Abu Dhabi Islamic Bank eyes $1.1 billion stake in Indonesia's top Islamic lender

ADIB stake in BSI: Abu Dhabi Islamic Bank (ADIB), the largest Islamic bank in the United Arab Emirates, is reportedly in talks to acquire a significant stake in Indonesia's leading Islamic lender, Bank Syariah Indonesia (BSI).  This potential move reflects ADIB's intention to capitalise on the burgeoning Islamic banking market in Southeast Asia.

ADIB is considering a minority stake purchase in BSI, with an estimated value of $1.1 billion, news agency Reuters reported, quoting sources. This could translate to a 15 per cent ownership position acquired from Bank Rakyat Indonesia (BRI), BSI's current majority shareholder.

The discussions are considered to be in their early stages, and no definitive agreement has been reached.  However, the potential deal underscores the growing importance of Islamic finance in Southeast Asia. This region, with a population exceeding half a billion people across 11 countries, presents a significant market opportunity for Islamic banking services. Indonesia, the region's economic powerhouse, boasts one of the world's largest Muslim populations, making it a particularly attractive market for ADIB.

Indonesia's Booming Islamic Finance Sector

According to the Islamic Finance Development Report published by Indonesia's financial services authority (OJK) in 2023, the country's Sharia financial assets reached a staggering $163 billion in July 2023, representing a 13 per cent increase compared to the previous year. This robust growth highlights the immense potential for Islamic banking services in Indonesia.

(With Reuters inputs.)