Focus on synergies with savvy global investor Dubai Investment Group
KUALA LUMPUR: Monday [16 October, 2006] – Bank Islam Malaysia Berhad, the oldest Islamic bank in the country, begins a new milestone today with Dubai Investment Group, a member of Dubai Holding, one of the largest conglomerates in the United Arab Emirates and with Lembaga Tabung Haji as partners.
This follows the completion of its recapitalisation exercise which involved the issue of 845 million new shares for a cash injection of RM1.014 billion. 690.19 million shares went to Dubai Financial LLC, a wholly-owned subsidiary of Dubai Investment Group (DIG), for RM828.22 million, while 155.29 million shares went to Tabung Haji for RM186.35 million. This gives Dubai Financial 40% and Tabung Haji 9% of the enlarged share capital of Bank Islam.
For Dubai Financial, this investment represents its single largest investment in the financial services sector in the Asia Pacific.
BIMB Holdings Berhad, Bank Islam, Dubai Financial and Tabung Haji signed the completion certificates at a special ceremony held at the Kuala Lumpur Convention Centre this evening and witnessed by Bank Negara Governor Tan Sri Dato’ Seri Dr Zeti Akhtar Aziz.
Also present at the signing ceremony was Dubai Islamic Investment Group (DIIG), a wholly owned DIG subsidiary which focuses on Islamic financial investments on a global scale.
Chairman of Bank Islam, Tan Sri Abdullah Tahir said in his speech that while the synergies from DIG’s sprawling business empire throughout the globe is immense, all three shareholders of Bank Islam will “each use our best endeavours” to make Bank Islam a leading domestic and international player in the Islamic banking sector.
“I also firmly believe that much can be learned from DIG’s international experience and I am confident that DIG can play a key role in helping to enhance our competitiveness in the international arena,” he added.
DIG is the global financial investor of Dubai Holding. Headquartered in Dubai, UAE, with local offices in New York, London, Hong Kong and Kuala Lumpur, the Group focuses on long and short term investments with the potential to deliver exceptional and sustainable returns.
DIG is structured as a conglomerate of investment companies with core investment expertise in the Industrial sector, Finance, Global Securities, Real Estate and Hospitality. The Group creates and manages a diversified and rapidly expanding portfolio of direct and indirect investments.
The Chief Executive Officer of DIG, Mr. Soud Ba ‘alawy, said several factors attracted DIG to Malaysia and to Bank Islam, “I think the support that Bank Islam has been getting from the Central Bank is significant to us. Malaysia’s Central Bank Governor has been doing a tremendously good job in putting together regulations that are very attractive for people like us.”
Ba’alawy added that DIG and Malaysia share the same kind of thinking in terms of economic progression, the openness to ideas and to different cultures and the attractive legal framework.
With this in mind, DIG decided to enter into partnership with Bank Islam. “It is not only Malaysia’s oldest Islamic institution but it is a strong brand and most importantly, it has very loyal customers. As a foreign investor, coming into a country like Malaysia, it is vital that we play a significant role in an institution such as this,” he said.
Tan Sri Abdullah in his speech, also said: “Our strategic alliance will no doubt enhance new market possibilities for both the DIG and Bank Islam. We see Bank Islam as the natural vehicle for DIG’s expansion into the Asia Pacific economies with dominant Muslim populations, while DIG will provide Bank Islam a solid bridge into the Middle East region. Through this natural alliance, we are optimistic that Bank Islam will help to push Malaysia into the forefront of Islamic banking.”
DIG estimates that the global Islamic finance sector is worth around US$350 billion and growing at about 16% per cent annually. As a sector it has been registering returns far superior than conventional banks at about 20 to 22 percent.