Malaysia: PMB to go into Islamic financing

KUALA LUMPUR: Pelaburan Mara Bhd (PMB) will go into a joint venture with Saudi Arabian-based Islamic Development Bank and inject RM100mil into just-acquiredKFH Ijarah House (M) Sdn Bhd to conduct syariah-compliant financial services, targeting the commercial sector.

KFH Ijarah House will be renamed PMB Tijari Bhd and will be 80:20 owned by PMB and Islamic Development Bank.

“The Islamic finance house would manage PMB’s financial services activities,” PMB group CEO Nazim Rahman said at a press conference.

Nazim said PMB Tijari would specialise in commercial leasing and musharakah and mudarabah services. (Musharakah and mudarabah services include short, medium and long-term project financing, import financing, export financing and working-capital financing.)

In the area of commercial leasing, PMB Tijari would focus on equipment financing, particularly in the oil and gas sector as well as government-related contracts.

“There is a huge market for commercial leasing in Malaysia,” PMB chief executive officer for financing business Tengku Ahmad Badli Shah Raja Hussin said, adding that PMB Tijari already had a good track record in the business.

PMB would continue to explore opportunities to invest in other financial institutions.

“It is a natural progression for us, but we cannot reveal the details due to regulatory sensitivity,” Nazim said.

PMB currently has about RM700mil worth of assets under its management. It expected the value of its assets under management to expand to RM1.5bil by the second quarter of this year.

“We will introduce new funds including a corporate education fund to achieve that goal,” Nazim said.

PMB, the investment and asset management arm of Majlis Amanah Rakyat (Mara), has completed the takeover of KFH Ijarah House for “slightly over RM1mil” since the middle of this month.

The completion of the acquisition of KFH Ijarah House – a subsidiary of Malaysia KFH Capital Ltd – in mid-March 2014 is part of PMB’s agenda to transform itself into a leading investment and fund management institution in the country, PMB group CEO Nazim Rahman said.

Nazim revealed that PMB had acquired KFH Ijarah House at “slightly over RM1mil” on a cash-free, debt-free basis. The price PMB paid represented a slight premium of the net tangible assets of the latter, which stood at around RM1mil.

(The Star Online / 26 March 2014)

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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com