THERE is an air of uncertainty hanging over BIMB Holdings Bhd, and its annual general meeting (AGM) on Wednesday could be an interesting affair.

For one, group CEO Datuk Seri Zukri Samat — who is also managing director of BIMB’s banking subsidiary, Bank Islam Malaysia Bhd — is due to retire early next month when his contract expires, and there is still no announcement as to who his successor will be. Zukri had informed the boards as early as mid-2016 of his intention to retire.

It is understood that the bank’s board has put forward a name to Bank Negara Malaysia and the decision now rests with the central bank. Sources say Bank Islam deputy CEO Khairul Kamarudin is the board’s candidate to take over from Zukri at Bank Islam.

However, it remains to be seen whether, just like Zukri, he will also hold the top job at the holding company. An analyst points out that the CEO’s role at the BIMB level may not be so important if the long-talked-about group restructuring, which basically involves Bank Islam taking over the listed status of BIMB, eventually comes through.

Khairul, a lawyer by training, has been with Bank Islam since December 2005 and was its director of business development before he took on the deputy CEO’s post in late 2015. He has been a key figure in the transformation of the bank’s consumer banking division over the years, but has yet to hold any CEO post.

Adding to the complication is that BIMB’s biggest shareholder, Lembaga Tabung Haji (TH), is understood to prefer Datuk Badlisyah Abdul Ghani, the former CEO of CIMB Islamic Bank, to replace Zukri at Bank Islam. TH owns a 51% stake in BIMB, which in turn wholly owns Bank Islam.

Ultimately, whoever replaces Zukri needs to be endorsed by the bank’s board before finally being approved by Bank Negara. Bank Islam currently has eight board members, of whom only one represents TH, namely Tan Sri Shukor Husin, who is a non-independent non-executive director.

According to industry sources, Datuk Muzaffar Hisham, the group head of Islamic banking and CEO of Maybank Islamic, had at one point been one of the external candidates considered for the job.

Meanwhile, on top of the uncertainty over who will take the helm, there could be possible changes to the BIMB board. Sources say TH may be looking to remove certain directors from the board. At press time, TH did not respond to an email by The Edge seeking comment.

BIMB’s April 25 circular to shareholders lists, among its ordinary business in the AGM, the proposal to re-elect Tan Sri Samsudin Osman (independent non-executive chairman), Datuk Rozaida Omar (non-independent non-executive director) and Datuk Zaiton Mohd Hassan (independent non-executive director), who are retiring by rotation in accordance with Article 61 of the company’s articles of association. Being eligible, however, they have offered themselves for re-election.

Assuming TH votes against any of these directors at the AGM, its 51% shareholding ensures that it will carry through.

However, it is interesting to note that it is not that easy to “remove” a director at an AGM, especially an independent one, given that there are strict rules relating to that.

According to legal sources, Section 63(2) of the Islamic Financial Services Act 2013 states, in a nutshell, that unless there is a prior written approval from the central bank, no licensed person can appoint or elect, or reappoint or re-elect any person as its chairman, director or CEO.

And clause 10.13 of Bank Negara’s corporate governance policy states that the approval of the central bank must be obtained before (a) a financial institution removes an independent director, and (b) an independent director resigns from his position. That clause is a requirement for financial institutions, and not a guideline.

In Zaiton’s case, industry sources indicate that Bank Negara has approved her tenure as an independent director for up till early next year.

Given the rules, it would be interesting to see what transpires at the AGM and if indeed, there will be any removals.

These uncertainties surely raise concerns about continuity and stability at BIMB. Bank Islam is one of the more profitable Islamic banks in the country and it accounts for about 80% of BIMB’s earnings.

The group has one of the strongest returns on equity (ROE) in the banking sector and boasts solid asset quality. In FY2016, its ROE, based on its after-tax profit, was 15.9% while its gross impaired financing ratio stood at 0.9%, much better than the Islamic banking industry’s average of 1.3%. BIMB posted a net profit of RM559 million that year, up 2% from the previous year.

The group also owns a 59.9% stake in Islamic insurer Syarikat Takaful Malaysia Bhd.