Malaysia's Bank Muamalat to raise up to 1 bln rgt via sukuk

May 25 (Reuters) - Malaysia’s Bank Muamalat will set up a 1 billion ringgit ($243.4 million) sukuk programme, after the Islamic lender said on Wednesday it would redeem 400 million ringgit worth of subordinated sukuk on June 15.

Bank Muamalat’s new sukuk programme has loss-absorption features to meet Basel III criteria, qualifying as Tier 2 capital, rating agency RAM Ratings said in a regulatory filing.

The bank is 70 percent owned by conglomerate DRB-Hicom , while the remaining shares are held by Malaysia’s sovereign wealth fund Khazanah Nasional Bhd.

In February, Bank Muamalat and Malaysia Building Society Bhd called off merger talks that would have created one of the country’s largest standalone Islamic banks. ($1 = 4.1080 ringgit) (Reporting by Bernardo Vizcaino; Editing by Eric Meijer)