Kuala Lampur: Bank Islam, the second largest sharia bank in Malaysia, is in early talks to buy a stake in PT Bank Muamalat Indonesia, Business Times reported on Monday.

Middle Eastern financial institutions such as Islamic Development Bank, Boubyan Bank Kuwait and a Saudi investment holding firm Sedco own 75 percent of Bank Muamalat and are looking to sell down their holdings, Business Times said citing a source.

The widely-read newspaper also said the Indonesia’s central bank was keen to see an Islamic bank take up a stake in Bank Muamalat — the country’s oldest Islamic bank.

Bank Islam is a 51 percent owned unit of Malaysia’s Islamic financial group BIMB Holdings Bhd, which has earlier said it was not keen on a Bank Islam-Muamalat union.

A Bank Islam official told Reuters the bank was interested in expanding into Indonesia but declined say if the intended acquisition would be Bank Muamalat.

Qatar Islamic Bank pulled out of the bidding race for a majority stake in Bank Muamalat, banking sources told Reuters in July last year, leaving Standard Chartered Plc as the sole remaining bidder.

Shares of BIMB rose 1.38 percent to 2.21 ringgit ($0.73) as of 0230 GMT. ($1 = 3.0285 ringgit).

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Picture of the Day

Dr Shariq Nisar, Director of Research and Operations of India’s premier shariah advisory firm TASIS and one of the senior most professionals of Islamic Finance in India, was in Malegaon on Sunday to address a seminar on "Prospects of Islamic Finance in India".

(Photo: ummid.com)