Our lowest-loss financing carries our largest rate risk
Salary-deduction personal financing has some of the lowest impairment rates in Malaysian retail banking. Written at fixed rates for up to ten years and funded by deposits that reprice within months, it also carries a rate exposure that credit reporting never shows.
Hedging the salary-deduction book before the policy rate rose
In December 2021, RM7.4 billion of our financing was salary-deduction personal financing to public-sector employees, written at fixed profit rates for up to ten years and funded mostly by term deposits that repriced within twelve months.
NOTE II
Recommending a smaller dividend than our listed parent had promised
In 2021 our listed parent told its shareholders that it aimed to distribute about 60 per cent of earnings, and nobody had asked the bank whether its capital plan could support that.
A number I cannot trace to a contract, a depositor or a Shariah ruling is not ready to go in front of a board.
Total assets, December 2025
RM46.2bn
64 per cent of financing to households, 36 per cent to businesses
CET1 ratio, December 2025
13.6%
Up from 12.4 per cent in December 2023 under a stress-tested payout
Current and savings accounts
31%
Share of customer deposits, up from 24 per cent in 2021
Finance colleagues led
240
Reporting, balance sheet management, capital, tax and zakat
An Islamic bank should price its rate, funding and Shariah risks in its own finance office, before a payout or a rate cycle prices them instead.
I am chief financial officer of Sejahra Islamic Bank Berhad, a fictional Islamic bank based in Kuala Lumpur and wholly owned by Sejahra Holdings Berhad, which is listed on the Main Market of Bursa Malaysia. At December 2025 we held RM46.2 billion of assets and RM34.1 billion of gross financing, almost two-thirds of it to households: home financing, salary-deduction personal financing for public-sector employees, vehicle financing and cards. Profit before zakat and taxation was RM618 million in 2025.
I came to Islamic banking from the other side of the causeway. I trained as an auditor in Singapore, learnt valuation and banking-book rate risk in a regional bank's treasury finance team through the turmoil of 2008, and moved to Kuala Lumpur in 2009 to run finance for that bank's newly separated Islamic subsidiary. Sejahra hired me in 2013 to manage its balance sheet. I became deputy CFO in 2016 and CFO in April 2021.
I understand my job as pricing the risks a bank still has time to choose. Every material decision of my five years as CFO has meant accepting something visible now, whether thinner margin, slower growth or a smaller dividend, against a larger cost that would otherwise have arrived later. The Shariah Committee, the risk function and the board own much of what matters here. My part is to put a defensible ringgit figure beside each choice before it is made.
Rate risk hedged before the cycle turned
In the first quarter of 2022 we hedged RM3.0 billion of fixed-rate personal financing with Islamic profit rate swaps and shortened new tenors. The overnight policy rate rose by 125 basis points over the following year; our net financing margin fell to 2.18 per cent rather than the 2.02 per cent our unhedged projection showed.
Capital rebuilt from a lower payout
CET1 rose from 12.4 per cent in December 2023 to 13.6 per cent in December 2025 without any new additional tier 1 issue, after the board adopted a stress-tested payout of 45 to 50 per cent instead of the 60 per cent our parent had announced.
Overlays released only on evidence
Of RM214 million of credit overlays built during the pandemic, we released RM118 million in 2023 and kept RM96 million. In 2024 RM61 million of the retained amount was absorbed when two SME cohorts deteriorated.
Deposits that stay when rates move
Current and savings accounts grew from 24 to 31 per cent of customer deposits between 2021 and 2025, and our twenty largest depositors fell from 34 to 21 per cent of the total, after we let RM2.6 billion of rate-sensitive institutional term deposits run off.
Current focus
I am redesigning our profit-rate hedging for a period of lower rates after the July 2025 cut, when the swaps that protected us in 2022 now cost us carry. I am also preparing the board's review of the 2027 to 2029 capital plan and of our 12 per cent CET1 floor.
Conversations I welcome
I am not looking to leave Sejahra. I would consider one independent non-executive directorship at a Bursa Malaysia-listed company outside financial services, ideally one funded through sukuk or Islamic financing, joining its audit committee and chairing it after a year. I can give about twenty-five days a year, subject to my board's consent, the bank's policy on outside appointments and a conflicts check. I accept a few speaking invitations from finance and governance audiences each year.
Beyond the page
The record behind the perspective.
In the boardroom
Sejahra Properties Sdn BhdDirector of the bank's wholly owned property subsidiary, in an executive capacity · 2021–present
Formation
Bachelor of AccountancyBukit Teratai University · 2000
Postgraduate Diploma in Islamic FinanceBayumas Institute of Islamic Finance · 2011
When the parent wanted the whole overlay released, Darren came to the committee with three cohorts, a reason for each and a written test for letting go. We minuted his conditions and checked them every quarter. A year later two of those cohorts turned, and the provision was already there.
Faridah MokhtaruddinFictional independent director and chair of the Board Audit Committee, Sejahra Islamic Bank BerhadThe full record ↗
Contact
I am not looking to leave Sejahra. I would consider one independent non-executive directorship at a Bursa Malaysia-listed company outside financial services, ideally one funded through sukuk or Islamic financing, joining its audit committee and chairing it after a year. I can give about twenty-five days a year, subject to my board's consent, the bank's policy on outside appointments and a conflicts check. I accept a few speaking invitations from finance and governance audiences each year.
