PT Bank CIMB Niaga Tbk, the Indonesian subsidiary of CIMB Group Holdings Bhd, is set to spin off its Islamic banking business into a standalone bank in the fourth quarter of this year.
CEO Lani Darmawan said the timeline is based on recent discussions with regulators, adding that the move is aimed at meeting regulatory requirements and allowing the Islamic business greater room to grow.
The new entity, to be named Bank CIMB Niaga Syariah, will have about IDR70 trillion (RM16 billion) in assets and will start with around 30 branches nationwide.
CIMB Niaga currently holds about 7% of Indonesia’s Islamic banking market, making it one of the largest players, though still behind Bank Syariah Indonesia (BSI).
Indonesia requires Islamic banking units with assets above IDR50 trillion or significant scale to be spun off into standalone banks, as part of its regulatory framework to strengthen the sector.
Following the spin-off, CIMB Niaga Syariah will operate independently but remain a 100%-owned subsidiary of CIMB Niaga.
The bank said it is also exploring growth through mergers and acquisitions and may consider an initial public offering in the future, although no timeline has been set.
Management added that the Islamic banking arm will focus on retail and SME segments, with a stronger push toward digital banking rather than branch-based services.
