1.

0 BACKGROUND OF THE INSTITUTION

1.1 RHB Islamic Bank
RHB Capital Bhd was established in Malaysia on 24 August 1994. During that time, it was
known as DCB Holdings Bhd and operates as public limited company before becoming as financial
banking institution. The founder is Tan Sri Rashid Hussain and has headquarters operate in Kuala
Lumpur, Malaysia.RHB Bank Bhd was resulted from the mergers of three main Financial Banking
institutions which is Kwong Yik Bank Berhad, Sime Bank Berhad and Bank Utama (Malaysia)
Berhad. In the beginning, DCB Holdings Bhd merges with Kwong Yik Bank Bhd when the founders
of RHB Bank Bhd acquire 75% stake in Kwong Yik Bhd in 1997. Then in 1999, DCB Holding Bhd
merges with Sime Bank Bhd and was known as RHB Bank Bhd after the second mergers. Finally,
RHB Bank Bhd merges with Bank Utama Bhd in 2003.
RHB Capital was listed on the Main Market of Bursa Malaysia Securities Berhad on 29
December 1994. Currently, it is the fourth largest fully integrated financial services group in
Malaysia. It main subsidiaries is RHB Bank Berhad, RHB Investment Bank Berhad, OSK
Investment Bank Berhad, RHB Insurance Berhad and RHB Islamic Bank Berhad, while its asset
management and unit trust businesses are undertaken by RHB Asset Management Sdn. Bhd. and
RHB Islamic International Asset Management Berhad. RHB Banking Group set up an Islamic
banking subsidiary which is RHB Islamic Banking BHD on 16 March 2005. In 2013, RHB Bank has
over 194 branches in Malaysia, 21 branches in Singapore, 2 branches in Thailand, and 1 branch in
Brunei and Vietnam.
SHAREHOLDERS
Name
Employees Provident Fund

Equities %
41.5%

Aabar Investments PJSC (Private Equity)

OSK Holdings Bhd.

17.7%
10.1%

Permodalan Nasional Bhd.

9.13%

Kumpulan Wang Persaraan

3.35%

Hong Leong Company (Malaysia) Bhd

2.52%

The Vanguard Group, Inc.

0.77%

AIA Bhd.

0.55%

Yayasan Hasanah

0.52%

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Norges Bank Investment Management

0.52%

MANAGEMENT TEAM
No.
1.
2.
3.
4.

Name
Dato' Khairussaleh Ramli
Mike Chan
U Chen Hock
Ibrahim Hassan

Position
Managing Director, Rhb Bank Berhad
Chief Executive Officer, Rhb Bank Berhad, Singapore
Head, Group Retail Banking
Managing Director, Rhb Islamic Bank Berhad

5.
6.
7.
8.
9.

Patrick Ho
Yap Choi Foong
Norazzah Sulaiman
Rohan Krishnalingam
Jamaluddin Bakri

Group Chief Risk Officer

Group Chief Financial Officer
Group Chief Marketing & Communications Officer
Group Chief Operations Officer
Group Chief Human Resource Officer

10.

Christopher Loh

Group Chief Strategy & Transformation Officer

1.2 Bank Islam Brunei Darul Salam

Brunei Islamic Bank was established in 2005 resulted from the mergers of two earliest local
Islamic financial institutions in Brunei. In the beginning, the bank started their initial operation as
Island Development Bank and converted into a full-fledge Islamic bank in January 1993 known as
Islamic Bank of Brunei. In 2005, the bank then come into the merger process with Islamic
Development Bank of Brunei and known as Bank Islam Brunei Darussalam and become the largest
bank in the country in the same time flagship Islamic financial institution.

BIBD is committed in fulfill the need of customer need and wants as internationally recognized
financial institution that governed by global best practice and experienced management team. The
headquarters of the bank is located at Bandar Seri Begawan. the Bank has fifteen branches at
strategic locations in Bruneis four districts and the Bruneis Leading Financial Institution largest
network of ATMs in the country. The bank has over 700 employees and B$ 6 billion worth of assets
under management, BIBD proudly serves more than 100,000 consumers.
This includes Consumer, Corporate as well as Institutional clients, thanks to its presence across the
country, availability of the largest Contact Centre in Brunei Darussalam, and innovative solutions such as
internet and mobile banking.BIBD is the only bank in Brunei Darussalam that serves all sectors and
segments within the retail banking market. With a strong focus on innovation and excellence, BIBD has been

