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Posts Tagged ‘Maybank

Aseambankers deals

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Points of Essence:

  • Malaysia based Aseambankers is seeking to forge an alliance with Japanese financial institutions to develop Islamic capital market products. This being part of the plan to enhance the sukuk market in Japan via the MIFC platform. As the investment arm of Malaysia’s largest bank, Maybank, Aseambankers is strategizing for a global expansion to Indonesia through Maybank’s latest aquisition of BII and also leveraging on Maybank’s strong presence in Hong Kong and Singapore. Business Times has the report.

By Roziana Hamsawi
A few financial conglomerates from Japan have expressed interest to work with Aseambankers Malaysia Bhd in developing Islamic capital market products, its chief executive officer Mohammed Rashdan Mohammed Yusof said.

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Written by Suapi Shaffaii

December 31, 2008 at 2:53 am

Maybank calls off talks with Indonesia’s Panin

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Points of Essence:

  • The Malaysian banking fraternity is bracing for yet another surprise with Maybank’s latest failed conquest. Reeling from the uncertainty of the BII deal for a banking expansion in Indonesia, this is another setback for Maybank as it sought to venture into Indonesian takaful industry. The proposed joint venture with Indonesian Panin would have given Maybank a 60% stake in Panin’s subsidiary PT Anugrah Life Insurance.
  • Citing circumstances beyond their control for the related parties not to proceed with the partnership negotiations, the bank committed to penetrate into Indonesia’s takaful industry at future opportunities.
  • However, it remains to be seen how this failure will affect Maybank’s future regional  expansion plans.
  • On another note, we have seen a string of faltered Indonesian deals for Malaysian companies lately, raising concerns on the viability of the investment ventures in Indonesia given its unfriendly investment environment.

KUALA LUMPUR: Malayan Banking Bhd (Maybank) has called off its discussions with Indonesia’s Panin on a possible joint-venture partnership to venture into the takaful industry there.

However, despite the setback, Maybank said on Wednesday it was still keen on Indonesia as a target market for its insurance and takaful expansion.

“Maybank would continue to look for possible options in developing its insurance and takaful business in Indonesia,” it said.

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Written by Suapi Shaffaii

September 3, 2008 at 3:39 pm

Maybank’s growth gathers momentum

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Points of Essence:

  • A string of Maybank’s significant acquisitions of the An Binh Bank of Vietnam, Bank Internasional Indonesia (BII) and Pakistan’s MCB Bank (formerly known as Muslim Commercial Bank) fueled concerns that it may have paid heavy price for such purchases prompted by the same overseas expansion plans by its rivals.
  • Maybank disputed the claims by asserting that the acquisition will enable Maybank to expand its regional presence in key growth markets and to establish itself as a financial services leader in the regional market.

By Rupert Walker | 30 June 2008

Malaysia’s premier bank extends its regional presence and leads the country’s drive for Islamic finance dominance.

Malayan Banking’s (Maybank) recent buying spree suggests it is in a hurry. But, says Surachet Chaipatamanont, CEO of the group’s investment banking arm Aseambankers, “Maybank’s recent acquisitions come after a long process of analysis and planning around the target markets. They are the result of the group’s deliberate strategy to enter markets with high populations and low penetration of banking services.”

Critics argue that government-owned Maybank may have succumbed to peer pressure to expand abroad so urgently, as close rivals such as Bumiputra-Commerce and Public Bank had already made overseas acquisitions. As a result, perhaps it has paid too much when it went shopping abroad.

In March, Maybank spent $133 million for a 15% stake in An Binh Bank in Vietnam. More significantly, later the same month it fought off HSBC, Bank of China and Kookmin Bank to buy Temasek’s 56% holding in Bank Internasional Indonesia (BII), the country’s sixth largest bank. It paid $1.1 billion, at a rich 4.6 times 2007 price-to-book after the Singapore investment company was forced to sell to comply with Indonesia’s “single-presence” rule. It was one of the last opportunities for a foreign bank to gain a bridgehead into the Indonesian banking market, and Maybank was especially attracted by the country’s under-developed Islamic banking sector. The purchase also made up for Maybank’s failure to capture the Indonesian Bank Permata in 2004.

Although Temasek had set two criteria – price and execution risk – it was clear that price was the more important since none of the rival bidders could be rejected for fear that they would not be able to stump up the cash or gain domestic regulatory approval. Maybank simply offered the most cash.

Then in early May, it paid $687 million for a 15% stake in Pakistan’s MCB Bank (formerly known as Muslim Commercial Bank) with an option to buy a further 5%. The deal was struck at a generous 11% premium to MCB’s stock market price and at 5.1 times book value, which was in line with the prices paid for Pakistani banks by ABN AMRO and Standard Chartered in the past two years. But unlike the two European banks, Maybank only acquired a minority stake and not control.

