www.btimes.com.my - KUALA LUMPUR: Malaysia's top two banks could be
dealt a bigger blow than expected if Indonesia limits the maximum stake a
single shareholder can own in its banks to below 50 per cent, as news
reports from Jakarta suggested.
A Reuters report yesterday said Bank Indonesia was set to announce next
month a reduction in the single-shareholder threshold from 99 per cent
currently to a level below 50 per cent. It quoted unnamed sources with
direct knowledge of the plan.
A Bisnis Indonesia report, also
quoting sources, said the central bank planned to limit the ownership in
banks to 40 per cent for financial institutions, 30 per cent for
non-financial institutions and 20 per cent for individuals. (source)
"The
latter two limits do not come as a surprise, but the 40 per cent would
be lower than market expectation of at least 51 per cent," noted a
banking analyst here.
While these news reports remain
unconfirmed, any such move would have an impact on CIMB Group Holdings
Bhd and Malayan Banking Bhd (Maybank) given their large ownership in
Indonesian banks.
CIMB owns 97.9 per cent of CIMB Niaga, while Maybank owns 97 per cent of Bank Internasional Indonesia (BII).
Analysts said the move would hurt CIMB more than Maybank as it derives a higher proportion of earnings from Indonesia.
Bank
Niaga accounts for about 30 per cent of CIMB's pre-tax profit, while
BII accounts for less than five per cent of Maybank's earnings.
Still, analysts said the banks were still engaging Indonesian regulators on the matter.
"From
what I gather, there seems to be hope that the new regulations may not
apply to financial holding companies and that even the rule is somehow
implemented, they will be given good time to comply," one told Business
Times.
Maybank, when contacted, said it was waiting for an
official announcement on the proposed new regulations from the
authorities in Indonesia.
"Once more clarity is obtained, we
would be better able to articulate our position and the steps we could
take moving forward," a spokesperson said.
CIMB declined comment.
Any
such move also hurts Singapore bank DBS' plan to buy a 67.4 per cent
stake held by Temasek Holdings in Indonesia's Bank Danamon for US$7.2
billion (RM22.6 billion), unless it negotiates an exemption.
"If
implemented, we would hope for two issues to soften the blow (to banks)
- a timeframe of more than 10 years to pare down shareholdings and the
possibility of this ruling not being applied retroactively," said an
analyst from Maybank Investment Bank Research.
OSK Research, too, felt that the time given to comply with the shareholding rule is important.
"Indonesia
is still a very lucrative banking market, so even if you get a 40 per
cent stake, but are given a long enough transition period, it's good
enough," it said.
Restriction on bank ownership in the region is not unusual. Malaysia limits foreign ownership of its banks at 30 per cent.
Maybank's
shares, which have shed 0.9 per cent so far this year, lagging the
broader market's 1.1 per cent gain, closed 7 sen higher to RM8.50
yesterday.
CIMB's shares, which have eased 3.4 per cent this year, added one sen to RM7.19.
No comments:
Post a Comment