Thursday, May 8, 2008

Maybank....dated May 2008

Market talk that MBB was about to make announcement on the acquisition of a bank in Pakistan. It is going ahead of the acquisition.

MCB’s stock is trading at Pakistan (Rm20.00), which means it is trading at nearly five times its book value. At current prices, a 10% stake in the bank would translate into Rm26.5 billion.

Meanwhile, FITCH Ratings, a global rating agency, believes that Malayan Banking Bhd's purchase of Bank Internasional Indonesia (BII) is unlikely to run into regulatory hitches.

Maybank's management has indicated that the deal will unlikely be affected by the new banking policy in Indonesia, which rules that a single entity cannot own more than two banks there by 2010. The matter still lacks clarity as some fears that the Malaysian government may be viewed as the ultimate owner of both Maybank and Khazanah Nasional Bhd, which already has banking interest in Indonesia. Maybank has also yet to address the issue openly. "The policy is not likely to be applicable to them based on their understanding. Meantime, they are waiting for further clarification from the management, or rather, the Indonesian authority.

Fitch had put Maybank on rating watch after the deal was announced in March 2008, mainly because the large cash transaction was set to affect Maybank's initially robust capital.

Fitch will resolve the rating watch in the coming weeks as its discussions with Maybank management have removed most of the concerns.

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