SINGAPORE -
Malaysia's second-biggest bank CIMB BUCM.KL said on Tuesday Indonesia will account for 40 percent of the group's profit by 2015, making it bigger than the contribution from its home operation.
However, the group's CEO Nazir Razak told reporters at the launch of its Singapore retail operations that the lender is not looking for more acquisitions in Indonesia.
Sept 29th From Reuters
Wednesday, September 30, 2009
Monday, September 28, 2009
Japanese Yen Hit Eight Month Record
The yen hit JPY= an eight-month high of
88.23 to the dollar on Monday, but later lost ground as Japan's
finance minister tried to tone down earlier comments suggesting
intervention was unlikely, remarks that had prompted speculators
to pile into the rise.
Here are some milestones in the yen's 138-year history:
1871 - The yen becomes Japan's currency as part of the Meiji
Restoration, which marked the start of Japan's modernisation and
opening to the rest of the world. Japan adopts the gold standard.
1949 - After World War Two the dollar's fixed rate is set at
360 yen via the Bretton Woods system, partly to help stabilise
prices in the Japanese economy.
1959 - The dollar/yen exchange rate is liberalised. The
margin of fluctuation is set at 0.5 percent on either side of its
dollar parity.
1963 - The margin of fluctuation is widened to 0.75 percent.
1971 - United States abandons gold standard. The end of
Bretton Woods system of fixed exchange rates forces a realignment
of world currencies.
Dec. 1971 - Smithsonian Agreement sets the dollar/yen
exchange rate at 308 yen, and allows it to fluctuate in a wider
band between 301.07 yen and 314.93 yen.
1973 - Japanese monetary authorities decide to let the yen
float freely against the dollar, and the yen appreciates as far
as 263 to the dollar.
1978 - The yen pushes through 200 to the dollar for the first
time, strengthening as far as 177.
1980 to 1985 - Yen's appreciation halts and partially
reverses despite Japan's big trade surpluses. Higher U.S.
interest rates see Japanese investors put money in dollar assets.
1985 - The Group of Five industrial nations, the predecessor
to the G7, sign the Plaza Accord in which they agree the dollar
is overvalued and to weaken it. The yen climbs from its
pre-accord level of around 240 to 211 in October and 200 in
November, a 20 percent rise in just a few months.
1986 - The U.S. currency falls further to around 190 yen in
January, 167 yen in April and 153 yen in August.
1987 - In February, six of the G7 nations sign the Louvre
Accord, which aims to stabilise currencies and halt the dollar's
broad decline. The dollar still falls from near 153 to 137 in
April and 120.80 by the end of the year.
1988 - On Jan. 4, the dollar falls to a post-war low of
120.45 yen in Tokyo trade, a level that holds as the low for more
than five years. The Bank of Japan intervenes to buy dollars and
sell yen that day on behalf of the Ministry of Finance.
Aug. 17, 1993 - The dollar declines to a new post-war low of
100.40 yen in Tokyo.
June 21, 1994 - The dollar falls through the key 100 yen
level and touches a record postwar low of 99.85 yen in New York
trade before finishing at 100.30 yen.
April 19, 1995 - The dollar hits a record post-war low at
79.75 yen after U.S.-Japanese trade frictions spark heavy
selling. By the end of the year it is near 103.40.
1998 - Asian financial crisis sees yen weaken to nearly 148
yen vs dollar in August, even after U.S. authorities join the
Bank of Japan to buy yen, spending $833 million, in June.
In October, dollar tumbles from near 136 yen to 111.50 yen,
as carry trades unwind following the near-collapse of hedge fund
major Long-Term Capital Management.
1999 - The yen strengthens further despite repeated
intervention, reaching 102 in November.
2001 - Following the Sept 11 attacks on the United States,
Bank of Japan intervenes to sell yen for dollars.
2003 - The Ministry of Finance begins massive intervention to
halt the yen's rise against the dollar, partly to shield Japanese
exporters as the economy remains stuck in its post-bubble slump
and deflation. The MOF spends 20.4 trillion yen ($200 billion)
over the year, nearly all of it to buy dollars and sell yen.
2004 - The MOF spends 14.8 trillion yen ($145 billion)
intervening in the first quarter of the year, including 1.67
trillion yen buying dollars on Jan. 9 alone. But the MOF ceases
intervention in March and has never since resumed.
2005 - The yen hits a high of 101.67 yen in January but then
falls, hitting 121.40 in December. Yen carry trades and Japanese
investors shifting funds into foreign assets drive the slide.
June 2007 - The dollar hits a 4-1/2-year high of 124.14 yen.
July 2007 - Yen's broad depreciation takes it to a 22-year low
on a real effective exchange rate (REER) basis. Since January
2005 the yen loses 25 percent of its value on a REER basis.
March 13, 2008 - The yen hits a 12-year high of 99.77.
Oct. 24, 2008 - Yen hits 13-year high of 90.87 vs the dollar.
Also sets an all-time high of 55.11 against the Australian
dollar, which loses almost a third of its value in just a month
on a massive unwind of carry trades.
Oct. 27, 2008 - The yen's surge prompts the G7 to issue
statement singling out the yen in warning on currency market
volatility.
Dec 12, 2008 - The dollar falls through 90 yen for the first
time in 13 years after a bill to rescue U.S. automakers fails in
the Senate.
Jan 22, 2009 - Hits fresh 13-year high of 87.10 against
dollar, driven up by risk aversion and option-led dollar selling.
Sept 28 - Marks 8-month high of 88.23 aginst greenback, but
later loses ground as Japan's finance minister tries to tone down
earlier comments suggesting intervention was unlikely.
Sources: Reuters, Bank of Japan, Bank of England
Sept 28 (Reuters) - The yen hit JPY= an eight-month high of
88.23 to the dollar on Monday, but later lost ground as Japan's
finance minister tried to tone down earlier comments suggesting
intervention was unlikely, remarks that had prompted speculators
to pile into the rise.
Here are some milestones in the yen's 138-year history:
1871 - The yen becomes Japan's currency as part of the Meiji
Restoration, which marked the start of Japan's modernisation and
opening to the rest of the world. Japan adopts the gold standard.
1949 - After World War Two the dollar's fixed rate is set at
360 yen via the Bretton Woods system, partly to help stabilise
prices in the Japanese economy.
1959 - The dollar/yen exchange rate is liberalised. The
margin of fluctuation is set at 0.5 percent on either side of its
dollar parity.
1963 - The margin of fluctuation is widened to 0.75 percent.
1971 - United States abandons gold standard. The end of
Bretton Woods system of fixed exchange rates forces a realignment
of world currencies.
Dec. 1971 - Smithsonian Agreement sets the dollar/yen
exchange rate at 308 yen, and allows it to fluctuate in a wider
band between 301.07 yen and 314.93 yen.
1973 - Japanese monetary authorities decide to let the yen
float freely against the dollar, and the yen appreciates as far
as 263 to the dollar.
1978 - The yen pushes through 200 to the dollar for the first
time, strengthening as far as 177.
1980 to 1985 - Yen's appreciation halts and partially
reverses despite Japan's big trade surpluses. Higher U.S.
interest rates see Japanese investors put money in dollar assets.
