KUALA LUMPUR, Feb 13 – Bank Islam, the second largest syariah bank in Malaysia, is in early talks to buy a stake in PT Bank Muamalat Indonesia, Business Times reported today.

Middle Eastern financial institutions such as Islamic Development Bank, Boubyan Bank Kuwait and a Saudi investment holding firm Sedco own 75 per cent of Bank Muamalat and are looking to sell down their holdings, Business Times said citing a source.

The newspaper also said that Indonesia’s central bank was keen to see an Islamic bank take up a stake in Bank Muamalat – the country’s oldest Islamic bank.

Bank Islam is a 51 per cent owned unit of Malaysia’s Islamic financial group BIMB Holdings Bhd, which has earlier said it was not keen on a Bank Islam-Muamalat union.

A Bank Islam official said the bank was interested in expanding into Indonesia but declined to say if the intended acquisition would be Bank Muamalat.

Qatar Islamic Bank pulled out of the bidding race for a majority stake in Bank Muamalat, banking sources said in July last year, leaving Standard Chartered Plc as the sole remaining bidder.

Shares of BIMB rose 1.38 per cent to RM2.21 (US$0.73) as of 0230 GMT. – Reuters