興業資本與大馬投資傳合併 業餘可互補締造雙贏

吉隆坡訊）市場傳言興業資本（RHBCAP，1066）將與大馬投資（AMMB,1015）合併組成大馬第二大銀行集團，分析員看好此舉將創造雙贏局面，得以互補雙方業務及解決公積金局持股權課題。

另一方面，成為併購目標的興業資本，極可能掀起股權爭奪戰，推高股票估值。除了最新傳言的大馬投資，對興業銀行有興趣的還包括日本的三井住友銀行和加拿大的豐業銀行。

興業資本起
大馬投資跌

在傳出與大馬投資合併消息後，興業資本與大馬投資股價走勢迥異，一起一跌。

在大市走低和銀行股受壓的情況下，興業資本週一（22日）送逆市走高，一度攀高30仙或0.05%至6令吉10仙，最終掛5令吉95仙，全天昂揚15仙或0.03%。不過，大馬投資閉市則收在4令吉26仙，全天挫4仙。

安聯研究指出，公積金局同時持有82.3%興業資本股權和9.6%大馬投資股權，可通過合併輕易解決興業資本持股權問題。

同時間，興業資本可覓得澳紐銀行這名外資夥伴，以及獲享合併後創造的協同效應和價值。

“興業資本將成為合併的最大受惠者，主因是與澳紐銀行結夥後，得享後者龐大商業資產和基礎，以及達到成本效益。”

分析員假設，若興業資本合併後營運開銷減少5%和營業額增加5%，協同效應推高2008財政年淨利23.5%。

同時，在目前可多方洽商的情況下，興業資本的股權奇貨可居，極可能引爆股權爭奪戰，進而推高估值。

安聯研究指出，興業資本成為併購主角，而且重組後效率改善以及獲得強勁非利息收入和回教銀行成長的烘托。

同時間，基本面強勁的大馬投資依舊受看好。澳紐銀行夥伴助力和整合大馬投資銀行（AIGB,2288）後每股盈利和股本回酬改善，強勁企業貸款則受惠于第九大馬計劃。

僑豐投資研究高級分析員陳建堯也認為，興業資本和大馬投資合併製造雙贏。

合併將助興業資本減少貸款

他指出，興業資本總資產高過大馬投資40%，總貸款卻相去不遠。合併將有助興業資本擴展借貸資產和沖淡企業貸款，大馬投資則減少偏向汽車貸款業務，為雙方帶來更佳貸款組合。

他表示，興業資本曾表示有意通過收購或內部成長提升市值和淨利一倍。合併讓公積金局持解決持股權課題。

他補充，目前只處于初步階段，而興業資本正積極進行財務重組，潛在影響須待詳情公佈才可定斷。

達證券則表示，合併對大馬投資（AMMB,1015）有利，得以加強其商業業務。

分析員比較興業資本和大眾銀行（PBBANK，1295），雙方雖擁有同樣分行數量，前者管理資產和存款卻低於後者，顯示獨自成長空間龐大。

再挑起銀行合併活動

另一方面，興業資本與大馬投資合併傳言再度挑起銀行領域的合併活動，分析員相信將出現更多併購。

陳建堯指出，國貿資本（EONCAP,5266）股權最近醞釀生變，鬆散股權架構成為另一市場收購目標。

市場揣測，美國聯合投資管理集團(Alliance Financial Group)有意並購國貿資本。一旦落實，合併後將成為第五大銀行集團。

安聯研究則指出，即使市場併購熱烈，三大銀行巨頭馬來亞銀行（MAYBANK,1155）、土著聯昌（COMMERZ,1023）和大眾銀行（PBBANK,1295）料將保持觀望。

2公司否認合併

興業資本和大馬投資週一一起否認合併傳言，表示對有關合併不知情。

根據市場消息稱，興業資本將與大馬投資合併，締造國內第二大銀行。持有大馬投資14%股權的澳紐銀行，則可借更強勁工具拓展東南亞市場。合併計劃據知已經獲得政府的首肯。

消息說，興業資本和大馬投資傳最快將於本週尋求國家銀行批准。

大馬銀行發言人否認合併，他說:“據我們所知，並沒有這回事。”

興業資本發文告回答交易所詢問說:“根據我們的資訊，以及在詢問過大股東後，我們並沒有任何與大馬銀行合併的消息。”

興業資本大股東公積金局則未能連絡上。

星洲日報／財經‧2007.10.23

呆賬率回落•積極開拓新業務銀行體系料穩健成長

2007-10-17 19:23
（吉隆坡訊）大眾銀行（PBBANK，1295）首9個月淨利表現令人激賞，不過分析員皆認為，國內其他銀行並不一定擁有如此標青表現，一切仍胥視各銀行的貸款成長、呆帳處理方式與海外拓展計劃。而國內銀行再掀併購的可能性不大。

雖然如此，分析員一致認為，國內目前銀行體系的基本面強穩，在呆帳率低迴與積極開拓新業務下，料將會取得穩健成長，甚至免受次貸風暴的干擾。

亞歐美投資銀行策略分析員鄭思傑表示，大眾銀行能取得驕人成績，主要是貸款與非利息業務表現可圈可點，加上海外貢獻提高，因此淨利稍微超出市場預測。

大眾貸款業務增長
其他銀行市佔率或受侵蝕

不過他指出，由於該公司貸款業務增長，意味其他銀行市佔率可能受侵蝕，料主要對手如馬來亞銀行（MAYBANK，1155）與土著聯昌（COMMERZ，1023）的業績表現受矚目。

“由於大眾銀行的主要貸款來自中小型企業與商業借貸，目前這些領域的借貸情況穩定，其他領域的內部成長也會平穩，因此證明國內其他銀行利益可能受損。”

同時他補充，為了競爭優勢，該銀行推出許多誘人貸款配套，雖然提高業績，卻也令賺幅稀釋。

銀行明年一次過收益料增加

雖然如此，鄭思傑表示，由於明年巴塞爾協議二（BASEL II）將生效，在界定新的內部評級體系下，信用、市場和操作風險等管理將更加成熟，料許多銀行將會有潛在的融資、脫售呆帳與資本管理活動，屆時銀行的一次過收益將增加。

