Dubai Group, a financial services company, announced on Thursday that its subsidiary Dubai Financial Group LLC (DFG), has signed an agreement with BIMB Holdings, concerning the sale of DFG's 30.5 per cent stake in Bank Islam. The sale transaction, which concluded on July 31, was valued at $550 million.

DFG acquired a 40 per cent stake in Bank Islam for a value of $ 224 million in October 2006. The shareholding was reduced to 30.5 per cent in 2009 due to DFG’s non-participation in the capital increase exercise that Bank Islam undertook at that time.

Established in 1983 as the first Islamic bank in Malaysia, Bank Islam is currently the largest standalone Sharia-based bank in Malaysia and Southeast Asia by assets size with a network of over 127 branches.

Since DFG’s acquisition, the total assets of Bank Islam grew from Malaysian ringitt 14.6 billion ($4.5 billion) in 2006 to MYR 37.4 billion ($11.5 billion) by the end of 2012 with substantial improvement in the quality of its loan book and continuous profitability.

Fadel Al-Ali, CEO of Dubai Group, said: “The sale of our stake in Bank Islam stems from a plan to support the ongoing restructuring process by selling assets at the right value. We are pleased that we achieved solid return on our investment. BIMB Holdings, as major shareholder, has played a role in this success, and we believe that they will continue to support Bank Islam to further grow their network.”