SINGAPORE: Indonesia's PT Bank CIMB Niaga Tbk is exploring an initial public offering of its Islamic banking arm after the unit is made independent, with a potential listing as early as 2028, two people with knowledge of the matter said.
CIMB Niaga Syariah is slated to operate as a standalone business from May 2026, the people said. A potential IPO would likely come only after it builds a track record as a separate entity, including audited financials, one of them added.
The Islamic unit could be valued at around $1 billion at the time of the potential 2028 listing in Indonesia depending on performance and market conditions, the people, who spoke on condition of anonymity, said.
It is still too early to determine an IPO size but proceeds from the potential listing would likely be used to bolster capital and fund growth and digital investments at the Islamic arm, one person said.
The timing and size of the potential offering remain subject to market conditions and regulatory processes, the people added. They also cautioned discussions remain preliminary and no final decisions have been made.
The people requested anonymity because the information is private.
CIMB Niaga declined to comment, saying it is focused on strengthening core businesses and supporting inclusive growth across Indonesia.
"At CIMB Niaga and CIMB Niaga Syariah, our focus remains on advancing our customers and society by delivering sustainable value to our customers, stakeholders, and the communities we serve, while continuing to strengthen our core businesses, enhance customer experience, and support inclusive and responsible economic growth across Indonesia," it said in an emailed response to Reuters.
The IPO consideration also reflects the lender's aim to tap growth in the world's largest Muslim-majority market.
Indonesia, Southeast Asia's biggest economy, has been pushing for greater consolidation and scale in Islamic banking, with the Financial Services Authority or OJK, the country's financial regulator, encouraging sector growth and setting out structural reforms in its 2023-2027 shariah banking roadmap.
A listing would position CIMB Niaga Syariah as one of the country's few publicly traded pure shariah lenders, potentially drawing strong domestic institutional demand as the halal economy expands.
CIMB Niaga, Indonesia's second-largest private lender, has been growing its shariah business. The Islamic unit's assets grew 7.6% to 67.5 trillion rupiah ($4 billion) in 2024 from a year ago, while financing disbursement rose 9.1% to 60.3 trillion rupiah, according to CIMB Niaga's 2024 annual report. - Reuters
