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Tuesday, 28 August 2007

MIDF may focus on Islamic banking: report

(KUALA LUMPUR) State- owned fund manager Permodalan Nasional Bhd (PNB) is mulling the possibility of making Malaysian Industrial Development Finance Bhd (MIDF) a full-fledged Islamic bank, says a report in Malaysia's Business Times, citing sources. The idea is still preliminary, but it remains a likely option after the fund launched a RM1.5 billion (S$654 million) buyout bid for MIDF, an investment bank, it said. 'That's the thinking right now. You can give it to Maybank (Malayan Banking Bhd), but how will it fit and will it create value?' MBT quoted one of the sources as saying. There has been speculation that PNB may merge MIDF and Maybank, the country's top lender. However, that could distract Maybank's current management which is busy trying to beef up the lender's overseas operations. It is also unclear how the Islamic banking plan for MIDF would fit with Maybank's own strategy. In March this year, Maybank got approval in-principle from Bank Negara Malaysia to set up an Islamic banking subsidiary. Although it does not have this currently, it is already the biggest Islamic banking player in the Asia-Pacific region, according to a survey done by the Asian Banker in January. PNB officials could not be reached for comment. MIDF started its business 47 years ago as a development finance institution, helping to finance small- and medium-sized enterprises. Today, it is a much bigger firm offering services in four core areas: investment banking (IB), development finance, asset management and industrial property. - (TBT, 27 Aug 07)

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