不過，MIMB投資銀行研究主管馮廷秀透露，雖然大眾銀行貸款業務成長，其實市佔率卻縮窄，主要歸咎於外國銀行成功進軍搶灘，這可能也是其他本土銀行應該注意的警訊。

雖然國內其他銀行業績仍無法知曉，不過他看好許多銀行在積極降低呆帳率、減低虧損撥備及積極提高企業效率等策略下，表現都可取得按年增長。

僑豐投資研究高級分析員陳建堯也說，由於企業活動增加，加上許多銀行開始脫售累積的呆帳，料可表現平穩。

“例如興業資本（RHB，1066）在業務重整下，包括債務重組，提昇業務效率等，料營業額將會提高。”

馮廷秀認為，非利息收入業務將是許多銀行的主要動力來源。他舉例，土著聯昌雖然在傳統業務表現平平，不過其投資銀行、回教投資、信託基金與外匯相關業務表現耀眼，讓其成長動力得以前進。

大眾銀行低成本對收入可成借鏡

另外，他非常欣賞大眾銀行的低成本對收入比（COST-INCOME RATIO），並希望國內銀行可以借鏡。

“該銀行的低成本對收入比只有35%，為全馬銀行最低。這顯示該銀行的執行效率非常高，節省不少成本，並可提高銀行聲譽，增加許多無形資產。”

另一方面，由於大眾銀行進軍中國與香港順利，未來貢獻提高可期，因此料許多銀行將會仿效。

進軍海外是主要擴展途徑

分析員認為，由於國內銀行蛋糕有限，加上海外銀行強勢進攻，惟有進軍海外市場，才能提高盈利上漲空間，並分擔業務風險。

“雖然中東資金大量流入我國，可是以目前情況來看，除非有相關合作，否則銀行領域獲利不多。最多是股市隨外資進駐高漲，銀行的股票經紀臂膀將趁機受惠。因此，衝出海外是未來主要擴展途徑。”

國內銀行再掀併購可能性不大

因此，分析員也紛紛否決國內銀行再度進行併購的可能性。因為在經銷網絡與節省成本上，各銀行已經找到平衡點。而土著聯昌與南方銀行整合的效應仍未發揮，也讓各銀行短期內靜觀其變，不會貿然收購。

“雖然市場預測國貿資本（EONCAP，5266）將是併購的對象，不過料該銀行只會轉移大股東，各大銀行並不會對它提出全面併購。”

星洲日報/財經•2007.10.17

Wall Street panics as Greece protests flare over austerity measures

Greece protests against the government's tough spending cuts broke out in Athens Thursday, was stocks plunged on Wall Street over concerns about tightening credit markets and declining global demand.

London
The Greek parliament agreed to a raft of austerity measures imposed on the heavily indebted nation by the IMF and its European neighbors as the price of a €110 billion ($142 billion) bailout package, even as stone throwing protesters took to the streets of Athens. Stocks on Wall Street plunged Thursday, partly on concerns that Greece's problems could spread to its neighbors and cool global demand for goods and services.

The benchmark Dow Jones Industrial Average fell over 8 percent in afternoon trading before making back most of its loses. The Dow closed down 347 points, or 3.2 percent, at 10,520. Later, it was reported that some of the initial eight percent plunge may be attributed to a trading error.

The protests Thursday in Athens were more muted than the day before, when a group that the police described as anarchists rampaged, firebombing and killing three employees at a local bank. Those were the first deaths caused by a Greek protest since the early 1990s.

Despite the money promised to Greece so far and the government's pledge to rein in government spending, doubts remain about the economic effectiveness and political feasibility of package that, whatever its long term outcome, is certain to drive the Greek unemployment rate, currently at 12 percent, higher. Some economists fear the large amounts promised to Greece so far will mean money won't be available for some of the eurozone members also struggling with large deficits if they get into trouble.

Greece is one of the so-called "PIGS," whose other members are Portugal, Ireland, and Spain. While the fiscal outlook is not as grim for those three as for Greece, spooked debt market investors are demanding higher yields to hold those countries' debt as well, which could make it harder for them to raise more cash, and perhaps could lead some of them to need assistance as well.

Greece today promised government pay-freezes, pension cuts, and a higher retirement age that foreshadow similar, if less drastic cuts that are likely to be made across Europe at a time when economic recovery is fragile, at best. The euro fell to a 14-month low against the dollar on Thursday, making US products more expensive for European consumers than local products.

British austerity
In Britain – where Margaret Thatcher set an international yardstick in the 1980s by subjecting the economy to its own shock therapy – it’s all painfully familiar.

But even here, the rigidity of the austerity plan now being imposed on Greece has sent a chill.

“What Mrs. Thatcher did was divisive – but it came in stages,” says Kevin Featherstone, a professor at the London School of Economics (LSE). “There wasn’t this pre-planned awareness about what was coming next, and of course in Britain there were choices that could be made.”

Mrs. Thatcher’s Conservative administration came to power in 1979, three years after a Labour government was forced to go to the International Monetary Fund (IMF) for $3.9 billion – the largest amount ever requested of the IMF at that time.

Over the course of the decade, she privatized state-owned industries and utilities, implemented strict trade union restrictions, and reduced social spending.
By 1982, the number of Britons without a job had risen above 3 million for the first time since the 1930s. The unemployment rate was as high as 20 percent in Northern Ireland and 16 percent in most parts of Scotland and the north of England.

Political analysts in the UK say they expect belt-tightening at home as well, no matter who won Thursday's general election, where polls closed at 10 pm (5 pm EST).

Britons are once again bracing themselves for a return to austerity. After all, their country has the highest level of debt in Europe after Greece. All three of the major parties contesting the election were in agreement that Britain’s deficit needs to be brought under control.

Meanwhile, Greece is grappling with 12 percent unemployment at the very outset of its austerity measures and bailout, the first-ever financial rescue of a member of Europe’s 16-state eurozone currency area.

Their aim is to cut Greece’s public deficit from 13.6 percent of gross domestic prodcut (GDP) to less than 3 percent of GDP by 2014.

On Friday, the German parliament is scheduled to vote on its support for the package -- something it is expected to approve. On May 2, European finance ministers endorsed the bailout, €80 billion of which will come from fellow eurozone members. The rest will come from the IMF. Germany will be contributing the largest European share of the money, €22.4 billion, something that has angered many German voters. Should other country's request bailouts, the political ability of Greece to pay could be more constrained.

