IslamicFinance.de

#Malaysia is introducing value-based intermediation (VBI) to take its Islamic finance industry to the next level of growth. As a first step, Maybank Islamic initiated the pilot launch of its rent-to-own (RTO) home scheme, called HouzKEY, targeted at properties priced under RM1 million. For now, the product is limited to the bank’s employees but should become available to the public early next year. The bank is aiming for a portfolio size of RM1 billion within the first year. According to experts, this is just the beginning of more RTO schemes to come as several other Islamic banks are expected to launch their own versions. BIMB Holdings group CEO Malkit Singh Maan says the bank is hoping to launch its RTO product for affordable homes in the first quarter of next year. Other VBI products that banks may offer in the future are green technology financing and green sukuk.

BIMB Holdings Bhd's wholly-owned unit, Bank Islam Malaysia Bhd, has issued the second tranche of the Subordinated Sukuk Murabahah amounting to RM400 million under the Subordinated Sukuk Murabahah Programme. The sukuk's tenure will be 10 years, with non-callable five years, and the maturity date will be Dec 15, 2025. The proceeds shall be used to finance Bank Islam's Islamic banking activities, working capital requirements and other corporate purposes and/or, if required, to redeem any outstanding Subordinated Sukuk Murabahah issued under the Subordinated Sukuk Murabahah Programme. The sukuk was rated 'A1/stable' by RAM Rating Services Bhd.

BIMB Holdings Bhd’s wholly-owned subsidiary Bank Islam Malaysia Bhd has issued the second tranche of the Subordinated Sukuk Murabahah amounting to RM400 million under the Subordinated Sukuk Murabahah Programme. BIMB said the second tranche has a tenure of 10 years non-callable five years, with its maturity date being Dec 15, 2025. The sukuk has been rated A1/stable by RAM Rating Services Bhd. The proceeds will be utilised to finance Bank Islam’s Islamic banking activities, working capital requirements and other corporate purposes and/or, if required, to redeem any outstanding Subordinated Sukuk Murabahah issued under the Subordinated Sukuk Murabahah Programme.

BIMB Holdings Bhd’s share price on Bursa Malaysia reacted well following announcement that its wholly-owned subsidiary, Bank Islam Malaysia Bhd aimed to increase the fund of two products under its Term Investment Account over the next six months. As at 10.26am today, the counter was four sen better at RM4.05 with 4,900 shares changing hands. Bank Islam is aiming for a RM2 billion fund for Waheed Investment Account (WIA Wakalah) and Special Investment Account (Mudarabah). Another account, the Al-Awfar Account, was also launched today. The bank also planned to maintain a RM2 billion fund size under its Transactional Investment Account.

BIMB Holdings Bhd is expecting a 15% growth in assets for its banking arm Bank Islam Malaysia Bhd for 2015, despite saying that it will be a very challenging year for the banking industry. Hizamuddin Jamalluddin, chief strategy officer of the managing director's office, said the expected asset growth is based on the group's current balance sheet. He added that in terms of loan growth, the group is expecting this year's growth to be similar to that of last year's. Hizamuddin was speaking to reporters during BIMB's launch of three new term investment accounts under the Islamic Financial Services Act 2013 (IFSA). The three products launched are the Special Investment Account Mudarabah, Waheed Investment Account Wakalah, and the Al-Awfar Account.

BIMB Holdings Bhd (BHB), which owns Bank Islam Bhd, is still keen to acquire a stake or even have a management control in Bank Syariah Indonesia as part of its expansion plan. Its group managing director and chief executive officer Johan Abdullah said the talks were still at a preliminary stage, and there was still no material development. Due to the regulatory uncertainty in Indonesia, Johan said that the group would engage the Indonesian authorities before making any decision to acquire a stake in the bank. At the firm's EGM, shareholders gave their nod to the proposed dividend reinvestment plan (DRP) that would provide shareholders with the option to elect to reinvest in whole or in part of their cash dividend with the new ordinary shares of RM1 each in BHB.

BIMB Holdings Bhd’s net profit for the second quarter ended June 30 increased 86.4% to RM129.67mil from RM69.58mil a year ago. The banking group's revenue for the period rose 3.8% to RM734.59mil while earnings per share (EPS) for the period stood at 8.68 sen. For the second-half period, the group said as a result of the acquisition of the 49% interest in Bank Islam Malaysia Bhd, the net profit attributable to the shareholders increased by RM109.4mil or 76.1%. Consequently, the EPS for the period under review also increased by 25.8%. To attract deposits, BIMB said greater focus would be placed on individual and retail deposits with new product features.

Malaysia's BIMB Holdings will issue a RM1.7 billion ringgit Islamic bond to help raise the US$884 million (RM2.835 billion) it needs to buy the remaining 49% stake of Bank Islam. The 10-year sukuk will be sold to Tabung Haji, BIMB's biggest stakeholder, in a private placement. The bond is made available for the six months to May 27, 2014. IMB's plans were initially rejected by the central bank due to a proposal to secure the sukuk with shares of the company. BIMB in August announced plans to acquire the stake it does not own in Bank Islam held by Dubai Group and Tabung Haji.

BIMB Holdings yesterday received shareholders' nod to buy the remaining 49% stake it does not own in Bank Islam Malaysia Bhd from Dubai Financial Group (DFG) and Lembaga Tabung Haji (LTH). The acquisition is expected to be accretive to the group's earnings by another 5% from the financial year ending Dec 31, 2014 (FY14). With BIMB's current 51% controlling stake in Bank Islam, the Islamic banking unit is already contributing 85% to the group's revenue and earnings. BIMB shareholders also gave the green light to BIMB to raise up to RM3 billion through a combination of a rights issue and a sukuk to part-finance the acquisition. Besides, BIMB might reportedly acquire stake in Bank Muamalat Malaysia from state investment fund Khazanah Nasional and conglomerate DRB-Hicom.

