Malayan Banking Bhd (Maybank) is maintaining its 60% dividend payout policy, despite having to pay hefty sums for stake acquisitions in three foreign banks this year. Maybank’s newly appointed president and chief executive officer Datuk Seri Abdul Wahid Omar said: “We will be able to commit to the dividend payout, barring unforeseen circumstances.” He said Maybank was in the midst of finalising an optimum capital structure, which will be announced by end-June, to maintain its capital adequacy ratio (CAR) and liquidity after funding for three stake acquisitions in foreign banks.
Speaking to reporters after Maybank’s EGM yesterday, Abdul Wahid said: “We would like to keep our CAR between a comfortable 11% and 12%.” As at end-2007, Maybank’s CAR stood at 13.32%, which was higher than the optimal level of 12% for banking groups in the country.
At the EGM, shareholders had voted in favour of Maybank’s proposed acquisition on the entire stake in Sorak Financial Holdings Pte Ltd, which owns 55.6% of Bank Internasional Indonesia (BII), for RM4.8 billion, valued at a 4.6 times price-to-book.
Maybank would make a tender offer to buy the remaining 44.4% stake in BII, which would cost the banking group another RM4 billion, after obtaining the approval from the Indonesian central bank at end-June.
Abdul Wahid said the central bank’s approval was also dependent on whether Maybank would meet the country’s single presence policy. Under the single presence policy set by the Indonesian central bank, a foreign investor cannot own stakes in more than one local bank.
Foreign investors with stakes in more than one bank were given until the end of last year to come up with a plan of action on how they want to comply with the new ruling. They were given three options -to merge, to divest or to create a holding company before December 2010.
It was reported that Maybank and Bumiputra-Commerce Holdings Bhd (BCHB), which owns Bank Niaga, might not meet the regulation, as Khazanah Nasional has shareholding in Maybank and BCHB. However, Maybank’s major shareholder is Permodalan Nasional Bhd, which owns about 51% in the banking group. “From our perspective, we pass the fit and proper test for the single presence policy, as we believe Maybank and BCHB are two separate entities, but we are still seeking clarity with the central bank regarding the matter,” he said. On Maybank’s potential stake acquisitions in the future, Abdul Wahid said Thailand was a big market, which Maybank would still consider, but the banking group would pace its expansion plans according to its financial capabilities. “It is enough for the moment to live with our aspiration on being a regional bank, as we now have presence in seven out of 10 countries in the Asean region. “We will now look to expanding via organic means, such as opening more branches in Cambodia,” he said. He added that Maybank was not in talks with any foreign banks for more potential stake acquisitions to fuel its regional expansion, as it wanted to focus on its present acquisitions first.
Apart from BII, Maybank has proposed to acquire a 15% stake in Vietnam’s An Binh Bank (ABBank) for RM430 million by end of the year and a 15% stake in Pakistan’s MCB Bank Ltd for RM2.17 billion.
Wahid reiterated Maybank’s rationale in acquiring MCB, despite investors’ concerns that it may be overpaying for the exercise. “It is going to be a full year ahead, and we are so busy that we are not looking at further acquisitions,” he said. Maybank’s share price closed at RM7.85, up five sen, with 11.7 million shares changing hands.