KUALA LUMPUR: AEON Credit Service (M) Bhd has entered into a shareholders' agreement with Aeon Financial Service Co Ltd to undertake digital Islamic banking business.

       In a statement today, the financial services company said this will be done via ACS Digital Bhd (ACSD) which is preparing to be licensed as a digital Islamic bank under Islamic Financial Services Act 2013 (IFSA).

       Aeon Credit will subscribe to 175 million ordinary shares in ACSD at RM1.00 per share. On completion, ACSD will become an associate company, the statement said.

       The total investment outlay and eventual share capital for ACSD is estimated to be RM550 million over the initial five years when the digital Islamic banking business commences, the statement said.

       It is envisaged that the eventual equity structure in ACSD would be AEON Credit (35%), Aeon Financial Service (35%) and Malaysian shareholders (30%), the statement said.

       This will be finalised within a period of five years from the commencement of the digital Islamic bank operations. The proposed joint venture will be fully funded by internally generated funds.

       Aeon Credit managing director Daisuke Maeda said the integration of digital Islamic banking business will enable it to meet customer lifecycle needs and expand its membership base for cross-selling activities. This will drive transaction volume and market share for all its businesses.

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       "Digital banks would be better positioned than traditional channels to serve the financially underserved segments,” he said. - Bernama