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consistently recognized for its superior customer service and ability to deliver value to all its stakeholders. It
is through continuous hard work, effort and commitment from our people that we are able to provide
seamless and innovative services to our customers, and ensure that their banking experience with us is
unique and best-in-class.
BIBD has performed a reformation of first brand come up with the upgrades in its overall service
delivery and branch design, which reflect the Islamic image canvas of Brunei Darussalam since the
commencement of its transformation journey. This strategy has differentiated BIBD from other financial
institution while in the same time they create their own trademark which is Bruneian at Heart.

SHAREHOLDERS
Ministry of Finance, Brunei Darussalam
Sultan Haji Hassanal Bolkiah Foundation
Fajr Capital Limited
Approximately 6,000 individual Bruneian investors

MANAGEMENT TEAM
No

NAME

POSITION

.
1

Yang Mulia Mubashar Khokhar

Managing Director

Yang Mulia Irwan bin Haji Lamit

Managing Director, BIBD At-Tamwil

Yang Mulia Hjh Noraini binti Haji Sulaiman

Berhad
Chief Financial Officer cum Deputy

Yang Mulia Dr Gyorgy Ladics

Yang Mulia Hein Jan Smit
Yang Mulia Hak Yeung
Yang Mulia Imran Samee
Yang MuliaKoh Swam Sing
Yang Mulia Salman Ashraf Khan
Yang Mulia Haji Minorhadi bin Haji Mirhassan

Managing Director
Chief Operating Officer
Chief Risk Officer
Head, Group Strategy & Merchant Banking
Head, Retail Banking
Head, Corporate Banking
Head, Treasury & Global Markets
Head, Government Relations & Special

11
12

Yang Mulia Hjh Normah Ismail

Yang Mulia Tahir Muzaffar

Projects
Head, Legal & Compliance
Head, Information & Technology

13

Yang Mulia Stuart Clegg

Head, Internal Audit

4
5
6
7
8
9
10

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14
15

Yang Mulia Azmat Ashraf

Yang Mulia Hajah Hanifah Haji Jena

Advisor, Corporate Banking

Head, Shariah

1.3 Kuwait Finance House (KFH)-Bahrain

Kuwait Finance House was established in 1977 as the first bank operating in accordance with
the Islamic Shari'a in Kuwait. The founder is Consortium of Kuwaiti merchants and has a
headquarters located Kuwait City, Kuwait. It was listed in Kuwait Stock Exchange at 31 December
2008. It has established its independent bank in several country such as Bahrain, Malaysian,
Turkey, and German and its also has stakes in other Islamic banks.
KFH has steadily managed to expand its business and achievements to lead the Islamic
banking industry and become a pioneer financial establishment, not only in the Islamic banking
industry, but also in the banking sector as a whole, besides being one of the biggest lenders in both
the local and regional markets.

SHAREHOLDERS
Kuwait Investment Authority (Direct)
Kuwait Awqaf Public Foundation (Direct)
Public Authority for MinorsAffairs (Direct)
The Public Institution for Social Security (Indirect)
TEAM MANAGEMENT

No

NAME

POSITION

.
1
2
3
4
5
6

Mr.
Mr.
Mr.
Mr.
Mr.
Mr.

Mazin Al-Nahedh
Srood Sherif
Shadi Zahran
David Power
Abdullah Abu Al-Hous
Abdulwahab Al-

7
8
9
10
11
12

Rushood
Mr. Leslie J Rice
Mr. Fadi Chalouhi
Mr. Khaled Al Jumaa
Mr. FahadAl-Mukhaizeem
Mr. Waleed Mandani
Mr. Gehad El-Bendary

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Group Chief Executive Office

Group Chief Information Officer
Group Chief Financial Officer
Group Chief Retail and Private Banking Officer
Group Chief Operations Officer
Group Chief Treasury Officer
Group Chief Risk Officer
Group General Manager Retail Banking
General Manager Legal Group
Group Chief Strategy Officer
Group General Manager Private Banking
Group General Manager Risk Management

