Bank Islam Malaysia a name that has been synonymous with Shariah-compliant banking is now once again creating a new milestone by becoming the first pureplay full-fledged Islamic financial institution listed in the Main Market of Bursa Malaysia.
With the listing Bank Islam Berhad will assume the listing status from its parent company BIMB Holdings Berhad which also marks the completion of the group’s restructuring exercise, which involved various activities including a private placement exercise, a scheme of arrangement to settle outstanding warrants, and the internal reorganisation of subsidiaries. These exercise will lead to a business realignment measure which will see a distribution and capital repayment exercise involving distributing BHB’s entire shareholdings in Bank Islam and Syarikat Takaful Malaysia Keluarga Berhad, to the shareholders of BHB, and the transfer of listing status of BHB in the Main Market to Bank Islam.
This reverse of roles will move BHB to become a wholly-owned subsidiary of Bank Islam, with Bank Islam assuming the parent company role and result in Takaful Malaysia becoming a standalone Takaful operator. Chief Executive Officer Mohd Muazzam Mohamed stated that with this exercise Bank Islam will be accorded full autonomy in undertaking and pursuing its corporate and business strategies and adopt capital management initiatives with the completion of this corporate exercise. He added, Bank Islam will now have access to a wider and diverse capital base, allowing for its efficient use towards greater support of its future expansion programmes and business growth.
“The listing also opens opportunities for investors to participate directly in the equity and future growth of the new Bank Islam Group, which includes BIMB Investment Management Berhad and BIMB Securities Sdn Bhd. Through a synergistic and holistic approach, Bank Islam aspires towards a prominent position in offering Shariah-ESG total financial solution through renowned excellence in digital banking and social finance by the year 2025” said Muazzam.
Islamic finance has seen tremendous growth over the years and is set to grow even more in coming years, the market which reported to be around US3 trillion is expected to see continuous double digit momentum. Malaysia, Indonesia, UAE, Bhahrain and Saudi Arabia are ranked the top 5 developed countries globally in Islamic Finance. This listing provides an advantageous position for Bank Islam to capitalise on the growth in the sector with its estimated market capitalisation of RM6.3 billion.
Separately, the bank is also embarking on a five-year business strategy roadmap (referred to as “LEAP25”) to deliver the promise of technology, redefine growth and work in new ways to address the unprecedented challenges brought upon by the COVID-19 pandemic. Five areas has been identified in achieving the desired goals namely in Social Finance, Wealth Management, Enterprises and Wholesale Banking, and Digital Bank.
Bank Islam has been a key proponent in advocating the Value-based Intermediation (“VBI”) and ESG considerations, the role of a societal institution will continue and provide support to its customers and the wider society.
Despite the missing confetti and sound of the gong, Bank Islam’s listing is a massive confidence booster for the nation as we climb out of the pandemic and enter the Recovery Phase. In his closing remark Muazzam was pleased with the support from investors both domestically and internationally “We received tremendous response and strong demands from domestic and international retail and institutional investors, including some of the biggest names in the investment community. On behalf of Bank Islam Group, I welcome all our shareholders and investors as we embark on an exciting future for Bank Islam and further catalyse the growth of the Islamic equity market in the country and region. We look forward to improving ratings and valuations for the new Bank Islam group.”
