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Saturday, 11 August 2007

KFH eyeing RHB Islamic branches

PETALING JAYA: Kuwait Finance House (Malaysia) Bhd (KFH) is believed to be in talks again with the Employees Provident Fund (EPF) to buy 35 to 50 branches of RHB Islamic Bank Bhd. A source said talks were under way but “not at an advanced stage'' and that this time around, KFH was only interested in the branches and not in taking equity in RHB Islamic. RHB Islamic has about 200 branches via RHB Bank. KFH has only two and intends to set up a network of 40 to 50 branches over the next four years to compete with rival Saudi Arabia’s Al Rajhi Bank, which has over a dozen branches. Al Rajhi also wants to expand its network to 50 by 2010. Sources said the best way to expand its network was to leapfrog by buying assets as the Kuwaiti bank was eager to tap into Malaysia’s retail Islamic banking market. Now it has a strong base in Islamic investment banking and its office in Kuala Lumpur is actively structuring deals for its clients in the region. The assets are there but everything hinges on pricing, according to a source. The cash-flush KFH has not stopped trying to cut a deal with RHB Banking Group after failing in its last attempt to buy a 32.8% stake in RHB. EPF eventually won the bid and is now in the driver’s seat at RHB Banking Group. This month marks KFH's two-year presence in Malaysia, while RHB Islamic began operations in March 2005. Recently, RHB Islamic got a new chief executive officer in Jamelah Jamaluddin, who was previously deputy CEO of KFH. Separately, KFH is looking for sites to open at least three branches by year's end. The possible locations are the Pavillion Mall in Kuala Lumpur, Bukit Indah in Johor, and one in Penang. - (Star, 11 Aug 07)

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