The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.
BANKING

Banking: Maybank buys in Pakistan

Malayan Bank, Malaysia’s biggest lender, has acquired 15% of Pakistan’s MCB Bank, Pakistan’s fourth-largest bank by asset value. This is the Malaysian bank’s third acquisition in Asia in two months and the largest banking acquisition in Pakistan.

Malayan Bank (Maybank) agreed to buy 15% of MCB Bank for M$2.17 billion ($685.5 million) – an 11% premium on the stock price. It has also secured the right to buy an additional 5% stake in MCB for $247 million from three other institutional investors. This acquisition values MCB at 5.13 times book value. Despite being above the average 4.1 times for Pakistani banks, it is still a more reasonable price tag than the 5.47 times book value that Standard Chartered paid for a controlling stake in Union Bank in July 2006, when the Pakistani banking sector first opened to foreign investors.

Abdul Wahid Omar, chief executive of Maybank, says this is an attractive opportunity to enter a "high-growth and profitable market". He adds that there is ‘limited execution risk’. Maybank expects Pakistan’s economy to emerge relatively unscathed from the recent political turmoil. However, both Moody’s and Standard & Poor’s downgraded the sovereign’s long-term foreign currency rating by one notch last month to B2 and B respectively.

"In terms of political risk, this is something that Maybank should be very aware of... but then, political risk is part and parcel of most emerging market investments," says Ritesh Maheshwari, banks analyst at S&P.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree