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Maybank mulls reverse takeover for Philippine unit

Publication Date : 28-02-2014

 

Malayan Banking Bhd (Maybank) has identified several Philippine-listed banks for a possible merger exercise that would see its Philippine unit being listed on the stock market there via a reverse takeover (RTO).

Maybank Philippines Inc president and chief executive officer Herminio M. Famatigan Jr. said two to three Philippine-listed financial institutions had been identified as potential targets.

He added that while the merger route was being studied as a means to get Maybank Philippines listed there, they were also concurrently working on a direct listing of the unit.

In November 2012, the Philippine banking regulator stipulated that Maybank, being a foreign party, needed to list at least 10% of its Philippine bank on the local bourse. Under the regulations, Maybank has until the end of 2015 to list its unit.

“We could address this issue on our own, or we could address this issue with the option to work with someone else. We don’t have a definite option at this moment,” said Maybank group president and chief executive officer Abdul Farid Alias at a briefing on the bank’s financial results.

Maybank had acquired a 60% stake in PNB Republic Bank in 1997 and renamed the bank as Maybank Philippines Inc. Later on, Maybank increased its ownership stake in Maybank Philippines to 99.6%.

On the possibility of Maybank embarking on a merger exercise in the Philippines, Abdul Farid said: “This is a good move. I think we need to create more consolidation in the industry in the Philippines. It will help us to improve the network. We are also taking this opportunity to see what are the options in the marketplace”.

Added Famatigan: “If there are opportunities to buy a listed bank and it makes sense, then we may do that. We would be looking at a distribution network that doesn’t overlap significantly with our current network. Also, it should have a business model that complements ours and is strong in areas that maybe we aren’t strong in.”

As for now, the bank’s gaze is fixed on the end-2015 deadline. “It (the listing) could happen this year, or it could happen next year. But the drop-dead date is end-2015,” Famatigan said.

An analyst told StarBiz that the possibility of Maybank Philippines listing via an initial public offering was higher, as an RTO on an existing listed bank might be too complicated.

For the financial year ended Dec 31, 2013, Maybank Philippines posted a 18.5% gain in pre-tax profit to 677.9 million pesos (US$15 million), while revenue was 30.4% higher at 3.56 billion pesos.

Gross loans were 18.1% up to 37.26 billion pesos while customer deposits stood at 50.59 billion pesos, 49.9% higher than a year ago. Maybank Philippines added 22 branches to close the year with 77 branches.

*US$1 = 44.66 pesos

 

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