well in Malaysia,” Mr. Manoharan said.
CIMB Bank offers a full suite of Islamic banking services in its home country of Malaysia, such as savings accounts, loans, bond offerings, he said.
“We’re still studying it and to be very honest, the expertise and the brains for Islamic banking is in the group. So, whenever the BSP wants to engage with CIMB on Islamic banking, we bring the group, and the assessment is done primarily by them. They do the market research, the whole opportunity sizing… Then if it’s something logical, then we’ll have a conversation,” Mr. Manoharan said.
“We haven’t done a full study. It’s not a priority for us. But we are open to exploring. We are still in the phase of understanding the opportunity. What can we contribute to Islamic banking?”
He added that the lender is prioritizing enhancing its digital offerings and services for consumers.
Mr. Manoharan said Islamic banking products have the appeal of only requiring the payment of a fee instead of interest, which changes depending on market conditions.
“Maybe some people like it better because you don’t get interest rate changes. Maybe I just like that I know that I’m paying one fee,” he said.
He added that the bank has customers from Mindanao, where most of the country’s Muslim community is located.
“Anyone who wants to access the bank in the Philippines can access [through their phone]. So, we have customers down south. That’s what is unique to us,” he said.
The three entities with Islamic banking operations in the country are state-owned Al Amanah Islamic Investment Bank, Maybank Philippines, which began operations in August, and CARD Bank, Inc., which opened an Islamic banking branch in Cotabato City this year. — A.M.C. Sy
