KUALA LUMPUR/DUBAI (Reuters) – Malaysia’s top lender, Maybank, said it was not in talks to buy a Dubai investor’s stake in Bank Islam, a deal which would have created the largest sharia bank in the Asia-Pacific region.
Earlier on Tuesday, several Islamic bankers in Malaysia had said that Maybank’s Islamic subsidiary wanted to acquire a stake in Bank Islam, the country’s second-largest sharia lender.
Dubai Islamic Investment Group, which is part of Dubai Group, was interested in selling its 40 percent stake in unlisted Bank Islam to Maybank Islamic, the banking sources added.
However, when asked to comment on the possible acquisition, a Maybank spokesman told Reuters the group was “currently not in talks with Dubai Group, as speculated”.
Approached to comment on whether it was selling its stake, Dubai Group said that it “is a long-term strategic investor” in Bank Islam.
“We are proud to be associated with the bank’s impressive turnaround over the past two years and are confident of its potential to grow further,” the group said in a statement.
“We believe that Bank Islam is well positioned to capitalise on the opportunities presented by the rapid growth of Islamic finance.”
Maybank Islamic is the biggest Islamic bank in Malaysia, which has one of the world’s most developed Islamic financial industries, thanks to a vast sharia bond market and a well established regulatory framework.
Talk of a Maybank Islamic-Bank Islam merger came as several other banks in the rapidly growing sector are also seeking acquisition opportunities to boost their size — although a sharply slowing global economy could put a brake on expansion plans.
Kuwait Finance House Malaysia, a subsidiary of Kuwait’s top Islamic bank, and Islamic Bank of Asia, which is backed by Singapore’s DBS, have said they are on the lookout for acquisition opportunities in the region.
“This matter comes under the purview of the shareholders, and in view of this, I am in no position to give you any response,” Bank Islam Managing Director Zukri Samat said in a statement when asked to comment on talk of the shareholding change.
Zukri had said in January that the lender, a subsidiary of Malaysian financial group BIMB Holdings Bhd, had identified a potential domestic merger or acquisition partner although it needed regulatory approval for talks.
Maybank Islamic acting chief executive Ibrahim Hassan declined to comment.