Bank Negara has rejected BIMB Holdings’ proposed move to issue sukuk using Bank Islam Malaysia’s shares as security for the debt, but has allowed the former to acquire the remaining 49% stake in the latter. The central bank has then requested to source and notify the bank on suitable alternative assets as security for the proposed sukuk. An analyst felt the rejection by the central bank would not deter or derail BIMB’s plans to acquire Bank Islam, although it may slow down the purchase process. Last month, BIMB had announced the proposed acquisition of the remaining stake in Bank Islam – 30.5% from the Dubai Financial Group and 18.5% from Lembaga Tabung Haji – for a total cash consideration of US$884.6mil (RM2.87bil). This was to be financed via a two-for-five rights issue of 426.7 million new shares, and a sukuk issuance of up to RM1.47bil.

Dubai Financial Group (DFG) has agreed to divest of its 30.5% stake in Bank Islam to BIMB Holdings in Malaysia, in a deal worth $550m. BIMB Holdings currently owns 49% stake of Bank Islam and the recent acquisition, which completed on 31 July 2013, will enable it to strengthen its banking business in the country. Bank Islam manages a branch network of more than 127 offices. Following DFG's acquisition, the total assets of the lender rose from MYR14.6bn ($ 4.5bn) in 2006 to MYR37.4bn ($11.5bn) by the end of 2012. In June this year, the company divested its credit card operation The Dubai First to Abu Dhabi based First Gulf Bank (FGB) in a deal reached at $164m.

BIMB Holdings Bhd is likely to conclude the purchase of the 18.5% stake held by Lembaga Tabung Haji (LTH) in Bank Islam Malaysia Bhd by the end of the month. BIMB owns 51% of Bank Islam, while the remaining 30.5% stake is held by Dubai Financial Group (DFG). LTH, meanwhile, is the ultimate holding company of both BIMB and Bank Islam. Apart from its direct interest in Bank Islam, the pilgrim fund also owns a 51.5% stake in BIMB. There were reportedly no problems in the talks between BIMB and LTH, with pricing done at arm’s length on market benchmarks and in the best interest of the shareholders. The two block of shares are likely to be valued between 1.6 times and 1.8 times price-to-book value. If both talks with DFG and LTH were successful, then BIMB would fully own Bank Islam. An announcement on both stake sales is expectyed to be made by end-July.

Malaysia's BIMB Holdings Bhd has received approval from the country's central bank to begin talks with Lembaga Tabung Haji for the latter's 18.5 percent stake in Bank Islam, the country's oldest Islamic bank. BIMB, which presently owns 51 percent of Bank Islam, is also in the process of acquiring the 30.5 percent stake held by Dubai Financial Group. If it acquires both stakes, BIMB will control 100 percent of Bank Islam. Negotiations between BIMB and Lembaga Tabung Haji will be completed by the end of the year. BIMB's chief executive officer Johan Abdullah told reporters in May that the valuation of the Dubai stake was already determined, although a complete proposal had not been filed and the amount has not been disclosed.

The listed vehicle for Bank Islam Malaysia, BIMB Holdings is looking at several options to expand through overseas penetration and local expansion. According to Bank Islam Malaysia managing director Datuk Zukri Samat, the bank is still pursuing plans of expansion to Indonesia through a strategic partner with broad experience. As a fully fledged Islamic bank, the task is more challenging, he said. Moreover, the bank is also extending the time for its discussions with the Dubai Financial Group over the 30.5% stake in Bank Islam to the end of the months, said BIMB group managing director Johan Abdullah.

The board of BIMB Holdings Bhd is set to deliberate on Dubai Financial Group LLC's (DFG) sale of a 30% stake in Bank Islam Malaysia Bhd. BIMB's group managing director and CEO Johan Abdullah said that there is no official agreement yet, and that the board is going to discuss this by the end of the month. He added that the sale must have value proposition and earnings accretion for shareholders of the company as a whole. Bank Negara Malaysia (BNM) gave BIMB Holdings until June 30, 2013 to complete its negotiations to buy DFG's 30% stake in Bank Islam Malaysia. Therefore, the parties must ensure the negotiations are completed within this deadline.

Talks between BIMB Holdings and the Dubai Financial Group (DFG) over the latter's 30.5% stake in Bank Islam Malaysia have stalled. This is because a long-awaited plan by BIMB to transfer its listing status to Bank Islam is nearing fruition, a prospect DFG finds more attractive than hiving off its interest to pare down debts. The bigger picture, however, is that pilgrim fund Lembaga Tabung Haji, the parent to both BIMB and Bank Islam, is revisiting the idea of a mega Islamic bank involving a merger between BIMB and Bank Muamalat Malaysia. Bank Islam managing director Datuk Seri Zukri Samat said the lender might carry out an initial public offering (IPO) within a year or two.

BIMB Holdings has listed RM62.84m ($21m) in net profit on revenue of RM502.26m ($168m) in general because of its aspirations in the Islamic finance realm and Takaful market in particular through its subsidiary Takaful Malaysia.
Johan Abdullah, BIMB's group CEO, stated that growth in the group's net income was accomplished by higher profit from the continued growth in financing, higher non-fund based income and improved asset quality in Bank Islam, as well as higher profit generated from Takaful businesses