1985 - The Group of Five industrial nations, the predecessor
to the G7, sign the Plaza Accord in which they agree the dollar
is overvalued and to weaken it. The yen climbs from its
pre-accord level of around 240 to 211 in October and 200 in
November, a 20 percent rise in just a few months.
1986 - The U.S. currency falls further to around 190 yen in
January, 167 yen in April and 153 yen in August.
1987 - In February, six of the G7 nations sign the Louvre
Accord, which aims to stabilise currencies and halt the dollar's
broad decline. The dollar still falls from near 153 to 137 in
April and 120.80 by the end of the year.
1988 - On Jan. 4, the dollar falls to a post-war low of
120.45 yen in Tokyo trade, a level that holds as the low for more
than five years. The Bank of Japan intervenes to buy dollars and
sell yen that day on behalf of the Ministry of Finance.
Aug. 17, 1993 - The dollar declines to a new post-war low of
100.40 yen in Tokyo.
June 21, 1994 - The dollar falls through the key 100 yen
level and touches a record postwar low of 99.85 yen in New York
trade before finishing at 100.30 yen.
April 19, 1995 - The dollar hits a record post-war low at
79.75 yen after U.S.-Japanese trade frictions spark heavy
selling. By the end of the year it is near 103.40.
1998 - Asian financial crisis sees yen weaken to nearly 148
yen vs dollar in August, even after U.S. authorities join the
Bank of Japan to buy yen, spending $833 million, in June.
In October, dollar tumbles from near 136 yen to 111.50 yen,
as carry trades unwind following the near-collapse of hedge fund
major Long-Term Capital Management.
1999 - The yen strengthens further despite repeated
intervention, reaching 102 in November.
2001 - Following the Sept 11 attacks on the United States,
Bank of Japan intervenes to sell yen for dollars.
2003 - The Ministry of Finance begins massive intervention to
halt the yen's rise against the dollar, partly to shield Japanese
exporters as the economy remains stuck in its post-bubble slump
and deflation. The MOF spends 20.4 trillion yen ($200 billion)
over the year, nearly all of it to buy dollars and sell yen.
2004 - The MOF spends 14.8 trillion yen ($145 billion)
intervening in the first quarter of the year, including 1.67
trillion yen buying dollars on Jan. 9 alone. But the MOF ceases
intervention in March and has never since resumed.
2005 - The yen hits a high of 101.67 yen in January but then
falls, hitting 121.40 in December. Yen carry trades and Japanese
investors shifting funds into foreign assets drive the slide.
June 2007 - The dollar hits a 4-1/2-year high of 124.14 yen.
July 2007 - Yen's broad depreciation takes it to a 22-year low
on a real effective exchange rate (REER) basis. Since January
2005 the yen loses 25 percent of its value on a REER basis.
March 13, 2008 - The yen hits a 12-year high of 99.77.
Oct. 24, 2008 - Yen hits 13-year high of 90.87 vs the dollar.
Also sets an all-time high of 55.11 against the Australian
dollar, which loses almost a third of its value in just a month
on a massive unwind of carry trades.
Oct. 27, 2008 - The yen's surge prompts the G7 to issue
statement singling out the yen in warning on currency market
volatility.
Dec 12, 2008 - The dollar falls through 90 yen for the first
time in 13 years after a bill to rescue U.S. automakers fails in
the Senate.
Jan 22, 2009 - Hits fresh 13-year high of 87.10 against
dollar, driven up by risk aversion and option-led dollar selling.
Sept 28 - Marks 8-month high of 88.23 aginst greenback, but
later loses ground as Japan's finance minister tries to tone down
earlier comments suggesting intervention was unlikely.
Sources: Reuters, Bank of Japan, Bank of England
(Writing by Mathew Veedon and Eric Burroughs)
88.23 to the dollar on Monday, but later lost ground as Japan's
finance minister tried to tone down earlier comments suggesting
intervention was unlikely, remarks that had prompted speculators
to pile into the rise.
Here are some milestones in the yen's 138-year history:
1871 - The yen becomes Japan's currency as part of the Meiji
Restoration, which marked the start of Japan's modernisation and
opening to the rest of the world. Japan adopts the gold standard.
1949 - After World War Two the dollar's fixed rate is set at
360 yen via the Bretton Woods system, partly to help stabilise
prices in the Japanese economy.
1959 - The dollar/yen exchange rate is liberalised. The
margin of fluctuation is set at 0.5 percent on either side of its
dollar parity.
1963 - The margin of fluctuation is widened to 0.75 percent.
1971 - United States abandons gold standard. The end of
Bretton Woods system of fixed exchange rates forces a realignment
of world currencies.
Dec. 1971 - Smithsonian Agreement sets the dollar/yen
exchange rate at 308 yen, and allows it to fluctuate in a wider
band between 301.07 yen and 314.93 yen.
1973 - Japanese monetary authorities decide to let the yen
float freely against the dollar, and the yen appreciates as far
as 263 to the dollar.
1978 - The yen pushes through 200 to the dollar for the first
time, strengthening as far as 177.
1980 to 1985 - Yen's appreciation halts and partially
reverses despite Japan's big trade surpluses. Higher U.S.
interest rates see Japanese investors put money in dollar assets.
1985 - The Group of Five industrial nations, the predecessor
to the G7, sign the Plaza Accord in which they agree the dollar
is overvalued and to weaken it. The yen climbs from its
pre-accord level of around 240 to 211 in October and 200 in
November, a 20 percent rise in just a few months.
1986 - The U.S. currency falls further to around 190 yen in
January, 167 yen in April and 153 yen in August.
1987 - In February, six of the G7 nations sign the Louvre
Accord, which aims to stabilise currencies and halt the dollar's
broad decline. The dollar still falls from near 153 to 137 in
April and 120.80 by the end of the year.
1988 - On Jan. 4, the dollar falls to a post-war low of
120.45 yen in Tokyo trade, a level that holds as the low for more
than five years. The Bank of Japan intervenes to buy dollars and
sell yen that day on behalf of the Ministry of Finance.
Aug. 17, 1993 - The dollar declines to a new post-war low of
100.40 yen in Tokyo.
June 21, 1994 - The dollar falls through the key 100 yen
level and touches a record postwar low of 99.85 yen in New York
trade before finishing at 100.30 yen.
April 19, 1995 - The dollar hits a record post-war low at
79.75 yen after U.S.-Japanese trade frictions spark heavy
selling. By the end of the year it is near 103.40.
1998 - Asian financial crisis sees yen weaken to nearly 148
yen vs dollar in August, even after U.S. authorities join the
Bank of Japan to buy yen, spending $833 million, in June.
In October, dollar tumbles from near 136 yen to 111.50 yen,
as carry trades unwind following the near-collapse of hedge fund
major Long-Term Capital Management.
1999 - The yen strengthens further despite repeated
intervention, reaching 102 in November.
2001 - Following the Sept 11 attacks on the United States,
Bank of Japan intervenes to sell yen for dollars.
2003 - The Ministry of Finance begins massive intervention to
halt the yen's rise against the dollar, partly to shield Japanese
exporters as the economy remains stuck in its post-bubble slump
and deflation. The MOF spends 20.4 trillion yen ($200 billion)
over the year, nearly all of it to buy dollars and sell yen.
