Malaysia's biggest lender by assets Malayan Banking Bhd (Maybank) is presently in discussions with Indonesian regulators to extend a deadline to reduce its stake in Bank Internasional Indonesia (BII), its chief executive officer said on April 12. Maybank was given until end of June to cut its stake in BII to 80 percent from 97 percent currently. It has so far managed to sell 0.5 percent of its stake in the open market.
"We have been given until June to bring our stake down to 80 percent. Clearly, compliance with that requirement will need (more options) other than a market placement," Abdul Wahid Omar told Reuters in an interview on Tuesday.
Speaking on the sidelines of the annual Invest Malaysia conference, Wahid said Maybank's acquisition of Singapore-based broker Kim Eng Holdings will be earnings-accretive immediately upon completion of the deal.
Asked if Mitsubishi UFJ has given any further indication as to whether it will sell its Kim Eng stake to Maybank, he said there were early indications that they would accept Maybank's offer.
"Obviously they're not making any commitments," Wahid said. "Our priority is to complete (the deal) and we are hopeful that the whole process will be completed by June," he added.
Maybank's investment in BII and more recently, its acquisition of Kim Eng was part of the "new house of Maybank."
"Come 2015, ASEAN will become an integrated economy. We are an economy of $4.5 trillion, with 600 million people and we are growing a good six percent per annum on average as an economic bloc," Wahid said.
ASEAN is a grouping of ten Southeast Asian countries, which includes Singapore, Malaysia, Indonesia and the Philippines.
"For ASEAN to prosper, ASEAN will need to have a group of large regional banks that will operate in all the markets and we want to make sure that we are one of them," he said.
The Kim Eng acquisition provides entry into six ASEAN destinations, and business alliances have already started in some of those destinations.
Maybank wants to raise about half of the $1.8 billion acquisition price in Singapore dollars, Wahid said, but added that it would depend on Singapore's market conditions.
"We will maximise fund-raising in Singapore dollars given the fact that Kim Eng is very much a Singapore-based entity," he said. "We also recognise that the market in Singapore may not be deep enough for long-term Singapore dollar funding." Asked what he thought about a consolidation in Malaysia's banking sector, Wahid said any such move would be driven by the market in that banks would survive as independent entities if they could keep their investors happy.