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发表于 31-5-2012 01:15 AM
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本帖最后由 50912cmea 于 31-5-2012 01:20 AM 编辑
Bank Negara takes control of MBf Finance...
Bank Negara takes control of MBf Finance.
By Eddie Toh and Meera Tharmaratnam.
5 January 1999
Business Times Singapore
THE Malaysian central bank has taken over the management of troubled MBf Finance - a move that may spell the end of the Loy family's grip on the largest finance company in Malaysia.
Bank Negara yesterday took the unprecedented step by putting seasoned banker Low Ngiap Jin as the new chief executive officer of MBf Finance, dislodging Loy Teik Ngan from the top post. "As part of its on-going efforts to strengthen the banking system, Bank Negara has today assumed control of MBf Finance," it said in a statement. The central bank said MBf Finance - a subsidiary of listed MBf Capital - is solvent. However, it requires recapitalisation to improve its financial health and to restore its risk weighted capital ratio to 8 per cent (the minimum statutory requirement). Bank Negara said it is a pre-emptive action to restore MBf Finance to a "healthy position as well as strengthen its board and management so as to ensure MBf Finance's viability as a going concern".
At the same time, Bank Negara also assumed control of Kewangan Bersatu, a smaller finance company.
Analysts said the management takeover of MBf Finance and the impending capital injection by the authorities may help prevent the collapse of the company and a systemic failure of the banking system. Officials of Bank Negara and MBf Finance did not respond to queries yesterday.
The Bank Negara statement did not say how long Mr Low will remain at the helm, or whether the management will revert to Mr Loy and his team when the finance company is nursed back to health.
The statement was silent on the issue of equity structure. A banking source said the government is expected to end up with a sizeable stake in the finance company in exchange for the fresh capital."The government can issue so many instruments to recapitalise the finance company," he said. However, Danamodal - the agency set up to recapitalise the banking sector - is not expected to take a direct stake after having backed out of the plan to buy a 30 per cent stake in RHB-Sime Bank.
Analysts said the latest moves are part of Malaysia's plan to press ahead with the consolidation of the fragmented finance sector to about eight companies from 39. Malaysia had earlier identified six major finance companies to be umbrella groups to absorb smaller firms.
The six anchor companies are Mayban Finance, Public Finance, Hong Leong Finance, Arab-Malaysian Finance, EON Finance/Credit Corp (Malaysia) and United Merchant Finance. MBf Finance was excluded from the list although it is the largest.
Particularly troubling is its non-performing loans - estimated to be at an industry high of over 30 per cent, or about 4.7 billion Malaysian ringgit (S$2 billion). It is not clear how much of the finance company's shareholders' funds of over RM1.1 billion had been erased to cushion its losses. With the rapid deterioration of its assets, Bank Negara was believed to be keen to assume control of the finance company as early as the start of last year following a series of runs in 1997.
Although MBf Finance fulfilled all the quantitative criteria, Bank Negara has persistently denied it the Tier-1 status that allows a greater range of business activities. Another reason is the perception that it was a one-man operation run by the late Loy Hean Heong. The central bank is said to be concerned about family-run banking or finance businesses.
Despite the pressure, analysts said MBf Finance, which has total assets of RM20 billion, managed to stave off Bank Negara. Last March, parent MBf Capital announced a strategic alliance with Bank of Commerce, a subsidiary of listed Commerce Asset Holding Bhd. MBf Capital was also involved in talks with GE Capital of the US and a Taiwanese financial group.
None of the deals materialised. Meanwhile, the government was getting impatient with the slow pace of revitalising the large company. In November, Danaharta - the agency set up to absorb NPLs - agreed to buy RM3.89 billion worth of sour loans from MBf Finance at a discount.
Assuming a 40 per cent discount, the agency would buy the secured loans at about RM2.33 billion. MBf Finance is estimated to have set aside RM500 million, leaving RM1 billion that it must write off its books - a hit that could well wipe out its shareholders funds, if it chooses to fully charge its losses in one go.
At about the same time, MBf Capital was mulling over a proposal by the authorities whether its finance arm should be taken over by Danamodal. "The bottom line is that MBf Finance is going to end up nationalised or institutionalised. But we're not recommending any stock investing yet till we see fresh equity in its books," said a research head. |
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