Thursday, January 6, 2011

Maybank acquisition of Kim Eng in line with regional strategy

KUALA LUMPUR: Standard & Poor's Ratings Services said MALAYAN BANKING BHD []'s possible acquisition of Kim Eng Holdings Ltd was in line with Maybank's plan to be a leading regional financial services provider in Southeast Asia.

The ratings agency said on Thursday, Jan 6 its its ratings on Maybank (A-/Stable/A-2) were not affected by the bank's possible acquisition of Kim Eng.

'We consider the proposed acquisition to be in line with the bank's strategy of becoming a leading regional financial services provider in Southeast Asia.

'The transaction would combine Maybank's commercial banking operations with Kim Eng's stock broking presence in the region.

However, S&P said the proposed transaction could have a material impact on Maybank's capitalisation, putting pressure on the bank's 'a-' stand-alone credit profile (SACP).

S&P said if it lowered the SACP by a notch, the counterparty credit rating would likely remain 'A-' to reflect our expectation of extraordinary government support.

'In our view, Maybank is a highly important institution to Malaysia (foreign currency A-/Stable/A-2; local-currency A+/Stable/A-1; ASEAN scale axAAA/axA-1+),' it said.

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