KUALA LUMPUR (July 31): Kuwait Finance House (Malaysia) Bhd (KFH Malaysia), the country’s first foreign Islamic lender, is planning an exit from the country after 19 years of operation, sources said.
“It is exiting to focus entirely on the Middle East,” an industry source said.
KFH Malaysia is wholly owned by its Middle Eastern shareholder, Kuwait Finance House — the largest bank in Kuwait and the second-largest Islamic bank in the world. Earlier this year, Kuwait Finance House merged with Ahli United Bank of Kuwait.
It is understood that, apart from Malaysia, Kuwait Finance House does not have a presence elsewhere in Asia. The group was not immediately available for comment.
KFH Malaysia, one of only two remaining stand-alone foreign Islamic banks in the country — the other being Al Rajhi Banking & Investment Corp (Malaysia) Bhd — has struggled to gain market share in an increasingly competitive market since setting up operations here in August 2005. There are currently 17 Islamic lenders in Malaysia, of which six are foreign.
According to the latest financial filing on its website for the first nine months ended Sept 30, 2023 (9MFY2023), KFH Malaysia’s total assets stood at RM7.46 billion, having dwindled from RM10.79 billion in FY2016.
Its 9MFY2023 net profit dipped to RM42.33 million from RM45.04 million for the same period a year earlier, though operating revenue improved to RM270.88 million from RM261 million. In FY2022, net profit rose to RM78.1 million from RM73.69 million in FY2021. It reported net losses of RM12.78 million in FY2020 and RM80.97 million in F2019.
As at Sept 30 last year, KFH Malaysia's gross financing book stood at RM3.75 billion, with the bulk of it in residential, personal use and working capital financing.
KFH Malaysia chief executive officer Mohd Hazran Abd Hadi recently left the bank to pursue “personal endeavours”, The Edge Malaysia weekly reported in early June. The bank appointed Ida Aizun Husin, its senior vice-president of corporate banking, as the acting CEO.