Greek promise
To receive the loan, the Greek government agreed to freeze public sector salaries until 2014, cut state pensions, and raise the average retirement age from 61 to 63. Laws limiting layoffs in the private sector to 2 percent of the workforce are also being scrapped.

Struggling to service a ballooning national debt, Greece has been locked out of the normal source for government borrowing, the bond market. Investors have been demanding high interest rates that Athens can’t afford to pay.

The hope behind the plans is that market fears can be soothed, as they were by recent belt-tightening by another eurozone member, Ireland.

Seeking to satisfy nervous lenders last year, Ireland raised taxes, slashed government spending, and imposed public sector pay cuts of between 5 and 15 percent.

But a crucial difference in context between the countries underlines the stark reality confronting Greek workers, according to Professor Featherstone.

“In Greece, the talk is of defending hard-won privileges, which might to some outside observers have seemed to be over the top in some ways. But it’s important to remember that they are in a context of a country in which there is very little welfare state, and a corresponding fear of unemployment,” he says. “Unemployment benefits last only in the very short term, perhaps only a few months.”

Few observers have been surprised at the level of anger now being unleashed on Greek streets in response to the austerity plan – described by Greece’s largest umbrella union, GSEE, as “the harshest, most unfair measures ever enacted.”

“The Greek population is of a rather different character to the British population,” says Peter Nolan, a professor of industrial relations at Leeds University.
“Greece had the highest level of general strikes of all southern, northern, and central European countries,” he says, “so the Greek populace will take to the streets very quickly if they feel their way of life is under threat.”

“In the Britain of the ’80s, I think no one really believed [Thatcher] was going to let unemployment soar, that she was not going to prevent the closures of manufacturing of steel works and of course the coal mines. Not only was she not going to do anything [to prevent it], but she was going to actively promote it.”

In March, Britain's Chancellor of the Exchequer warned that the next round of public spending cuts would have to be “tougher and deeper” than those implemented by Thatcher.

Why Greek debt 'contagion' is roiling global stock prices

Investors are wracked by uncertainty. Might Greece still default on its debt? Might Germans pull back financial support? Which country might be next? The questions are unsettling stock prices.


By Mark Trumbull, Staff writer / May 6, 2010

Stock prices plunged Thursday in the US as well as Europe amid growing worries about financial contagion from the Greek debt crisis.

The Dow Jones Industrial Average fell 347.8 points (or 3.2 percent) Thursday, while European stocks were down nearly 5 percent – the third straight day of declines with Greece in the spotlight.

Thursday's trading centered around the fear of ripple effects on several fronts.

They include:

Virulent and sometimes-violent street protests in Athens showed a rift between many Greeks and their government. The parliament voted to support austerity measures designed to win international rescue loans. The underlying question: Will the Greek public go along with belt-tightening that could be the equivalent of a multiyear recession for that country, or will Greece eventually default on its debt and drop its membership in the euro zone?
The euro fell as Jean-Claude Trichet, president of the European Central Bank (ECB), expressed confidence that Greece would not default on its debts but offered no new steps to quell investor doubts. The underlying question: With bond investors betting that Greek debt is still at risk of default, does the ECB have the tools or the will to calm the atmosphere of crisis?
Moody's, the credit-rating agency, issued a report warning that banks in Portugal, Italy, Spain, Ireland, and Britain could all be weakened because of the debt crisis. The underlying question: With several European nations in fiscal trouble, will the burden of sovereign debts spill over to affect the health of private-sector banks and the wider economy?
Germany's parliament is preparing for a Friday vote on granting aid to Greece. The underlying question: Will Germans be willing to pay a significant price – helping Greece and possibly other euro zone nations – for the economic benefits they reap by preserving Europe's currency union?
"Trichet keeps insisting that the Greek economy constitutes only 2 percent of the European economy," economist Desmond Lachman of the American Enterprise Institute wrote in a Thursday commentary for the institute. But "the body blow that a Greek default would deliver to the European banking system – together with the contagion that it would unleash on Spain, Portugal, and Ireland – would have major reverberations throughout the global economy."

The path forward
That potential for contagion has taken center stage for investors this week. The common theme in all this is uncertainty, which translated into a sell-off in financial markets.

Many finance experts say the logical path forward is for Greeks to adjust their living standards downward, for citizens of other high-debt nations to do the same, and for nations like the Germany and the US to support aid packages from the International Monetary Fund (IMF) to help Greece make the transition while remaining in the euro zone.

But Germans are angry at having to bail out another nation, just as many Greeks are angry at the belt-tightening that's being imposed on them as the price of membership in the currency union.

Even if Greeks go along, there's no guarantee that investors in Greek bonds will get their money back.

Europe's PIIGS
Here's why all this is more than just a localized problem.

After Greece, the euro zone may have to deal with debt worries among the rest of the so-called PIIGS nations (Portugal, Ireland, Italy, Greece, and Spain). Private-sector banks in Europe hold lots of bonds from these nations, so the risk of default adds to worries about their health, too.

At the very least, the chaos raises concerns that Europe's economy will be in the doldrums, and that the global economic recovery will be dampened as a result. US and Asian firms won't be exporting as much to Europe.

At worst, the turmoil leads some investors to believe that difficult political decisions will be needed to keep the euro zone alive. (The euro has fallen this year from being worth about $1.45 to $1.26 on Thursday.)

Mohamed El-Erian, who heads bond-trading giant PIMCO, told CNBC that he sees a "high probability that euro zone will look different a year from now," with new rules, fewer members, or both.

EU rescue plan buys time to defuse Greek debt crisis

The Euro sculpture is seen in front of the European Central Bank in Frankfurt, Germany, in this 2009 photo. On May 10, the bank and the European Union announced a nearly $1 trillion rescue plan to keep the Greek debt crisis from spreading to other indebted EU members.


By Laurent Belsie / May 10, 2010
In approving a nearly $1 trillion rescue package, European leaders have buoyed markets and stopped the Greek debt crisis from spreading to other European Union members, at least in the very short term.

Related stories Blog: EU can still contain spreading Greek debt crisis
 Why Greek debt 'contagion' is roiling global stock prices

And that could be key to helping the European Union through its growing financial crisis.
Investors certainly were enthusiastic. Stock markets rebounded in dramatic fashion Monday, with major European stock indexes rising from 5.2 percent to 9.3 percent, Tokyo's Nikkei index climbing 1.6 percent, and the Dow Jones Industrial Average up 3.9 percent. All three major US indexes climbed into positive territory for the year after last week's selloff.

