The Star Online: Business
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| Maybank IB expanding regionally Posted: 26 Aug 2011 07:25 PM PDT MAYBANK Investment Bank (Maybank IB), which registered a 49% surge in fee-based income to RM292mil, is all geared for expansion as a regional financial powerhouse. This follows the purchase of Kim Eng Securities which provided an enlarged platform for advisory and corporate work in the large financial markets of Hong Kong, London and New York. "We plan to do more outside Malaysia like in Singapore, Indonesia and Thailand and to some extent, in the Phillipines," says Maybank president and CEO Datuk Seri Wahid Omar. "For example, the team at Kim Eng Philippines is working well with our corporate bankers there and that synergy has resulted in mandates being won, some of which will be executed in the current financial year," he tells StarBizWeek. In Indonesia, Maybank IB has been supporting small medium enterprises and over time they have become credible organisations and some have been listed. "With Kim Eng coming into the picture, we can now continue to service customers across various markets, be it loans, debt capital or equity capital markets," says Wahid. Through its acquisition of Kim Eng, Maybank IB now has a presence in six out of 10 Asean countries. Under their joint efforts to capture market share, Maybank IB was the joint or sole bookrunner in the three initial public offerings for Bumi Armada, Eversendai and MSM Holdings Malaysia Bhd in which Kim Eng managed the settlement of foreign tranches and also provided distribution. Maybank IB and Kim Eng are embarking on a two-year merger plan divided into three phases that involve establishing the merger framework; conducting integration planning and execution of integration plans. The two companies are currently in the second phase of integration planning and expect to begin execution of plans by the start of 2012. They are also streamlining their interim operations while identifying and executing quick-wins. Maybank has set high growth targets for its investment banking business. "We want to be number one in the region," says Wahid, referring to a three-year road map where in 2012, the aim will be to stabilise operations, in 2013, it will be about capturing more synergy in the home markets and by 2014, it will be to work towards regional leadership position. Come 2015, the target is to be the number one Malaysian investment bank and top five among regional investment banks. "When it comes to equities broking, we want to be among the top three brokers in Malaysia, Indonesia, Thailand, Singapore and the Phillipines," says Wahid. In view of upcoming competition among existing investment banks like the successful CIMB Group, Wahid says: "We are game for it." Kim Eng's headcount is about 2,300 and Maybank IB's is about 700. However, it is not much about the number of people. "We have more people in the broking side compared to the investment side, especially when we embark on retail broking activities in the region. "What is more important is to build the investment banking capability, especially in the mergers and acquisitions advisory. We are looking to strengthen the teams in Singapore, Indonesia and Thailand by bringing in more talent," he says. Wahid says all five pillars in the group's investment banking business investment banking and advisory, retail equities, institutional equities, equity and commodities solutions and asset management will cut across geographical markets and are set for expansion. "We have big plans in these areas," he says. Among Maybank IB's notable deals for financial year 2010/2011 include the privatisation exercises of Tanjong Public Ltd Co, Titan Chemicals Corp, MTD Capital Bhd and Berjaya Retail Bhd as well as the listing of CapitaMalls Malaysia Trust, Malaysia Marine and Heavy Engineering Holdings Bhd, MSM and Sunway REIT. Maybank IB is also lead arranger and lead manager for numerous bond issues and sukuk. Related Stories: |
| 40% profit from global ops by 2015 Posted: 26 Aug 2011 07:25 PM PDT Indonesia ops picking up steam barring any rule changes MALAYAN Banking Bhd's (Maybank) international operations from countries such as Singapore and Indonesia are expected to contribute 40% to the group's net profit by 2015. Currently, Singapore alone contributes 14% or S$375mil to group pre-tax profit. However, the pace of change is gathering in Indonesia, judging from the last financial results which saw PT Bank Internasional Indonesia Tbk (BII) reporting a net profit of 461 billion rupiah or RM255mil, representing 6% of group profit, for the full year of 2010. This was a significant turnaround from the net loss of 41 billion rupiah in the previous corresponding period year ended Dec 31, 2009. The main drivers for this turnaround was greater growth across the core businesses and improvements in all business operations, a statement from Maybank had said. Net interest income surged 21.8% to 4.03 trillion rupiah despite a narrowing of net interest margin. Non-interest income rose 13.8% to 2.01 trillion rupiah. Overall asset quality at BII continued to improve while subsidiary WOM Finance experienced higher provisioning that was related to its second hand motorcycle financing. WOM has stopped financing this segment and is currently redefining its used motorcycle financing business model. "There has been significant improvement and WOM is back in profit," says Maybank president and CEO Datuk Seri Wahid Omar. The challenge for Maybank currently is to weather through a new potential ruling pertaining to curbs on either foreign or single shareholding in Indonesian banks. Maybank is no stranger to the changing regulatory landscape in Indonesia which had earlier required the banking group to sell down its 97.5% stake in BII by 20%. Flexibility However, it was able to obtain some flexibility, which has now become part of the guidelines, based on the prevailing share price of BII compared with the 510 rupiah per share that it had paid. This time around, Wahid is also confident of obtaining the same flexibility as before. In fact, he hopes that the Indonesian authorities will bear in mind the earlier bad times when foreign investors brought in the much-needed capital to help restructure the banks in Indonesia. "There will probably be some kind of selldown," says Pong Teng Siew, head of research at Jupiter Securities. "It may be a blanket rule that does not just apply to Maybank. Malaysia has similar rules on foreign and single shareholding." He noted that Maybank had bought such a large stake in BII and at such an expensive price of 4.65 times price to book value. "It looks like they bought the stake and then decided on how to react on each change (in regulations in Indonesia)," says Pong. It may end up finding that it has to place less reliance on Indonesia and diversify elsewhere, in view of new rules being imposed on banking. "That potential new ruling can be a setback for Maybank's plans in Indonesia," said Pong. "It should look into aggressive expansion into other areas and other countries such as Thailand." In his interview with StarBizWeek, Wahid did indicate that Maybank is targeted to have full-fledged banking licences in Thailand, Laos and Myanmar by 2015. Wahid does not consider the impact on Maybank to be serious, should Indonesia limit its foreign shareholding to 51% and below. "Should we be compelled to reduce our stake to below 50%, then obviously, the profit contribution will be reduced in proportion accordingly. BII contributed RM255mil which represents only about 6% of group net profit of RM4.45bil in the last financial year. Maybank has put in a lot of effort to turn BII around. It will continue to expand the number of bank branches from 344 branches to 450 by end of 2012. Currently, the focus at BII is on retail, small and medium scale enterprises (SMEs), commercial and corporate banking. BII's current strengths are in SME, commercial and community banking as well as garnering deposits. "Moving forward, we want a balanced approach," says Wahid. Related Stories: |
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