Friday, Dec 15, 2017
Finance | Asia-Pacific | Malaysia

TH grows “hand in hand with the nation”


4 years ago

Dato Sri Abdul Azeez Bin Abdul Rahim, Chairman of Lembaga Tabung Haji (TH)
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Dato Sri Abdul Azeez Bin Abdul Rahim

Chairman of Lembaga Tabung Haji (TH)

Islamic finance and its subsectors are considered a National Key Economic Area for Malaysia. In an interview with PM Communications, Chairman of Lembaga Tabung Haji (TH) Dato Sri Abdul Azeez Bin Abdul Rahim talks about how the success of his company, is indicative of “the success of all Muslims in Malaysia and one of the nation’s prides.”

What is TH’s contribution to the socio-economic development of Malaysia?

Lembaga Tabung Haji (TH) helps pilgrims save money and be able to perform Hajj. Pilgrims save their money with us and we to give high competitive dividend for their savings. The dividend is higher than Islamic and conventional banks. This year we gave 6% and on top of that, we gave an additional of 2% to assist them to increase their savings in order to perform the Haj.

People that had no current accounts or savings are allowed to open an account here at TH. With this savings, the Malaysian Muslims not only able to save for the purpose of pilgrimage but they could also participate in economic activities through our platform. TH grew hand in hand with the Nation. We are now involved in plantations, Islamic finance, real estate, oil and gas, ICT, tourism, and marine services.

TH achieved RM3.7 billion revenue, an increase of 34% since the year before. What are the main factors behind this success, and what is the role of London in TH’s new strategy?

TH’s success is the success of all Muslims in Malaysia and it is one of Nation’s prides. We rely on our depositors’ unprecedented support and loyalty and they have shown their trust in maintaining their savings with us. Besides these aspects, TH has demonstrated a solid business strategy that is crucial for success.

TH constantly explores profitable investment opportunities. So far we have invested more than £500 million in real estate in United Kingdom with the focus on properties that generate competitive returns. I was in London last week, looking at a few potential property investments. The wide range of property investment opportunities in London will make it appealing to many other investors all around the world. It is the place to be for us, as it shows tremendous growth prospects. Currently, TH owned a few prominent properties in United Kingdom; 10 Queen Street Place, 151 Buckingham Palace Road and Unilever UK Headquarters, Leatherhead, Surrey; and in Australia, 3 Collins Square, Melbourne.

In this light I believe the ties between Malaysia and the UK are growing stronger than ever. We go to London often, and this is also the opportunity for British investors to explore Malaysia, because Malaysia has also very interesting investment opportunities, especially considering the economic corridors established by the Prime Minister - namely North Corridor Economic Region (NCER), Iskandar Malaysia (IM), East Coast Economic Region (ECER) in Peninsular Malaysia; and Sarawak Corridor of Renewable Energy (SCORE) and Sabah Development Corridor (SDC) in East Malaysia.

One of the reasons we are going to United Kingdom is because we are confident that London will become a main player in Islamic Finance and a hub for Islamic investment. Yet, many people are not familiar with Sharia-compliance funds. Therefore many countries send their people to Malaysia to get trained in Islamic Banking products. With Malaysia being one of the key players in this sector, we believe, we could help train many countries on Islamic Banking products.

How do you think Sharia-compliance products, Islamic funds and more broadly speaking, Islamic finance could contribute to shaping a more sustainable financial system?

Islamic finance has gained tremendous traction over the last four decades. It is no longer a niche but a mainstream offering as it has benefits which are as good as or even better than conventional financing. Additionally, it is viewed as more cost-competitive than conventional financing. Islamic finance is a viable alternative to interest-based financing. It is actually a system that is both effective for Sharia and commercially. Notably, the Islamic finance sector is expected to create thousands of new job opportunities further igniting robust economies, hence boosting the industry and establishing global competitive advantages.

AEC will be established next year. How do you think the establishment of a single market will impact the sector?

AEC will promote a more competitive economic region, equitable economic development within the region, as well as making the region part of the global economy with ASEAN centrally positioned to participate in the global supply network. Essentially, this would reduce the transaction costs associated with economic interchange and would make the region more attractive to MNCs wishing to take advantage of its diversity and openness.

Can you share with us more information regarding TH’s CSR programmes?

One of the first initiatives I undertook when joining TH was to add value to the existing CSR programmes. This is because CSR or humanitarian project has always been my passion. I have always been involved in CSR and humanitarian projects. I went to Fukushima and I have also been to Syria, Somalia, Gaza, New Zealand and Australia when the severe earthquakes occurred. Been brought up from a poor family, I have depth empathy of people who do not have; therefore giving back to the community is a must for me.

TH has several CSR programmes especially in education for underprivileged children. Through the Iqra’ Project, which is a nationwide initiative, we provide school supplies - such as uniforms, books, and bags - for kids in rural and remote areas every year. We also provide them support in terms of tutoring for English and Mathematics for instance.

Thus, one of the biggest and most significant TH’s CSR contributions is the Haj subsidy for Malaysian Pilgrims. TH subsidise the first timer Muassasah pilgrims so the haj cost for them will remain at MYR9,980 per pilgrim, when the actual haj cost has now escalated to MYR16,155 per pilgrim. Ultimately, this is the biggest CSR contribution from TH to its stakeholders every year. This is also aligned with the objective of TH’s establishment, to assist its depositors to gradually save for the purpose to perform the haj on top of providing excellence haj services in the best interest of its stakeholders.

As the Chairman of TH, what is your vision regarding the future of the institution?

TH established in Malaysia since 1963, half a century ago. Today, our existence and business remains intact and stronger with a total of approximately MYR 50 billion savings and more than eight million depositors nationwide, placing us as one of the leading and premier Islamic organisation. With the supports from the staff, our loyal depositors and the right cautious investment strategies, I wish to take TH to greater, higher level.

TH is a pioneering concept, how could other countries replicate the concept for other Islamic communities?

Presently, TH is the only institution of its kind in the world. Since its inception, TH continuously improves and upgrades its services and operations to the best interest of its depositors, to keep up with the times and stay in line with the current practices. We should be easily pleased and comfortable with what we have achieved so far. However, we acknowledge that to maintain and move forward in the current ever changing economic environment, we must equip ourselves with all necessary tools to remain relevant to potential depositors.

Several countries have approached us to seek our assistance in guiding and knowledge sharing in establishing and replicating TH at their home land. I believe with the right-strategic collaboration, supports, we could help make it possible.

What would be your message about Malaysia to our readers?

Malaysia is a small country with a large golden heart. As a Nation, we are always looking for ways to help other countries, helping our brothers regardless of race or religion. To all our brothers and sisters in the UK, I’d like to say that with warmth sense of humanity and investment opportunities, Malaysia has a lot offers and it is an opportunity which is not to be missed.

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