Islamic finance awards 2013: Bank Syariah Mandiri
Best Islamic bank in Indonesia
Islamic finance has been frustratingly slow to take off in Indonesia, considering the opportunity: 240 million people, 210 million of them Muslim, with increasing wealth and a widespread interest in investing in a way consistent with their faith. Many Islamic banks have been set up in Indonesia, often with heavy Malaysian involvement, and the Islamic Banking Association claims that the industry is growing by 40% a year off a low base, but there’s still a sense of potential rather than traction.
The two biggest names in local Islamic finance are Bank Syariah Mandiri and Bank Muamalat Indonesia, which compete with foreign-backed names such as Bank Permata (Standard Chartered Saadiq) and Bank Niaga (CIMB). Mandiri is the leader to date, boosted considerably by the support of its parent, Mandiri. That backing is the reason Fitch rates the Islamic bank AA+(idn), and the parent bank also helps considerably with product distribution. For example, Mandiri, the parent, put Rp300 billion ($31 million) of new funds into the Islamic business in December 2011 to finance expansion, and is understood to be considering an IPO for it.