Sunday, February 17, 2008

Bank Muamalat to have new CEO, chairman

(The lead story of today's (Feb 18, 2008) of The Malaysian Reserve)

Bank Muamalat Malaysia Bhd, which saw DRB-Hicom Bhd acquiring a 70% stake in the bank in October last year, will see changes at the top management level soon.

It is learnt that following the acquisition of the stake from Bukhary Capital Sdn Bhd in a RM1.07 billion share deal, the bank has been searching for a new CEO to further push its transformation plan. The management revamp will also see a change in the chairmanship of one of the smallest Islamic banks in the country. Bank Muamalat’s assets total about RM13 billion currently.
The bank has been in the limelight since DRB-Hicom got an offer from Bukhary Capital, owned by tycoon Tan Sri Syed Mokhtar Al-Bukhary, to sell its entire stake in the bank. The balance 30% stake in Bank Muamalat is currently held by Khazanah Nasional Bhd.
The Malaysian Reserve understands the bank’s current chairman Datuk Ismail Shahuddin will not be renewing his contract when his term expires at the end of next month, while CEO Datuk Abdul Manap Abdul Wahab is already on leave pending his last day at the bank at the end of this month. The two, formerly from Malayan Banking Bhd, came on board at Bank Muamalat in 2005.
Sources said prior to their appointments, the bank was experiencing a downtrend in its performance, as shown by the deterioration in its net profit of RM18 million in financial year (FY) 2001 to its first-ever net loss in 2004.
However, under their leadership, the bank had managed to return to the black in FY05 and registered a huge improvement in its net profit to RM32 million. The strong showing continued in FY06, with its net profit increasing 130% to RM73.9 million. This was mainly attributed to strong earnings from its retail and wholesale businesses as well as enhanced asset quality management. Revenue in FY06 rose to RM627.2 million f rom RM471.9 million previously.
The purchase of Bank Muamalat by DRB-Hicom will see Syed Mokhtar cementing his control of the DRB-Hicom group, of which he already owns about 15%.
The deal, expected to be completed by the first quarter of this year, values the bank at RM1.6 billion or more than double the value it was when Bukhary Capital bought a 30% stake in early 2004 from Commerce Asset Holdings Bhd.
Established in 1999 following the merger between Bank Bumiputra Malaysia Bhd and Bank of Commerce, the bank absorbed the Islamic banking assets of the two banks. It was then, one of only two Islamic banks operating in the country, with the other being Bank Islam Malaysia Bhd.

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