Why are markets so relieved? The bailout package is huge: At $957 billion, it exceeds the $700 billion Troubled Asset Relief Program enacted by the US in 2008 that helped reassure markets that the government would stand behind big faltering banks. Besides loan guarantees from the EU, the package includes up to $250 billion from the International Monetary Fund and, for the first time, direct purchases of government debt by the EU's central bank.

Another key component is timing: While the backstop of loan guarantees and debt-purchases does nothing to solve the long-term debt problems of Greece and other highly indebted members of the EU, it does buy time for politicians to begin paring debt and for markets to adjust to the possibility that they won't be able to.
By delaying default, European leaders hope to avoid more surprises like Greece's acknowledgement early this year that its deficit was far worse than advertised.
"If you look at the worst contagion episodes, surprise is an important part," says Carmen Reinhart, an economist at the University of Maryland who has studied the history of sovereign defaults. The goal of government action "is reducing the chance that we have one of those meltdown scenarios."

Argentina's steep economic problems in 1999 rattled world markets, she points out. But by the time the nation actually defaulted on some of its external debt in 2002, markets had priced in that vulnerability.

If, as expected, the global economy has begun a slow recovery, the delay in defaults that the EU is trying engineer may also give highly indebted governments a little more breathing room to make the difficult budget cuts that lie ahead.

迄今逾13宗‧企業全購陸續有來

迄今逾13宗‧企業全購陸續有來
大馬財經 財經焦點 2010-05-04 18:30
（吉隆坡）隨著經濟走向復甦，全面獻購和私有化等企業活動開始蠢蠢欲動，分析員認為全購活動趨熱絡不外乎估值遭低估等原因作祟，在經濟復甦，融資有門之下，相信新併購條例“功效有限”，不排除會有更多私有化計劃排隊出爐。

分析員說，馬股在兩年前大選後表現遜色，導致許多公司股價低迷，無法反映實際表現，令大股東興起私有化的念頭，儘管股價目前有起色，但並不能令大股東滿意；而且，隨經濟復甦，銀行大開融資之門，也為有意私有化的大股東提供“方便”之門。

平均每月3.25宗

根據《星洲財經》粗略估計，馬股今年至4月杪止已浮現最少13宗全面獻購計劃，平均每月3.25，單單4月就有4宗，平均一週一宗。（見表）MIMB投資銀行研究主管陳建堯表示，私有化計劃，一般不離三個考量，即股價顯著下跌、估值被嚴重低估和擁有鬆動現金流或強勁資產負債表。




“大股東可能認為公司資產豐裕，但股價卻未能反映實際身價，因此趁經濟最壞時間過去之際，採取私有化動作，而銀行系統流動性依舊充裕，也可為全面獻購融資活動大開方便之門。”

他認為，雖然馬股迄今飆漲不少，但整體估值並未趨向昂貴，因此並未損及大股東對全購和私有化的熱情。

“馬股交易分為兩級（Two Tier），富時綜指成份股本益比平均為16至17倍，相反小資本股本益比僅9倍。”

另一位分析員認為，儘管資產估值隨股市連月暴漲水漲船高，但仍有部份企業表現落後大市，估值並未取得顯著上漲。

新併購條例或加速全購案

至於新併購條例是否加快企業全購步伐，陳建堯不排除可能，但認為影響將多侷限在大型資本股上，小資本股影響並不大。

“不過，大股東也可將之作為技術性操作的機會，若出價獲小股東接受獻議，屆時即可進行全購，反之則繼續讓股東發掘箇中價值，是一舉兩得的策略。”

證監會與交易所在3月建議，在新條例下，資產脫售必須以股東出席投票至少75%的股權與超過50%的人數來通過，而反對脫售資產的股東不能超過投票股權的10%，以保障小股東的保障。

旧屋装潢从中获利 新一波产业热潮爆发

家指出，房市正引来一波热潮，但蓬勃情况仅局限在特定地点，投资趋势，也开始从“大空间”，转为“小空间”、“概念强”、“设计独特”的高档房屋。

满家乐、吉隆坡城中城、哥打白沙罗、Desa Park City，是目前的产业投资热区，并连带推动此区的二手公寓价格，就算只属于有期地契的房屋也赶上这波热潮。

想放弃传统房屋投资的投资者，也可考虑投入“产业投资信托”或将二手房屋大势装潢，利用“化腐朽为神奇”的力量，在这波复苏浪潮中获利。

财经周刊《The Edge》日前举行了研讨会探讨有关课题，以下是主讲人一些谈话重点。

CB Richard Ellis(马)私人有限公司董事经理史龙展: 房市出现排长龙盛况

“我到现在还听到，其他行业传出‘生意难做”的投诉；但我国房市却一度上演了排长龙购屋的盛况，一些新推介活动，甚至出现连续10日排队的情况。”

史龙展用实例作为演讲的开端，以乐观展望探讨领域复苏情况。

史龙展指出，2009年6月开始，产业增长指标开始转向正面，而且活跃上升，今年农历新年过后，又来一次强劲复苏，之前因经济不佳，导致一些投资者押后了购买计划。

发生在特定地点

但史龙展强调，上述良好情况，只发生在特定地点及特定发展商的产品，如满家乐、吉隆坡城中城、Ara Damansara一带，甚至带动了二手公寓的涨潮，而且有地产业也开始扬升。

“Ara Damansara近期推介的半独立式洋房，出售价格高达280万令吉，而且目前还处在扬升趋势。况且，相比邻国新加坡，我们的价格仍很低，这提供了进一步扬升的空间。”

“我相信，新一波的产业热潮已爆发，去年的推介活动开始频密，现在则是投资者，选择良好产业的时候！”

除了上述3个“热点”另外一些地区的产业价格，也正在升温，如哥打白沙罗的房价不断上扬，而且此区几乎每一个地点，价格都在涨。

“另外，八打灵及梳邦一带的公寓价格，一年内从每平方尺300令吉，增加至600令吉。我国的公寓是处在谷底，还是已经回弹，不容易回答；相比新加坡及香港，我们的价格确实很低，但以吉隆坡城中城及满家乐来看，我们公寓市场却处在回弹周期。”

