Malaysian banks are looking out for alternative growth strategies for their Islamic operations, after a proposed three-way merger was called off.
The planned merger of Malaysia’s CIMB Group Holdings, RHB Capital, and Malaysia Building Society (MBSB) was scrapped off last month after a drop in the price of CIMB stock complicated a proposed share swap deal with RHB Capital.
The merger would lead to the creation of one of the world’s largest Islamic banks with $190bn in assets.
MBSB, a non-bank lender and the smallest of the three firms, is now looking to convert itself into a full-fledged Islamic lender.
The lender has unveiled plans to convert existing conventional financial products into Islamic products and launch new ones to close the gap with competitors.
RHB intends to double its sharia financing assets to 30% of the total by 2017. At the same time, the lender is exploring increasing its Islamic finance product range.
CIMB Islamic, the Islamic unit of CIMB, is also planning to introduce new sharia-compliant products as well as is open to acquisition deals, said chief executive Badlisyah Abdul Ghani.
Moreover, the company is reviewing its Asia-Pacific operations, in an aim to reduce costs in its investment banking arm by a third.