Wednesday, September 29, 2010

Al Baraka to spend RM618m on Indonesian, M’sian assets

By Anuja Ravendran
Bahrain-based Islamic lender, Al Baraka Banking Group, plans to spend US$200 million (RM618 million) on acquisitions and is looking at buying assets in Indonesia and Malaysia, Bloomberg reported yesterday, citing its chief executive officer, Adnan Ahmad Yousef.

Al Baraka also plans to sell US$200 million of sukuk by year-end and has appointed Standard Chartered plc as its manager for the sale, according to Bloomberg.

Al Baraka had even earlier on set its sights on Malaysia. In January, a Middle East news portal quoted Adnan as saying that the bank was talking to a Malaysian party to acquire a stake in Bank Muamalat Malaysia Bhd, which is 70% owned by DRB Hicom Bhd and 30% owned by government investment arm, Khazanah Nasional Bhd.
Al Baraka was said to be interested in buying a 40%-49% stake in the Malaysian lender as it sought new growth areas to diversify earnings amidst a maturing domestic market. Adnan had hoped to conclude the acquisition by end-2010.

However, a local newspaper had in mid-September reported that the talks had broken down as the parties could not agree on the terms.
DRB-Hicom had indicated that it was looking for a potential foreign strategic partner that will be able to bring its market to the Malaysian bank.
The Al Baraka Banking Group is is a Bahrain Joint Stock Company listed on Bahrain and NASDAQ Dubai stock exchanges, with Standard and Poors' longterm and short-term credit ratings of BBB- and A3 respectively.
The group, this year, acquired Pakistan's Emirates Global Islamic Bank Ltd, which boosted its network in the country to about 90 branches. It also began operations in Syria this year. The authorised capital for the bank is US$1.5 billion (RM4.64 billion), while total equity amounts to about US$1.7 billion.

(This story appeared in The Malaysian Reserve on 23 September 2010. The Malaysian Reserve is a daily business/finance newspaper published out of Kuala Lumpur, with a sectoral page on Islamic finance on Mondays, edited by Habhajan Singh)