Best bank – Public Bank
Best equity house – RHB Sakura
Best debt house – CIMB
Best M&A house – CIMB
While capital controls remain in place there is little that Malaysians can do with their cash. So it remains in deposits. Corporate loans have continued to contract but consumer finance is growing strongly, especially auto loans. Of the new credit extended 70% went on car purchase. Such a trend has served Public Bank well once again. It’s the bank that sets the benchmark for service in the consumer-heavy market. Public Bank capitalized on the consumer-finance boom and experienced a 24% growth in mortgage lending, compared with a sector average of 18%. Vehicle hire purchase jumped 66%, with the bank grabbing a 22% market share.
Loans to small and medium-size enterprises also increased and Public Bank dominates this area with a 43% market share. The bank deserves credit for expanding so successfully within the competitive and still overbanked market. Most important, asset quality has not been compromised in a quest for growth. Non-performing loans stayed well below the country’s average of 7.5% to stand at 2.4%.
In the past year several high-profile equity deals hit the Malaysian market. And in the centre of the action was RHB Sakura. Of the RM7.07 billion ($1.8 billion) of IPOs, RM5.41 billion-worth were lead managed by RHB. Its market share in equity market transactions works out at 76.5%.
Deals that grabbed the headlines not only in Malaysia but the region as a whole were the June 2002 IPOs of Maxis and Plus. The two transactions amounted to $1.4 billion, more than double the amount of equity raised in the Malaysian markets over the previous three years. And while the deals were for high-profile Malaysian corporates, they were by no means definite sells. The weekend before the sale of Plus, prime minister Mahathir Mohamad decided to resign, and then just as quickly retracted the announcement. It made investors even more jittery as equity markets worldwide kept sinking. RHB maintained its winning ways when it won the mandate to take Kinsteel public in a deal worth RM27.2 million.
CIMB looks immovable from its position as best debt house in Malaysia, following up last year’s success with several new deals. Its closest competitor was HSBC with a market share of 16.88% and $731.8 million in deals compared with CIMB’s 18.99% market share and $858.78 million-worth of transactions. CIMB’s nearest domestic competitor is RHB, which was only involved in around $390 million-worth of bond issuance.
Although many of the deals for Malaysian corporates in Malaysian ringgits are pretty straightforward, CIMB is attempting to develop the markets. In January of this year, alongside HSBC, it lead managed Sime Darby’s inaugural $131.5 million Islamic bond issue. The seven-year dated paper was a great success. Six times oversubscribed, the deal was launched at the lowest price ever for a corporate bond deal in Malaysia. CIMB was also active in securitization, acting as lead manager for the country’s first deal in auto loan receivables for Bumiputra Commerce Finance in a transaction worth $134.2 million.
CIMB excels in domestic M&A. Its unparalleled contacts in the corporate world and government are proving invaluable. It was involved in 43 deals, almost twice as many as its nearest competitor, AmMerchant Bank. Foreign players Goldman Sachs and Deutsche Bank were involved in important deals, but only two apiece. The spread of CIMB’s business is well balanced between advising the bidder or the target. Big transactions included Penerbangan Malaysia’s $1.3 billion merger with Malaysian Airline System and Celcom, the country’s number two mobile operator being bought by Telekom Malaysia in a deal worth $1 billion to create the country’s largest mobile group.
