Bank Muamalat talking of merging again

Is considering a DFI as partner this time.

Bank Muamalat Malaysia Bhd has revived talks of a merger, this time with a development financial institution (DFI). Analysts said that among the possible candidates are Bank Rakyat Malaysia Bhd and Malaysian Industrial Development Finance Bhd (MIDF).

DFIs are specialized financial institutions with the specific mandate to develop and promote key sectors are considered of strategic importance to Malaysia. They include Bank Simpanan Nasional, Export-Import Bank of Malaysia Bhd, Small Medium Enterprise Development Bank Malaysia Bhd or SME Bank and Bank Pembangunan Malaysia Bhd and Bank Rakyat and MIDF.

Bank Muamalat and Bank Islam Malaysia Bhd are the only two standalone Islamic banks in Malaysia licensed by Bank Negara, the central bank.

Bank Muamalat had been in negotiations with Affin Holdings Bhd on a potential acquisition, but talks between the two were called off in March.

Bank Muamalat has had a tough time courting suitors over the past few years. It failed to strike a merger deal with Bank Islam Malaysia in 2011 and Bahrain-based Islamic lender Al Baraka Banking Group prior to that.