Malaysia's BIMB gets nod to start Bank Islam purchase talks with Dubai

KUALA LUMPUR, Oct 8 (Reuters) - Malaysia's BIMB Holdings Bhd

has obtained approval from the country's central bankto start talks with Dubai Financial Group to buy out thelatter's 30.5 percent stake in the Southeast Asian country'soldest Islamic lender, Bank Islam.

"The negotiations are to be completed on or before March 31,2013," BIMB, which owns a 51 percent stake in Bank Islam and isMalaysia's second-biggest Sharia bank, said in a local stockexchange filing on Monday.

The negotiations will also include Malaysian Haji pilgrimsfund Lembaga Tabung Haji, which owns 51.76 percent in BIMB and18.5 percent in Bank Islam.

Dubai Financial Group is a unit of Dubai Group, againstwhich three banks began legal proceedings last month in anunprecedented move to secure repayment of loans in the Gulfstate. The lawsuit against Dubai Group, an investment vehicleowned by Dubai's ruler, could delay a wider deal onrestructuring $10 billion of debt.

(Reporting By Yantoultra Ngui; Editing by MuralikumarAnantharaman)


Messaging: yantoultra.ngui@thomsonreuters.com))