Page 58 - Bank Muamalat_AR24

56 BANK MUAMALAT MALAYSIA BERHAD

RETAIL BANKING

Vehicle Financing

Financing Assets: Financing Income: Total Disbursements: Net Impairment:
RM2,230.01 RM99.23 RM978.52 0.13%
million million million (FY2023: 0.13%
(26.4%) (52.6%) (17.5%) remain stable)

Malaysia’s vehicle market saw a record-breaking Total Industry Dealer relationships were also strengthened through joint
Volume (TIV) of 816,747 units in 2024, a 2.1% year-on-year marketing and sales events, branch roadshows, and tailored
increase. This robust performance was driven by strong dealer programmes, particularly for new model launches.
domestic demand, a resilient economy, and favourable The Bank capitalised on peak buying periods with thematic
conditions for vehicle financing. Passenger cars were a sales campaigns. Furthermore, efforts were made to
primary growth driver, and Battery Electric Vehicle (BEV) sales strengthen the Muamalat Auto Centre (MAC) and its
notably surged by 45%, indicating a shift towards sustainable support function by streamlining internal processes and
mobility. Within this environment, the Bank successfully documentation and adding sales and support teams at MAC
increased its market share within the Non-National segment Processing, which led to significantly improved approval
from 47% in December 2023 to an impressive 58% in turnaround times through the Monoline Structure and
December 2024, indicating a strong penetration strategy collaboration with EON’s Digital Sales Channel.
and growing preference for the Bank’s offerings.
Finally, a proactive emphasis was placed on the EV/Hybrid
As a result, the Bank’s Vehicle Financing gross balance grew segment, supporting ESG goals and capitalising on growing
significantly in FY2024, rising by RM670 million (45.4%) to demand, as demonstrated by the 2023 Special Electric
RM2.23 billion from RM1.53 billion in FY2023. This expansion Vehicle campaign. This forward-looking initiative positions
notably outpaced national TIV growth. The strong performance the Bank for sustained success and continued contribution
stems from ongoing product campaigns, vigorous ground to the Malaysian automotive sector in line with its “Better Lives,
activities, strong partnerships with car dealers, positive Together” mission.
market sentiment, enhanced purchasing power, normalising
economic activities, and consistent vehicle parts supply.
Building on FY2024’s successes, vehicle financing is
Crucially, this growth was achieved without compromising well-positioned for continued growth and aims for further
asset quality. The gross impaired financing ratio for Vehicle market penetration. Strategic priorities for FY2025 will
Financing remained exceptionally low at 0.13% at the end likely encompass deepening its presence in the pre-owned,
of both 2024 and 2023, significantly below the industry reconditioned, and used car markets, with a specific focus
average of 0.6%. This highlights the Bank’s prudent credit on improving the turnaround time for used car financing to
assessment and risk management. an ambitious four hours. The Bank will continue to focus on
product innovation, continuously developing competitive
The strong performance in 2024 was supported by several and Shariah-compliant financing solutions, with potential
strategic initiatives. These included expanding into the ready expansion of floating rate offerings. Strategic partnerships
stock segment, which targeted pre-owned vehicles from will continue to be cultivated and expanded with a wider
brands like Honda, Perodua, Toyota, BMW, Volvo, and network of reputable car dealers and platforms. Digitalisation
Mercedes, as well as unregistered reconditioned vehicles. of processes also remains a key focus, with plans for
Additionally, the Bank established partnerships with end-to-end processing for EV/Hybrid financing to enhance
reputable used car dealers such as myTukar (CARRO), MAC and digital sales channels for seamless customer
Carsome, and Carlist. The introduction of a floating rate journeys, building on the EON Digital Sales Channel’s success.
package provided greater flexibility in pricing and enhanced
market competitiveness.