Islamic Development Bank (IDB) plans to sell its stock ownership in PT Bank Muamalat Indonesia Tbk to raise some proceeds to fund its business expansion in other countries.
Bank Muamalat is the second largest sharia bank in Indonesia by assets. Also known as the oldest Islamic-based bank in Indonesia, it booked IDR23.65 trillion assets at end of June.
IDB holds 32.82% shares of Bank Muamalat, while Boubyan Bank Kuwait holds 24.94% and Atwill Holdings Limited has 17,95%. The other shareholders have not more than 5%.Those three major shareholders have earlier planned to release their shares for different motives.
IDB’s main motivation is the internal regulation limiting ownership in a sharia bank at 20%. IDB has a new regulation stating that ownership in banks should not exceed 20%. In Muamalat it has 32%, and it will decrease the shares to below 20%
Boubyan Bank’s motive of divestment, in the meantime, to face the influence from the 2008 financial crisis, forcing the bank to limit its business only in Middle East area.
Moreover, Bank Muamalat's divestment plan has to be delayed since there is no price agreement between the shareholders and potential investors, both from Indonesia and abroad.
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