The Brunei Investment Agency (BIA) has acquired Dubai-based investment firm Fajr Capital’s 29.73% stake in Brunei’s biggest financial institution Bank Islam Brunei Darussalam (BIBD).
BIBD acknowledged Fajr Capital’s role in transforming the institution into an “award-winning bank with global repute” in their announcement on January 14. The value of the sale was not disclosed.
With BIA’s acquisition, BIBD becomes wholly Bruneian-owned, with its remaining shareholders being the Brunei government – directly through the Ministry of Finance and Economy (MOFE), the Sultan Haji Hassanal Bolkiah Foundation (YSHHB) and 6,000 individual Bruneian investors.
Chairman of BIBD and MOFE Minister II Yang Berhormat Dato Seri Setia Dr. Awang Haji Mohd Amin Liew Abdullah said the bank’s transformation over the past decade has included earning a consistent A- (Stable) rating from Standard & Poor’s since 2014 and returning dividends to shareholders that are on par or better than regional competitors.
“There has been a remarkable improvement in corporate governance and accounting standards. BIBD’s transformation has benefitted the bank’s customers, employees and shareholders, and contributed significantly to local business growth and job creation in the country,” said the minister.
“BIA’s investment in BIBD will continue to build on Fajr Capital’s good work. We are excited to usher the bank to its next phase of growth and evolution. BIA’s experience in portfolio management activities and global investments will definitely help to grow the bank in the years to come.”
BIBD has achieved record profitability in the past several years, with the group posting their biggest net profit of $147 million in 2018.
BIBD was Fajr Capital’s inaugural investment in 2010, with the bank’s then managing director saying the move would bring in best practices to improve the bank’s performance domestically and internationally.
“Fajr Capital’s long-term and successful investment in BIBD validates our investment thesis and demonstrates our commitment to the markets and communities we serve,” said CEO of Fajr Capital Dato Paduka Iqbal Khan.
“BIBD is an example of Fajr Capital’s ability to structure attractive investment opportunities, develop and enable strong management teams, and support ‘domestic champions’ in their growth trajectory by creating enduring strategic, operational and financial value.”
Fajr Capital is a sovereign-backed private equity firm investing in high growth Organisation of Islamic Cooperation (OIC) markets. Its shareholders include the investment agencies of the governments of Abu Dhabi, Brunei and Malaysia.
A previous report in 2011 listed the Brunei government’s shareholding in BIBD at 45% with YSHHB owning 25%. BIBD’s accolades include winning Best Managed Bank in Brunei, the Best Retail Bank in Brunei for seven consecutive years and Strongest Bank in Brunei by Balance Sheet by the Asian Banker.