30 May 2012

Malaysia's 30 per cent foreign ownership limit in local banks may be raised in the near future provided that there is reciprocity in the region - Prime Minister Datuk Seri Najib Razak

Malaysia's 30 per cent foreign ownership limit in local banks may be raised "in the near future" provided that there is reciprocity in the region, Prime Minister Datuk Seri Najib Razak said.

"We're willing to look (at it). At the moment, it's at 30 per cent ... it's possible that we might increase it in the near future. But it's also important within Asean to have reciprocity. I'd like to see more reciprocity," he said at an open dialogue session with fund managers and other investors at the start of the two-day Invest Malaysia conference here yesterday.

Najib's comments come as Indonesia mulls lowering the single ownership limit in its banks. Recent press reports from Indonesia suggest that the country will next month announce plans to limit the ownership in banks to less than 50 per cent for financial institutions.

This poses a major problem for Malayan Banking Bhd (Maybank) and CIMB Group as they each have controlling stakes in Indonesian banks. CIMB owns 97.9 per cent of CIMB Niaga, while Maybank owns 97 per cent of Bank Internasional Indonesia (BII).

"There are some voices of concern (about this), but I hope it won't materialise," Najib said, adding that any such move would be "regressive".

"I don't like to see countries within Asean changing the rules, being more regressive ... I think that's the wrong direction. If at all, stick to the existing rules, but don't go back and be regressive. That's the message we send.

"Because, if they do so, then other countries are going to do the same and that will undermine our efforts for greater integration within Asean," he remarked.

Maybank's president and chief executive officer Datuk Seri Abdul Wahid Omar, speaking to investors later, said Maybank is continuing to engage with the Indonesian authorities on the matter.

"It is our hope that should any percentage be imposed, that percentage should not apply to banking groups," he said.

He noted that if Indonesia's intention in lowering the limit was to improve corporate governance, in terms of limiting control by any single entity or individual, that concept was not new.

"That concept is being embraced by every country, including Malaysia, but it does not apply to banks," Abdul Wahid said, pointing out that OCBC Bank in Malaysia, for example, is fully owned by its parent company.

Last year, there was much speculation that Australia and New Zealand Banking Group (ANZ) may want to up its stake in lender AMMB Holdings Bhd after Najib, on a visit to Australia in March that year, said he was open to the foreign lender raising its stake to 49 per cent.

Najib later clarified that the limit may be evaluated on an individual merit basis.

ANZ, which became a shareholder in 2007, holds a 23.8 per cent stake in AMMB.

Source: www.btimes.com.my

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Prime Minister Najib Razak jokes and says opposition's promises to reduce petrol price overnight, abolishing student loans, abolishing toll rates and increasing minimum wage to RM 4,000/month are too far fetched
Here is the link to the video- http://www.youtube.com/watch?v=JpUSkaDKgiY


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