MALAYSIA - BANKING - Bank Islam may assume BIMB listing status - rumored to look Bank Muamalat

www.btimes.com.my - BIMB have been discussing the pros and cons of such a move. They may want to simplify the BIMB group structure, one source says.

Kuala Lumpur: Bank Islam Malaysia Bhd, the country’s oldest Islamic lender, may assume the listing status of its parent company BIMB Holdings Bhd, sources said.

BIMB owns 51 per cent of Bank Islam, from which it derives the bulk of its earnings. “BIMB have been discussing the pros and cons of such a move. They may want to simplify the BIMB group structure,” one of the sources told Business Times. (source)



Bank Islam accounts for some 85 per cent of BIMB’s profit before zakat and taxation (PBZT). The rest of the BIMB group’s earnings comes mainly from a listed Islamic insurance firm, Syarikat Takaful Malaysia Bhd (STMB), in which BIMB owns a 65.2 per cent stake.

A banking analyst from a local brokerage said it would make sense for Bank Islam to be the listed entity as investors tend to buy into BIMB for exposure to the fast-growing Islamic
banking operations.


“Having Bank Islam at the top helps matters because it stems the leakage to minority interests that happens now at the BIMB level and also gives investors direct exposure to the banking
operations rather than through the holding company,” said the analyst.

The change in structure would also improve valuations, he said, pointing out that currently there was a tendency to attach a holding company discount.

Bank Islam managing director Datuk Seri Zukri Samat, when asked about the matter in a recent interview, said: “It’s an idea the shareholders may want to consider seriously as the direct
listing will give the bank flexibility in raising capital for its future expansion.”

BIMB could not immediately be reached for comment. BIMB, listed on the Main Market in 1997, is controlled by the pilgrims fund Lembaga Tabung Haji, which also holds an 18.5 per cent stake in
Bank Islam.

Still, it remains to be seen how another major shareholder of Bank Islam, Dubai Group LLC, would feel about the bank being listed.

Dubai Group, which bought a 40 per cent stake in the bank from BIMB in 2006 for RM828 million, or RM1.20 a share, has since diluted its stake to 30.5 per cent after it did not take up its
portion of new preference shares in the bank’s last cash-raising exercise.

Its stake would be further diluted if the bank were to be listed. On the other hand, a listing could provide an exit opportunity for the group, should it want to realise its investment.

Bank Islam, which accounted for RM342 million of BIMB’s PBZT of RM399.8 million for the nine months to September 30 last year, is keen to expand into Indonesia and Bangladesh.

BIMB shares, which have gained 5.4 per cent this year, beating the benchmark FBM KLCI’s 1.9 per cent gain, last closed at RM2.14.

Source: http://www.btimes.com.my/Current_News/BTIMES/articles/20120223003210/Article/index_html - Feb 23, 2012