KUALA LUMPUR, June 11 (Reuters) - Malaysia's BIMB Holdings Bhd BIMB.KL has received approval from the country's central bank to begin talks with Lembaga Tabung Haji for the latter's 18.5 percent stake in Bank Islam, the country's oldest Islamic bank.

BIMB, which presently owns 51 percent of Bank Islam, is also in the process of acquiring the 30.5 percent stake held by Dubai Financial Group. If it acquires both stakes, BIMB will control 100 percent of Bank Islam.

Islamic finance in Malaysia, which has seen regulatory reforms boost its share of the country's total banking assets to more than 20 percent, has seen major consolidations as banks seek to manage operational costs and win bigger deals.

Negotiations between BIMB and Lembaga Tabung Haji, which manages funds for Muslim Malaysians to perform their pilgrimages to Mecca, will be completed by the end of the year, BIMB said in a stock exchange filing on Tuesday.

BIMB's chief executive officer Johan Abdullah told reporters in May that the valuation of the Dubai stake was already determined, although a complete proposal had not been filed and the amount has not been disclosed.

(Reporting by Al-Zaquan Amer Hamzah; Editing by Matt Driskill)

((alzaquan.amerhamzah@thomsonreuters.com)(+60323338039)(Reuters Messaging: alzaquan.amerhamzah.thomsonreuters.com@reuters.net))

Keywords: BIMB BANKISLAM/