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Wednesday January 20, 2010

Bank Islam stake buyer likely a foreigner

By FINTAN NG


fintan@thestar.com.my

PETALING JAYA: The unidentified buyer of Dubai Group LLC’s 30.5% stake in Bank Islam Malaysia Bhd, a unit of BIMB Holdings Bhd, is likely a foreigner as the bank needs a shareholder that can enhance the value of its businesses.

Dubai Group LLC is the financial arm of Dubai Holding, an investment company of the emirate of Dubai. According to a press report, the unidentified buyer was completing due diligence on the unlisted bank in which BIMB holds a 51% stake.

Standard & Poor’s Equity Research analyst Alexander Chia said whoever acquired the stake from Dubai Group would have to bring something of value to the table, which meant that the new shareholder was likely from abroad.

“The rationale of having a strategic shareholder is to enhance the value of the bank. In all likelihood, this will be a foreign buyer with a profile along the lines of Dubai Group,” he told StarBiz.

Chia covers Bank Islam’s holding company BIMB for Bursa Malaysia’s CMDF-Bursa Research Scheme programme.

Meanwhile, Rothschild Malaysia Sdn Bhd managing director cum chief executive officer Piers Willis would not comment on whether the unidentified shareholder was an overseas investor when contacted. Rothschild is the advisor to Dubai Group.

Chia said Bank Islam had quite a big presence in the Islamic banking and financial services sphere and had a 68% stake in Syarikat Takaful Malaysia Bhd, which also denied media reports at its AGM in mid-November that a new equity partner was in the offing.

“In terms of assets, it is among the top two largest in the country, the other being Maybank Islamic,” he said.

However, Chia said despite the imminent entry of a new shareholder, the bank had not made clear what its strategy would be like in the foreseeable future.

“There has been talk over the last couple of years of expansion via mergers and acquisitions but the bank has not made clear how this will be done,” he said.

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