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MALAYSIA
Finance
June 21, 2007

Malaysia’s first NPLs auction nets Maybank 256m ringgit
In a first of its kind for Malaysia, Maybank Bhd has used an open auction to sell non-performing loans (NPLs) for 424.8 million ringgit and make a gain of 256 million ringgit.

Its deputy president and chief financial officer, Datuk Mohammed Hussein, in announcing this Thursday, said the improvement in its net NPL ratio will be reflected in the results for its financial year which ends this month.

The two tranches of long outstanding corporate NPLs were bought by two special purpose vehicles - Gale Force Sdn Bhd, which is part of the Standard Bank of South Africa Group; and Popular Ambience Sdn Bhd, which is jointly owned by Standard Chartered Bank (Hong Kong) Ltd and Standard Chartered Bank Malaysia Bhd.

"We believe that this (open bidding) process has resulted in optimum value creation for the bank as well as its stakeholders, by obtaining predictable outcomes for uncertain assets," Mohammed said in a statement.

"It also enables our staff, particularly in remedial management and loan recovery, to focus on more income generating activities."

The auction, he said, drew 26 potential investors.

"Maybank believes that what it has done will also benefit the entire banking industry, since in the process of completing the sale, it has whetted the appetite of international investors to NPL sales and cleared any regulatory and legal hurdles to pave the way for other NPL sales to follow," he added. Bernama

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