AEON Credit Service (M) Berhad (“AEON Credit” or the “Company”) today announced that it has entered into a shareholders’ agreement with AEON Financial Service Co., Ltd (“AFS”) to undertake digital Islamic banking business through ACS Digital Berhad (“ACSD”), which is preparing to be licensed as a digital Islamic bank to carry on digital Islamic banking under Islamic Financial Services Act 2013 (IFSA).

Pursuant to the shareholders’ agreement was entered by the parties, AEON Credit shall subscribe for 175 million ordinary shares in ACSD (“ACSD Shares”) for a total subscription price of RM175 million at RM1.00 per ACSD Share. Upon completion of the subscription, ACSD will become our associated company and the equity structure in ACCD will be:

The total investment outlay and eventual share capital for the ACSD is estimated to be RM550 million during the foundational phase of up to five years from commencement of the digital Islamic digital banking business. To comply with the equity condition imposed by the Minister of Finance (MOF) (“Equity Condition”), it is envisaged that the eventual equity structure in the ACSD would be AEON Credit (35%), AFS (35%) and the Malaysian shareholder(s) (30%). The equity interest of the respective parties shall only be finalised at that point in time of compliance with the Equity Condition within a period of 5 years from
the commencement of the business and operations of the digital Islamic bank, i.e. by 7 April 2029.

The proposed joint venture signifies a timely opportunity for AEON Credit to reach a wider pool of customers through ACSD’s digital Islamic banking business by deploy combined expertise of all parties in providing financial services and solutions to customers, especially from the underserved and unserved market segments, adding dynamism to the banking landscape and contributing to the financial inclusion agenda in Malaysia.

Daisuke Maeda, Managing Director of AEON Credit said “We are directing our energies to the creation of a thriving AEON Living Zone, our ecosystem that provides seamless and onestop solution by embedding multiple services & products including retails, financing, banking, insurance and entertainments. The integration of our digital Islamic banking business onto the AEON Living Zone will enable us to meet customer lifecycle needs and expand our membership base for cross-selling activities which will drive transaction volume and market share for all our businesses.”

“Further, in line with our corporate philosophy to embrace financial inclusion for all the customer segments and to support Sustainable Development Goal 10 which aims at reducing inequality, digital banks would be better positioned than traditional channels to serve financially underserved segments such as gig economy workers or rural residents, who may lack of credit history to have the equal opportunities to receive loans or, to gain access to a wider variety of financial services.”

On the other hand, AEON Credit has also announced a proposed bonus issue of 255,307,690 new ordinary shares in AEON Credit on the basis of 1 bonus share for every 1 AEON Credit share held by the shareholders of the Company whose names appear in the Record of Depositors of the Company on an entitlement date to be determined and announced later (“Proposed Bonus Issue”).

“The Proposed Bonus Issue is to reward the existing shareholders of AEON Credit for their continued support by allowing them to participate more in the equity of the Company in terms of the number of AEON Credit Shares held with no cash outlay by them, whilst maintaining their percentage equity interest in the Company.”

“Besides, this will also improve the marketability of our shares on the Main Market of Bursa Securities, increasing trading liquidity of our shares at a lower trading price and greater participation from existing shareholders and new investors” said Daisuke Maeda, Managing Director of AEON Credit.

The Proposed Joint Venture will be fully funded by the Company’s internally generated funds and is anticipated to contribute positively towards the earnings of the Company in future over the long term after the launch of the digital Islamic banking business