2004 - The MOF spends 14.8 trillion yen ($145 billion)
intervening in the first quarter of the year, including 1.67
trillion yen buying dollars on Jan. 9 alone. But the MOF ceases
intervention in March and has never since resumed.
2005 - The yen hits a high of 101.67 yen in January but then
falls, hitting 121.40 in December. Yen carry trades and Japanese
investors shifting funds into foreign assets drive the slide.
June 2007 - The dollar hits a 4-1/2-year high of 124.14 yen.
July 2007 - Yen's broad depreciation takes it to a 22-year low
on a real effective exchange rate (REER) basis. Since January
2005 the yen loses 25 percent of its value on a REER basis.
March 13, 2008 - The yen hits a 12-year high of 99.77.
Oct. 24, 2008 - Yen hits 13-year high of 90.87 vs the dollar.
Also sets an all-time high of 55.11 against the Australian
dollar, which loses almost a third of its value in just a month
on a massive unwind of carry trades.
Oct. 27, 2008 - The yen's surge prompts the G7 to issue
statement singling out the yen in warning on currency market
volatility.
Dec 12, 2008 - The dollar falls through 90 yen for the first
time in 13 years after a bill to rescue U.S. automakers fails in
the Senate.
Jan 22, 2009 - Hits fresh 13-year high of 87.10 against
dollar, driven up by risk aversion and option-led dollar selling.
Sept 28 - Marks 8-month high of 88.23 aginst greenback, but
later loses ground as Japan's finance minister tries to tone down
earlier comments suggesting intervention was unlikely.
Sources: Reuters, Bank of Japan, Bank of England
Sept 28 (Reuters) - The yen hit JPY= an eight-month high of
88.23 to the dollar on Monday, but later lost ground as Japan's
finance minister tried to tone down earlier comments suggesting
intervention was unlikely, remarks that had prompted speculators
to pile into the rise.
Here are some milestones in the yen's 138-year history:
1871 - The yen becomes Japan's currency as part of the Meiji
Restoration, which marked the start of Japan's modernisation and
opening to the rest of the world. Japan adopts the gold standard.
1949 - After World War Two the dollar's fixed rate is set at
360 yen via the Bretton Woods system, partly to help stabilise
prices in the Japanese economy.
1959 - The dollar/yen exchange rate is liberalised. The
margin of fluctuation is set at 0.5 percent on either side of its
dollar parity.
1963 - The margin of fluctuation is widened to 0.75 percent.
1971 - United States abandons gold standard. The end of
Bretton Woods system of fixed exchange rates forces a realignment
of world currencies.
Dec. 1971 - Smithsonian Agreement sets the dollar/yen
exchange rate at 308 yen, and allows it to fluctuate in a wider
band between 301.07 yen and 314.93 yen.
1973 - Japanese monetary authorities decide to let the yen
float freely against the dollar, and the yen appreciates as far
as 263 to the dollar.
1978 - The yen pushes through 200 to the dollar for the first
time, strengthening as far as 177.
1980 to 1985 - Yen's appreciation halts and partially
reverses despite Japan's big trade surpluses. Higher U.S.
interest rates see Japanese investors put money in dollar assets.
1985 - The Group of Five industrial nations, the predecessor
to the G7, sign the Plaza Accord in which they agree the dollar
is overvalued and to weaken it. The yen climbs from its
pre-accord level of around 240 to 211 in October and 200 in
November, a 20 percent rise in just a few months.
1986 - The U.S. currency falls further to around 190 yen in
January, 167 yen in April and 153 yen in August.
1987 - In February, six of the G7 nations sign the Louvre
Accord, which aims to stabilise currencies and halt the dollar's
broad decline. The dollar still falls from near 153 to 137 in
April and 120.80 by the end of the year.
1988 - On Jan. 4, the dollar falls to a post-war low of
120.45 yen in Tokyo trade, a level that holds as the low for more
than five years. The Bank of Japan intervenes to buy dollars and
sell yen that day on behalf of the Ministry of Finance.
Aug. 17, 1993 - The dollar declines to a new post-war low of
100.40 yen in Tokyo.
June 21, 1994 - The dollar falls through the key 100 yen
level and touches a record postwar low of 99.85 yen in New York
trade before finishing at 100.30 yen.
April 19, 1995 - The dollar hits a record post-war low at
79.75 yen after U.S.-Japanese trade frictions spark heavy
selling. By the end of the year it is near 103.40.
1998 - Asian financial crisis sees yen weaken to nearly 148
yen vs dollar in August, even after U.S. authorities join the
Bank of Japan to buy yen, spending $833 million, in June.
In October, dollar tumbles from near 136 yen to 111.50 yen,
as carry trades unwind following the near-collapse of hedge fund
major Long-Term Capital Management.
1999 - The yen strengthens further despite repeated
intervention, reaching 102 in November.
2001 - Following the Sept 11 attacks on the United States,
Bank of Japan intervenes to sell yen for dollars.
2003 - The Ministry of Finance begins massive intervention to
halt the yen's rise against the dollar, partly to shield Japanese
exporters as the economy remains stuck in its post-bubble slump
and deflation. The MOF spends 20.4 trillion yen ($200 billion)
over the year, nearly all of it to buy dollars and sell yen.
2004 - The MOF spends 14.8 trillion yen ($145 billion)
intervening in the first quarter of the year, including 1.67
trillion yen buying dollars on Jan. 9 alone. But the MOF ceases
intervention in March and has never since resumed.
2005 - The yen hits a high of 101.67 yen in January but then
falls, hitting 121.40 in December. Yen carry trades and Japanese
investors shifting funds into foreign assets drive the slide.
June 2007 - The dollar hits a 4-1/2-year high of 124.14 yen.
July 2007 - Yen's broad depreciation takes it to a 22-year low
on a real effective exchange rate (REER) basis. Since January
2005 the yen loses 25 percent of its value on a REER basis.
March 13, 2008 - The yen hits a 12-year high of 99.77.
Oct. 24, 2008 - Yen hits 13-year high of 90.87 vs the dollar.
Also sets an all-time high of 55.11 against the Australian
dollar, which loses almost a third of its value in just a month
on a massive unwind of carry trades.
Oct. 27, 2008 - The yen's surge prompts the G7 to issue
statement singling out the yen in warning on currency market
volatility.
Dec 12, 2008 - The dollar falls through 90 yen for the first
time in 13 years after a bill to rescue U.S. automakers fails in
the Senate.
Jan 22, 2009 - Hits fresh 13-year high of 87.10 against
dollar, driven up by risk aversion and option-led dollar selling.
Sept 28 - Marks 8-month high of 88.23 aginst greenback, but
later loses ground as Japan's finance minister tries to tone down
earlier comments suggesting intervention was unlikely.
Sources: Reuters, Bank of Japan, Bank of England
(Writing by Mathew Veedon and Eric Burroughs)
INDONESIA'S BANK MANDIRI EYEING CONTROLLING STAKE IN AXA MANDIRI
JAKARTA-
Indonesia's PT Bank Mandiri (JSX:BMRI) said it is set to have controlling stake in life insurance company PT Axa Mandiri Financial Service (AMFS), it owns jointly with a French partner.
