Malaysian banks wary of Indonesia's new share limit

Malaysia’s CIMB and Maybank would be the most affected by Indonesia's new regulation limiting the maximum bank ownership of a single shareholder to below 50 percent.

 

Unconfirmed reports say that Bank Indonesia was set to announce next month a reduction in the single-shareholder threshold from 99 percent currently to 40 percent for financial institutions, 30 percent for non-financial institutions and 20 percent for individuals.

CIMB owns 97.9 percent of CIMB Niaga, while Maybank owns 97 percent of Bank Internasional Indonesia.

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 percent of CIMB’s pre-tax profit, while BII accounts for less than five percent of Maybank’s earnings.

Maybank 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 percent stake held by Temasek Holdings in Indonesia’s Bank Danamon for $7.2 billion, unless it negotiates an exemption.

For more.

Join Asian Banking & Finance community
Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!