Bank Islam M&A options open for strategic candidates

  • Business
  • Saturday, 06 Sep 2014

From left: Clixster CEO Noor Azlan Khamis, Zukri, Angkasa president Datuk Abdul Fattah Abdullah and Visa Malaysia country manager Ng Kong Boon.

KUALA LUMPUR: Bank Islam Malaysia Bhd, which is still aiming to be a mega Islamic bank in the country, is keeping its merger and acquisition (M&A) options open to candidates that can complement its strengths in consumer banking.

Managing director Datuk Seri Zukri Samat said the bank remained committed to its goal but wanted to narrow the search to players whose portfolios were strong in areas that Bank Islam was not in yet.

“We are not in talks with any parties at the moment, but we are looking for those that can complement us. For example, since we are strong in the consumer banking side, a bank with good corporate banking business will be a better M&A target,” he said.

Zukri was speaking to reporters after the bank concluded an agreement with the National Cooperative Body of Malaysia (Angkasa) on the issuance of a multipurpose smart card, exclusive for the 8.4 million Angkasa members as well as its 11,300 affiliate cooperative bodies.

He noted that over 70% of Bank Islam’s total portfolio was in consumer banking.

There are now over 20 Islamic bank players in Malaysia under local and foreign banking groups.

On its venture into Indonesia’s financial sector, Zukri said the bank was taking a wait-and-see approach, given the change in the country’s leadership and recent views on foreign investor participation.

“We don’t have anything concrete to announce at this juncture but we are still keen on the Indonesian market. Because there is a change of government, we are watching the situation for any changes in their financial sector,” he said.

He also said based on the bank’s projected growth for the year, the first tranche of between RM300mil and RM400mil should be sufficient.

Bank Islam is expected to issue the first tranche of its RM1bil sukuk by the end of the year.

The bank will apportion part of its sukuk issuance for its working capital, including branch expansion, financial expansion and IT system upgrades.

For this year, the bank is targeting 20% financing growth, lower than the 25% it achieved last year.

The bank is also working on the initial public offering (IPO) of a property company. Zukri said the IPO was targeted for this year and would be the bank’s fourth.

The smart card, Bank Islam Visa Debit Card-i, can be used for cashless transactions and online banking services. It features coin deposit services which enable loose change amounts to be stored directly unto the card itself.

Zukri said the bank and partners targeted to issue 600,000 cards within the next 12 months.

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