Malayan Banking Berhad (Maybank) on Thursday remitted $666 million (Rs 44 billion) to Pakistan (on Monday value) as payment for 15 percent shares of MCB Bank Limited. Maybank had signed an agreement for the purchase of upto 20 percent ordinary shares of Nishat Group on May 3rd, 2006.
The purchase price was reportedly Rs 470 per share for 15 percent share with a put option for 5 percent further sale within one year with Nishat Group. On Thursday, MCB Bank's shares closed at Rs 263.63 per share. It took nearly six weeks for the deal to obtain necessary approvals from the regulators in both the countries.
SBP reportedly gave its final approval on June 17, 2008 after the deal was approved by Bank Negara (BNM) Malaysia. Sources in MCB expressed their appreciation of the help given by SBP and the Ministry of Finance in final conclusion of the deal.
The remittance advise from Maybank puts to rest the anxiety and fears expressed about its unravelling due to the steep fall in share prices in Pakistan during the last six weeks due to political uncertainty amid growing economic difficulties.
Malaysia's largest financial institution has taken a long-term view as the MCB fundamental strength continues to be unaffected. With time deposits of only 10 percent compared (to 25-30 percent in the industry) and 90 percent of current and saving deposit - MCB continues to outperform its peers with low cost deposits.
Having a Reform of Assets (ROA) of four percent; Return on Equity (ROE) of 30 percent; and the lowest administrative cost among large banks, the Maybank deal will further boost the deposits of MCB and place it in an advantageous position in tight liquidity environment. The purchase price of Rs 470 per share represents 5.4 times MCB book value.
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