2.0 COMPARISON BASED ON THE SIMILAR TYPE OF INSTRUMENT

2.1 Credit Card
Bank Islam Brunei Darul Salam

Kuwait Finance House (KFH)-

RHB Islamic Bank

Bahrain
i.BIBD MasterCard Classic

Classic & Gold Credit Cards

Benefits

Benefits

i. RHB World MasterCard

Credit Card

Benefits
The point can be redeemed for cash, The card has no interest
charged
Besides that, the
donate to charity, bill payment and e The card has shariah compliant
MasterCard also have
Tunai.
and also involve in the
exclusive Plaza Premium
MasterCard also are accepted to
worldwide acceptance.
Lounge Services for RHB
worldwide at over 36 million The card will give up to 50
Premium Card members
days
grace
period
and
can
do
for example has 20%
merchants
the
settlement
by
cash,
cheque,
discount at Plaza Premium
and 2 million ATM which include
direct
debit
to
KFH-Bahrain
Lounges all around the
online transaction.
account
and
e-Banking
Service.
world
The card also has been protected with the
additional layer of online shopping
security which is MasterCard

Secure

Code.

2.2 Islamic Investment

Bank Islam Brunei Darul Salam
i.

Term deposit- BND

Benefits

Kuwait Finance House (KFH)-

Bahrain
i. Invest in real estate which are:
Durrat Al Bahrain

RHB Islamic Bank

i. Islamic money market deposit

RHB offers a wide range of

Invest in Shariah compliant which

Kuwait Finance House is acquire deposit or investment products
is free from interest in fixed term Durrat Al Bahrain in 2003 and was to be used by its clients based
investment. Profit will pay on holding about 50% of share and on various Shariah approved
maturity and may reinvest with world class residential, leisure, concepts to meet its diverse
client needs and applications.
the deposit amount.
commercial and tourist destination
destination.
2.3 Equity Financing

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Bank Islam Brunei Darul Salam

Kuwait Finance House (KFH)-

i. Personal Financing

Bahrain
i. Mudharabah Financing

Benefits

Benefits

A maximum Total Debt Service The rabb al-mal (investor) can

RHB Islamic Bank

i. Equity Home Financing
Benefits
Flexible terms to meet your

Ratio (TDSR) of 60% for those

contract mudharabah with more

with net income of BND 1,750.00

than one person through a single

and above.
For those with net income of
below BND 1,750.00 shall be
subject to Banks policy.

needs.
Extensive coverage across

Malaysia
Ceiling rate protection
transaction.
The mudharib is authorized to do Redraw facility
anything which is normally done
in the course of business.

3.0 CONCEPT OF ISLAMIC BANKING

3.1 Credit Card
Bank Islam Brunei Darul
Salam

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Kuwait Finance House

(Bahrain)

RHB Islamic Bank

i) Al-Kafalah bil Mal

(guarantee)

Under the concept of Al-Kafalah

i.Al-Qard Al Hassan

bil Mal, BIBD guarantees to the

Merchant the payment for the
goods or services purchased by
the Cardholder.

i. Al-Wakalah bil Ujrah

(agency concept)
The credit card finance product Under this concept,
BIBD is acting on behalf
which is based on Al-Qard Al
of the Cardholder to
Hassan, allowing the client to
administer the Cardholder's
repay the amount without any
payment to the Merchant
profit, and agreed upon fees for
and managing the Card
providing several services.
account with the imposition
The Kuwait Finance House
credit card is a shariah
of a prescribed fee.
compliant card which is no
interest and no hidden cost.
The card only charges an
annual fee which is payable on
a monthly basis.

3.2 Islamic Investment

Bank Islam Brunei Darul
Salam

Kuwait Finance House

(Bahrain)

RHB Islamic Bank

i.
Ijarah
i. Ijarah
i. Bai Bithaman Ajil
Utilizing the concept of Ijarah It literally means leasing,
whereby the Bank Negara
(BBA)
Lease to own KFH-Bahrain
agrees to lease out its
has introduced a 25-year home
portion of the property to the
financing home, 18 years longer
customer at an Ijarah rate
Bai Bithaman Ajil means a
agreeable by both parties.
than the existing home financing
"deferred payment sale".
The customer also
Under this principle, the
home scheme available through
undertakes to gradually
Bank first sells an asset to
purchase the banks
Murabahah.
the customer, on cash
ownership.
payment basis at a price KFH-Bahrain offers customers
This will diminish the
equal to the Investments
the convenience and flexibility
banks portion in the
partnership and when the
amount.
of paying for their house or lands
banks entire equity holding
The Bank then purchases
through easy installments over
has been purchased by the
the asset from the

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Customer on deferred
payment basis at an agreed
price, equal to the
Investments amount plus
the profit amount.

an agreed upon time frame that

can be extended for a maximum
period of up to twenty five years.

customer, the bank will

transfer the property
ownership to the customer
by way of a Notice of
Fulfillment.

