Islamic banking group Kuwait Finance House said today it was planning an aggressive expansion in Malaysia despite losing a recent bid to take over a local banking group.

Kuwait Finance House Malaysia Berhad (KFHMB) is one of few foreign Islamic financial institutions with a license to operate here, and managing director K Salman Younis said the group planned to open at least 10 branches a year.

"At this point in time, no target, but we want to add at least 10 branches per annum in the next few years," Younis told reporters.

The branches will be in the densely populated Klang Valley surrounding the capital Kuala Lumpur and in Malaysia's eastern coastal states, he said.

"There are no restrictions on the number of branches that KFHMB can open but it will be on a case by case basis," he said.

KFHMB, leading a consortium of Middle East investors, in March failed to acquire a stake in ailing Malaysian lender, Rashid Hussain Berhad, through which it had planned to create the world's largest Islamic bank.

"Right now ... we are just focusing on our organic growth strategy," Younis said.

KFHMB on Wednesday signed a deal with Magna Prima Berhad, a Malaysian developer and builder, to finance the development of a six-star luxury condominium development in the heart of Kuala Lumpur.

KFHMB will provide up to RM25 million in Islamic financing for Magna Prima's land acquisition and part of the construction costs.

KFHMB, which started operations in Malaysia in February 2006, in recent months has moved to expand investment into the Asian region as it seeks to develop its status as a regional Islamic banking player.

In February it concluded a US$21 million joint venture with the Singapore-based Pacific Health Care to invest in medical centres across Asia this year.

In March, it entered a property venture to develop a retail and residential site in the western city of Chongqing in China, a project the group said would play an important role in developing Islamic finance in the region.