Affin makes its move

PETALING JAYA: Affin Holdings Bhd’s resolve to explore a possible acquisition of a stake in Bank Muamalat Malaysia Bhd seems to reflect an aspiration to become a bigger player, especially in the Islamic banking sector.

While news of Affin getting the authorities’ approval to start negotiations to potentially buy into Bank Muamalat had caught some analysts by surprise, there was no denying by market observers that a positive conclusion of the deal would up Affin’s game in the niche sector.

Kenanga Research, for one, which called the deal a potential synergistic acquisition, said in its report: “We believe Affin has identified Islamic banking as a growth area in which it wants to build its existing position in the medium to long term.”

“In our opinion, this is a good move and probably a natural progression, given that the acquisition of Bank Muamalat will be key to the group becoming a bigger player in Islamic banking,” the brokerage explained, pointing out that the potential acquisition would not only expand Affin’s existing branch network and asset and customer base, but it would also enable Affin to tap into Bank Muamalat’s existing business collaborations with DRB-Hicom Bhd, such as those in relation to Pos Malaysia Bhd and Proton Holdings Bhd.

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