JAKARTA: Islamic Development Bank (IDB) plans to sell its stock
ownership in PT Bank Muamalat Indonesia Tbk to raise some proceeds to
fund its business expansion in other countries, said Said Taufik Ridha,
Structured Finance Officer Public Private Partnership Division at IDB
“Overall, IDB’s fund is limited. Our mandate is to help develop sharia banks in 56 member countries. As one grows, it would be better if we invest the fund in other sharia banks in other countries, concerning our mandate,” he said last week. (source)
“Overall, IDB’s fund is limited. Our mandate is to help develop sharia banks in 56 member countries. As one grows, it would be better if we invest the fund in other sharia banks in other countries, concerning our mandate,” he said last week. (source)
Bank Muamalat is the second largest sharia bank in Indonesia by assets. Also known as the oldest Islamic-based bank in Indonesia, it booked IDR23.65 trillion assets at end of June.
IDB holds 32.82% shares of Bank Muamalat, while Boubyan Bank Kuwait holds 24.94% and Atwill Holdings Limited has 17,95%. The other shareholders have not more than 5%.
Those three major shareholders have earlier planned to release their shares for different motives. IDB’s main motivation is the internal regulation limiting ownership in a sharia bank at 20%, said Mulya Siregar, Sharia Banking Director at Bank Indonesia.
“IDB has a new regulation stating that ownership in banks should not exceed 20%. In Muamalat it has 32%, and it will decrease the shares to below 20%,” he said recently.
Concerning the IDB’s new regulation on bank ownership, Said Taufik could not give further detail. “I don’t know the detailed regulation,” he affirmed.
Boubyan Bank’s motive of divestment, in the meantime, is said to face the influence from the 2008 financial crisis, forcing the bank to limit its business only in Middle East area.
“Boubyan Bank gets the impact of 2008 crisis. Thus, it wants to recover. By limiting its expansion only in Middle East, all investment outside the area will be drawn, including from Bank Muamalat in Indonesia,” Mulya added.
Moreover, Bank Muamalat's divestment plan has to be delayed since there is no price agreement between the shareholders and potential investors, both from Indonesia and abroad. (20/T04/NOM)
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