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Tuesday, January 13, 2009

Malaysia's Bank Islam identifies potential M&A partner

KUALA LUMPUR, Jan 13 (Reuters) - Malaysia's Bank Islam has identified a potential domestic merger or acquisition partner, with the aim of creating of a large Islamic bank, its managing director said on Tuesday.

The lender, the second biggest Islamic bank in Malaysia in terms of assets, has been scouring its home market and neighbouring Indonesia for a partner to boost its size and enlarge its market share.

Managing Director Zukri Samat said Bank Islam, a subsidiary of Malaysian financial group BIMB Holdings Bhd (BIMB.KL), still needs regulatory approval for talks.

"We have basically identified but no conclusion has been reached yet," Zukri told reporters on the sidelines of an Islamic economic forum. "This one is subject to regulatory approval. It could be an acquisition, it could be a merger."

He did not elaborate.

Malaysia's oldest sharia lender, Bank Islam began business in 1983 and is trying to claw back market share after heavy losses and stiff competition eroded its pioneer advantage.

(For more Reuters coverage of Islamic finance, click on [ID:nISLAMIC])

(Reporting by Liau Y-Sing; Editing by Kim Coghill)

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