Kuwait Finance House said to weigh sale of M’sian operations
KUWAIT Finance House KSC, the first foreign Islamic bank to operate in Malaysia, is weighing a sale of its operations in the Southeast Asian nation, people familiar with the matter said.
Kuwait Finance House is working with Credit Suisse Group AG to consider strategic alternatives for the Malaysian business, the people said, asking not to be identified as the process is private. The unit has a book value of RM1.7 billion ( US$ 478 million), according to its 2014 annual report.
The possible disposal comes after Kuwait Finance House said in March it will focus on expansion in the Middle East and North Africa. Banks in the six- member Gulf Cooperation Council will increase total loans about 10 perc ent this year as they take advantage of the region’s strong growth prospects, ratings company Standard & Poor’s wrote in an October 13 report.
A purchase would add to the US$2.7 billion of bank acquisitions in Malaysia over the past five years, data compiled by Bloomberg show. In January, CIMB Group Holdings Bhd. scrapped an allstock merger with RHB Capital Bhd. that would have valued its smaller rival at 1.44 times book value.
Net income at Kuwait Finance House ( Malaysia) Bhd, which started operations in 2005, fell five per cent last year to RM92.8 million while its parent increased profit 9.1 per cent over the same period. Representatives for Kuwait Finance House didn’t immediately respond to phone calls and an e- mail seeking comment.
The Malaysian unit had total assets of 10.5 billion ringgit at the end of December, the annual report shows. Its operations include retail and commercial banking, home financing, corporate advisory, asset management and an arm operating in the offshore financial center of Labuan. — Bloomberg