A plan is being floated on a “marriage” between Malaysia Building Society Bhd (MBSB) and Bank Islam Malaysia Bhd. Sources say the idea of a merger between the two is being mooted at the shareholder level of both companies, namely the Employees Provident Fund (EPF) and Lembaga Tabung Haji (LTH). A common factor the two companies have is Tan Sri Samsudin Osman, who is chairman of EPF and BIMB Holdings Bhd – Bank Islam’s listed parent company. BIMB wholly owns Bank Islam, which is its main income generator. Bankers say that if a merger is to take place, the EPF would be able to vote, unlike the situation in the failed merger with CIMB and RHB.
Bank Islam Malaysia expects a 20 per cent growth in its financing activities this year, says Managing Director, Datuk Seri Zukri Samat. He said this would be slightly lower compared with the 25 per cent growth registered last year. Zukri added that this was probably impacted by some of Bank Negara Malaysia's measures to slow down the debt growth in the household sector. On its aim to become Malaysia's first mega Islamic bank, he said the bank was open to any merger and acquisition proposal but is not in talks with any party at this point in time. Towards this end, he said the bank was looking for synergies to complement the areas that the Islamic bank is lacking, for instance, corporate banking.
Maybank Islamic Bhd has dimissed speculations that it is in talks with Bank Islam Malaysia Bhd over a potential merger and acqusition (M&A). Its chief executive officer Muzaffar Hisham said the proposed merger of three local financial institutions to create a mega Islamic bank has not prompted Maybank Islamic to rush into M&A for expansion. Muzaffar said Maybank Islamic will continue to focus on its key objective, namely humanising financial services, which has been the driver of the bank’s outstanding track record over the last three to four years. Meanwhile, Muzaffar said Maybank Islamic is optimistic of maintaining its growth momentum in the second half of the year after recording an encouraging performance in the first half.
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 largest Islamic bank, Bank Islam Malaysia Bhd, is revising its base financing rate (BFR)to 6.85% per annum from 6.6% per annum effective Friday. Bank Islam in a statement on Thursday said the revision is in line with Bank Negara Malaysia's recent move to increase the overnight policy rate (OPR) by 25 basis points to 3.25%. The last revision in Bank Islam's BFR was on May 16, 2011, when the rate was revised from 6.3 % to 6.6%.
Bank Islam Malaysia Bhd is targeting to achieve a total of 140,000 savings and investment accounts with total deposits of RM500 million in its next Al-Awfar campaign. The campaign will likely be held in the second half of this year until year-end. Following this, the bank would have a total of one million Al-Awfar accounts with total deposits of RM2.5 billion. For the next Al-Awfar campaign, more than half a million ringgit is planned to be spent on advertising and promotion. To participate, new customers are required to open accounts with a minimum deposit of RM1,000 while existing Al-Awfar account holders can top up with a minimum deposit of RM1,000. Depositors have to maintain a minimum balance of RM1,000 in their accounts at all times for a four-month period to entitle them to take part in the campaign.
Bank Islam Malaysia Bhd will spend more than RM5 million this year on its corporate social responsibility (CSR) programmes to cater for various segments of society nationwide. The CSR programmes planned this year include housing projects for the needy in Johor, which involved the rehabilitation and construction of houses for 22 families costing more than RM4 million. So far, the bank has built or rehabilitated houses for more than 151 improverished families in Kelantan, Terengganu, Kedah, Pahang, Perak and Sarawak. The bank is also looking to extend its CSR activities in Sabah as there is still a need for houses for the poor as well as basic infrastructure like surau and others.
Bank Islam Malaysia Bhd has reiterated its interest in the Indonesian Islamic banking market despite previous attempts at penetrating the world’s largest Muslim country seeing a dead-end. Managing director Datuk Seri Zukri Samat said Indonesia possessed tremendous prospects as the country, with a population of 240 million, is still underserved in the Islamic banking sector. Islamic banking penetration in Indonesia is about 3% to4%, whereby Malaysia is between 23% and 24%. There is a huge Muslim population in Indonesia but Islamic banking penetration is very low, certainly there is a lot of business opportunity there, he said.
