IslamicFinance.de

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.

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.

Bank Negara Malaysia (BNM) has extended the deadline for the negotiations among BIMB Holdings Bhd, Dubai Financial Group LLC and Lembaga Tabung Haji (LTH) over the Bank Islam Malaysia Bhd stake to July 31. Following the extensión of the deadline, a formal approval shall be sought for the proposed acquisition as mutually agreed among the parties. BIMB already owns 51% in Bank Islam. A 30.5% stake is with the Dubai Financial Group (DFG) while 18.5% is held by Lembaga Tabung Haji (LTH). BIMB is seeking to purchase LTH's stake in Bank Islam. LTH also owns a 51.5% stake in BIMB. BIMB may have to fork out RM2.7bil to own 100% of its unlisted banking unit Bank Islam.

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.