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Indonesian banks seen as less attractive due to shareholding restrictions  

March 19, 2014
Daljit Dhesi, The Star

Banks in Indonesia are becoming less attractive to Malaysian financial institutions because of ownership restrictions.

RAM Ratings co-head of financial institution ratings, Wong Yin Ching said while Indonesia was still an attractive proposition, prospective suitors were more cautious, given the 40% cap on single ownership of domestic banks there.

“This will be punitive on capital, as banks are required to deduct non-consolidated entities from common equity Tier-1 capital under Basel III. Other countries that Malaysian banks are interested to expand to include the Philippines, Cambodia, Vietnam and Thailand,” she added.

On the whole, she said Malaysian banks’ appetite for regional expansion, whether through mergers and acquisitions or organic growth, remained hearty as they pursued income diversity.

Read more: The Star

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