Malaysia's BIMB Holdings Bhd said that they are set to pay US$884 million to gain the full control of Bank Islam in a deal that will help it increase its stake in the rapidly growing banking sector. The Bank Islam is the country's oldest and largest standalone Islamic bank. BIMB currently owns 49% of Bank Islam and will pay to gain another 30.5% stake from a unit of the Dubai Group for US$550 million. BIMB said that they will acquire the remaining 18.5 percent from Tabung Haji, the domestic pilgrim fund, for US$334.6 million. Tabung Haji is BIMB's biggest stakeholder.
The Islamic financial sector in Malaysia has seen major consolidations in its sector as they seek to win bigger deals and manage growing operational costs. The financial sector has seen numerous regulatory reforms boost for its shares in the country's total banking assets.
Dubai Group said that they are currently caught up in serious financial trouble with debts estimated at US$10 billion. The Dubai Group is the financial services arm of ruler Sheikh Mohammed bin Rashid al-Maktoum's Dubai Holding Llc.
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