KUALA LUMPUR: DRB-Hicom Bhd is exploring a potential merger of Bank Muamalat Malaysia Bhd and Bank Islam Malaysia Bhd but there are no plans to sell its shareholding in Bank Muamalat.
The company said on Friday, May 13 it had submitted a letter of expression of interest to BIMB Holdings Bhd (BIMB) to explore a potential merger of the two banks and “has yet to commence any exploratory discussions with BIMB”.
DRB-Hicom is the holding company of Bank Muamalat and it holds a 70% stake while Khazanah Nasional Bhd owns the remaining 30%.
“The interest to merge is to add value and enhance the development of Islamic finance in Malaysia which continues to register strong growth over the years,” it said.
DRB-Hicom said the total assets of the overall Islamic banking sector (including development financial institutions) amounted to RM350.8 billion at end-2010, up 15.7% from 2009.
It added the Islamic banking sector (including development financial institutions) now accounted for over 20.8% of the overall banking system in terms of assets, financing and deposits.
“A proposed merger will witness the emergence of a mega Islamic bank and is in line with our government's call to reinforce Malaysia's position as a leading international centre for Islamic finance and to create a home-grown bank,” it said.