This is potentially delivering a blow to Malaysia's Bank Islam, which has been eyeing getting a stake in Muamalat through the rights issue to tap Indonesia's potentially vast Islamic banking market.
"All of our major existing shareholders have given their commitment to take part in the rights issue," said Andi Buchari, Muamalat's finance director, in an interview with Reuters.
Muamalat's major shareholders are Saudi-based Islamic Development Bank with 28.01 percent, Kuwait's Boubyan Bank with 21.28 percent and Saudi Arabia's Sedco Group with 21.28 percent. The rest is owned by institutional and retail investors.
The bank aims to sell 850 million new shares, higher than its previous statement of 820 million, at 1,161 rupiah a piece.
Muamalat, which is the country's oldest Shariah bank, is eyeing 2010 full year profit of 240 billion rupiah, more than double last year's 109.07 billion rupiah, Buchari said. Planned loan disbursement is 16 trillion rupiah by the end of the year.
"We aim to increase our assets up to 19 trillion rupiah this year by pushing up loan growth into industry," said Buchari, adding the bank's assets in 2009 were at 16 trillion rupiah. Shareholders are keen to see how Muamalat can grow in the next two to three years, said Buchari. He said Bank Islam's only chance now to buy a stake was to talk with existing shareholders.
Bank Islam declined to comment.
Bank Muamalat said in February it wanted to raise 1 trillion rupiah from a share sale to double its capital base and allow it to attract new business.
Buchari said that after the rights issue the company's capital adequacy ratio will rise to 16 percent from 10 percent now. The company is also eyeing dollar sukuk bonds next year to further strengthen its capital. However, he declined to give details as the plan is still at an early stage.
Indonesia, which has the world's largest Muslim population, is seen as the next big market for the $1 trillion Islamic finance industry as growth matures in its traditional base of the Middle East and Malaysia.
Buchari said the Shariah banking sector's growth will be above 30 percent, continuing a trend last year as many conventional banks open new Shariah units.
"It's higher than the conventional banking sector which will only grow about 10 percent this year," Buchari said.
However, he acknowledged assets are still small and urged Indonesia's tax office to give Shariah banks some tax incentives, adding the central bank could also give an exemption on the level of capital adequacy ratio needed.
