Thank you for Subscribing to Business Management Review Weekly Brief
Through this article, Sazrin Mohd Razak reflects on the bank’s pioneering role in Islamic finance. She outlines how Bank Islam continues to blend Shariah principles with financial innovation, digital transformation, and sustainability—building a future-ready Islamic banking ecosystem grounded in trust, governance, and long-term value creation.
Integrating Strategy, Finance, and Sustainability For Long-Term Value
With over two decades of experience across strategic planning, finance, and sustainability, my role as Director of Strategy & Planning and Investor Relations is to align the Bank’s direction with long-term value creation. As a Chartered Accountant, I oversee Investor Relations, Strategic Planning, and the Sustainability Roadmap—ensuring all three work in harmony to strengthen performance and governance.
My career spans roles from consolidating over 120 subsidiaries at Malaysia’s largest oil and gas corporation to establishing finance operations for a foreign-based Islamic bank and leading strategic development for a major local commercial bank. These experiences have deepened my understanding of how to unite financial discipline with strategic foresight and stakeholder engagement.
Today, I work closely with Management to drive strategy, business direction, and sustainability commitments while ensuring transparent investor communication. My goal is to deliver a cohesive strategy that connects financial strength, good governance, and sustainable growth—ultimately achieving fair valuation and long-term trust.
Pioneering the Islamic Banking Movement in Malaysia
The roots of Islamic banking in Malaysia can be traced back to 1963, with the establishment of Tabung Haji, an institution created to manage the savings of Malaysian Muslim pilgrims for Hajj. This initiative demonstrated the practicality and promise of Shariah-compliant financial management, laying the foundation for a fully Islamic financial ecosystem.
Malaysia’s Islamic finance industry has since grown into one of the world’s most comprehensive—supported by strong regulation, robust infrastructure, and steadfast Shariah compliance.
Our goal is to integrate strategy, finance, and sustainability into a unified framework that drives long-term value and strengthens stakeholder trust.
On 1 July 1983 (20 Ramadan 1403H), the establishment of Bank Islam Malaysia Berhad (BIMB) marked a historic milestone as the first full-fledged Islamic bank in both Malaysia and Southeast Asia. Since then, Bank Islam has been instrumental in developing and innovating Shariah-compliant financial solutions that define Malaysia’s global leadership in Islamic finance.
Illustration 1: Evolution of the financial ecosystem that ensures Shariah compliance in Malaysia
Illustration 2: Malaysian Islamic banks are expected to play a more effective role in delivering a positive and sustainable impact on the broader economy
Over the years, this pioneering vision has translated into sustained growth. As of FY2024, Malaysia’s Islamic financing assets recorded a ten-year cumulative annual growth rate (CAGR) of 10.1 percent, with market share rising from 7.8 percent in 2007 to over 30 percent in 2024. Bank Islam’s total assets reached RM99.5 billion, with a market capitalization of RM5.9 billion. The Bank maintains a healthy Net Income Margin of 2.0 percent—above the industry average—and a strong capital ratio of 20.3 percent as of June 2025. Asset quality remains robust at 1.05 percent, underscoring prudent risk management and resilience.
Blending Shariah Principles with Modern Financial Innovation
Since the 1980s, Malaysia’s Islamic Banking System (IBS) has integrated Shariah principles into the conventional banking framework. Bank Islam has continuously evolved, expanding across retail and corporate segments while maintaining strong governance and integrity.
In 1990, the Bank helped structure Malaysia’s—and the world’s—first sukuk, a RM125 million issuance by Shell MDS Sdn Bhd, laying the foundation for today’s thriving sukuk market.
Later milestones include Al-Awfar (2009), an innovative Mudarabah-based investment account, and the Ihsan Sustainability Investment Account (ISIA)—Malaysia’s first Islamic investment account channeling funds into ESG- and SDG-aligned assets. These developments embody Bank Islam’s commitment to blending faith-based principles with forward-looking financial innovation.
Driving Digital Innovation the Shariah-Compliant Way
Digital transformation at Bank Islam is about more than technology—it’s about accessibility, efficiency, and inclusion, all grounded in Islamic values. Our journey focuses on nurturing digital talent, developing innovative Shariah-compliant solutions, and enhancing customer experience through secure, user-friendly platforms.
Our future-ready operating model rests on four pillars: Cloud Native to drive faster innovation, Data Practice to turn insights into impact, AI Enablement to enhance interactions, and Open API to foster ecosystem collaboration.
Since 2019, we’ve evolved from the “GO” mobile app to BIMB Mobile and BIMB Web, culminating in Be U—our first cloud-native platform delivering a fully digital, self-service experience.
Through our subsidiary FINODYN Sdn Bhd, established with RELDYN Tech Sdn Bhd, we now provide B2B Shariah-Compliant financial platforms, consulting, and support—strengthening our position as a digital leader in Islamic finance.
Our strong financial performance reinforces investor confidence, with our Top 30 shareholders holding over 85 percent of total shareholdings. In FY2024, Bank Islam’s inclusion in the FTSE4Good Bursa Malaysia Index reaffirmed our ESG leadership and commitment to long-term stakeholder value.
Building a Resilient Future Grounded in Islamic Principles
For financial institutions seeking to strengthen their Islamic banking journey, long-term vision is key—anticipating future needs while staying rooted in Shariah values. Success depends on building well-capitalized, resilient institutions supported by a robust legal, regulatory, and supervisory framework that reflects the distinct risk profile of Islamic finance.
Equally vital are strong Shariah governance structures, continuous research, and product innovation that integrate Islamic values into modern financial models.
Developing market infrastructure that ensures sustainability and policy alignment is essential for long-term growth. The ultimate goal remains clear: to enhance wealth creation and promote balanced, inclusive, and ethical economic progress—reflecting the true spirit of Islam in finance.
