WHOLESALE BANKING | Cesar Tordesillas, Malaysia

Malaysian banks unlikely to engage in capital raising

Unless they are trying to significantly boost capital outlay, Banks in Malaysia are unlikely to engage in capital raising activities, said banking analysts.

“We believe that most banks in Malaysia are unlikely to engage in capital raising activities in the near term given that they are well capitalised to meet the Basel III requirement, unless they foresee that they may need capital for something else," said Alliance Research banking analyst Cheah King Yoong.

“We do anticipate that most banks will be in capital conservation mode to preserve their capital in order to meet the capital requirement under Basel III which will kick off next year,” he added.

The core equity capital ratio, which measures the amount of capital a bank has, is generally above 7% for all banks in Malaysia and this is healthy enough to meet Basel 111 requirements, according to Cheah

Maybank which recently raised a record RM3.66bil via a private placement exercise was looking to strengthen its current businesses in the region, in relation to the rapid expansion of its business in Indonesia, Philippines and other regional markets. It denied looking at any merger and acquisition activity for now as previously speculated.

It said its private placement exercise was a move to boost its equity capital ahead of the implementation of the Basel III capital framework.

Apart from the continued strength of the Malaysian domestic economy, Maybank was seeing tremendous opportunities in the economic growth across the Asean region, it added.

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