The state bank and the country's largest lender in assets, owns 49 per cent of Axa Mandiri and France's AXA holds the majority 51 per cent share.
Agus Martowardojo, the president of Bank Mandiri said the bank wants to acquire at least a 2 per cent stake from the AXA group, adding the acquisition process is expected to be completed before the end of this year.
AXA Mandiri has succeeded in banc-assurance business and grown to rank among three largest in life insurance market share in less than two years after its operation in the country. (28th September 2009)
Indonesia's PT Bank Mandiri (JSX:BMRI) said it is set to have controlling stake in life insurance company PT Axa Mandiri Financial Service (AMFS), it owns jointly with a French partner.
The state bank and the country's largest lender in assets, owns 49 per cent of Axa Mandiri and France's AXA holds the majority 51 per cent share.
Agus Martowardojo, the president of Bank Mandiri said the bank wants to acquire at least a 2 per cent stake from the AXA group, adding the acquisition process is expected to be completed before the end of this year.
AXA Mandiri has succeeded in banc-assurance business and grown to rank among three largest in life insurance market share in less than two years after its operation in the country. (28th September 2009)
Thursday, September 17, 2009
StanChart to advise Bayan on Indonesia coal financing
JAKARTA -
Indonesian coal miner PT Bayan Resources Tbk (BYAN.JK) said on Wednesday it has appointed Standard Chartered Bank (STAN.L) as a financial adviser for raising at least $150 million for a briquetted coal project.
Standard Chartered is advising PT Kaltim Supacoal -- a joint venture firm between Bayan and a unit of Australia's White Energy Ltd (WEC.AX) -- on financing for the expansion phase of Bayan's Tabang mine in East Kalimantan on Borneo island to 5 million tonnes in annual capacity, it said.
"Based on current information and proposed expansion plans, the final amount available under the facility is expected to be a minimum of $150 million," Bayan said in a statement.
The joint venture was established to turn high moisture coal produced in Bayan's Tabang mine into a higher energy clean burning product using technology provided by White Energy for use in coal-fired power plants.
Bayan plans to get production up to 15 million tonnes a year from an initial target of 5 million. It has completed construction of the first coal upgrading plant and has produced first batch upgraded clean coal briquettes last month at its plant which has a capacity of 1 million tonnes per annum.
The financing will be conditional upon the successful completion of due diligence by Standard Chartered Bank including the satisfactory operation of the new plant, the firm said.
Standard Chartered has also agreed to provide Kaltim Supacoal with an immediate interim working capital facility of $10 million to assist with its operating and production ramp-up expenses.
Bayan is one of Indonesia's largest coal miners, operating a 15 million tonnes per year coal terminal at Balikpapan in East Kalimantan.
Indonesian coal miner PT Bayan Resources Tbk (BYAN.JK) said on Wednesday it has appointed Standard Chartered Bank (STAN.L) as a financial adviser for raising at least $150 million for a briquetted coal project.
Standard Chartered is advising PT Kaltim Supacoal -- a joint venture firm between Bayan and a unit of Australia's White Energy Ltd (WEC.AX) -- on financing for the expansion phase of Bayan's Tabang mine in East Kalimantan on Borneo island to 5 million tonnes in annual capacity, it said.
"Based on current information and proposed expansion plans, the final amount available under the facility is expected to be a minimum of $150 million," Bayan said in a statement.
The joint venture was established to turn high moisture coal produced in Bayan's Tabang mine into a higher energy clean burning product using technology provided by White Energy for use in coal-fired power plants.
Bayan plans to get production up to 15 million tonnes a year from an initial target of 5 million. It has completed construction of the first coal upgrading plant and has produced first batch upgraded clean coal briquettes last month at its plant which has a capacity of 1 million tonnes per annum.
The financing will be conditional upon the successful completion of due diligence by Standard Chartered Bank including the satisfactory operation of the new plant, the firm said.
Standard Chartered has also agreed to provide Kaltim Supacoal with an immediate interim working capital facility of $10 million to assist with its operating and production ramp-up expenses.
Bayan is one of Indonesia's largest coal miners, operating a 15 million tonnes per year coal terminal at Balikpapan in East Kalimantan.
Tuesday, September 15, 2009
Indonesia's largest bank leads syndication credit to fertilizer company
JAKARTA-
Indonesia's largest bank, Bank Mandiri, was appointed to lead a syndication credit, worth 490 million U.S. dollars, for PT Pupuk Kalimatan Timur (Pupuk Kaltim),the country's biggest fertilizer manufacturer, local media detikcom reported on Monday.
The fund is aimed to refinance construction of Kaltim-5 project with capacity of 2,500 Metric Tons per Day (MTPD) of ammonia and 3,500 MTPD of urea in Bontang of West Kalimantan, Agus Martowardojo, the bank's president director, was quoted by the report as saying.
The total investment for the project is 700 million U.S. dollars, according to the report.
"The syndication credit is expected to be an important momentum to support government program of fertilizer company revitalization for the sake of the country's food resilience," said Agus here.
He said that local and foreign banks have expressed their intention to participate in the syndication.
There is an annual demand of 10 million tons of fertilizer in the country, however, the domestic companies can only produce 7 million tons a year.
The Pupuk Kaltim's president director Hidayat Nyakman said the project is one effort to increase Indonesia's fertilizer production capacity. The project will replace the aging and inefficient Kaltim -1.
Hidayat said that of the total investment of 700 million, his company expects 70 percent (490 million dollars) from banking finance and the rest (210 million dollars) from its internal fund.
Indonesia's largest bank, Bank Mandiri, was appointed to lead a syndication credit, worth 490 million U.S. dollars, for PT Pupuk Kalimatan Timur (Pupuk Kaltim),the country's biggest fertilizer manufacturer, local media detikcom reported on Monday.
The fund is aimed to refinance construction of Kaltim-5 project with capacity of 2,500 Metric Tons per Day (MTPD) of ammonia and 3,500 MTPD of urea in Bontang of West Kalimantan, Agus Martowardojo, the bank's president director, was quoted by the report as saying.
The total investment for the project is 700 million U.S. dollars, according to the report.
"The syndication credit is expected to be an important momentum to support government program of fertilizer company revitalization for the sake of the country's food resilience," said Agus here.
He said that local and foreign banks have expressed their intention to participate in the syndication.
There is an annual demand of 10 million tons of fertilizer in the country, however, the domestic companies can only produce 7 million tons a year.
The Pupuk Kaltim's president director Hidayat Nyakman said the project is one effort to increase Indonesia's fertilizer production capacity. The project will replace the aging and inefficient Kaltim -1.
Hidayat said that of the total investment of 700 million, his company expects 70 percent (490 million dollars) from banking finance and the rest (210 million dollars) from its internal fund.
Friday, September 11, 2009
Indonesia's Mandiri to open remittance unit in Malaysia
JAKARTA-
Indonesia's Bank Mandiri (BMRI.JK) will open a new unit in Kuala Lumpur dedicated to collecting remittances from the millions of Indonesians working in Malaysia, a senior executive said late on Thursday.
Thomas Arifin, Director for International Banking, said the new unit would help Mandiri, Indonesia's biggest bank, increase its fee-based income.
