Wednesday, September 3, 2008

Bank Islam eyes Indonesia for regional expansion

By Alfean Hardy
Bank Islam Malaysia Bhd, which is eyeing both organic growth and mergers and acquisitions (M&As) to grow its business, is looking at penetrating the Indonesian market for all the opportunities it offers despite the recent problems encountered by Malayan Banking Bhd (Maybank), its managing director Datuk Zukri Samat said.
Speaking at a media briefing in Kuala Lumpur on Bank Islam's financial performance for its financial year ended June 30, 2008, Zukri said the bank would take the lessons learnt from the Maybank affair before it ventured into the Indonesian market.
"It's the obvious choice. It's very near us... also, it's a country of 250 million with the major it y Muslims. There's a lot of potential in Indonesia, especially in consumer banking and we're a retail bank and we want to export our expertise there," he added.
Asked on what Bank Islam's strategy would be, Zukri said it could either acquire a strategic stake in an Indonesian bank or acquire completely one of the country's smaller banks. "There's nothing black and white but we're expanding a lot of energy and time looking for (the right partners)," he added.
"We want, if there's a suitable partner, to merge Bank Islam with a suitable partner in order to make a bigger Islamic bank. In terms of regional expansion, the focus for now will be Indonesia. Other markets like Thailand and Singapore will come later. For now we need to prioritise," he added.
On how Bank Islam could finance any future M&As, Zukri said the bank did not have have any financial constraints.
"As of now, there's no budget yet but, as and when, we've identified and finalised our target, then we will work out our numbers," he said.
"In terms of support from our shareholders, I don't think we've got any problems. We've got big shareholders like Dubai Investment Group (DIG) and Lembaga Tabung Haji (LTH), so we don't foresee getting more capital as an issue.
"The challenge is to find the right party and partner to marry," he added. DIG and LTH hold a 40% and 9% respectively in the bank. The 51% majority stake is held by BIMB Holdings Bhd.
(The Malaysian Reserve, p5, Sept 04, 2008)