Malaysian banks wary of Indonesia's new share limit

Malaysia’s CIMB and Maybank would be the most affected by Indonesia's new regulation limiting the maximum bank ownership of a single shareholder to below 50 percent.

Unconfirmed reports say that Bank Indonesia was set to announce next month a reduction in the single-shareholder threshold from 99 percent currently to 40 percent for financial institutions, 30 percent for non-financial institutions and 20 percent for individuals.

CIMB owns 97.9 percent of CIMB Niaga, while Maybank owns 97 percent of Bank Internasional Indonesia.

Analysts said the move would hurt CIMB more than Maybank as it derives a higher proportion of earnings from Indonesia.

Bank Niaga accounts for about 30 percent of CIMB’s pre-tax profit, while BII accounts for less than five percent of Maybank’s earnings.

Maybank said it was waiting for an official announcement on the proposed new regulations from the authorities in Indonesia.

“Once more clarity is obtained, we would be better able to articulate our position and the steps we could take moving forward,” a spokesperson said.

CIMB declined comment.

Any such move also hurts Singapore bank DBS’ plan to buy a 67.4 percent stake held by Temasek Holdings in Indonesia’s Bank Danamon for $7.2 billion, unless it negotiates an exemption.

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