| KUALA LUMPUR
KUALA LUMPUR Malaysia's top lender, Malayan
Banking (MBBM.KL), has bought a 15 percent stake in Pakistan's
largest listed lender MCB Bank (MCB.KA) for $680 million,
betting on a bright economic future despite recent political
The deal is Maybank's third acquisition in two months after
taking stakes in Bank Internasional Indonesia (BNII.JK) and
Vietnam's An Binh Bank as it seeks higher-growth areas as its
domestic market becomes more mature and competitive.
State-controlled Maybank, which has been criticised for
being too slow to expand abroad, agreed at the weekend to buy
the MCB Bank stake for 44.29 billion rupees, or 470 rupees per
share -- an 11 percent premium to the stock's last traded
Its the largest-ever banking acquisition into Pakistan,
according to Thomson Reuters. MCB had total assets of about 400
billion rupees ($6.14 billion) at the end of March.
Analysts said Maybank was having to pay a high price for
being among the last to hit the overseas acquisition trail.
"(Maybank) paid a decent price considering the banking
sector is under pressure worldwide," said Mohammed Sohail,
Director of equity broking at JS Global Capital Ltd.
Trading in Maybank shares has been suspended since Friday,
pending an announcement. It last traded at 8 ringgit per share,
giving it a total market value of nearly $12.4 billion.
MCB shares were down 0.07 percent at 421.60 rupees at 0656
GMT, outperforming the broader Pakistan market .KSE which was
1.8 percent lower.
"This acquisition ... will align Maybank with a highly
attractive franchise in a high-growth and under-penetrated
banking market with a large population," Maybank Chairman
Mohamed Basir Ahmad said in a statement.
Pakistan's banking industry is among the world's most
profitable because of five years of financial reform, economic
growth and rising incomes. MCB's net profit rose nearly 26
percent in 2007 to $242 million, which analysts attributed to
its aggressive entry into consumer financing and to low
Maybank and MCD are likely to seek future deals together,
according to Merrill Lynch's Soofian Zuberi, managing director
and co-head of Asia Equity Capital Markets.
"The two banks have agreed to seek out opportunities in
Central Asia and the Middle East. These are markets where there
is a geographic and cultural proximity that both parties can
work together on," said Zuberi, who advised on the deal.
Maybank voiced confidence in Pakistan's political outlook
after February elections returned the nation to civilian
democratic rule for the first time in almost a decade.
Pakistan, a key U.S. ally, also sits on the front line of
conflict between Western forces and Islamist militants.
Maybank said the offer represented about 5.13 times MCB's
book value. That is toward the top end of recent deals in
Pakistan, which was a magnet for foreign banks even before
Oman's Bank Muscat BMAO.OM and Japan's Nomura Holdings
(8604.T) paid 2.8 times book value for Pakistan's Saudi Pak
Bank SPCB.KA in January this year. In 2006, Standard
Chartered (STAN.L) paid a lofty 5.6 times for Union Bank.
FLURRY OF DEALS
Maybank said in March it had bought a 15 percent stake in
Vietnam's An Binh Bank for $135 million cash. A week later, it
paid $2.7 billion, 4.6 times book value, for a controlling
stake in Indonesia's sixth-largest bank, Bank Internasional
Indonesia, a price judged very high by analysts familiar with
Maybank Chief Executive Abdul Wahid Omar said the bank was
seeking to raise capital to help restore its capital ratios
following the acquisition spree.
The fund-raising plan is expected to be announced by the
end of next month, he told reporters. He declined further
Maybank shares have fallen 11 percent since the Indonesian
deal was announced. Fitch and Moody's have both put its credit
ratings on a negative outlook, amid expectations that it would
need to raise funds to bolster its balance sheet.
Maybank said it was buying the MCB stake from existing
shareholders, including individual investors Mian Umer Mansha,
MCB Chairman Mian Hasan Mansha and Muhammad Saleem.
Other sellers were the bank's pension funds as well as the
Nishat Mills Ltd Employees Provident Fund Trust and the Adamjee
Insurance Company Ltd.
The deal included the possibility of buying up to another 5
percent of MCB Bank from the three individual investors at no
more than 510 rupees per share.
Maybank's investment banking arm, Aseambankers, and JP
Morgan advised Maybank. Merrill Lynch advised the sellers.
(Additional reporting by Michael Flaherty and Sahar Ahmed;
Writing by Mark Bendeich; Editing by Jean Yoon and Quentin