3.3 Equity Financing

Bank Islam Brunei Darul
Salam

Kuwait Finance House

(Bahrain)

i.Tawarruq
i.
Ijarah
i.
Tawarruq, also known as
Utilizing the concept of

reverse Murabahah, refers to

Ijara Lease to own
the process of purchasing the
KFH-Bahrain has

commodity for a deferred price

introduced a 25-year home
financing home, 18 years
determined through musawama
longer than the existing
(bargaining) or Murabaha
home financing home
(mark-up sale), and selling it
scheme available
to a third party for a spot
through Murabaha.
KFH-Bahrain offers
price so as to obtain cash.
Customers the
convenience and

RHB Islamic Bank

Musharakah Mutanaqisah
It also known as Diminishing
Musharakah (Partnership).
Under diminishing Partnership,
the customer and bank enter into
a co-ownership agreement to
acquire and own a commercial
property with the view that
customer to progressively reduce
the ownership of the bank until
the customer finally holds the
full ownership of the property.

flexibility of paying
for their house or
lands through easy
installments over an
agreed upon time
frame that can be
extended for a
maximum period of
up to twenty five
Kafil
years.

(Guarantor)

4.0 FLOW OF PROCESS OF EACH PRODUCT

4.1 Al-Kafalah Bil Mal (Guarantee)

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Makful Anh
(Principle debtor)

Makful-Lah
(Creditor)

Guarantor agree to be
a responsible
principle debtor
liability

Creditor can retrieve

his debt in case of
default by the
principle debtor

Makful Bih
(Debtor/Things)

4.2 Al-Qard al-Hassan

Ijab
(Offer)

Muqridh
(Creditor)

Muqtaridh
(Debtor)

Maal
(Property/Asset)
Qabul
(Acceptance)

4.3 Al-Wakalah Bil Ujrah (Agency Concept)

Al-Muwakil
(Importer)

Akad
Saving

Al-Wakil
(Bank)

Document
& Payment

Exporter

Transfer Good
4.4 Ijarah

Vendor
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Transfer of
Asset

Bank
(Lessor)

Beneficial used
of Asset

Entrepreneur
(Lessee)

Lease Rental

Payment of
purchase price

4.5 Tawarruq

Part A
(Bank)
Sale for immediate
payment

Party B
Sale for payment
deferred by 24
month

Sale for immediate

payment

Commodity
Buyer

Commodity
seller

Developer

4.6 Musyarakah Muntanaqisah

10%
Advance
d

Sell & Purchase

Agreement
90% Purchasing
Bank

Customer

Installment

Musyarakah
Muntaqisah Form

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Sell &
Purchase
Musyarakah
Ijarah
Waad

4.7 Bai Bithaman Ajil

Bank sell the

asset to the

Bank

Customer
Customer repair
the selling price by
installment

Bank purchase the

asset from the
owner/vendor

Customer
identify the asset
to be acquired

Owner/ Vendor of
Asset

5.0 CALCULATION OF PROFIT

5.1 Earnings per Share for RHB Islamic Bank
Basic earnings per share are calculated by dividing the net profit for the financial year by the
weighted average number of ordinary shares in issue during the financial year.

Net profit for the financial year (RM000)

Weighted average number of ordinary shares in issue (000)
Basic earnings per share ( sen )

2015
254,853
1,173,424
21.72

2014
224,315
1,173,424
19.12

5.2 Earnings Per Share for Kuwait Finance House (Bahrain)

Basic and diluted earnings per share is calculated by dividing the profit for the year
attributable to the shareholders of the Bank by the weighted average number of ordinary
shares outstanding during the year after adjusting.

