Malaysia Islamic Banks Ripe for Consolidation

3 Zulhijjah 1433

Malaysia’s Islamic banks are ready for consolidation as they seek ways to cope with rising operational costs, a top official with Bank Muamalat Malaysia Bhd (BMMB) said, signalling a greater acceptance in US$143.64 billion sector for M&As.

Islamic banks in the past have often been reluctant to merge, in part due to resistance from powerful shareholders who fear a loss of control while strains in global financial markets discourage risk-taking.

Islamic finance has grown in leaps and bounds to account for 23.7 percent of Malaysia’s total banking assets although a major aspect is missing — the development of megabanks that can issue ground-breaking products in the same way as conventional banks.

More information : Business Times Malaysia