May 21, 2011

Bank Islam-Bank Muamalat Merger: Another Bailout, Slams PAS

Another bailout? This is the question summing up concerns by PAS vice president Salahuddin Ayub over the merger proposal between Bank Islam Malaysia Berhad and Bank Muamalat, involving tax payers’ money.

“I am afraid this is another bailout that has been the unhealthy culture in our country and which continues to burden the people,” he told the media yesterday.

Salahuddin argued that the merger idea might be mooted to rescue Bank Muamalat, which was rumoured to be in trouble, at the expense of Bank Islam, adding that his suspicioun was fuelled by absence of any official statements from Bank Muamalat over its woes.
Salahuddin said the merger would not benefit Bank Islam as it was part of BIMB Holding Bhd with Tabung Haji as its biggest share holder at 51 percent.

“What is the point of merging with Bank Muamalat? What are the benefits? Bank Islam already has 115 branches nationwide. What will it get by merging with Bank Muamalat?

"If it has only few branches, one can say it is reasonable, but Bank Islam's network spreads nationwide. Ditto Tabung Haji,” stressed Salahuddin, who is also the Kubang Kerian member of parliament.

Salahuddin reiterated that PAS was not 'comfortable' with the proposed merger because it smacked of a bail-out using public funds.
'Don't Burden Bank Islam'

Last week, DRB-HICOM, the biggest shareholder in Bank Muamalat, expressed its interest to Bank Islam on the prospect of merger with the Islamic bank, but stopped short of saying whether it would give up controlling stake of 70 percent in Bank Muamalat. The other 30 percent stake is held by Khazanah Nasional Berhad.

DRB-HICOM  claimed the merger would give birth to the region's largest Islamic bank, in line with the government’s aspiration to strengthen the country’s position as an international hub for Islamic finance.

Salahuddin however said the proposed merger was due to Bank Muamalat’s internal problems, and would only serve to burden Bank Islam.

“Bank Mualamat should be transparent in this issue. It must issue its financial status clearly, and come clean on what happens to Bank Muamalat,” he urged.

"Why use Bank Islam to take over such a troubled bank?” he asked.

Salahuddin said he would bring the matter to the parliament next week, as well as send a letter to the Public Accounts Committee chairman to compel Bank Muamalat to disclose its financial statements.
- Harakahdaily

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