"The bank will initially cover millions of Indonesian workers who are working in Malaysia by progressively extending the number of outlets," Arifin said in a text message sent to Investor Daily.
In a press release on Friday, Bank Mandiri said the remittance unit in Malaysia would be set up by Mandiri International Remittance, the lender's subsidiary which is focused on developing remittance services.
Indonesians working abroad, mainly Malaysia, Singapore and the Middle East, sent home about $8.2 billion in remittances in 2008, according to the state agency in charge of migrant workers.
However, remittances are expected to drop as much as 10 percent this year as firms lay off workers because of tougher economic conditions.
Shares in Bank Mandiri were unchanged on Friday, while the broader market .JKSE was up 0.4 percent.
Indonesia's Bank Mandiri (BMRI.JK) will open a new unit in Kuala Lumpur dedicated to collecting remittances from the millions of Indonesians working in Malaysia, a senior executive said late on Thursday.
Thomas Arifin, Director for International Banking, said the new unit would help Mandiri, Indonesia's biggest bank, increase its fee-based income.
"The bank will initially cover millions of Indonesian workers who are working in Malaysia by progressively extending the number of outlets," Arifin said in a text message sent to Investor Daily.
In a press release on Friday, Bank Mandiri said the remittance unit in Malaysia would be set up by Mandiri International Remittance, the lender's subsidiary which is focused on developing remittance services.
Indonesians working abroad, mainly Malaysia, Singapore and the Middle East, sent home about $8.2 billion in remittances in 2008, according to the state agency in charge of migrant workers.
However, remittances are expected to drop as much as 10 percent this year as firms lay off workers because of tougher economic conditions.
Shares in Bank Mandiri were unchanged on Friday, while the broader market .JKSE was up 0.4 percent.
Wednesday, September 9, 2009
More than a year ago, Malaysia Today triggered the alarm bell by revealing that Maybank, a taxpayer-owned bank, was about to blow billions in a stupid deal. None of the politicians from Pakatan Rakyat took up the case though. Maybe they felt since it was Malaysia Today that revealed it then there was no need to panic. But NST and BT also reported the matter, although they tried to make it sound like a positive move. Now, everyone is trying to lock the stable door after the horse has bolted.
NO HOLDS BARRED
Raja Petra Kamarudin
Another RM2 billion loss?
By Hussein Hamid
http://blog.limkitsiang.com/, 9 September 2009
Tell me who would be stupid enough to go and buy a bank in Indonesia? You tell me who would do that? Then if that was not enough you go and take a running jump into Pakistan and buy another bank there. But wait there is more! While they are doing that why not pick up a bank in Vietnam. In all they spent an incredible RM10.8 billion to acquire these three banks. Who would be stupid enough to do this when Maybank has been advise AGAINST making the purchase? Maybank belongs to the Government and so they will take instructions from the Government.
Taking instructions from a Government run by idiots who thinks that Maybank is also Maybank. So in essence it is the Barisan Government that is stupid enough to go and buy three Banks in Indonesia, Pakistan and Vietnam for RM10.8 billion.
Now Malayan Banking has confirmed that it lost RM2 billion in this escapade. Now which UMNO guy made a few hundred million in commission from these purchases? Who are the usual suspects? Najib as the Minister of Finance has to be suspect number one – but if MACC does the questioning they will say that he is just ‘helping with inquires’. But Najib must beware that even helping with inquiries can be dangerous if Muhyiddin has anything to do about it.
Najib must have been advised by that Nor Mohamed Yaacob because he had experience of losing more billion when he was with Bank Negara – around RM30 billion in fact.
This latest escapades would have been hysterically funny if it had happened in one of those tin pot African country where you would need half the money in the Banks just to buy a loaf of bread. And of course as far as Najib is concern this is a ‘victimless crime’ because it does no physical harm to any person or property, or to which was in fact consented, and is currently illegal if based on statutory laws. As victimless as PKFZ and all those plundering of the nation resources. Well Najib I got news for you. The Rakyat now knows that in the end they pay !! That RM37.23 million Aidilfitri bonus for Felda – we all pay. That RN500 million for Razak Baginda – we pay. Soon you will be paying for this that you are now making the Rakyat pay…and then it will be Good Night for you.
*************************************************
Maybank wins bid for Indonesia's BII
By Adeline Paul Raj
New Straits Times, 27 March 2008
MALAYSIA'S biggest bank, Malayan Banking Bhd (Maybank), has won a bid to take control of Bank Internasional Indonesia (BII) for US$1.5 billion (about RM4.8 billion), a major step for the lender to expand in the region. BII is Indonesia's sixth largest bank in terms of assets, with over 230 branches.
"This acquisition will transform our growth prospects in Indonesia and significantly enhance our regional presence," Maybank acting chief executive officer Datuk Aminuddin Md Desa told reporters at a briefing yesterday in Kuala Lumpur.
To comply with takeover rules, Maybank will also offer to buy the remaining 44 per cent of BII, which could push its total bill to US$2.7 billion (RM8.6 billion). It plans to fund this internally. The deal comes just days after it agreed to buy a 15 per cent stake in Vietnam's An Binh Bank for RM430 million.
Maybank's bid for BII, at 4.6 times book value, appears steep, an indication of the stiff fight from bigger rivals and limited opportunities in the region. Analysts said that it was probably the most expensive bank purchase ever in Indonesia. Research firms like Citigroup had expected it to pay US$1.8 billion (RM5.7 billion) for all of BII.
Aminuddin, however, believes it is worth paying the hefty premium to get a controlling stake in a crucial market like Indonesia. The country has no foreign shareholding limits and offers one of the highest growth potential in the region. "It's an opportunity we couldn't afford to miss," he said.
A Reuters report said Maybank had beaten Bank of China for BII, after Europe's biggest lender, HSBC, dropped out in the last leg of the race. According to Aminuddin, BII will start contributing profits in the third year after the deal is completed. Maybank's strategy is to tap the remittance business and, later, trade finance. With BII, revenue contribution from Maybank's international operations will jump to 30 per cent in the next one or two years from about 19 per cent currently, he said.
In the first stage of the BII deal, which could take three months to complete, Maybank will pay RM4.8 billion to buy all of Sorak Financial Holdings Pte Ltd, which holds 56 per cent of BII. Sorak is owned by Singapore investment arm Temasek (75 per cent) and South Korea's Kookmin Bank (25 per cent). Maybank will then make a RM3.8 billion offer to buy out BII's minority shareholders.
On whether Maybank intends to take BII private, Aminuddin said it was still too early to say as it would depend on how minority shareholders respond to the offer. He pointed out, however, that Indonesian law states that as long as there are at least 3,000 public shareholders, a company can be kept listed no matter what the public shareholding spread is. Maybank, whose shares traded at RM8.95 yesterday before being suspended for the announcement, expects to complete the entire deal in six months. Temasek is selling its stake in BII to comply with Indonesian laws that forbid a foreign investor from owning more than one bank.
*************************************************
Temasek comes full circle with BII stake
Early this year, however, Temasek indicated that it was selling its BII stake. Eventually, an agreement to sell the stake to Maybank for US$1.1 billion was announced in March.
