This article first appeared in The Edge Malaysia Weekly on January 26, 2026 - February 1, 2026

KAF Investment Bank Bhd (KAF IB) is exploring the possibility of selling KAF Digital Bank Bhd, sources say, a development that comes barely six months after the Islamic digital bank launched its app to the general public on Aug 8.

According to at least three sources, representatives of KAF IB have approached several parties, including banks, to gauge their interest.

“They were looking to sell 100% of the digital bank for RM80 million,” one of the sources tells The Edge. Another source adds that KAF IB has been talking to “multiple parties, including from elsewhere in the region”.

KAF IB CEO Rohaizad Ismail could not immediately be reached for comment.

KAF Digital Bank is operated by a consortium comprising KAF IB and four fintech and tech-based partners, namely Carsome, MoneyMatch, Jirnexu and StoreHub.

The bank is 84% owned by KAF IB, while each of the four partners holds a 4% stake.

KAF IB is part of the KAF group of companies, a diversified financial services group that is majority-owned and controlled by its founder Datuk Khatijah Ahmad. CTOS data shows that Permodalan Nasional Bhd has a 33.05% stake in KAF IB, while AKKA Sdn Bhd and AKKA Holdings Sdn Bhd hold 33.05% and 33.9% respectively.

It is unclear why KAF IB is weighing a sale of the digital bank, given that it is still in the early stages of operation. Industry sources, however, suggest the move may be driven by the high cost pressures associated with running a digital bank, with one noting that compliance and risk-related expenses are significant.

A pertinent question is whether Bank Negara Malaysia will allow the digital bank to be sold in its entirety. The central bank had undertaken a rigorous selection process, choosing just five consortiums from 29 applicants for a digital banking licence, with the successful bidders announced in 2022.

“It makes more sense to me that they (KAF IB) would pare the stake, rather than sell it whole,” says one industry source, pointing out that KAF IB would require Bank Negara approval for any shareholding change.

Adding to complications, KAF Digital Bank CEO Rafiza Ghazali will be leaving at the end of this month upon the end of her contract to take up another job, The Edge reported two weeks ago. The bank appointed Suzaini Mokhtar as acting CEO during the transition period.

Rafiza, who had helped set up the digital bank from scratch over three years ago, will be joining Fasset as its managing director of consumer banking from Feb 1. The global crypto investment platform had last October received provisional approval from Malaysian regulator Labuan Financial Services Authority to launch the world’s first stablecoin-based Islamic digital bank.

KAF Digital Bank was one of the five digital banks licensed by Bank Negara in April 2022 to cater to segments that are unserved or underserved by incumbent banks. It was one of only two to operate under an Islamic licence, the other being AEON Bank.

Interestingly, AEON Bank, which is ultimately owned by Japan’s AEON Group conglomerate, is another digital bank in which changes in shareholding can be expected down the road. Bank Negara requires AEON Bank to bring in a 30% local shareholder by 2029.

AEON Bank is operated by AEON Bank (M) Bhd, which is equally owned by AEON Financial Service Co Ltd (AFS) and Main Market-listed AEON Credit Service (M) Bhd (KL:AEONCR). AFS is a Japanese financial group with roots in the retail sector and with a strong presence in Asia.

The other three digital banks are ­GXBank, Boost Bank and Ryt Bank. KAF Digital Bank and Ryt Bank were the last of the five to open their apps to the general public, on Aug 8 and 26 last year, respectively. 

Given that they are still in the foundational phase, all five of the banks are loss-making. Bank Negara requires the digital lenders to show “a path to profitability” in their fifth year.

KAF Digital Bank reported a net loss of about RM44.4 million in the financial year ended June 30, 2025 (FY2025). Its total assets stood at RM215.66 million. In 1QFY2026, its net loss stood at RM11.83 million compared with RM7.29 million in the same quarter the year before. Total assets then stood at RM225.36 million.

KAF IB’s profit after tax from continuing operations stood at RM52.97 million for the financial year ended June 30, 2025 (FY2025) against RM62.12 million a year earlier. In 1QFY2026, profit came in at RM77.2 million compared with RM19.48 million in the same period the year before. Its total assets as at end-September last year were RM8.26 billion.

In February 2024, KAF IB sold its stockbroking firm KAF Equities Sdn Bhd to CIMB Investment Bank Bhd. KAF Equities then became known as CIMB Securities Sdn Bhd. 

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