More banks look for M&As abroad: Survey

Malaysian financial services players, especially the banking sector, are keen on merger and acquisition (M&A) deals, said PricewaterhouseCoopers (PwC).

PwC partner Soo Hoo Khoon Yean said a recent survey on 375 Asia-based senior executives found more and more local banks were looking for M&A deals abroad in a move to become supra-regional players.

"Supra-regional strategies are different from one another, but the regional supra structure or conglomerate seems to be in everyone's mind across Asia, just like Malaysia," he told reporters after revealing the survey findings on "Emerging Opportunities -- Financial Services M&A in Asia 2011" today.

He said China, Singapore and Thailand were among the top three countries in the spotlight of local players.

He said even though they are unsure about how the Europe debt issue and how it will affect Asia, Malaysian players are very keen on M&A deals as they are not in that slowdown phase yet.

"Malaysian respondents thought that with the problem the Western banks are facing, it is an opportunity to fill the shoes in many of the territories we are interested in," he added.

The survey found deals in the first half of this year were mainly bank consolidations, with none from other financial services, whereas last year M&A deals centred on the insurance industry with a total value of US$912 million.

A total 18 M&A deals in the financial services were recorded last year.

However, M&A deals for the first half of this year have doubled over the same period last year.

The survey also found business leaders upbeat about the M&A market, especially in Asia.

PwC executive director Angie Wong Hui Chern said respondents from Malaysia were among the most confident in Asia, with over 80 per cent predicting higher activities for such deals in the year ahead.

Almost half of the Malaysian respondents said they were considering a M&A deal in the next 12 months.

Wong said the low penetration in Malaysia's insurance industry continued to attract interest from Japanese, Australian and European insurance giants.

There is also potential for rationalisation of the takaful market, she added. --Bernama