KUALA LUMPUR: Islamic banks in Malaysia should start merging to form stronger entities, says the chief of Bank Islam Malaysia Bhd, the country's oldest Islamic lender.
There are currently 16 Islamic banks in the country, of which 10 are local, the largest being Maybank Islamic Bank Bhd.
Maybank Islamic, with an asset size of RM59.6 bil lion, is also the region's biggest. Bank Islam has some RM31 billion in assets. (source)
Maybank Islamic, with an asset size of RM59.6 bil lion, is also the region's biggest. Bank Islam has some RM31 billion in assets. (source)
"I think it's time that Islamic banks should start merging, but I think the rule of the game is that it should be industry driven...it shouldn't be forced," Bank Islam's managing director Datuk Seri Zukri Samat said.
As competition in the industry grows keener, smal ler banks may have no choice but to look for a partner to merge with, he said.
Last week, Bank Islam's parent BIMB Holdings Bhd decided against pursuing a merger with smaller rival Bank Muamalat Bhd.
It is understood that its reason for not going ahead was the discovery that there wasn't much value to be derived from the merger.
Meanwhile, Bank Islam is continuing on its growth path and said its pre-tax profit this financial year is likely to top that of the 12-month period a year ago.
It made a pre-tax profit of RM503 million for the last financial year that spanned 18 months.
"We expect, barring any major unforeseen circum stances, that we should be abe to surpass the per formance of the last year (for the 12-month period)," Zukri said.
He was speaking to reporters after presenting zakat cheques to representatives from the Islamic Religious Council and state zakat centres here yes terday.
Its zakat payment for the 2010 financial year rose by 29.7 per cent to RM11.58 million.
June 1, 2011
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