EXIM BANK CONTINUES ITS ROLE IN DIFFICULT ECONOMY

The Bank continues to facilitate Malaysian exporters and investors expanding their global reach via financing and export credit insurance facilities.

KUALA LUMPUR, Monday (6 July 2009]: Export-Import Bank of Malaysia Berhad (EXIM Bank) is committed to continue its drive to support Malaysian exporters and investors extending their international business by providing banking facilities and insurance coverage particularly those that significantly contribute to the extension and enlargement of Malaysia’s export volume, value and markets.

While the Bank recognize that 2009 would be more a challenging year due to the continued global economic uncertainties, it would continue to provide support to its existing and potential customers and partners who are willing to take the challenge and participate in the still-significant global trade and investments and to be ready for future businesses when the tide turns for the better.

In 2008, EXIM Bank approved a total of RM460.3 million direct loans and guarantees to customers in many sectors including construction, investment, manufacturing and commodity trading. In addition, the Export Credit Refinancing (ECR), extended via participating financial institutions and by far the single largest product of the Bank by volume, contributed a total of RM9.5 billion in loan disbursement compared with RM8.4 billion in the previous year. This is due to continuous and intensified efforts made by the Bank in cooperation with participating financial institutions to continuously support the country’s international trade financing needs.

Today, the Bank is supporting the financing needs of Malaysian companies and investors with operations in four continents spread across two dozen countries worldwide. ASEAN and Middle East continue to be major contributors to the Bank’s portfolio with about two-third of its exposures while Africa, Europe and Asia-Pacific make up the rest.

In the trade credit insurance, EXIM Bank has a total of RM2.43 billion business in force in 2008, as compared with RM2.78 billion in 2007. As for commercial and political risk insurance business, the Bank approved RM120 million worth of business in 2008 taking into account our cautious approach in light of the global economic crisis. Thus, the total Malaysian exports insured for 2008 amounted to RM2.55 billion and is spread over 72 countries primarily across Asia and Africa.

“EXIM Bank maintained positive and stable performance for both banking and insurance businesses although a more selective approach has been adopted to respond to the current global economic situation,” said Mohd Fauzi Rahmat, Managing Director/Chief Executive Officer of EXIM Bank.

He added that EXIM Bank is set to expand its reach further by giving better options to its customers via the introduction of Shariah-compliant products. Islamic financing has been identified as a new area of growth for the Bank especially as Malaysia is expanding its trade involving the Organization of Islamic Countries (OIC) member states. It is envisaged that by the end of 2009, the Bank would have sufficient Shariah-compliant banking products to cater for the banking needs of its growing global customers. The Bank is also planning to introduce takaful (Islamic insurance) products by the year 2010.

To improve operating efficiency, major initiatives at various level of the Bank are being implemented to turn the Bank into a more vibrant Development Financial Institution (DFI), thereby improving the Bank’s overall efficiency in terms of delivery system, processes and procedures, corporate and risk governance, as well as general operations.

In order to strengthen the capacity of the Bank in line with the increasingly sizeable requirements of the Malaysian companies and investors that are fast spreading their ventures overseas, the shareholders funds of EXIM Bank has increased to RM2.8 billion in 2008, compared with RM839 million a year ago. This would go a long way in ensuring that EXIM Bank continues to thrive as a vibrant and active DFI for Malaysian exporters and investors over the medium and long term.

The strategies and initiatives that were implemented resulted in EXIM Bank returning to an improved footing in 2008 despite the challenging global economic environment precipitated by the sub-prime mortgage crisis that begun in the United States and spread far and wide to other regions of the world, including regions that EXIM Bank has exposures to.

For the year ended 31 December 2008, EXIM Bank recorded a net profit of RM20.2 million, turning around from its RM50.2 million loss-making position recorded during FY2007.

During FY2008, the Bank’s operating revenue grew 11.6% to RM223.3 million as compared with RM200.0 million in the previous financial year. The growth in revenue is largely credited to a combination of key initiatives implemented by the Bank during the year as part of its plan to improve its business and operational effectiveness as well as turn around its financial position. Banking business remains our core revenue earner contributing about 60% of our total income for the year 2008.

Profit before tax came to RM10.3 million compared to a loss before tax RM64.2 million in FY2007. This gives EXIM Bank Earnings Per Share (EPS) of 1.12 sen compared with a loss of 6.87 sen last year.

The success of EXIM Bank as a complementing financial institution is a shared responsibility involving continuous engagement and collaboration between industry players including both the providers and the users of the financial services, the regulators and the Government.

“With the combined efforts and contributions, we can look forward with confidence to a stronger and more prosperous EXIM Bank,” added Fauzi.