Tuesday, 16 October 2012

MBB news update

Maybank: M&A option to access Thai growth
KUALA LUMPUR: Malayan Banking Bhd, Malaysia’s largest lender,
is considering options to expand in Thailand including takeovers after raising RM3.66 billion (US$1.2 billion)
this month to boost its presence in Southeast Asia.

“There are a number of options we are assessing at the moment,” chief executive officer Abdul Wahid Omar,
48, said last week in an interview in Tokyo. “Our default position is to look at opening a branch there by 2014,
but if there are other interesting opportunities we’ll be open to look at them.”

Malayan Banking, also known as Maybank, is competing with Southeast Asian rivals that are reducing reliance on their home markets through acquisitions in the region’s faster-growing countries. The company, which already controls PT Bank Internasional Indonesia and owns smaller stakes of lenders in Vietnam and Pakistan, bought Singapore brokerage Kim Eng Holdings Ltd last year.

Maybank earned 28 per cent of pretax income from overseas operations in the six months through June 30
and plans to generate 40 per cent of operating profit from abroad by 2015, Wahid said last year, adding that he wants
the bank to enter all of Southeast Asia’s major markets by then.

“It’s hard to grow organically in Thailand,” Lim Sue Lin, an analyst at HwangDBS Vickers Research Sdn,
said by phone in Kuala Lumpur. “It’s better for them to get ready infrastructure and distribution channels via an acquisition.
It helps if the target has a good local franchise.”

Shares of Maybank have risen 4.2 per cent this year and were unchanged at RM8.94 as of 10am in Kuala Lumpur today.
The benchmark FTSE Bursa Malaysia KLCI Index has gained 7.9 per cent this year.

“It is our intention to have a full presence across all the 10 countries in Southeast Asia,” Abdul Wahid said in an interview on Oct 12.
“Within that context, the idea of raising additional capital is meant to
enable us to grow a bit more aggressive in markets like Indonesia, the Philippines and later possibly into Singapore.”

Abdul Wahid, who was attending the Institute of International Finance’s annual meeting in Tokyo,
reiterated that proceeds from its Oct 8 share sale are not meant for making a bid for Bank of Ayudhya Pcl in Thailand.

General Electric Co said last month that it’s reviewing options for its remaining stake in Bangkok-based
Bank of Ayudhya after selling an initial 7.6 per cent. Singapore’s Oversea- Chinese Banking Corp and
Malaysia’s CIMB Group Holdings Bhd are considering bidding for the stake, people familiar with the matter said Oct 5.

Other banks on the takeover path in Southeast Asia include DBS Group Ltd, the region’s biggest lender.
DBS said on April 2 that it offered to buy PT Bank Danamon Indonesia for about US$7.2 billion.

CIMB Group, Malaysia’s second-largest lender, in May agreed to buy a 60 per cent stake in
Bank of Commerce in the Philippines after making acquisitions in Thailand, Indonesia and Singapore over the last seven years. -- Bloomberg

Read more: Maybank: M&A option to access Thai growth http://www.btimes.com.my/Current ... _html#ixzz29KxVYlxe


Maybank unit aims to be key player in Asia by 2017

By Roziana HamsawiPublished: 2012/10/15Share PDF

ASSET MANAGEMENT: Bringing firms under one roof will enhance group’s regional reach

MALAYAN Banking Bhd's (Maybank) asset management companies are targeting to grow
their assets under management at about 50 per cent a year, reaching RM37 billion by 2015.

The country's largest lender is currently consolidating all its asset management businesses which are managed by
Maybank Asset Management Sdn Bhd (Maybank AM), Maybank Ventures in Malaysia, KE Capital Partners in Singapore,
Kim Eng Asset Management in Thailand and ATR Kim Eng in the Philippines under one roof.

In a press statement released yesterday, Maybank Asset Management said it is pursuing its goal
to become a key player in the asset management industry in Asia by 2017.

The consolidation of the asset management companies, it said would allow greater focus,
capitalise on economies of scale, achieve efficient collective work processes to enhance Maybank's reach across the region.

Maybank Asset Management chief executive officer Nor' Azamin Salleh said
Maybank AM is working closely with Maybank Kim Eng to support their growth plans.

He said the group's aim is to strengthen its foothold in Asean and later, Asia-wide.

"Eventually, investors will have access to our products and offerings through our in-house marketing team,
Maybank branches, private banking centres and possibilities of online mediums," he said.

