National deposit insurer releases annual report, underscoring good governance practices

Kuala Lumpur, 24 April 2007: National deposit insurer, Perbadanan Insurans Deposit Malaysia (PIDM), today reported that its key initiatives were completed well under budget and on time, in line with prudent financial management and good governance standards.

PIDM’s objective is to create an organization that is well-governed and well managed, based on sound business and financial practices, because as the administrator of public funds, it is committed to set the example of trustworthiness and prudence.

“In this regard, we shall continue to uphold and practice good governance in fulfilling our mandate and corporate objectives,” said Jean Pierre Sabourin, Chief Executive Officer of PIDM, who presented the organisation’s 2006 annual report to the press today.
 
This is PIDM’s second annual report and its first full year report. Its first annual report for 2005 covered only the first four months of its operations from September to December 2005. This is also the second consecutive year that PIDM has filed its annual report last month with the Minister of Finance within the statutory requirement of three months from the end of its 31 December financial year.

The Annual Report 2006 is available on the website in four languages – Bahasa Melayu, English, Chinese and Tamil.

For the financial year ended 31 December 2006, PIDM recorded an income of RM105 million comprising premium revenue of RM102 million and investment income of RM3 million. Its operating expenses amounted to RM15 million which was RM5 million lower than budgeted.

This resulted in a net surplus of RM90 million for the year with PIDM’s deposit insurance funds (DIF) totaling RM122 million at the end of 2006, comprising the conventional DIF (RM111 million) and Islamic DIF (RM11 million). 

During the year under review, PIDM focused its efforts in strengthening its capacity and capability as the national deposit insurer. This included executing a Strategic Alliance Agreement with Bank Negara Malaysia, which facilitates vital information sharing, and issuing Regulations on Disclosure Requirements for Joint Accounts and Trust Accounts.

“Moving forward, we will implement further regulations to make our legislation operative, especially in the area of implementing the Differential Premium Systems (DPS), terms and conditions of membership, information disclosure requirements and product insurability,” Sabourin said.

The DPS is aimed at encouraging member institutions to practice sound risk management.  Other measures, such as information disclosure requirements and product insurability, are expected to improve public confidence in the deposit insurance system as these initiatives will ensure that depositors receive relevant and necessary information concerning insured deposit products.

During the past year, PIDM has also been actively engaging and educating its various stakeholders, from bankers to regulators and government entities to the general public, as part of its efforts to create greater awareness about its role, Sabourin noted at the press conference, which was also preceded by PIDM’s first annual dialogue with member institutions.

“International studies have shown that informed depositors directly contribute to the effectiveness of the deposit insurance systems. Public confidence in the deposit insurance system contributes to the stability of a country’s financial system,” added Sabourin.

In this context, PIDM also revealed its upcoming advertising campaign at the release of its annual report. The campaign spans advertising in both print and broadcast media, and is set to commence on 28 April 2007.

The print and television advertisements, available in three versions, can also be viewed on PIDM’s website at www.pidm.gov.my.
 

For more information about this press release, kindly contact : S.Loganathan, General Manager, Communications and Public Affairs Division (Tel : 03-2274 2615) Zeti Zahariah Zainul, Manager, Communications and Public Affairs Division (Tel : 03-2260 7436 ext 112)

ABOUT PIDM

PIDM administers the Government-backed deposit insurance in Malaysia. We protect depositors – automatically – up to RM60,000 per depositor per member institution. For further information:

• Call 1-800-88-1266, 8.30am to 5.30pm on Monday – Friday (excluding public holidays)
• Email: info@pidm.gov.my
• Visit: www.pidm.gov.my