Business Times, 11 August 2008
Temasek Holdings’ trouble-plagued bid to sell a stake in Indonesia's PT Bank Internasional Indonesia to Malaysia's Maybank holds a significance beyond the deal itself. More than just a transaction gone awry, it also reflects the changing realities facing the Singapore investment company.
The story of BII in Temasek's portfolio, in fact, says a lot about the shifts in its investment history over the last few years.
It will not be too much of an exaggeration to say that the road to Barclays and Merrill Lynch started with two Indonesian banks in the early 2000s. BII was one of the first major overseas investments by Temasek. Back in 2003, Temasek led a consortium called Sorak Financial Holdings, which also included Kookmin Bank, Barclays and Swiss-based ICB Financial Group Holdings, to clinch ownership of BII after reaching an agreement with the Indonesian Bank Restructuring Agency (Ibra).
Sorak paid 1.9 trillion rupiah (S$380 million at the time) for a 51 per cent stake in BII. The BII acquisition came just after Temasek and Deutsche Bank acquired a 62 per cent stake in another Indonesian lender, Bank Danamon, earlier that year.
Until then, Temasek's major investments had been mostly Singapore-centric. So BII, together with Danamon, marked the start of Temasek's overseas investments, as well as the beginning of its investments in foreign banks. Some questioned the acquisitions at the time, while others saw a political motive (buying the two banks, which were distressed entities restructured for sale by Ibra, was seen as contributing to Indonesia's recovery from the Asian crisis).
But there was also a clear commercial imperative: It was a genuine opportunity to buy financial assets at attractive valuations with the potential for strong returns — a theme that would run through to the present time.
Temasek went on to buy over Barclays and ICB's stakes in BII, and is estimated to have invested at least S$455 million in all in the bank.
Then came one of the regulatory shifts that have become all too familiar to Temasek. New foreign ownership rules under the Indonesian central bank's single presence policy, which takes effect by the end of 2010, meant that Temasek had to reduce its Indonesian bank portfolio by half.
Until late last year, the preferred option seemed to be a merger of BII and Danamon to meet the new rules. BII went as far as to say that it was drafting a proposal to merge with Danamon. The two banks complemented each other, said BII president-director Henry Ho.
Early this year, however, Temasek indicated that it was selling its BII stake. Eventually, an agreement to sell the stake to Maybank for US$1.1 billion was announced in March.
What led to the change of heart? First, it could be reflective of Temasek's growing caution, even disappointment, over the Indonesian market. The regulatory shifts and flip-flops in Indonesia, including that involving Temasek's telco investment
Indosat, suggested that reducing its Indonesian exposure might be a prudent option.
At the same time, while the financial sector in Indonesia appeared healthy, critics have charged that it was vulnerable to a sudden reversal of fortunes because of the inflow of hot money into the stock market and the spike, until recently, in international commodity prices.
The second factor might hold some irony. If the path to Barclays and Merrill had started with BII and Danamon, then the decision to sell BII could also be traced to Temasek's push west-wards. Temasek's investments in Barclays and Merrill, beginning last year, signified a new global thrust beyond regional acquisitions.
That meant realigning the portfolio, and raising funds for new investments by disposing of existing assets. There could be one more reason at play: the billions pumped into Barclays and Merrill, while undeniably long-term in nature, are currently sitting on huge paper losses. It would be nice to book a profit somewhere, and the sale of the BII stake to Maybank would have yielded a useful S$1 billion, according to some estimates.
Of course, in the neighbourhood scheme of things, Malaysian central bank Bank Negara put the brakes on the deal last month. Apparently, it was worried that Maybank could suffer losses from overpaying (not unreasonable, given that the price is 4.7 times over book) for BII. It is still unclear how things would pan out, but as it is, it is a setback for Temasek.
It is now forced to revisit its options for BII, including merging it with Danamon. And if Temasek continues to put the BII stake up for sale, it is unlikely to fetch a price as high as the one Maybank was willing to pay, given the circumstances.
Another lesson in the realities of investing in the region then. No wonder even ailing US and European banks look so attractive.
*************************************************
Najib: Deal good for Maybank
New Straits Times, October 2008
Maybank's decision to acquire a controlling stake in PT Bank Internasional Indonesia (BII) was made before the global economic downturn, Datuk Seri Najib Razak said.
Therefore, he said, it was too late for Maybank to back out of the acquisition.
Asked if the move was a good idea considering the current state of the global economy, the deputy prime minister and finance minister said the decision was a commercial one which was up to Maybank to decide on without government intervention.
Najib, however, insisted that the move was still a good one for the country.
"It (Maybank) will own the fifth largest Indonesian bank and become a regional bank," he said at the cabinet's open house at the Putra World Trade Centre on Wednesday.
Maybank shelled out RM4.26 billion for a 55.6 per cent stake in BII on Tuesday.
It was given a RM759 million rebate after the original price was deemed too high given the current economic scenario.
The initial price was more than four times the book value of the bank, resulting in several parties demanding that a new deal, at two to three times the book value, be hammered out.
Maybank stood to forfeit its RM480 million deposit from the original tender if it pulled out of the deal.
NO HOLDS BARRED
Raja Petra Kamarudin
Another RM2 billion loss?
By Hussein Hamid
http://blog.limkitsiang.com/, 9 September 2009
Tell me who would be stupid enough to go and buy a bank in Indonesia? You tell me who would do that? Then if that was not enough you go and take a running jump into Pakistan and buy another bank there. But wait there is more! While they are doing that why not pick up a bank in Vietnam. In all they spent an incredible RM10.8 billion to acquire these three banks. Who would be stupid enough to do this when Maybank has been advise AGAINST making the purchase? Maybank belongs to the Government and so they will take instructions from the Government.
Taking instructions from a Government run by idiots who thinks that Maybank is also Maybank. So in essence it is the Barisan Government that is stupid enough to go and buy three Banks in Indonesia, Pakistan and Vietnam for RM10.8 billion.
Now Malayan Banking has confirmed that it lost RM2 billion in this escapade. Now which UMNO guy made a few hundred million in commission from these purchases? Who are the usual suspects? Najib as the Minister of Finance has to be suspect number one – but if MACC does the questioning they will say that he is just ‘helping with inquires’. But Najib must beware that even helping with inquiries can be dangerous if Muhyiddin has anything to do about it.
Najib must have been advised by that Nor Mohamed Yaacob because he had experience of losing more billion when he was with Bank Negara – around RM30 billion in fact.
This latest escapades would have been hysterically funny if it had happened in one of those tin pot African country where you would need half the money in the Banks just to buy a loaf of bread. And of course as far as Najib is concern this is a ‘victimless crime’ because it does no physical harm to any person or property, or to which was in fact consented, and is currently illegal if based on statutory laws. As victimless as PKFZ and all those plundering of the nation resources. Well Najib I got news for you. The Rakyat now knows that in the end they pay !! That RM37.23 million Aidilfitri bonus for Felda – we all pay. That RN500 million for Razak Baginda – we pay. Soon you will be paying for this that you are now making the Rakyat pay…and then it will be Good Night for you.
