No BIMB-Bank Muamalat merger in the works

Business & Markets 2013
Written by Janice Melissa Thean of theedgemalaysia.com
Thursday, 16 May 2013 08:59
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KUALA LUMPUR: BIMB HOLDINGS BHD [] has denied any plans for a
merger with Bank Muamalat Malaysia Bhd, about which there has been
market speculation of late. Conglomerate DRB-HICOM BHD [] has a
70% stake in Bank Muamalat.
Asked to comment on the rumours, BIMB group managing director and
chief executive Johan Abdullah said: “Nothing is on the table at the
current moment.” He added that it is not an option for the bank to
consider at this point.
Board discussions are due by the end of the month on BIMB buying
Dubai Financial Corp’s (DFC) 30.5% stake in Bank Islam Malaysia Bhd.
BIMB has a 51% controlling stake in Bank Islam.
Bank Negara Malaysia (BNM) has extended the deadline for BIMB’s
negotiations to transfer its listing status to Bank Islam to June 30 from
March 30.
“Suffice to say that at the current juncture the valuation and pricing
parameters have been determined but we have not got a full-blown
proposal as yet, which we are going to discuss in detail at the end of
the month,” said Johan.
On the group’s prospects, BIMB is expecting good growth ahead.
With the completion of its three-year sustainable growth plan (SGP) at
end-December, BIMB has launched its next strategic programme for 2013 to 2015, the Hijrah to Excellence (H2E) plan.
“We are targeting growth in assets at 15% per annum, growth in financing at 25% and a return on equity (ROE) of 18%,”
Bank Islam managing director Datuk Seri Zukri Samat told reporters after the AGM yesterday.
BIMB’s financing income grew by 23.4% as net financing reached RM19.5 billion for its 2012 financial year (FY12), while its
ROE rose 20.21% against the sector’s 19.6%.
The bank’s projections for 2013 to 2015 appear less robust than its FY12 performance due to several factors. “One of them
being the economic position of the country. Last year GDP grew at about 5.6%. This year the projection is lower; we are
probably looking at about 5% GDP growth,” Zukri said.
The Islamic banking sector is expected to grow by 15% from 2010 to 2015, according to the Financial Sector Master Plan, he
said. This is lower than the 20% growth seen in the segment over the last 10 years.
Zukri highlighted the rising level of household debt in Malaysia, which BNM forecast at RM754.6 billion for 2013, up 13% from
2011.
“We anticipate that Bank Negara may come out with more guidelines on responsible lending,” he said.
In terms of expanding BIMB’s regional presence, the group is still keen on the Indonesian market.
“We had already tried twice but we were unsuccessful. Having said that, we remain interested in the Indonesian market,”
Zukri said.
An attempt made with PT Bank Muamalat Indonesia Tbk failed to materialise last September.
“Our intention is to be a strategic partner with a 30% to 40% shareholding as long as we have enough board representation
and we can add value to the bank,” said Zukri.
The Indonesian banking sector is growing quickly but its penetration rate remains low, between 3% and 4%, compared with
Malaysia’s 20%, he said.
“In terms of valuation, the price [of acquiring stakes] has gone up quite substantially. We are still looking but at this juncture
we have not found the right candidate,” said Zukri.
BIMB’s focus on forming strategic partnerships will be in Southeast Asia, where it sees good potential in consumer banking,
management said.