The Dandelions

.. the mutual admiration and bashing society.

This is your Finance Minister speaking..

Posted by barbie on October 7, 2008

This is an old news, but due to my long Raya holiday.. I just get to read it this morning.

KUALA LUMPUR, Oct 1 – Despite the current economic turmoil, Finance Minister Datuk Seri Najib Razak has called Maybank’s acquisition of a controlling stake in PT Bank Internasional Indonesia (BII) a beneficial move.

“It has obtained a bank in the fifth largest population in the world and this makes it a regional bank,” he told reporters at today’s Cabinet Raya open house at the Putra World Trade Centre.

The deputy prime minister said that the decision was a commercial one and the government would not intervene.

“It was a decision taken before the current global financial crisis and you can’t back out of it,” he replied when quizzed about the wisdom of the move.

Maybank finally paid RM4.26 billion for BII yesterday after being given an RM759 million rebate for a 55.6% stake in the bank after criticism that the original price-tag was too high given the economic situation.

The original price was 4.6 times the book value of BII and calls for a new deal at 2-3 times book value were raised by certain quarters.

However, pulling out from the original tender would have resulted in forfeiture of the RM480 million deposit.

(The Malaysian Insider)

Simple maths.

55.6% stake at inflated book value = RM4.9bil

Actual value = 1/3 = RM1.4bil

Discount given = RM700mil

Overpaid = RM4.26bil-RM1.4bil = RM2.86bil

If Maybank pull out from the tender, lose RM480mil.

Somehow, paying extra RM2.86bil than losing RM480mil (paying the penalty) is considered a better deal to certain people. Probably, the deal must go on because someone’s desperate to earn a big commission?

Obviously, this is a F-GOOD deal! RM2.86bil is gone like that! BII is considered a mediocre bank it’s not even sure if in the nearest future Maybank will be able to turn it around. Well, probably when the time come, we will see another ala-MV Augusta deal, and be sure we will be told that it is a good deal again!

No other bank in Malaysia charge exorbitantly for ATM transactions, ATM card replacements, online transactions, etc. That’s how Maybank got so rich and cash-flushed. And from the money that they ripped off from the customers, they are overpaying for a mediocre bank. How else Maybank is going to raise for the funds?

Quoting a commentator at The Malaysian Insider:

The answer is obvious, of course.

1) Limit free ATM withdrawals to twice per month. Charge customers RM2 for every subsequent ATM withdrawal.

2) Charge customers RM8 for every online e-Standing Instruction transaction regardless of value

3) Charge customers RM20 for every interbank giro transaction regardless of value

4) Charge customers RM50 for every ATM card replacement

5) Summarily convert every loan account to “Islamic banking” loans that work out to higher cumulative interest rates without the consent of the customers, while issuing circulars saying that being a “prihatin” bank they’re doing it for the benefit of the customers

In short, Maybank will just continue ripping people off at a larger scale. I pray and wish that this dastardly bank will collapse soon.

Great, Singapore just got rid of a stale fish and Malaysia is happy to take it, it takes no idiots to wonder why Temasek readily gave a discount to dispose off their shares. Why Singapore is always ahead of Malaysia when it comes to doing business?

Maybank on Tuesday bought 55.7 per cent of Indonesia’s eighth largest bank from Sorak Financial Holdings for US$1.24bn, a 15 per cent rebate on the original US$1.5bn deal.

Most analysts concede that Maybank paid too much for BII. According to Chris Oh of the Malaysian unit of JPMorgan, Maybank’s RM8.26 billion price tag valued each BII share at 467 rupiah, an 8.4 per cent discount to its original tender offer of 510 rupiah per BII share.

Even so, Oh estimated that the discounted price works out to a 4.2 times price to book valuation or 42 times 2008 earnings — fairly steep valuations in these troubled times of impaired bank asset values. – Business Times Singapore

Oh, Maybank is a GLC company, it belongs to PNB, and EPF is one of the minority shareholders of the bank (if you don’t already knew that) so there goes my hard earned money.

Why Maybank would not want to just abort the deal and pay the penalty? Lose face a bit.. but, trust Singapore to shrewedly negotiated the deal to ‘force’ Maybank into completing the deal, they probably included some special clauses to make sure Maybank complete the deal. Afterall, Maybank couldn’t say it did obtained Bank Negara Malaysia (BNM) approval as it has been approved much earlier before the changes in Indonesia on the selldown. Either way, Maybank is screwed just like you and me, screwed upside down, backside frontside by the government and opposition alike. Heh!


11 Responses to “This is your Finance Minister speaking..”

  1. walski69 said

    Fortunately, I only deal with this screwed up financial organization on a need-to only basis… I don’t bank there (don’t plan to in the future either), nor would I ever recommend anyone banking there.

    Banking in Indonesia is very different than how the industry is run in Malaysia. Over there, while the industry is regulated, it’s only loosely so, and thus just about anyone can open a bank. As far as I know, there is very little intervention by the Central Bank, and so unless a particular bank has a good track record, it can be quite risky for the consumer, as evidenced by the 1998 financial crisis, when the value of the Rupiah plummeted, and many banks had to fold, taking their customers’ funds into the abyss with them.

    Good luck to Maybank if they’re planning to operate BII like they do their own bank in Malaysia… the concept that service charges need to come with actual service (and I mean GOOD service) seems to somehow escape Maybank. Well, at least in Malaysia that seems to be the case…

  2. You know, Maybank is one of the banks I hate the most! Thank god I don’t have an account with them. They’re a bunch of sharks!

  3. […] This is yourFinanceMinister speaking.. […]

  4. mesoso said

    barbie open bank, i deposit, you happy, i happy..hehe


  5. barbie said

    Er, that sounds… wrong 😀

  6. Madame said

    Dammit!!!! Will the plundering and stupidity never cease???

  7. mesoso said

    madame ah…is this not a banana republic we live in?? no??

    mesoso dreams of a land far far away. a kingdom actually (ruled by prince barbie of course..), so beautiful and peaceful..where honesty, sincerity, and abundance are need to cheat, no need to fight, got enuf for everyone..and everyone lives happily ever after…hehe


  8. erniejean said

    Everyone knows the time is almost up for the UMNO goons.

    So expect intensified plundering and pilferaging Madame……. 😦

    Actually, that place you dream of, Mesoso, with Barbie as the Prince may just exist…it’s known in the book of legends as “The Land of the Pink Unicorns”

  9. Abracadabra said

    Yes and I am a banker. I use all your savings to invest in illiquid assets then declare myself bankrupt because of illiquidity. muahahahaha!

  10. mesoso said

    erniejean ah..tell mesoso please please to get to this land of Pink Unicorns?? mesoso wants to go there quick2 ah..


  11. missjolie said

    Just goes to show what we are made of. 😦 A resounding-Malaysia Boleh! Yeah, Malaysia REALLY BOLEH!

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