Tuesday October 9, 2012
PNB and EPF take up most of Maybank placement, sources say
By CHOONG EN HAN and RISEN JAYASEELAN
PETALING JAYA: Malayan Banking Bhd's (Maybank) fund raising private placement exercise, which hit a record RM3.66bil has been taken up largely by Permodalan Nasional Bhd (PNB) and the Employees Provident Fund (EPF) sources close the deal said.
The sources told StarBiz that local funds had taken up about 70% of the placement shares, with the balance 30% or so going to foreign parties such as pension funds.
“The funds have been driven by yield,” said one source. Maybank's shares carry a gross yield of just under 8%, according to Bloomberg data.
Sources said that PNB was likely one of the single largest takers via its various Amanah funds in the exercise. PNB, directly and through its funds, owns 51.7% of Maybank and would unlikely suffer any dilution since due to its purchase of the placement shares.
The share placement exercise, announced last Friday and which book building closed yesterday, entailed an issuance of 412 million new Maybank shares (up from the initially targeted 300 million shares) at RM8.88 per unit.
Analysts said this would make Maybank a well-capitalised bank in the country ahead of the implementation of the Basel III capital framework early next year.
Maybank had said that the fund raising was premised on a dual rationale to bolster its capital as well as “support its growth objectives to expand its business in Indonesia, the Philippines and other regional markets.”
Analysts covering Maybank reckoned that the banking giant was poised to embark on acquisitions in the region.
Speculation has been rife that Maybank was considering buying a 25% controlling stake in Thailand's Bank of Ayudha.
Analysts said that Maybank had remained open to mergers and acquisitions (M&As) in Thailand, which was the missing link within its Asean commercial banking footprint. (Maybank's rival CIMB Bank Bhd, which already has significant presence in Thailand, is now said to be considering a bid for the Bank of Ayudha stake.)
Maybank said its fund raising would notch up its “proforma core equity position (before the proposed interim dividend) from 7.97% to 9.27% while its proforma total capital adequacy ratio will improve from 15.66% to 16.96%.”
In comparison, CIMB had a total capital adequacy ratio of 13.11% as of end-June 2012.
Maybank said “strong demand” had enabled it to raise an additional RM1bil from the initial target of RM2.64bil to hit RM3.66bil.
Interestingly, Maybank's successful fund raising came amid weak global economic conditions and faltering confidence over the global financial system.
The deal was also the largest equity private placement in the Malaysian corporate history.
Maybank president and CEO Datuk Seri Abdul Wahid Omar said in a statement:“This exercise is a timely boost of confidence to Maybank that it is on the right track to delivering sustainable growth.”
Chairman Tan Sri Megat Zaharuddin Mohd Nor said:“The board and management remain committed to growing Maybank responsibly and delivering superior returns to our investors, who have shown tremendous support as demonstrated by the outcome of the private placement.”
A banking analyst said the fund raising clearly pointed to more M&As on the part of Maybank.
“They met the Basel III requirements earlier, hence this move to strengthen its capital position, is more likely for M&A opportunities that come its way,” the analyst said.