DRB-HICOM Bhd has explained that its expression of interest to Bank Islam Malaysia Bhd (BIMB) was only in exploring a possible merger between it and Bank Muamalat Malaysia Bhd.

It said it did not express an interest in selling its 70 per cent stake in Bank Muamalat to BIMB.

A proposed merger will witness the emergence of a mega Islamic bank and is in line with the government’s call to reinforce Malaysia’s position as a leading international centre for Islamic finance and create a home grown bank, it said in a statement.

DRB-HICOM said as shareholder of Bank Muamalat, it is interested in exploring the possible merger between Bank Muamalat and BIMB, and accordingly had submitted its interest to the latter.

However, DRB-HICOM has yet to commence any exploratory discussions with BIMB.

It made the explanation following reports that it was interested in selling its 70 per cent stake in Bank Muamalat to BIMB.

DRB-HICOM said 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.

The total assets of the overall Islamic banking sector (including development financial institutions) amounted to RM350.8 billion as at the end of 2010, an increase of 15.7 per cent from 2009.

The Islamic banking sector (including development financial institutions) now accounts for over 20.8 per cent of the overall banking system in terms of assets, financing and deposits.-- Bernama

KUALA LUMPUR: BIMB Holdings Bhd has confirmed receiving notification from Khazanah Nasional Bhd and DRB-HICOM Bhd on the sale of their stake in Bank Muamalat Malaysia Bhd to the company.

Its group managing director/chief executive officer Johan Abdullah said he will bring up the matter at the board meeting on May 25, for further discussions.

"They want to sell and have identified us as a potential buyer," he told reporters after the company's annual general meeting here yesterday.

Johan said if the board agrees to the proposed acquisition, BIMB Holdings will seek approval from Bank Negara Malaysia, before proceeding to negotiate with Khazanah Nasional Bhd and DRB-HICOM Bhd.

A news report last month stated that Khazanah Nasional plans to sell its 30 per cent stake in Bank Muamalat as part of its mission to gradually divest all its non-core holdings and assets.

DRB-HICOM, which has a 70 per cent stake in Bank Muamalat, needs to sell down its holding to 40 per cent, to meet Bank Negara requirements. - Bernama