虽然如此，房屋市场逐渐掀起的热潮，却还未带动租赁市场，导致租赁回酬偏低，如果继续维持在低水平，而利率却大举提高，便会制造问题。

盼租赁市场回扬

但史龙展强调，目前公寓6%至7%的回酬仍然处于可应付水平，低潮也只是暂时性，相信市场能期待租赁市场回扬。

整体房屋领域中，较令人担心的是办公室大楼，目前这个组合仍然疲弱，却仍不断有新的供应；当需求不殷切之际，便无法吸纳过剩的产业供应，遗留下问题。

史龙展说：“目前，巴生谷的办公室市场共占地6200万平方尺，而且每年还有300万至500万平方尺的新供应，但是预料3至5年内的出租率还会进一步下跌，这个情况教人相当担心。”

何振顺研究私人有限公司董事何振顺: 巴生谷房价飙升

何振顺用实例探讨了巴生谷一带，房价的走势。

孟沙巴鲁区(Bangsar Baru)的双层排屋的价格，从去年的95万令吉，飙升至今年3月份的130万令吉；Damansara Utama的双层排屋，从去年9月的50万令吉，扬升至60万令吉；八打灵再也SS2的双层排屋价格，则从去年9月的45万令吉，上涨至55万令吉。

“这个趋势，反映出房价的飙升情况；满家乐、珍珠白沙罗、Setia Alam的每年的增值率，最高可分别达10.6%、15.5%、及14%。”

另一方面，何振顺也对比孟沙、满家乐及吉隆坡城中城一带的房产这10年的转变。

何振顺说：“其实，孟沙一带的公寓模式，10几年来都没有太大的改变，而且1994年公寓的情况，和2010年的差不多。这个地区，已经不太可能有太多改变，你总不能推倒半独立式洋房，还是排屋，然后建造新的公寓吧。”

孟沙公寓难发展

至于吉隆坡城中城，10年来则发生了巨大的转变。1994年，国油双峰塔还未竣工，这项工程一直等到1997年金融风暴之后，才正式完成。

在建竣之前，双峰塔一带的住宅区并无需求可言，但是需求却跟随吉隆坡城中城计划的展开而不断增加。

“只要观察这一带公寓的发展情况就会发现，趋势是跟随吉隆坡城中城的发展计划同步发展的。”

何振顺补充，若拿城中城及孟沙相比，孟沙的公寓已经难再发展，但金山角地区却明显不同，他们有大批可发展的地皮，而且之前作为公寓的土地，也能轻而易举地转换为高楼发展用途。

至于满家乐，改变就更大，预料未来3年内的供应将增加68.3%，而且平均每年增加18.96%。

满家乐供应料增

何振顺说：“1994年满家乐只有2个现成的工程及3个在建筑中的工程。今天，已经多达56个工程，反映出16年的增长率高达11.2倍，每年平均增长16.3%。”

他也透露，当要分析走势房地产走势时，可以透过分析“鸟瞰图”然后沿着可能的发展轨迹，探测下一个发展地段在哪里，然后再进行投资。

“以满家乐为例，透过地图您能发现，他是孟沙的另一个延伸。”

何振顺也建议投资者，在购屋时要探测一个地区是否会蓬勃，可先到附近的商业区走一走，看看商机是否蓬勃，商店的出租情况是否良好，然后再作出决定。

Hall Chadwick Asia私人有限公司主席古马泰尔马林甘: 产业投资信托回酬稳

“想要在产业市场投资，有什么方式？购买房屋、投资商店、进行收租？在2005年之前，要投资产业或许只能透过这样的方式，但现在情况已经改变，是‘产业投资信托’，改变了这个面貌。”

古马在会上以产业投资信托为主题，探讨投资产业投资信托的优缺。

古马解释，产业投资信托是一个上市的投资工具，将一组产业集合在一起，收到的租金再扣除费用后，将利润定期派发给基金拥有人，为投资者提供稳定回酬。

“投资者只需要交付一次10%的预扣税，而产业投资信托是不需要被内陆税收局抽税的。”

相比一般产业，产业投资信托提供资金增值、派发固定股息、具有流通性、在税务上让投资者受益、有专业人士协助管理、让投资者拥有大型的资产而且和其他投资产品挂钩，比起传统投资，优势更多。

产业投资信托不但能带来租金，而且大部分的盈利都将派发给股东，债务水平偏低，现金也充裕；相比之下，产业股所需要的投资资本开销较高，因此负债率也比较高，股息派发率相对低。

“况且，产业投资信托将把收入的90%到100%，派发给股东；但产业股项并不一定派发股息。”

此外，产业投资信托的性质，还包括：长期性回酬、与股市及债券的关联性较低、能减低投资风险；另外，资料显示若投资组合中参杂产业投资信托，一般表现会超越单纯的债券或股票投资。

但是古马也补充，产业投资信托也存在重新融资风险，股息回酬可能会因为利息成本高昂而降低、产业估值不佳还有资本筹资活动导致的盈利稀释问题，也是产业投资信托的风险。

益资利投资研究主管程宏扬: 产业股项前景俏

身在证券界的他指出，我国的产业股项在市场处于牛市时，会超越大市，低潮时显得波动更大，而且大部分上市在大马交易所的产业公司，都以低过账面价值的价位交易。

“投资者在遴选股票时，能专注在公司的基本面、了解他们的管理方针、并着重地库表现；同时，常出现在报章头条的发展商，也是能关注的公司之一。”

程宏扬对产业股项的前景看好，并相信公司在未来12个月并不会面对任何销售方面的难题，尤其是那些落后他人，而且价格被低估的公司。

“虽然利率调高，但数据显示，巴生谷一带的产业销售情况仍然蓬勃，甚至有3小时就售罄的情况；再加上银行贷款竞争激烈，一般都会推出良好配套，更进一步巩固产业公司的走势。”

但他提醒投资者，不要只买“便宜”的公司，反而应买入有增长前景的公司。

Bukit Kiara Properties私人有限公司董事经理童银坤: 越丑越好扭转机会

Bukit Kiara Properties在满家乐一带的成功实例，一直被人津津乐道。2000年以只有5人的团队，建立Bukit Kiara Properties，发展到现在共有80名员工，发展总值超过12亿令吉，创办人之一童银坤，绝对应该记上一功。