Nevertheless, MCB is regularly rated one of the country’s top banks and is often viewed as a proxy for Pakistan’s growth – which fits neatly into Maybank’s strategy. MCB’s net profits have grown almost eight-fold in the past four years, and it ranks as the Islamic country’s fourth largest bank by asset size. Sources close to the deal also pointed to a cultural fit between the banks and a shared ambition to develop Islamic finance.

As confirmation of its global plan, Maybank stated in a stock exchange filing on May 5 that “the proposed acquisition will enable Maybank to further expand its regional presence in key growth markets and to continue with its efforts to establish itself as a financial services leader in the regional market”.

Maybank is the largest bank in Malaysia with assets of more than $66 billion, spread across 361 domestic branches and 88 international outlets. It has significant personal banking operations in Brunei, the Philippines and Singapore, a presence in other Southeast Asian markets and in Hong Kong, London and New York, and it was the first Malaysian bank granted the right to establish a branch office in China. Through its subsidiary, Etiqa, Maybank has a substantial insurance business – both conventional and, since 2002, takaful (shari’ah-compliant) – while its other Islamic finance operations are on an expansionary path. Its Aseam group of companies engages in a wide range of corporate and investment banking activities. It is also the second-largest listed company on Bursa Malaysia (the nation’s stock exchange) with a market capitalisation of about M$46 billion ($14 billion).

Although Maybank has been aggressively pursuing acquisitions to participate in high-growth overseas markets, there is clearly some scepticism about whether it is doing it the best way. The group’s share price has been falling since it announced the BII deal, and ratings agencies have put it on credit watch.

“Maybank seems to be moving too quickly and paying too much, as if it’s frightened that it’s been left behind. It doesn’t exactly give a sense of prudent planning,” says a banking analyst at the Kuala Lumpur branch of an international bank.

Islamic finance innovator
But one area where Maybank’s strategy attracts little criticism is Islamic finance. It is now one of the largest Islamic banks in Asia Pacific. According to the Islamic Financial Services Board, Islamic finance is worth about $700 billion globally, having grown at around 15% in each of the past three years. Moody’s Investors Services attributes this rise partly to increased wealth in Islamic countries driven by higher oil prices, and where the compliance of financial products and services with shari’ah rules and principles is a big concern for many consumers.

Malaysia is by some margin the largest sukuk (Islamic bonds) market in the world, and the authorities want Islamic finance to make up 20% of its banking assets by 2010, which can be helped by Islamic banks using sukuks for long-term funding and asset-liability management. Maybank used sukuks to help develop its Islamic banking operations last year; subordinated sukuks are more favourable for capital requirements, while they also offer higher yields for investors.

In April, Maybank, through MNN Sukuk Inc, issued the first ever Regulation-S lower tier-2 10-year (non-call-five) sukuk. At 33bp over six-month Libor, it was also the tightest deal for a Malaysian subordinated borrower, and the second-tightest subordinated debt deal from Asia ex-Japan. Maybank executives took its roadshow to Hong Kong, Singapore, Abu Dhabi, Bahrain and London, and sources said that the bank successfully established relationships with several new accounts, especially in the Middle East.

In the domestic market, “Islamic banking and finance in Malaysia have progressed in tandem with the efforts by the authorities [through the Malaysia International Islamic Financial Centre] to promote Islamic financial services and make Malaysia the regional hub,” says Ibrahim Hassan, acting CEO of Maybank Islamic. But “it is not primarily to meet a religious need; instead it is being driven by a desire to offer distinctive products and services that customers want, be it in the form of pricing or product features. In the final analysis, Islamic bankers cannot take demand for granted, but must treat it as commercially-driven in order to be successful”.

Maybank has 400 branches offering both conventional riba-based products and shari’ah-compliant products, and has 12 branches dedicated to Islamic banking and finance.

Maybank took its present domestic form after the Asian financial crisis, when the government forced it to merge with Pacific Bank and PhileoAllied Bank in 2000, as part of a strategy to clean up the banking sector through consolidation.

Not everything has gone smoothly for the bank. A year ago, an embarrassing memo confirmed what everybody knew anyway – that the affirmative action policy towards promoting bumiputra participation had not expired with the end of the so-called New Economic Policy. It said that law firms that wanted to deal with the bank had to have at least three partners, and one of them had to be ethnic-Malay. Following the uproar among the country’s minorities, the Malaysian Cabinet of Ministers told Maybank to stop such practices – at least officially. Few are under any illusion that most banks continue the policy unofficially and with the government’s tacit approval.

For the past two decades, Maybank has been led by Amirsham Abdul Aziz, but in May, Abdul Wahid Omar was officially appointed as his successor, although it is still unclear if any change in overall strategy is on the cards. Meanwhile Amirsham will be working in the prime minister’s office, in charge of the economic planning unit.

Source: FinanceAsia.com

Written by Suapi Shaffaii

July 2, 2008 at 7:54 am