Bank to complete acquisition by end of next month

KUALA LUMPUR: Malayan Banking Bhd (Maybank) received its shareholders’ nod for the acquisition of Bank Internasional Indonesia (BII) at an extraordinary general meeting here yesterday.

“We have the approval of shareholders and now we will proceed for the regulatory approval,” Maybank’s president and chief executive officer Datuk Seri Abdul Wahid Omar told reporters.

Maybank had earlier announced the acquisition of the entire equity interest in Sorak Financial Holdings Pte Ltd which holds a 55.6 per cent stake in BII for RM4.8 billion cash.

Abdul Wahid said Maybank expects to complete the acquisition of Indonesia’s sixth largest bank by the end of next month and subsequently it will proceed with the tender offer for the remaining 44.4 per cent stake.

Besides Indonesia, Maybank had announced two other acquisitions this year, namely in Vietnam and Pakistan, aiming to have international operations contribute 20 per cent of the group’s profit by the financial year ending June 30, 2010.

The contribution from international operations in terms of pre-tax profit continues to grow, reaching 18.7 per cent in March 2008 from 15.6 per cent in March last year.

However, Abdul Wahid said Maybank was not in talks with any more banks for acquisition purposes as it was ‘busy’ with the current series of acquisitions but the bank planned to increase its number of branches in Cambodia.

On concerns of a capital squeeze following a series of acquisitions that led to a fall in Maybank’s share prices, Abdul Wahid said: “The stakeholders have agreed and this will allow us to move forward.”

The bank will come out with its optimal capital structure to restore its capital adequacy ratio in June, said Abdul Wahid.

“We are working on it and we will get back to you.” Abdul Wahid reiterated the bank’s commitment to maintaining a dividend payout of 60 per cent as the acquisition will not affect the policy.

On other matters, Abdul Wahid said Maybank will brief Members of Parliaments (MPs) on the rationale behind the purchase of BII.

“This is unprecedented but we are happy to do it. We are looking for a suitable date,” he added.

In the Dewan Rakyat yesterday, Second Finance Minister Tan Sri Nor Mohamed Yakcop said the ministry will call on Maybank to give a briefing to MPs to explain further the purchase of the bank.

As the issue of the BII purchase by Maybank is the high price, Nor Mohamed said he does not have the precise answer as the decision to purchase was Maybank’s.

Elsewhere, Abdul Wahid said the bank is confident it can comply with Indonesian’s single-presence policy under which no single controlling shareholder can simultaneously own more than one bank.

He said Permodalan Nasional Bhd (PNB), the major stakeholder of Maybank, is not acting as an investment arm of the government like Khazanah Nasional Bhd.

PNB is instead the fund manager of several Amanah Saham unit trusts, he explained.

CIMB Group, of which Khazanah is the major shareholder, is in the midst of merging its 64 per cent-owned Indonesian subsidiary PT Bank Niaga with PT Bank Lippo Tbk.

It was reported that Khazanah and PNB could be seen as units under the ultimate control of the Malaysian government and hence could be subject to Indonesias single presence policy. — Bernama