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Re-engineering process for MIDF

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Points of Essence:

  • MIDF plans to expand its Islamic finance business by proposing Shariah compliant structures to finance new projects as well as for expansion, modernisation and relocation programmes in the manufacturing and services sectors.

Malaysian Industrial Development Finance group managing director Mohd Najib Abdullah talks about what the company has been doing to cope with a tougher 2008 and life as a privatised entity

STARBIZ: MIDF is undergoing an internal restructuring. What is the focus of the company after that?

Mohd Najib Abdullah: MIDF’s restructuring efforts and focus is to have a lean and efficient group structure as a diversified financial services provider, offering investment banking, asset management and development finance services.

This is the second transformation programme that I am involved in and it is not getting any easier given the ever-changing financial landscape.

There are three main areas of emphasis – people, where we upgrade and enhance the skills sets and expertise of our employees, process – where we improve our processing efficiency and productivity, and finally technology, as an enabler to meet the demands of our customers in service delivery as well as risk management.

We re-engineered our sales process and the way we operate our back offices. We have a central shared service by having a common platform for the entire group. We invested in technology that supports the whole group and not just our core subsidiaries. We improved our risk infrastructure.

Mohd Najib Abdullah

We also launched our new master brand. These efforts will further strengthen our operations and enhance the services we offer our customers and stakeholders in each of our core areas. It is about having a sustainable long-term business proposition.

We will focus on our “Cradle to Maturity” approach, whereby our clients are able to grow with us.

Our core solutions follow through our clients’ lifecycle – development finance as they start off, investment banking when they grow and asset management once they mature.

How is MIDF going about carving a niche for itself in the industry?

I believe most sectors of the economy are competitive unless you have a monopolistic or oligopolistic position.

Competition will push us to excel. As we compete in the open market especially with globalisation challenges, we have taken aggressive measures to strengthen our position.

In each of our core businesses, we need to have a differential advantage against the competition.

This will be the basis for each of our business models. MIDF Investment‘s goal is to be a niche and profitable boutique investment bank.

From a customer’s point of view, the bank’s key value proposition is in providing personalised service to a smaller stable of clients, compared with much larger investment banks. From our shareholder’s point of view, MIDF Investment places more emphasis on quality as opposed to quantity.

The bank is focusing on profitability rather than volume or market share. Finally, we need to retain our best talent and are able to attract new talent into the company.

To do so we need to be a successful company as well as adopt a holistic approach in human capital management.

Now that the company is privatised and wholly owned by Permodalan Nasional Bhd (PNB), has there been a benefit business wise for the company?

The affinity as a 100% subsidiary of PNB adds credibility and reach in our marketing efforts. Business introductions and referrals certainly help in building a larger customer base for the services that we provide. We certainly have no complaints.

We have active communications between the shareholder, the board and management in how the company should move forward. More so after the privatisation. It is only natural. However, in the competitive financial services sector, the quality and relevance of our combined range of financial services must still be demonstrated.

What is MIDF doing to grow its Islamic finance business?

MIDF Asset is one of the leading asset management companies in Malaysia.

Our investment mandates include equity, fixed income and balanced portfolios based on specific requirements such as Syariah, ethical and trustee.

MIDF’s Development Finance division promotes the development of the industrial sector in Malaysia through the provision of financing for manufacturing-based small and medium enterprises.

The financing includes conventional and Syariah-compliant financing for new projects as well as for expansion, modernisation and relocation programmes primarily in the manufacturing and services sectors.

We definitely propose Syariah-compliant structures ahead of conventional ones, given our forte and the aspirations of the Government in making Malaysia a vibrant Islamic financial hub.



Written by Suapi Shaffaii

September 15, 2008 at 4:39 pm

Posted in General Issue

Tagged with , ,

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