*************************************************
Maybank wins bid for Indonesia's BII
By Adeline Paul Raj
New Straits Times, 27 March 2008
MALAYSIA'S biggest bank, Malayan Banking Bhd (Maybank), has won a bid to take control of Bank Internasional Indonesia (BII) for US$1.5 billion (about RM4.8 billion), a major step for the lender to expand in the region. BII is Indonesia's sixth largest bank in terms of assets, with over 230 branches.
"This acquisition will transform our growth prospects in Indonesia and significantly enhance our regional presence," Maybank acting chief executive officer Datuk Aminuddin Md Desa told reporters at a briefing yesterday in Kuala Lumpur.
To comply with takeover rules, Maybank will also offer to buy the remaining 44 per cent of BII, which could push its total bill to US$2.7 billion (RM8.6 billion). It plans to fund this internally. The deal comes just days after it agreed to buy a 15 per cent stake in Vietnam's An Binh Bank for RM430 million.
Maybank's bid for BII, at 4.6 times book value, appears steep, an indication of the stiff fight from bigger rivals and limited opportunities in the region. Analysts said that it was probably the most expensive bank purchase ever in Indonesia. Research firms like Citigroup had expected it to pay US$1.8 billion (RM5.7 billion) for all of BII.
Aminuddin, however, believes it is worth paying the hefty premium to get a controlling stake in a crucial market like Indonesia. The country has no foreign shareholding limits and offers one of the highest growth potential in the region. "It's an opportunity we couldn't afford to miss," he said.
A Reuters report said Maybank had beaten Bank of China for BII, after Europe's biggest lender, HSBC, dropped out in the last leg of the race. According to Aminuddin, BII will start contributing profits in the third year after the deal is completed. Maybank's strategy is to tap the remittance business and, later, trade finance. With BII, revenue contribution from Maybank's international operations will jump to 30 per cent in the next one or two years from about 19 per cent currently, he said.
In the first stage of the BII deal, which could take three months to complete, Maybank will pay RM4.8 billion to buy all of Sorak Financial Holdings Pte Ltd, which holds 56 per cent of BII. Sorak is owned by Singapore investment arm Temasek (75 per cent) and South Korea's Kookmin Bank (25 per cent). Maybank will then make a RM3.8 billion offer to buy out BII's minority shareholders.
On whether Maybank intends to take BII private, Aminuddin said it was still too early to say as it would depend on how minority shareholders respond to the offer. He pointed out, however, that Indonesian law states that as long as there are at least 3,000 public shareholders, a company can be kept listed no matter what the public shareholding spread is. Maybank, whose shares traded at RM8.95 yesterday before being suspended for the announcement, expects to complete the entire deal in six months. Temasek is selling its stake in BII to comply with Indonesian laws that forbid a foreign investor from owning more than one bank.
*************************************************
Temasek comes full circle with BII stake
Early this year, however, Temasek indicated that it was selling its BII stake. Eventually, an agreement to sell the stake to Maybank for US$1.1 billion was announced in March.
Business Times, 11 August 2008
Temasek Holdings’ trouble-plagued bid to sell a stake in Indonesia's PT Bank Internasional Indonesia to Malaysia's Maybank holds a significance beyond the deal itself. More than just a transaction gone awry, it also reflects the changing realities facing the Singapore investment company.
The story of BII in Temasek's portfolio, in fact, says a lot about the shifts in its investment history over the last few years.
It will not be too much of an exaggeration to say that the road to Barclays and Merrill Lynch started with two Indonesian banks in the early 2000s. BII was one of the first major overseas investments by Temasek. Back in 2003, Temasek led a consortium called Sorak Financial Holdings, which also included Kookmin Bank, Barclays and Swiss-based ICB Financial Group Holdings, to clinch ownership of BII after reaching an agreement with the Indonesian Bank Restructuring Agency (Ibra).
Sorak paid 1.9 trillion rupiah (S$380 million at the time) for a 51 per cent stake in BII. The BII acquisition came just after Temasek and Deutsche Bank acquired a 62 per cent stake in another Indonesian lender, Bank Danamon, earlier that year.
Until then, Temasek's major investments had been mostly Singapore-centric. So BII, together with Danamon, marked the start of Temasek's overseas investments, as well as the beginning of its investments in foreign banks. Some questioned the acquisitions at the time, while others saw a political motive (buying the two banks, which were distressed entities restructured for sale by Ibra, was seen as contributing to Indonesia's recovery from the Asian crisis).
But there was also a clear commercial imperative: It was a genuine opportunity to buy financial assets at attractive valuations with the potential for strong returns — a theme that would run through to the present time.
Temasek went on to buy over Barclays and ICB's stakes in BII, and is estimated to have invested at least S$455 million in all in the bank.
Then came one of the regulatory shifts that have become all too familiar to Temasek. New foreign ownership rules under the Indonesian central bank's single presence policy, which takes effect by the end of 2010, meant that Temasek had to reduce its Indonesian bank portfolio by half.
Until late last year, the preferred option seemed to be a merger of BII and Danamon to meet the new rules. BII went as far as to say that it was drafting a proposal to merge with Danamon. The two banks complemented each other, said BII president-director Henry Ho.
Early this year, however, Temasek indicated that it was selling its BII stake. Eventually, an agreement to sell the stake to Maybank for US$1.1 billion was announced in March.
What led to the change of heart? First, it could be reflective of Temasek's growing caution, even disappointment, over the Indonesian market. The regulatory shifts and flip-flops in Indonesia, including that involving Temasek's telco investment
Indosat, suggested that reducing its Indonesian exposure might be a prudent option.
At the same time, while the financial sector in Indonesia appeared healthy, critics have charged that it was vulnerable to a sudden reversal of fortunes because of the inflow of hot money into the stock market and the spike, until recently, in international commodity prices.
The second factor might hold some irony. If the path to Barclays and Merrill had started with BII and Danamon, then the decision to sell BII could also be traced to Temasek's push west-wards. Temasek's investments in Barclays and Merrill, beginning last year, signified a new global thrust beyond regional acquisitions.
That meant realigning the portfolio, and raising funds for new investments by disposing of existing assets. There could be one more reason at play: the billions pumped into Barclays and Merrill, while undeniably long-term in nature, are currently sitting on huge paper losses. It would be nice to book a profit somewhere, and the sale of the BII stake to Maybank would have yielded a useful S$1 billion, according to some estimates.
Of course, in the neighbourhood scheme of things, Malaysian central bank Bank Negara put the brakes on the deal last month. Apparently, it was worried that Maybank could suffer losses from overpaying (not unreasonable, given that the price is 4.7 times over book) for BII. It is still unclear how things would pan out, but as it is, it is a setback for Temasek.
It is now forced to revisit its options for BII, including merging it with Danamon. And if Temasek continues to put the BII stake up for sale, it is unlikely to fetch a price as high as the one Maybank was willing to pay, given the circumstances.
Another lesson in the realities of investing in the region then. No wonder even ailing US and European banks look so attractive.
*************************************************
Najib: Deal good for Maybank
New Straits Times, October 2008
Maybank's decision to acquire a controlling stake in PT Bank Internasional Indonesia (BII) was made before the global economic downturn, Datuk Seri Najib Razak said.
Therefore, he said, it was too late for Maybank to back out of the acquisition.
Asked if the move was a good idea considering the current state of the global economy, the deputy prime minister and finance minister said the decision was a commercial one which was up to Maybank to decide on without government intervention.