如何化腐朽为神奇？童银坤的其中一项宗旨，便是“越丑越好”。“很多人问我，怎么发现是产业热点？其实，只要遇到对的价格、对的地点及对的时间，每一个产业都有潜能成为热点。”

以二手市场为例，童银贵说，投资者要懂得透过“越丑越好”的概念“扭转机会”。

“有些屋子，看起来真的很糟糕，很多投资者看了第一眼，尽是嫌弃的表情。但，我们要把眼光放远一些，看这个地点还能带来什么，它可能有宽敞的后院，或者是坐落地点很好，这些优势只要懂得掌握，再把它装修一番就会不一样。”

满家乐仍受青睐

他以本身的经验为例，一些原本破旧的房屋，在经过“改造”而蜕变后，价格马上扬升，而且往往那些因“丑陋”而无人问津的房产，在装修后都会变成最抢手的房屋。至于要如何改造，则靠本身的想象力及创意。

另外，许多人担心满家乐已经出现供应过剩的问题，但童银贵认为，这一带仍然是投资者青睐的地点，而且外国投资者计划也会进入此市场。

“满家乐看起来高档且昂贵，但如果比较新加坡，这根本不算什么，这也是我们吸引外国投资者的强项。不可否认，钢铁成本上涨，很可能导致我们需要将价格转嫁，但目前投资者已经愿意为素质良好的产业，支付更高价格。”

童银坤说，房地产领域并非一成不变，你在投资之前有许多投资工作要准备，同时也要确保不会被情绪干扰决定。

The Structure of Basel II

The Structure of Basel II
The original Basel Accord’s simplicity probably helped its introduction by national prudential regulators. But the insensitivity to variations in risk (both between and within risk categories) had the potential to increase the incentive for risk-taking behaviour. Hogan & Sharpe (1997a and 1997b) and Gup (2003: 74), for example, argue that attaching a risk weight of 100% to all commercial loans irrespective of counterparty allowed banks to pursue higher-risk (to achieve higher return) lending since this requires no more capital than less-risky lending but has greater upside income potential. Basel II addressed this shortcoming by enabling the use of a much wider range of credit-risk weights, by providing for the use of different approaches to determining risk weights and by extending the capital requirement to cover all risks banks face.

Basel II has three pillars.
The first deals with a bank’s core capital requirement (Pillar 1); the second allows for supervisor discretion to adjust this requirement to allow for additional risk and particular circumstances (Pillar 2); and the third fosters market discipline (Pillar 3).

Pillar 1: Capital requirements for core risks

Pillar 1 refines the calculation of regulatory capital in three important ways. First, it uses a more granular approach to credit-risk weights; second, it provides banks (subject to the regulator’s approval) with a choice of methods for calculating risk weights for certain types of risk; and third, it incorporates operating risk into the capital requirement.

The anatomy of Pillar 1 is represented in Figure 1, which shows the Basel II innovations in bold type to distinguish them from those of Basel I. Note the introduction of three possible approaches to the calculation of the capital requirement for credit risk under Basel II; the standardised (externally set) risk weights and two approaches that rely on internal ratings (the foundation internal ratings basis, FIRB, and the advanced internal ratings basis, AIRB). Observe the introduction of a capital requirement for operating risk also provides for three approaches to the calculation of the capital requirement. An introduction to each innovation follows.

The calculation of the capital requirement for credit risk starts by dividing a bank’s assets into five categories (corporate, sovereign, bank, retail and equity) within which there are sub-groups reflecting the different risk parameters for each asset type. The capital requirement for each represents an attempt to capture the average probability that a loan to each category of borrower would default, and the proportion of the loan that would be lost if default occurred.

Under the standardised approach, risk-weights are prescribed for each risk category, where the risk of each is rated by the borrower’s externally-determined credit-rating agency such as Standard and Poor’s (S&P). The value of the loans in each category is multiplied by the prescribed risk weight and the product is multiplied by 8 per cent to determine the minimum capital requirement. To illustrate, there are six credit-rating grades for corporate loans, where grade 1 covers loans rated AAA to AA– (on Standard and Poor’s long-term scale), grade 2 covers A+ to A– and so on. The standard risk weights vary from 20 per cent to 150 per cent for these grades (APRA, APS 112 and APG 112). While this is the ‘default’ approach, which can be viewed as an extension of Basel I, it represents a substantial advance. Basel I used just four risk weights, two of which (in Australia) covered the bulk of bank balance sheet assets. The standardised approach requires an improvement in risk-management systems to generate the data to satisfy Basel II’s more granular risk categories. Most ADIs are using this approach, which is expected to generate, on average, a modest reduction in regulatory capital (Egan 2007).



The more radical innovation is the provision for banks to use either of two internal rating approaches subject to the regulator’s (that is, APRA) approval. The foundation internal ratings-based approach (FIRB) uses internal estimates of the probability of loan defaults (PD) and feeds this into a more complex probability-based formula (that relies on the supervisor’s estimates of the other risk components) to determine the risk weight to be used to calculate the amount of capital to be held against the loan. The advanced internal ratings-based approach (AIRB) uses internal estimates of loss given default (LGD) and the other risk components (effective maturity and the exposure at default) in a prescribed formula to determine the risk weight and hence the capital charge against a loan. These approaches derive from the internal risk assessments banks (including Australia’s big banks) began undertaking in the 1990s and thus Basel II can be viewed as following industry practice.

Basel II does not change the two methods that can be used for assessing the capital requirement for market risk introduced in 1996. However, it introduced a capital requirement for operational risk exposures. Operational risk refers to the risk that losses may result from a lack of verification and control processes (such as the loss of Є4.9 billion at Société Généralé due to a trader’s ability to circumvent operating systems that was revealed in January 2008). Three approaches for assessing operating risk are available; two that are relatively simple (the basic indicator and several standardised approaches) and the third advanced measurement approach (AMA) could be used by banks ‘with advanced operational risk measuring and modelling capabilities’. Under the standardised approach, an ADI divides its activities into three categories — retail banking, commercial banking and all other activities, which have different capital requirements — and the sum of these requirements sets the ADI’s operational risk-capital requirement. The capital requirement for retail and commercial banking is based on an ADI’s gross outstanding loans and advances (as an indicator of its operating risk exposure) whereas for the third category the capital requirement is based on the ADI’s gross income from these activities (APRA, APS114). To be accredited to use the advanced approach banks must have ‘an operational risk management framework that is sufficiently robust to facilitate quantitative estimates of the ADI’s ORRC (operational risk regulatory capital) that are sound, relevant and verifiable’ in relation to the ‘complexity of the ADI’s business’ (APRA, APS115: para. 21).

