Manama/Kuala Lumpur: Bahrain-based Islamic lender Al Baraka is in talks to buy a stake in Malaysia's Bank Muamalat, its chief executive said, with a source adding it could buy up to 49 per cent in the lender.
"Nothing has been signed, there are just talks," Chief Executive Adnan Yousif said. He said that Al Baraka had already considered buying a stake in Muamalat before the global financial crisis, but that earlier talks had been put on hold.
He said Al Baraka had not made any decisions on the purchase yet and did not elaborate on the potential size of a stake.
A person familiar with the matter said Al Baraka was looking to buy between 40-49 per cent of Bank Muamalat and that the parties were likely to sign a non-disclosure agreement by next week.
The two banks "have not reached the price negotiation stage yet," the person said, declining to be identified.
Malaysian conglomerate DRB-Hicom holds a 70 per cent stake in Bank Muamalat and state investment agency Khazanah Nasional owns the rest.
Bank Muamalat's assets totalled about $4.3 billion (Dh15.78 billion) at the end of September, according to a newspaper report.
Diversification trend
Al Baraka's interest in the Malaysian lender comes as Gulf Islamic banks seek new growth areas to diversify sources of earnings as their domestic markets mature.
Al Baraka has already said it is planning to spend $30-50 million to buy a bank in Indonesia as it seeks to expand its global footprint.
