Maybank plans fundraising

PETALING JAYA: MALAYAN BANKING BHD (Maybank) has announced its intention to undertake a fundraising exercise for working capital, general banking and other corporate purposes in a foreign country, but has yet to disclose further details.

In a filing with Bursa Malaysia, the country’s largest bank attached comprehensive special-purpose audited financial statements for the three financial years ended Dec 31, 2014, 2013 and 2012.

“The special-purpose audited financial statements were prepared to fulfil legal requirements of a foreign country in which Maybank intends to undertake a fundraising exercise for working capital, general banking and other corporate purposes,” it said.

Meanwhile, Maybank, which would be holding its AGM today, could see its Indonesian operations under the spotlight.

The 70%-owned Indonesian subsidiary, PT Bank Internasional Indonesia Tbk (BII), had higher loan-loss provisions, which more than halved its contribution to the group’s pre-tax profit in 2014. Indonesia only contributed 3% to the bank’s pre-tax profit, down from 7.4% in the preceding year.

Maybank had targeted international operations’ profit contribution to be 40%, but only managed to hit 28.8% due partly to the provisions for two accounts in Indonesia.

This was a worse performance compared with 2013, when international operations contributed 30.3%.

In the latest annual report, Maybank group president and chief executive officer Datuk Abdul Farid Alias said the bank’s executive committee was working with BII’s management to address the issue.

“First, we have re-profiled the global banking business with a more selective focus on clients and industries in line with the group’s risk appetite,” he said.

“Second, to avoid further asset quality deterioration, we have tightened credit approval procedures and instituted new approval matrixes and limits to ensure tighter control over loan approvals. We are also closely monitoring market conditions that could potentially have an adverse impact on selected corporate borrowers.”

He noted that excluding the corporate debtors that had affected BII’s 2014 operations, the other segments within BII had “done well”. For instance, BII’s consumer banking and business banking segment grew 16% and 15.5%, respectively.

BII is one of Maybank’s key overseas subsidiaries and the ninth largest commercial bank in Indonesia by assets. It had 428 branches in the republic as at Dec 31, 2014.

Maybank operates in 20 countries, stretching from the Asean region to Britain (London) and the United States (New York); but three countries – Malaysia, Singapore and Indonesia – are considered its “home markets.”

In the year ended Dec 31, 2014, these three markets accounted for 88.6% of total group profit before tax, with Malaysia contributing 71.2%.

Despite Indonesia’s poor profit performance during the period, Maybank is targeting a loans growth of 13% to 15% for BII this year. That is higher than the targets for Malaysia and Singapore (8% to 9% loans growth).

The Minority Shareholder Watchdog Group has asked whether this key performance indicator is achievable.

It also questioned why the initial loans growth target for Indonesia of 17%-20% was revised to 16%-17% last year.

Despite the revised target, the Indonesian operations still missed it, achieving a loans growth of only 5.4% – far short of Indonesia’s industry loans growth of 11.4%.

While BII failed to hit its target, Maybank as a group nonetheless met its 13% group loans growth target.

However, the Malaysia loans growth KPI, like Indonesia’s, was revised lower. With a 9% domestic loans growth last year, Maybank met the revised 9%-10% target (from 12%). Maybank’s Malaysia loans growth was in line with the total industry growth of 8.7%.


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