Najib, however, insisted that the move was still a good one for the country.
"It (Maybank) will own the fifth largest Indonesian bank and become a regional bank," he said at the cabinet's open house at the Putra World Trade Centre on Wednesday.
Maybank shelled out RM4.26 billion for a 55.6 per cent stake in BII on Tuesday.
It was given a RM759 million rebate after the original price was deemed too high given the current economic scenario.
The initial price was more than four times the book value of the bank, resulting in several parties demanding that a new deal, at two to three times the book value, be hammered out.
Maybank stood to forfeit its RM480 million deposit from the original tender if it pulled out of the deal.
Friday, September 4, 2009
Maybank, CIMB in big fight in Indonesia
THE stage is set and the fight begins at two levels for CIMB group and Malayan Banking Bhd (Maybank) to slug it out in Indonesia – between themselves as the two largest Malaysian banking groups – and among the formidable banking giants in Indonesia.
Between the two, it looks like CIMB has a seven-year headstart, having bought Bank Niaga at a time when many were afraid to touch Indonesian assets and at a much cheaper price of 1.5 times book value compared with Maybank’s acquisition of Bank Internasional Indonesia (BII) at 4.6 times.
While Maybank was busy settling external and internal issues related to the Indonesian government’s regulations and huge impairment charges at BII, CIMB was building its fort in Indonesia by merging Bank Niaga with Bank Lippo. That brings CIMB Niaga’s branch network in Indonesia to 654 which definitely overshadows BII’s 250 at the moment.
On an individual bank level, CIMB Niaga, the fifth largest bank in terms of asset size, and BII, which is eighth largest, will have to contend with the other banking giants in Indonesia.
CIMB’s overseas (mostly from Indonesia) pre-tax profit contribution at 22% is, of course, a source of excitement within the group. It is something that Maybank, which is already very successful in its core commercial banking operations, is eyeing with “green eyes.’’
For the second quarter ended June 30, the enlarged CIMB Niaga’s pre-tax contribution surged 82.8% to RM371mil from RM203mil. When it comes to business and competition, those that respond to new challenges can emerge winners and those that appear to be the current winners can suddenly find themselves out of the race, if they are not vigilant.
For many back home, it will be a keenly watched competition between the two Malaysian banking groups in Indonesia especially now that Maybank has made known its decision to take a one-time hit of RM1.7bil in impairment and higher loan loss provisions at BII.
With a new team in place, BII appears resolute and confident that it can make some money at the operating level by year-end although it will take three to five years to be earnings accretive.
The anticipation (and pressure) is very obvious among Maybank executives when they speak of BII. “Our first priority was to address the motorcycle financing problems,’’ said Maybank president and CEO Datuk Seri Abdul Wahid at last week’s results briefing. “That has turned around with good operating numbers. We will proceed to improve consumer, small and medium-scale enterprises and corporate banking at BII.’’
The initial expectations of BII are not high but as the momentum builds up, Maybank hopes to at least obtain a return on investment that is equivalent to the cost of debt (taken to fund the acquisition) at about 6%, which comes up to about RM474mil.
The competition between CIMB and Maybank in Indonesia will become more intense should Maybank double its number of branches at BII, by which time, CIMB would have done something else to fortify its position.
At the moment, CIMB seems pretty confident that it has the scale; something that is required in the Indonesian banking sector, while their strategists would probably be trying to figure how fast Maybank would take to carry out its BII expansion.
CIMB chief financial officer Kenny Kim recently told StarBiz that CIMB Niaga was dominant in the capital market franchise, with Niaga’s strength in retail and corporate banking and Lippo’s leadership in transactional banking. Overall, the message is to build leadership in key market segments.
All said, one should not forget that Maybank has other substantial foreign operations such as in Singapore while CIMB is about to implement a transformation programme for its Thai business.
By Yap Leng Kuen
● Senior business editor Yap Leng Kuen’s view is that reach through a strong branch presence is important but equally vital are internal strategies to extract value. Many would be watching if BII can deliver its numbers and show that it is able to earn more from a smaller physical branch network than CIMB Niaga.
Between the two, it looks like CIMB has a seven-year headstart, having bought Bank Niaga at a time when many were afraid to touch Indonesian assets and at a much cheaper price of 1.5 times book value compared with Maybank’s acquisition of Bank Internasional Indonesia (BII) at 4.6 times.
While Maybank was busy settling external and internal issues related to the Indonesian government’s regulations and huge impairment charges at BII, CIMB was building its fort in Indonesia by merging Bank Niaga with Bank Lippo. That brings CIMB Niaga’s branch network in Indonesia to 654 which definitely overshadows BII’s 250 at the moment.
On an individual bank level, CIMB Niaga, the fifth largest bank in terms of asset size, and BII, which is eighth largest, will have to contend with the other banking giants in Indonesia.
CIMB’s overseas (mostly from Indonesia) pre-tax profit contribution at 22% is, of course, a source of excitement within the group. It is something that Maybank, which is already very successful in its core commercial banking operations, is eyeing with “green eyes.’’
For the second quarter ended June 30, the enlarged CIMB Niaga’s pre-tax contribution surged 82.8% to RM371mil from RM203mil. When it comes to business and competition, those that respond to new challenges can emerge winners and those that appear to be the current winners can suddenly find themselves out of the race, if they are not vigilant.
For many back home, it will be a keenly watched competition between the two Malaysian banking groups in Indonesia especially now that Maybank has made known its decision to take a one-time hit of RM1.7bil in impairment and higher loan loss provisions at BII.
With a new team in place, BII appears resolute and confident that it can make some money at the operating level by year-end although it will take three to five years to be earnings accretive.
The anticipation (and pressure) is very obvious among Maybank executives when they speak of BII. “Our first priority was to address the motorcycle financing problems,’’ said Maybank president and CEO Datuk Seri Abdul Wahid at last week’s results briefing. “That has turned around with good operating numbers. We will proceed to improve consumer, small and medium-scale enterprises and corporate banking at BII.’’
The initial expectations of BII are not high but as the momentum builds up, Maybank hopes to at least obtain a return on investment that is equivalent to the cost of debt (taken to fund the acquisition) at about 6%, which comes up to about RM474mil.
The competition between CIMB and Maybank in Indonesia will become more intense should Maybank double its number of branches at BII, by which time, CIMB would have done something else to fortify its position.
At the moment, CIMB seems pretty confident that it has the scale; something that is required in the Indonesian banking sector, while their strategists would probably be trying to figure how fast Maybank would take to carry out its BII expansion.
CIMB chief financial officer Kenny Kim recently told StarBiz that CIMB Niaga was dominant in the capital market franchise, with Niaga’s strength in retail and corporate banking and Lippo’s leadership in transactional banking. Overall, the message is to build leadership in key market segments.
All said, one should not forget that Maybank has other substantial foreign operations such as in Singapore while CIMB is about to implement a transformation programme for its Thai business.
By Yap Leng Kuen
● Senior business editor Yap Leng Kuen’s view is that reach through a strong branch presence is important but equally vital are internal strategies to extract value. Many would be watching if BII can deliver its numbers and show that it is able to earn more from a smaller physical branch network than CIMB Niaga.
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