Three banks were accredited to use the advanced methods from January 2008 and a fourth (NAB) was given approval to use the foundation IRB approach. Three other banks have applied to move to an IRB approach during 2008 and are operating under Basel I in the meantime (RBA 2008a: 67). The advanced approaches are expected to reward banks with modest reductions in regulatory capital (for lower credit-risk exposures); although 10 per cent will be the maximum reduction in 2008 and 2009 (under Pillar 2 provisions) while the banks are demonstrating the performance of their risk-management models (Egan 2007).

Pillar 2: The Supervisory Review Process
Pillar 2 has two aspects. The first requires banks to assess their overall risk profile (in addition to the risks specified under Pillar 1) and to calculate any further capital that should be held against this additional risk. The additional risks potentially identified under Pillar 2 include credit concentration risk, liquidity risk, reputation and model risk. Consequently, Pillar 2 could be expected to add to the amount of capital held by banks (and offset the lower credit-risk capital requirement).

The second aspect of Pillar 2 is its inclusion of a ‘supervisory review process’. This allows supervisors to evaluate each bank’s overall risk profile and to mandate a higher prudential capital ratio where this is judged to be prudent (APRA, APS 110). APRA’s decision to increase NAB’s capital requirement following its foreign exchange losses (in January 2004) illustrates this process.

Pillar 3: Market Discipline

Pillar 3 requires disclosure of information regarding the calculation of bank capital positions and risk-management processes designed to strengthen the capacity of security markets to respond to changes in bank risk profiles. The idea is that banks which the market judges to have increased their risk profiles without adequate capital will have their securities sold down in debt and equity markets. The additional costs that this will impose on financing bank operations will provide an incentive for management to modify either the bank’s risk profile or its capital base. This dimension of Basel II is thus designed to complement Pillars 1 and 2 by providing additional discipline on bank risk-taking behaviour.

APRA’s prudential information disclosure requirements are most detailed for the Australian-owned ADIs that use the advanced risk-management approaches because of their use of internally-generated risk ratings. They are required to report quantitative risk-management information on a semi-annual basis and qualitative risk-management information on an annual basis, as well as reporting basic capital-adequacy information on a quarterly basis. The reporting requirements are less detailed for the ADIs that use the standard risk weights and for overseas-owned ADIs, assuming their home regulator’s prudential information disclosure requirements are equivalent to APRA’s (APRA June 2007 and APS330).

Securitisation
In this and the next sub-section Basel II’s approach to securitisation (BCBS 2004b: 120–43) and credit risk mitigation (BCBS 2004b: 31–51) within Pillar 1 are introduced because of the role these processes played in the crisis triggered by the US sub-prime loan debacle (which is discussed in section 5). The process of moving assets (these principally have been housing loans) off the balance sheet via securitisation (a variation of the ‘originate-to-distribute’ model used by Australia’s loan originators) has been an important feature of bank asset-liability management. In Australia it has been used especially by the regional banks.

The assets are securitised through the services of a special-purpose vehicle (SPV) established by a bank. The SPV arranges the issue of asset-backed securities (mortgage-backed securities, MBSs, where housing loans are involved) to investors and pays the bank for the loans with the proceeds. The bank avoids a capital requirement for the securitised assets provided the arrangement ensures it is no longer exposed to any risks associated with the assets, such as the risks that would arise if the originating bank agreed to any explicit credit enhancement of the securities or from implicit liquidity or solvency support for the SPV which could result in the securitised assets being brought back onto the originator’s balance sheet.

Credit-risk mitigation
An important dimension of Basel II is its treatment of credit-risk mitigation techniques such as the use of collateral, guarantees (by a third party) and other credit-risk reduction measures such as credit derivatives, which reduce the amount of loss in cases of default. Credit-default swaps (CDS) are the most extensively used credit derivative. They provide banks with the opportunity to buy protection against default events on one or more of its assets, which would reduce its credit risk. For example, a bank could purchase credit-risk protection on a specified set of loans or corporate securities held by the bank by issuing a CDS and paying a premium (this would be paid six monthly at the agreed rate) to the party that decides to accept the credit risk (such as a bond investment manager or another bank that wants to diversify its credit risks). The protection seller faces the obligation to compensate the protection buyer should pre-defined default events occur on the specified parcel of loans or securities. Should a default event occur the bank would receive a compensation payment and this lowers its loss given default, whereas should no default event occur the seller would receive the premium payments without having to compensate the bank.

Basel II explicitly recognises the role of banks’ increasing use of instruments such as credit derivatives. Since these instruments reduce the risk of loss they reduce a bank’s capital requirement. The reduction depends on the credit standing of the provider of the credit-risk mitigation instrument, such as the protection seller in the case of CDS. Thus the risk-weighted assets are adjusted using a risk weight appropriate to the risk class of the protection seller. For protection sold under the CDS, the same process is followed but the risk weight applied is that appropriate to the reference credit being protected.

Governor's Keynote Address at the Risk Management Seminar on the New Capital Accord (Basel II)

Speaker : Governor Dr. Zeti Akhtar Aziz
Venue : Nikko Hotel, Kuala Lumpur
Date : 15 April 2004
Language : English


"Enhancing the Soundness of the Banking Sector - The New Capital Accord"

It is my pleasure to welcome you to the Risk Management seminar on Basel II organized for the directors and senior management of banking institutions. The objective of this seminar is to promote greater understanding of the impending changes to the international capital adequacy regulation. Given the importance of the subject and its implications on the banking industry, it is important for the industry to understand the intentions and the challenges arising from these changes so that the necessary action may be taken in a manner in which the benefits to be derived from it can be maximised. While there has been global acceptance of the broad principles of the new accord, differing implementation approaches are being adopted by different countries. I will take the opportunity to discuss the new Accord from our perspective and the approach that will be adopted for Malaysia. This seminar will provide you with the opportunity to engage in discussions on the issues concerning the new Accord.