Tan Sri Khalid Ibrahim has denied allegations of a link between his recent settlement with Bank Islam Malaysia Berhad (BIMB) over a RM66 million loan and a controversial water restructuring agreement between Selangor and Putrajaya. Last month, Khalid told The Malay Mail Online he had reached an out-of-court settlement with BIMB over a US$18.52 million (RM66.67 million) loan settlement suit, without compromising PKR or the PR coalition. He declined to give further details but it is understood that the settlement was for an amount much lower than RM66.67 million. The hastily signed MoU on the water restructuring plans between Selangor and Putrajaya has added to the intrigue surrounding the March 23 Kajang by-election, with some PKR leaders questioning the timing of the deal and Khalid’s suit settlement.
he High Court fixed case management on March 18 to allow possible settlement between Selangor Menteri Besar Tan Sri Abdul Khalid Ibrahim and Bank Islam Malaysia over two suits linked to a RM66.67 million loan to purchase Guthrie shares 13 years ago. According to Khalid's counsel S. Selvarajah, his client and Bank Islam are seeking to reach a global settlement over the matter. In 2007, Khalid had filed a suit against the bank to seek a declaration that the Al-Bai Bithaman Ajil(BBA) facility entered between them in 2001 was null and void. Khalid also sought a declaration that Bank Islam had breached the collateral contract and the BBA facility. Bank Islam then countersued Khalid, claiming that Khalid had breached its contract in the loan agreement over his purchase of the Guthrie shares.
Bank Islam Malaysia (Bank Islam) plans to open 141 branches nationwide by year-end. Managing director Datuk Seri Zukri Samat said the new branches will be opened at Jalan Chan Sow Lin in Kuala Lumpur; Bandar Enstek in Negeri Sembilan, Bukit Ibai in Trengganu, Sri Damansara, Puchong and in Johor. Nine more branches are planned for 2015. In addition to the bank's branch expansion, Zukri said Bank Islam has also enhanced its distribution channels by establishing five urban business centres, improve on internet banking and mobile banking services as well as provide more than 1,200 self-service terminals nationwide. Due to the new set of terms and conditions introduced by Bank Negara on loans, the bank suffered a 10 per cent decline in assets and loan performance.
Bank Islam Malaysia expects a 20% year-on-year growth for its financing assets this year led by its retail financing business with demand for individual and housing credit. Bank Islam will also focuse on growing its fee-based income which had been very encouraging in the recent period. Cost is a major concern for banks. There has been some softening in loan demand. Bank Islam has originally been concentrating more on owner-occupied houses rather than speculation-based buying. The bank is planning to open at least five new branches in Malaysia by the end of this year with the first one being in Kelantan. Currently, the bank has 133 branches and a total retail deposit of about RM8 billion.
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.
Bank Islam Malaysia is confident of achieving more than 15% growth in profit before tax and zakat this year compared with RM600.3 million last year. Managing director Datuk Seri Zukri Samat said consumer banking would continue to be the main contributor to achieve the target. 70% of the financing portfolio is to be contributed by consumer banking and the balance of 30% from corporate and commercial banking. For the first quarter of this year, the bank raked in profit before tax and zakat of RM151.5mil. However, Zukri said the economic growth which is somewhat slow currently and the new guidelines on responsible lending might affect the bank's financing growth.
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.
Bank Islam Malaysia is exploring opportunities to expand its business in South-East Asia, especially in Indonesia. However, the bank has not identified suitable joint-venture partners to penetrate foreign market, according to its managing director, Datuk Zukri Samat. Bank Islam was earlier reported to have held talks with an Islamic bank in Indonesia to acquire up to 40% stake in the latter. Meanwhile, Zukri said, the bank aimed to expand its operations by opening five branches nationwide by year-end. Bank Islam recently closed a deal regarding a business zakat of RM320,000 to Majlis Agama Islam Johor. Zukri said the zakat payment represented part of the total RM9.2mil for financial year 2012, based on its profit of RM600mil the previous year.
Bank Islam Malaysia Bhd (BIMB) expects its 'Dream-of-a-Lifetime' campaign, starting today to Sept 30, 2013, to increase the customers' uptake of the Al-Awfar Savings and Investment account. Just as in the previous campaign, the latest promotional initiative also offers Al-Awfar customers the opportunity to win cash prizes of up to RM1 million. To be eligible for the draw, the account holders needed to maintain a minimum balance of RM1,000 in their accounts until Dec 31, 2013. Each RM1,000 deposited will entitle the customers one entry for the prize draw. BIMB said the campaign will be opened to all existing as well as new account holders. To date, the bank has secured approximately RM1.54 billion in deposits through Al-Awfar of which 90 per cent are in Al-Awfar Savings Account.
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 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.