Maybank on lookout for acquisitions abroad

KUALA LUMPUR: Malayan Banking Bhd (Maybank) is looking at acquisition opportunities in countries like Thailand, Singapore, or the Philippines in a bid to achieve its goal of deriving 40% of its profit from international operations by 2015.

Maybank group president and CEO Datuk Abdul Farid Alias said based on its own business portfolio track record, it should be able to reach 34%-35% of profits by 2015 organically.
"The remaining has to come from inorganic activities. We've a few options looking at inorganic growth, options that would lead us to succeed in getting 40% earnings outside Malaysia by 2015. Having said that, we don't have anything real at this point of time," he told reporters at a press conference after the group's AGM here yesterday.
"We're not sitting on one side of the table across anyone to discuss a potential deal in the near term but we're monitoring. We have a game plan. Once we see something that makes sense to us from a price perspective and from our ability to execute, only then we can have 1+1=3," said Farid.
He said Thailand is a market that Maybank has not been able to penetrate from a commercial banking perspective although it is the biggest broker and investment bank there.
"At the same time, we don't want our option to only be in Thailand. Our option would include potential growth in Indonesia, Singapore, Philippines, just to name a few," said Farid.
Maybank chairman Tan Sri Megat Zaharuddin Megat Mohd Nor said it is not looking at particular opportunities in Indonesia at the moment although the country offers a lot of attraction in terms of the high margin.
"If there are real opportunities for us to become a lot bigger through inorganic opportunities and still be in control, then Indonesia will be attractive. But we're not going to look at Indonesia if it's going to dilute our operational control," said Megat Zaharuddin.
Farid denied that Maybank is in talks with parties for a possible merger exercise that would see its Philippine unit listed on the stock market there via a reverse takeover (RTO).
"It's not true that we're talking to anybody on potential RTO acquisition or merger but that's an option and it remains (an option) whether we do it by way of RTO, merger or straight (direct) listing. We want to have as many options to see what make sense before we proceed," he said.
It was reported that Maybank Philippines Inc president and CEO Herminio M. Famatigan Jr. said two to three Philippine-listed financial institutions had been identified as potential targets. They were also concurrently working on a direct listing of the unit.
The Bangko Sentral ng Pilipinas (BSP), the central bank of the Philippines, had stipulated that Maybank, being a foreign party, needed to list at least 10% of its Philippine bank on the local bourse. Maybank has until the end of 2015 to list its unit.
Meanwhile, Maybank plans to open new branches in Shanghai and is in talks with the China Banking Regulatory Commission to expand. Maybank Greater China consists of three branches in Hong Kong, Shanghai and Beijing.
On its associate bank MCB Bank Ltd in Pakistan, Farid said it remains a challenging market there.
"However, MCB still continues to be the most profitable bank in Pakistan and from a profitability perspective, MCB registered a return on equity of 21%, which is decent in any market. For us, the option is what else can we do to improve the performance in Pakistan," said Farid.