BIMB: Bank Islam has no exposure to 1MDB

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KUALA LUMPUR (May 14): BIMB Holdings Bhd (BIMB) group chief executive officer has declared that its wholly-owned Bank Islam Malaysia Bhd has "zero" exposure to the controversial strategic investment firm, 1Malaysia Development Bhd (1MDB).

"I can confirm that Bank Islam has no exposure to 1MDB," said BIMB (fundamental: 2.7; valuation: 1.8) group chief executive officer Datuk Sri Zukri Bin Samat at a press conference after the company's annual general meeting.

However, he added that its 60.31% owned insurance arm Syarikat Takaful Malaysia Bhd (Takaful) has subscribed to Islamic bonds issued by the then Terengganu Investment Authority worth up to RM85 million.

The Islamic bonds that were bought by Takaful (fundamental: 0.95; valuation: 1.5) in 2009 carries 5.25% of coupon rate which will mature in 2039.

According to Zukri, the limited exposure to the bonds would not pose "systemic risk" to the group as it is only 2% to 3% of Takaful's asset base of RM7.16 billion and is guaranteed by the government of Malaysia.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)