Commenting on the prospects in Asia, Nor' Azamin said there are significant growth opportunities
as international asset managers are flocking here and global investors are turning to this region for investments.

"Despite the deceleration in economic growth of the region's two giants, China and India,
and other major exporting economies tempering earlier optimism, we are still confident that Asia
as a whole can bolster growth at a moderate pace," Nor' Azamin said.

He noted the positive growth forecast in early 2012 for Asia-ex Japan's Asset Management
industry growing up to US$4 trillion (RM12.32 trillion) by 2015 would augur well to Maybank AM as well.

"The formation of the Asean trading link platform would be an excellent conduit to tap the
region's growth opportunities as it allows investors an easy access to a wider investment
selection across connected markets," Nor' Azamin commented.

He added that the main drivers to be the burgeoning wealth in the region are coming from rising
foreign interest rates and new pools of assets from insurance and retirement funds.

Nor' Azamin said that the Asian region was an obvious choice, given the positive outlook on the
sustainability and potential upside of its economy coupled with a foreseeable high demand for investment products.

"In addition, the company's strategic expansion regionally is in line with that of parent company Maybank.
Being part of Maybank, enables us to tap into the group's extensive distribution network and know-how in Asia," he noted.

Read more: Maybank unit aims to be key player in Asia by 2017 http://www.btimes.com.my/Current ... _html#ixzz29KxhKpfo

Call for more time to 'tweak' Basel III

Malaysia's top two banks, Malayan Banking Bhd (Maybank) and CIMB Group Holdings Bhd,
say the Basel III package of measures to strengthen the global financial system needs more scrutiny
and are calling for more time to "tweak" the new regulations.

One of the deepest concerns is that the banking sector could lose investor appeal,
Maybank said at the Institute of International Finance annual meeting here.

The Basel III package of measures will see a gradual phase-in of the standards from next year until 2019.

"The consultative papers have been placed with the central banks,"
said Maybank president and chief executive officer Datuk Seri Abdul Wahid Omar.

Overall, while there are some elements like trade finance and small and medium enterprises (SMEs) that can be tweaked,
the banking sector must be prepared for Basel III.

"We saw it as an eventuality and that was why we raised US$1.2 billion (RM3.66 billion) blanket capital to make sure we are prepared," he said in reference to last week's successful completion of a bookbuilding exercise in relation to its private placement.

He called for a level playing field, arguing that the risk weighted assets of European banks are between
20 per cent and 30 per cent, one third that of Asian banks, which measure at between 50 per cent and 60 per cent.

CIMB Group chief executive Datuk Seri Nazir Razak said there are details that need to be looked
into as well as Basel III's implications on the banking landscape.

Basel III, he said, is crafted in the context of problems in the West,
which is heavily reliant on a global ratings framework that is biased against developing countries.

Nazir said further scrutiny shows that the new regulations will be disadvantageous to Asian banks.

"It places excessive liquidity requirements on Asian banks when there is so much of liquidity
in the region and likewise, there is too much emphasis on government bonds when there is enough in Asia."

Smaller banks also stand to suffer as Basel III means heavy compliance costs.

"The West wants to deleverage but Asia has a huge appetite for funds and we need to intermediate that or,
otherwise, it will be counter-productive," said Nazir.

Asian banks will need to boost their cooperation and make sure Basel III does not impact their capacity to give out funds.

Australia and New Zealand Banking Group Ltd CEO Michael Smith suggested providing degrees of flexibility
(to adopt Basel III), according to the various nations.

Most Asian banks can meet all the targets under Basel III, unlike their European counterparts, s
ome of which will find it difficult to impose the capital requirement.

A more pragmatic approach is needed, he said, adding that the economic structure of Asia is different.

"The sheer amount of liquidity moving around the world due to the monetary easing of
central banks in Europe or the United States creates an issue in Asia as investors chase the yields," said Smith.

The shift from Basel 1 to Basel II took 20 years while the shift from Basel II to Basel III took 18 months.

Wahid said Asean, which has set a target to become the Asean Economic Community by 2015,
needs to be served by well-capitalised and well-distributed regional banks.

Apart from Maybank, CIMB and Public Bank of Malaysia, there are the DBS Bank,
OCBC Bank and UOB Bank from Singapore and the Bangkok Bank of Thailand.

He is looking to Indonesian banks next to expand their reach to other Asean countries.

Read more: Call for more time to 'tweak' Basel III http://www.btimes.com.my/Current ... _html#ixzz29Ky6h1Uz

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