Maybank hopes won't be affected by Indonesia central bank shareholding limit

KUALA LUMPUR (Bernama): Malayan Banking Bhd, which owns 97% of PT Bank Internasional Indonesia Tbk (BII), hopes that a proposed new regulation on the limit of shareholding in Indonesian banks will not apply to the banking group.
Its president and chief executive officer, Datuk Seri Abdul Wahid Omar, said on Tuesday the banking group was talking with the relevant authorities in Indonesia on the proposed plan.
“It
is our hope that should any percentage be imposed, that percentage
should not apply to the banking group,” he told reporters after a
corporate presentation on the bank at the sidelines of Invest Malaysia
2012 here.
Abdul Wahid was responding to a news report on the
possibility of the central bank of Indonesia limiting the maximum stake
of a single shareholder in the country's banks to below 50% from the
current 99%.
When asked whether the decision would affect the banking group, he said that it would depend on the approach taken.
“If
their intention is to improve corporate governance in terms of limiting
the control by any single corporate entity and individual, that concept
is not new.
“That concept is being embraced by every country
including Malaysia but it does not apply to banks,” Abdul Wahid said,
adding that OCBC Bank in Malaysia is fully owned by OCBC Singapore as well as Citibank and HSBC, which are wholly-owned by their respective parent banks.
The
proposed regulations, which are expected to apply to both domestic and
foreign investors, will likely be announced next month.
According
to the report, Bank Indonesia would likely outline differing ownership
rules depending on whether the shareholder is another financial
institution, a non-financial institution or a family.
It said family shareholdings are expected to be given the lowest threshold, but all are expected to be under 50%.
Commenting on Prime Minister Datuk Seri Najib Tun Razak's
remarks on local banks being conservative and not risk takers, he said
there were other parties like venture capitalists that could undertake
risky projects.
“The role of bank is to mobilise deposits and
channel this fund into productive business. Typically banks have to
make sure that the risk appetite will yield returns so we cannot take
unnecessary risk,” he said.
He said there will be industries
that carry more risks than others so it's up to banks to come up with
risk management practices to assess the risk and to mitigate them.
For
riskier projects that involve new technologies and others, he suggested
that apart from banks, there were other parties like venture capitalist
as well as “angel investors” comprising high net worth individuals, who
could still inject funds in the projects