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Profit for the year attributable to the shareholders of the bank

2015
145,841

2014
126,476

( KD thousands)
Weighted average number of ordinary shares outstanding

4,689,866

4,687,483

during the year (thousand share)

Basic and diluted earnings per share attributable to the

31.10

26.98

shareholders of the Bank ( fils)

6.0 CONCLUCION
All those 3 Islamic banking were practicing policy and regulation that were based on the
Shariah principle. They are not using a conventional banking concept which practicing the
manmade, but in the other hand they adherence to the principles of Shariah that were created by
Allah Almighty. Those Islamic banking aim at maximizing the profit but they still subject to
Shariah principle which does not allow Riba and Gharar in performing business operations. This
concept is coincide with the source and law from Al-Quran, Hadith & Sunnah that comprise a rule
and regulation suitable for Islamic Banking operation that does not allow the paying and receiving
of interest and offering a profit sharing in operating the business.
Based on the type of instrument of those 3 Islamic bank use, they does not charging interest
on the usefulness of the credit card but in addition they offering a benefit to the customer to attract
them and retain their customer loyalty. So are with the investment instrument that frees from
interest and compliance with Shariah Principle but in addition they offering a profit sharing to
benefit both parties bank and customer. The equity financing of those Islamic bank is using equitbased financing. An equity-based financing promotes the sharing of risk where it was different
from debt financing that propose a concept of transfer risk. The 3 Islamic banks apply a
Musyarakah (partnership) structure concept where it is traditionally an equity financing structure.
This concept proposes Bank and customer enters into a partnership arrangement with both parties
giving capital into the venture. A risk on the venture is shared according to equity ratio, and so is

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the return where it will also be shared. The risk factor is therefore elevated because there is a
possibility of losses being shared between Bank and customer.
Islam allows financial transactions based on assets as well as on investments in terms of
joint ventures on condition of profit and loss sharing mechanism. The purpose of Islamic Banks
made different Shariah compliant products for the deposit and financing sides in order to facilitate
the customers obtaining a benefit of Islamic Banking. Every Muslim supposed to have a
responsibility to make a contribution in raise the Islamic Banking in order to give awareness to
conventional banking about the concept of Shariah principle which is clearly important in social
welfare and not just making profit solely.

7.0 RECOMMENDATION

Introduce a benchmarking programme

Benchmarking is essential for IBIs to be at par with international best practices. Hence, a
benchmarking programme will be introduced to facilitate IBIs in evaluating their relative
efficiency, identifying the performance gaps and formulating strategies to improve and
deliver the best results.
Enhance knowledge and expertise
To increase the pool of bankers and takaful operators who are knowledgeable and
competent, efforts will be directed to promote human capital development to support the
envisaged growth of the industry via:
- Requiring IBIs and takaful operators to commit adequate budget allocation for skills
development to enhance knowledge and expertise in the field of Islamic banking and
takaful.
Increase the number of Islamic banks to stimulate competition
In order to capitalise on competition as the driving force for growth, the number of fullfledged Islamic banks will be increased over the medium term. As an interim measure,

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efforts will be directed to develop potential eligible players by reviewing the Islamic
Banking Division (IBD) structures and formulating policies to strengthen these IBD models.
This will also provide the basis to identify potential players that have achieved the critical
mass with the adequate infrastructure and that are ready to operate as fully fledged Islamic

banks.
To stimulate greater competition and to accelerate greater international integration,
consideration will be given to issue Islamic banking licenses to qualified foreign Islamic
banking players that have presence in the global Islamic banking industry.

8.0 REFERENCES

http://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=50009458
http://www.islamicfinancenews.com/authors/rhb-islamic-bank
RHB Islamic Bank official page: http://www.rhb.com.my/
Kuwait Finance House-Bahrain official page : http://www.kfh.com/en/
Bank Islam Brunei Darul Salam (BIBD) official page : http://brunei.deposits.org/about/bibd/
www.kfhbonline.com/fluidcwkfh/portlets/login/portal.jsp

https://en.wikipedia.org/wiki/RHB_Bank
http://www.rhbgroup.com/about-us/our-leadership/group-senior-management
http://www.4-traders.com/RHB-CAPITAL-BHD-6491141/company/
http://www.bibd.com.bn/about/corporate-profile/
http://www.bibd.com.bn/about/management/
https://en.wikipedia.org/wiki/Kuwait_Finance_House
http://www.kfh.com/en/about/index.aspx#

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