For superbly steering the wheel of Agrobank’s transformation journey, leading its way to become a sustainable entity, Dato’ Wan Mohd Fadzmi Wan Othman, Chief Executive Officer of the Agrobank (Malaysia), was chosen as this year’s 2017 ADFIAP Outstanding CEO Awardee. He was honored at the welcome dinner and awards night on May 10, 2017 during the ADFIAP 40th Annual Meetings in Macao SAR, China.
Dato’ Fadzmi took over the helm as President and Chief Executive Officer of Agrobank in mid-2011 and immediately embarked on a transformation journey that saw the Bank progressively modernizing its banking operations. The journey started with the implementation of a 4-year strategic business plan which was implemented in 2012 under the first transformation phase that established several key strategic goals to ensure that the Bank fully performed its mandated role by focusing on the agriculture sector.
The Bank’s strategic goals were supported by six (6) strategic drivers, namely, (1) focus on new growth areas (2) capitalizing on technological advancement (3) improving strategic alliances (4) rejuvenating human capital (5) focusing on MSMEs and (6) intensifying financial inclusion. The Bank steadily expanded its capability to provide financing solutions throughout the agriculture value chain , i.e., from farm to table, for both the upstream and downstream activities. As a result, the Bank’s growth in the primary agriculture sector recorded the highest financing value of RM5.14 billion with a growth of 15.3% compared with the previous year of RM4.5 billion. The Bank has commanded strong market leadership in agro-food at 27.3% of total financing generated by the banking sector, which saw the agro-food financing portfolio grew by 14.2% compared to a lower growth rate by the banking sector.
In 2011, 50% of the Bank’s products were already offered on Islamic terms and the bigger challenge then was to convert the rest of the conventional legacy assets into Islamic. Dato’ Fadzmi set an aggressive target to accelerate the conversion exercise in three years during which the execution process was strictly monitored. The journey towards becoming a full-fledged Islamic Bank was not easy based on the complexity of conversion process in ensuring banking operation, products and services adhere with Shariah standards and regulations under the Islamic Financial Services Act (IFSA) 2013.
In support of the Government’s initiative to increase food production and to cater to the growing demand for financing especially SMEs, a wide range of Shariah compliant products and services have been developed along the value chain. A total of 44 enhanced products and services from term financing, working capital financing, micro financing, trade financing, fee-based services (motor, takaful, and will writing), and diverse deposit products are currently available.
For financial inclusion, the Bank has broadened its rural branch network, expanded utilization of its electronic banking platform, and provided a full range of services such as affordable credit, savings, and remittances services.
For the next transformation phase, the business focus is to provide comprehensive financial access to the agriculture community in line with the aspiration under its vision and to pursue greater diversification by retaining the Bank’s market share in agrofood while expanding its presence in the agro-based industries. Six new strategic focus areas have been identified as: (1) effective intermediary function (2) sound and sustainable operating model (3) high performing and sustainable organization (4) sound and prudent financial management (5) centre of agriculture excellence and (6) effective stakeholder engagement to ensure the Bank is on the right trajectory for growth and change.
Moving forward, Agrobank has targeted to grow its financing base at an average rate of 10% each year from 2016-2020. The Bank has currently 460 Agro Agents and is targeting to have 300 new Agro Agents annually to reach 1,500 agent by 2020. Focus will be on strengthening market presence in agro-based industries as well as on strengthening human capital. Dato’ Fadzmi is aware that the agriculture industry is high-risk but the food business will always be around no matter the cycle.