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Jakarta Post

Maybank sees gold in RI infrastructure projects

Malaysia’s largest bank and financial group, Malayan Banking Berhad, better known by its trading name, Maybank, is looking to tap opportunity in Indonesia as the government plans to boost its infrastructure projects, a move expected to spur ballooning funding needs in years to come

Anggi M. Lubis (The Jakarta Post)
Singapore
Mon, April 6, 2015

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Maybank sees gold in RI infrastructure projects

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alaysia'€™s largest bank and financial group, Malayan Banking Berhad, better known by its trading name, Maybank, is looking to tap opportunity in Indonesia as the government plans to boost its infrastructure projects, a move expected to spur ballooning funding needs in years to come.

Maybank global banking head Amirul Feisal Wan Zahir said in Singapore during the group'€™s Invest ASEAN business summit last week that Indonesia would be the group'€™s key focus this year.

Maybank'€™s global banking includes the group'€™s corporate banking, transaction banking, asset management and investment banking Maybank Kim Eng.

Feisal said the company would focus on lending to transportation, utility and consumer firms in Indonesia and expected to see market growth in the long term.

'€œIndonesia'€™s middle class continues to rise, that'€™s an opportunity we have to pay attention to,'€ he told reporters on the sidelines of the summit.

The problem, he said, was how Indonesia would be able to pool capital to help it fund infrastructure growth, which has been long hindering distribution of economic growth.

'€œAs a bank we have to see the problem,'€ he reiterated.

President Joko '€œJokowi'€ Widodo '€” following his bold move late last year to scrap more than US$200 trillion in Premium fuel subsidies, which had long burdened the country'€™s current account '€” has pledged to boost infrastructure projects through state budget reallocation.

Among his ambitious infrastructure plans is the construction of a 1,000 kilometers worth of railway by 2019 and the extension of railways from 5,434 km to 8,692 km. Other plans include the construction of new power plants with a combined capacity of 35,000 megawatts, to see the number of seaports increase from the existing 278 to 450, and to have 49 new dams built within five years.

Maybank, according to its 2014 annual report, has forecast its Indonesian loan growth to reach between 13 percent and 15 percent this year, above the group loan growth of around 9 percent and 10 percent. In Singapore and Malaysia, as a comparison, Maybank expects to book around 8-9 percent in loans this year.

Maybank '€” which owns 79 percent of Jakarta-listed lender Bank International Indonesia (BII) '€” had 31.4 billion ringgit ($8.5 billion) worth of Indonesian loans last year, or almost 8 percent of its total loan book, according to its financial statement.

Among the group notable key deals in Indonesia along last year was a $1 billion syndicated loan facility to coal miner Adaro Indonesia and $330 million to automotive financing company Astra Sedaya Finance.

Maybank'€™s operation in Indonesia is also carried out through Islamic lender Maybank Syariah Indonesia and stock brokerage Maybank Kim Eng Securities Indonesia.

Maybank Kim Eng group CEO John Chong said that while the securities holding hoped to focus on its existing activities in Indonesia, it was looking to be more active in equity and bonds offerings.

He also said that the group saw high potential in channeling funds in corporate expansion toward infrastructure projects.

'€œJokowi has placed a huge focus on infrastructure. There is need for new power plants, roads, ports and public transportation,'€ Chong said in a group interview after the summit.

'€œ[To fund the infrastructure projects] you cannot just rely on the bank market, it'€™s not efficient. You need to do a combination of bonds and bank market and we see an opportunity there.'€

Invest ASEAN 2015 is a series of yearlong regional business summits held by Maybank Kim Eng in countries across Southeast Asia, with Indonesia expected to host the last conference in October.

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