KINA Group, Papua New Guinea’s largest non-bank financial institution, has acquired Maybank PNG for about K319 million plus any difference in asset value on the completion date.
Maybank, also known as Malayan Banking, set up its PNG arm in 1994, and offers a range of products including loans, overdrafts, trade financing, foreign exchange, banker guarantees, current accounts, savings and fixed deposit accounts.
The acquisition will see Kina Group become PNG’s fourth-largest bank, with company chief executive Syd Yates saying the acquisition would give customers of both banks access to a broader range of banking and financial services products from under the one roof.
“We have watched Maybank PNG’s progress in PNG with great interest, as it developed from primarily servicing the cross-border needs of Malaysian clients in the South Pacific region, through to its expansion to offering services fitting the needs of the entire PNG community,” he said.
“Maybank PNG was identified as an attractive acquisition for Kina due to its established infrastructure, conservative capital structure and client base which offers exposure to PNG’s growing middle class, small-to-medium enterprise sector and high net-worth individuals.”
“A banking licence is really the missing part of the puzzle for Kina Group. We will have access to wholesale money at a lower cost and be able to pass those benefits on to our customers.”
“We intend to invest the appropriate resources in the newly acquired business, enabling us to unlock its full potential and create new opportunities for the customers of both businesses.”
“This will allow us to bring more competition to the marketplace, which is great news for all PNG consumers,” he said.
The transaction is being undertaken in consultation with the Central Bank of PNG and is expected to be completed in July 2015, Kina said.
Kina would phase out the Maybank branding, replacing it with that of Kina Group following conclusion of the deal, it said.
“Maybank PNG’s existing customers will benefit from this transaction as we have the
resources and capabilities to take its banking operation to the next level, particularly through the introduction of new products and services via Kina’s technology platform,” he said.
Mr Yates said Kina Group would provide comparable offers of employment to Maybank PNG staff to ensure continuity of customer service.
Maybank PNG staff will retain all their current benefits, with the addition of benefits offered to Kina Group employees, including housing loans on favourable interest rates.
“The combined group will comprise 260 staff, and we are excited by the opportunities to provide further job opportunities to PNG citizens as we continue to invest in the growth of the newly formed group,” Mr Yates said.
Cornerstone investors that have agreed to provide funding in connection with the
transaction include PNG superannuation funds Comrade Trustee Services, Nambawan Super and National Superannuation Fund.
Kina Group said it was considering options to fund future growth, including a possible stock exchange listing.
“Kina Group intends to extend its physical presence in PNG, through expanding its branch network following the acquisition,” Mr Yates said.
“Providing greater access to financial services to residents in isolated areas will be critical in tapping into this growth opportunity.”
Maybank group chief executive Abdul Farid Alias said the sale was part of a company push to evaluate its international operations with a specific focus on maximising capital use and optimising resources.
“While we have been operating profitably and successfully in Papua New Guinea over the years, we have had to evaluate how best we can use our capital going forward, especially in light of new and more stringent requirements under the Basel III regime,” he said.
“Ultimately, we believe that we can achieve greater value creation for all our stakeholders by re-focusing our resources in the ASEAN and Greater China region where we can realise greater synergies and achieve better returns on capital investment.”