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16 May 2010

Malaysian bank plans to get listed in Indonesia

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Malayan Banking Bhd (Maybank) is exploring the possibility of having a dual listing in Indonesia but says it needs regulations for such a listing of foreign companies to be allowed in Jakarta before proceeding, reported the StarBiz.

The banking group is also expanding its branch network overseas, where it plans to open more branches in China, Cambodia and the Philippines.

“The focus of Maybank will be organic growth,'' said president and CEO Datuk Seri Abdul Wahid Omar at the company's EGM here.

Wahid said there were several advantages of having a listing in Jakarta's IDX and one of them was to create better visibility for Maybank there.

Wahid said Maybank would be adding three more branches to its current eight in Cambodia.

It will also be converting its representative office in Beijing to a branch and looking to open two more branches in Chengdu and Shenyang in China.

“Our presence there will to support our corporate customers from Malaysia, Singapore and Indonesia,'' said Wahid in explaining why Maybank would be opening more branches in China.

In Indonesia, its subsidiary Bank Internasional Indonesia (BII) opened 11 new branches in the first quarter and the plan is to have just under 300 by the end of June and 433 in a couple of years.

Wahid said the optimal size is 450 branches to capture most of the growth in the Indonesian market.

The bank is also looking to add five more branches in the Philippines to expand its network there to 50 branches.

At Maybank's EGM, shareholders approved the bank's dividend reinvestment plan (DRP).

The DRP, which will offer shareholders the option of receiving their dividends either in cash or new shares in the company, is important for Maybank in meeting future Basel 3 capital requirements, which will come into force at the end of 2012.

As Maybank does not have a holding company, its equity capital ratio under Basel 3 would have been penalised by its cost of investments in subsidiaries.

Maybank has ample capital, with Tier 1 capital of 14.5 percent.

Under the new Basel 3 rules, its capital equity ratio would drop to 6.4 percent given that it does not have a holding company structure.

“The DRP is a way for us to conserve capital,'' Wahid said.

With the DRP, Wahid said Maybank could still pay out dividends at a ratio of 40 percent to 60 percent and therefore allow shareholders to invest a big portion of that money back into the company.

Maybank needs fresh approvals from the CEO Datuk Seri Abdul Wahid Omar relevant authorities everytime it issues a DRP.

On the group's financial performance, Wahid said the fourth quarter should be good but this being the company's financial year-end, adjustments needed to be made.

He added that the fourth quarter would have less funding gains as it did than in the first nine months.

Furthermore the ringgit has not performed as well against the US dollar as it did in the company's third quarter.

“There will be less of that and based on that the numbers may not be as high,'' Wahid said.

On writedowns in Pakistan, Wahid said the group's fair value exercise would take place at the end of its current financial year in June, adding that the group did not have much exposure to highly indebted euro zone PIIGS countries (Portugal, Italy, Ireland, Greece and Spain). “It's manageable and we are not affected,'' he said.


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