BIMB’s shares jump the most in 8 years on proposed listing of Bank Islam


BIMB Holdings Bhd’s shares jumped 8.59% to RM 4.30 yesterday on the news of a proposed listing of its subsidiary Bank Islam Malaysia Bhd.

BIMB Holdings announced it will proceed with its proposed group restructuring exercise that will unlock significant value for shareholders, as well as transfering its listing status to its subsidiary, Bank Islam.

According to a filing to the local stock exchange, the group said it received approval from the Ministry of Finance and Bank Negara Malaysia in relation to the proposed internal reorganisation and distribution, and capital repayment.

Upon completion of the proposed exercise, BIMB’s listing status will be transferred to Bank Islam, which will emerge as the one and only full-fledged Islamic financial institution to be listed in the region, enhancing its corporate stature.

“This listing will allow Bank Islam to better position itself in the Islamic finance and Islamic capital market, and capitalise on the growth of both markets in its efforts to expand its customer base,” said BIMB in a statement.

The principal advisor for the exercise is Maybank Investment Bank Bhd.

For the third quarter ended Sept 30, 2020, BIMB’s earnings continued to be depressed by allowances for impairment on financing and advances in the quarter.

The Shariah-based lender’s net profit fell 34.8% year-on-year (YoY) to RM135.81 million due to a higher net allowance for impairments, its exchange filing yesterday noted.

Revenue for the quarter was 3.6% YoY lower at RM1.33 billion against RM1.38 billion as economic activity recovered in the quarter. The group declared an interim single-tier dividend of 12.6 sen for the quarter.

BIMB stated that it has been per- severing with sustainable financial results that are within the industry’s average, while leveraging the low interest-rate environment.

“The bank also maintained its prudent stand with regard to the market outlook. A pre-emptive

impairment provision in the form of management overlay was made during the quarter in consideration of the challenging economic environment,” it stated in a filing to Bursa last month.

Moving forward, it noted that Bank Islam aims to carry on with its strategic direction, while emphasising on its support of the economy by maintaining sustained business growth, giving continuous support to the community as a whole, protecting consumers’ financial viability and leveraging digitalisation.

Despite the difficult path ahead, the bank will continue its 2020 initiatives towards preserving sustainability for its business and all stakeholders.

For the cumulative nine-month period, BIMB’s net profit fell 17.8% YoY to RM498.07 million, while turnover declined 7.6% YoY to RM3.72 billion.