Dubai Islamic Bank rules out taking controlling stake in Indonesian lender

Dubai Islamic Bank is the largest Sharia-compliant bank in the UAE. Ryan Carter / The National

Dubai Islamic Bank has ruled out seeking a controlling stake in Bank Panin Syariah, and its plans are limited to raising its stake in the Indonesian lender to 40 per cent from 25 per cent now, its chief executive said on Tuesday.

Dubai Islamic, the largest Islamic bank in the UAE, bought 2.42 billion shares in the listed Sharia-compliant lender in June, its first foray into Southeast Asia.

“It’s currently at 25 per cent and we want to go up to 40 per cent. That’s where it stops,” chief executive Adnan Chilwan said on the sidelines of an industry conference in Kuala Lumpur, without giving a time frame for when it would raise the stake.

In May, the bank said it hoped to reach 40 per cent before the end of the year, using its own cash to fund the purchase.

Under Indonesian rules, foreign ownership of local lenders requires regulatory approval to go above 40 per cent. Last month, Indonesia’s financial services authority said it was preparing a five-year industry blueprint that would address foreign ownership limits.

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