BIMB SET FOR CORPORATE REVAMP
Bank Islam will become group’s listed holding company, says CEO
BIMB Holdings Bhd is set to undergo a corporate restructuring that will involve the transfer of the company to Bank Islam Malaysia Bhd to establish the latter as the group’s listed holding company.
It is following in the footsteps of RHB Bank Bhd, Affin Bank Bhd and Alliance Bank Bhd, which had collapsed their financial holding company structhis tures in the last three years.
Only AMMB Holdings Bhd and CIMB Group Holdings Bhd have maintained their structures so far. BIMB chief executive officer (CEO) Mohd Muazzam Mohamed said the move, which would drive better efficiency for the group, would still maintain Tabung Haji (TH) as the new company’s (Newco) largest shareholder.
“Further details on the restructuring exercise are expected in the second quarter of year. It is our effort to further strengthen the company’s operations in the future.
“With the move, TH still remains the largest shareholder of the new company. Based on our discussion with TH, we remain an important investment to the fund,” said Muazzam, who is also CEO of Bank Islam, in an interview with NST Business recently. TH has a 53.82 per cent stake in BIMB, followed by Permodalan Nasional Bhd (17.5 per cent), Employees Provident Fund (12.78 per cent), and Retirement Fund Inc (2.16 per cent).
Muazzam said the restructuring exercise required that BIMB’s RM1.3 billion sukuk must be first settled and this could be done through equity financing.
BIMB was evaluating the fundraising options via equity, including a private placement exercise, he added.
“There are several options (for equity financing) that will be assessed. If we are to implement the private placement, we are confident of getting investors to be part of the group,” said Muazzam.
He said “buy” calls from analysts for BIMB indicated that its outlook was positive, thus boosting investor sentiment.
BIMB has eight “buy” calls and one “hold” with a consensus target price of RM5.04, indicating an upside potential of 17.8 per cent.
RHB Investment Bank Bhd analyst Fiona Leong said as investors got a clearer picture on BIMB’s reorganisation plans, its price-to-book value multiple would rise to levels more reflective of its resilient profits and position as proxy to the largest standalone Islamic bank in Malaysia.
“BIMB’s underlying operations continue to outpace peers while its balance sheet is healthy. Its fourth quarter results last year reaffirmed our view that the stock still offers an attractive upside, notwithstanding a 19 per cent year-to-date rise,” she said in a note.