WHOLESALE BANKING | Cesar Tordesillas, Indonesia

Bank Islam Malaysia looking to buy Indonesian banks

Bank Islam Malaysia is still keen on buying a stake in a Islamic financial institution in Indonesia although no decision has been made on potential Indonesian acquisitions.

It is still awaiting further clarification on the country's shareholding regulations for commercial banks, according to BIMB Holdings Bhd group managing director and CEO Johan Abdullah.

BIMB Holdings has a 51% stake in Bank Islam Malaysia, with another 30.5% owned by the Dubai Financial Group LLC and 18.5% by Lembaga Tabung Haji.

Bank Islam Malaysia was reported to be looking to buy a stake in Indonesia's PT Bank Muamalat, but reports said Bank of Indonesia might impose new caps on single-shareholder stakes in the country's commercial banks as early as this month.

Under the present regulatory framework, an investor, including a foreign party, can own up to 99% of an Indonesian commercial bank.

“I think we need to constantly engage with them (Indonesian authorities) because we don't want to be caught in a situation where we put in money, and later on, we don't know what is the downside,” said Johan.

Johan pointed out that the group liked the Indonesian financial market as it was quite robust. He also said no decision had been made on a potential public listing of Bank Islam Malaysia.

“It is not in the pipeline. We are still exploring. We want to know if the present structure is right. How to create value,” he said.

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