S&P: Maybank outlook positive

Standard & Poor's said it affirmed its A-/A-2 counterparty credit ratings on Malayan Banking Bhd. (Maybank) following the bank's announcement that it will acquire a controlling interest of 56% in PT Bank Internasional Indonesia Tbk (B+/CreditWatch positive/B) through Sorak Financial Holdings. Maybank will also be tendering for the 44% in Bank Internasional Indonesia held by the public. The process is likely to take slightly more than six months.

The outlook is positive.

This acquisition is part of Maybank's strategy to increase its geographic diversification, and the agency said that, over the next few years, the acquisition of Bank Internasional Indonesia is expected to improve Maybank's future income profile by serving as a platform in the growing Indonesian market.

The affirmation is based on Maybank's sound financial profile and strong domestic franchise as the largest commercial bank in Malaysia, underpinned by continued improvement in asset quality, S&P said.

That being said, the capital outlay of $1.5 billion is notably larger than the initial bid of $800 million and would result in a decline in Maybank's ratio of adjusted total equity to adjusted assets to 7.1% from 9.1%, the agency added.

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