Dubai Group unit sells stake in Bank Islam
Dubai, August 1, 2013
Dubai Financial Group, a subsidiary of diversified financial services company Dubai Group, has sold its 30.5 per cent stake in Bank Islam to BIMB Holdings, a Malaysia-based investment holding company.
The agreement was signed between DFG and BIMB on July 31 and the sale transaction was valued at $550 million.
DFG acquired a 40 per cent stake in Bank Islam for a value of $224 million in October 2006. The shareholding was reduced to 30.5% in 2009 due to DFG’s non-participation in the capital increase exercise that Bank Islam undertook at that time, said a statement.
Established in 1983 as the first Islamic bank in Malaysia, Bank Islam is currently the largest standalone Sharia-based bank in Malaysia and Southeast Asia by assets size with a network of over 127 branches.
Since DFG’s acquisition, the total assets of Bank Islam grew from MYR14.6 billion ($4.5 billion) in 2006 to MYR37.4 billion ($11.5billion) by the end of 2012 with substantial improvement in the quality of its loan book and continuous profitability.
Fadel Al-Ali, chief executive officer, Dubai Group, said: “Since our investment, Bank Islam has grown in scale and size, and is a pioneer in retail Islamic banking in Malaysia today. The sale of our stake in Bank Islam stems from a strategic plan to support broader ongoing restructuring process by selling assets at the right value.”
“BIMB Holdings, as major shareholder, has played an instrumental role in this success, and we believe that they will continue to support Bank Islam to further grow their network and market share,” Al-Ali added. - TradeArabia News Service
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