Bank Islam lists on Bursa Malaysia

by NUR HANANI AZMAN / pic by BLOOMBERG

BANK Islam Malaysia Bhd becomes the first pure-play full-fledged Islamic financial institution listed in the Main Market of Bursa Malaysia today, taking over the listing status from BIMB Holdings Bhd (BHB).

The listing marks the completion of the BHB group’s restructuring exercise, which entails a private placement exercise, a scheme of arrangement to settle outstanding warrants, and the internal reorganisation of subsidiaries.

BHB and Bank Islam CEO Mohd Muazzam Mohamed said 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.

“With the listing, Bank Islam will 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.

“In addition, the group will have greater scale and ability to support its organic growth,” he said in a statement.

BHB announced the restructuring exercise in December 2019. The corporate exercise was reportedly delayed due to the Covid-19 pandemic.

The internal business realignment measures also include distribution and capital repayment exercise involving distributing BHB’s entire shareholdings in Bank Islam and Syarikat Takaful Malaysia Keluarga Bhd (Takaful Malaysia), to the shareholders of BHB, and lastly, the transfer of listing status of BHB in the Main Market to Bank Islam.

Concurrently, BHB will become a wholly-owned subsidiary of Bank Islam, with the Bank assuming the parent company role. This exercise results in Takaful Malaysia becoming a standalone Takaful operator with diversified and strong institutional shareholders.

Maybank Investment Bank Bhd acted as the Principal Advisor for BHB on its restructuring exercise.

According to Mohd Muazzam, 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 Behd and BIMB Securities Sdn Bhd.

He said 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.

“This listing provides an advantageous position for Bank Islam to capitalise on the growth in Islamic finance and the Islamic capital market, along with its efforts to expand the Bank’s customer base.

“With an estimated market capitalisation of RM6.3 billion, Bank Islam is embarking on a five-year business strategy roadmap (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,” he added.

Bank Islam will continuously pursue traction in its line of businesses towards achieving LEAP25 through five business drivers: Social Finance, Wealth Management, Enterprises and Wholesale Banking, and Digital Bank.

As the world continues battling the Covid-19 pandemic, the group pursues its focus on integrating the principles of Shariah, Value-based Intermediation and  Environmental, Social, and Governance considerations to remain resilient and promote financial inclusion for all.

He said it will continue to provide support and contribute to the rejuvenation of Malaysia’s economy, particularly post-pandemic and further spur the development and growth of the Islamic finance and banking industry in the era of advanced technology.

“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.

“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,” he said.