Philosophy and objective of capital regulation

A well functioning and efficient banking sector is vital to the economic growth process. The banking institutions perform the important intermediation function of mobilizing funds to finance productive activities. This intermediation process needs to be performed in an environment of financial stability. Therein lies the importance of confidence and soundness of the financial system. Banking business inherently involves risks and these risks need to be rigorously managed. In an environment of heightened uncertainty and increased volatility, this needs to be reinforced with the development of a more robust and resilient banking system. Hence the importance of prudential regulations to ensure the soundness and stability of the financial system.

An important component of prudential regulation is having a sound capital framework that measures risks accurately and allocates adequate capital to the risks. The current capital accord issued in 1988 has served as the international benchmark for capital adequacy assessment for banking institutions. While it has achieved the desired results in terms of developing more well-capitalized banking institutions globally, the rapid developments in the financial markets over the years, including the growth of off-balance sheet financing such as asset securitisation have rendered the broad-brush measurement of the existing accord to be less effective.

Risk and Risk Management - the need for new accord

New institutional structures and evolving market practices have reduced the effectiveness of the existing accord. While the basic categorization of risks have not changed significantly, the ways in which risks present themselves have changed quite substantially. With the introduction of new products and more complex financial transactions enabled by technological innovations, risks can be disaggregated and rebundled in new ways. Similarly, the advances in financial engineering and improved expertise have allowed the introduction of new hedging instruments to facilitate risk management. Significant enhancements have been achieved in the measurement of market risk where the use of internal value-at-risk models is fast becoming the industry standard.

The advances in the quantitative approach to the management of market risks have also expanded to the areas of credit as well as operational risks. Despite the significant data constraints, new research has strengthened the theoretical foundation for internal credit and operational risk modeling. The development of new hedging instruments such as credit derivatives has also increased the use of credit risk transfer mechanisms within the financial system, thus promoting more active credit portfolio risk management. Key developments have also taken place in the area of operational risk. The experience of large corporate failures due to fraud and lapses in internal controls has focused greater attention on improving operational risk management in banking institutions. This has prompted the need for banking institutions to provide capital for operational risk and to put in place a more integrated risk management framework on an enterprise-wide basis.

The essence of the new accord

The efforts of the BIS to introduce an enhanced framework for capital adequacy regulation through Basel II is in the context of these developments. The accord seeks to bring into greater alignment the more advanced concept of capital management into the regulatory equation. The assessment of capital adequacy needs to look beyond the computed capital ratio. The new Basel Accord therefore comprises three pillars. The first pillar provides a minimum capital measurement framework for credit and operational risks. In essence, the regulatory capital requirement is aligned more closely with the actual degree of underlying risk that the banking institution faces. It provides the capital measurement that has three options with different levels of complexities for both credit and operational risks to better reflect actual risk. The second pillar focuses on strengthening the supervisory process, particularly in assessing the quality of risk management in the banking institutions. The supervisory process aims to provide the mechanism to ensure that other risks such as concentration risks and market risks in the banking books being managed. Under such an environment, prudent lending such as that characterized by a high degree of portfolio diversification, could justify lower capital requirements. The third pillar specifies minimum disclosure requirements on capital adequacy to enhance market discipline.

Despite its relatively more complex architecture, the implementation of the new framework provides a number of options and flexibility to banking institutions. This is to ensure that the approach adopted reflects and is commensurate with the nature of risk-taking activities and the level of sophistication of individual institutions. In adopting the standardized approach for credit risks, the credit exposures are weighted based on recognized external credit ratings. However, for large banking institutions with businesses which are highly complex, the more advanced approaches, that is, the foundation or advanced internal rating based (IRB) approach may be more appropriate to reflect their actual risk profile. Similarly, there are three alternative approaches that may be adopted in allocating capital for operational risks, that is the basic indicator approach, the standardised approach and the advanced measurement approach.

The objective of the new framework is to emphasise on the need for refined measurement of risks, more efficient capital management and the adoption of sound risk management practices that will ultimately contribute to greater financial stability. This will be complemented with efforts to enhance the corporate governance framework, the robustness of the internal control systems, and to introduce greater transparency and market discipline. Within the context of these developments is the importance of the ability of the board members and top management of banking institutions to assess risk from a broader perspective and its strategic impact on the institution.

In view of the significant implications of this new capital framework, Bank Negara Malaysia has been directly involved in the consultative process through regional forums to ensure that issues and concerns of the emerging markets are considered by the BIS in designing the new accord. We are pleased to note that many of these issues have been taken into consideration.

Motivation for migration to the new accord

The adoption of the new accord is consistent with building strong risk management capability. The enhanced risk management practices required by the new accord not only can result in greater capital savings but becomes vital as the domestic banking system becomes increasingly competitive and integrated with the global marketplace. Effective and efficient decision making is enhanced with relevant and timely information supported by more quantitative analysis. This can be achieved through having a more robust data architecture and information system, integrated processes and enhanced information flow and reporting. Having a robust risk management framework would also allow banking institutions to better assess the marginal contribution of existing as well as new business lines to the institution’s overall financial performance. This would allow for more-informed decision-making, thus contributing towards greater competitive advantage.

Moving forward, there will be increased expectation for more efficient use of internal resources. A more enhanced and integrated risk management framework, and the adoption of a risk adjusted performance management model would serve to further facilitate shareholders’ activism and drive greater efficiency among banks.

Risk management however does not operate in a vacuum or in isolation and it should not be viewed merely for the purpose of regulatory compliance. Priority should be given to ensure that the risk management framework is well-aligned and well-integrated with the strategic business directions of the banking institution. The benefits of refined risk quantification and more robust risk management should be translated into improvements in business operations and more effective functioning of the institutions. This will in turn ultimately bring benefits to the consumers and the economy at large.

Implementation challenges and considerations

Given the complexity of Basel II, the ability to comply appears to be the main concern within the banking community. This is truly a major undertaking with respect to the IRB approaches or the internal rating based systems. The resources involved and data constraints are often cited as the two main challenges in implementing the IRB approach, particularly for banks in the emerging markets. At this stage, data on default and credit migration for certain market segments is too limited to facilitate any meaningful analysis. It is therefore recognized that some lead time would be needed for banking institutions to produce a robust and meaningful validation of internal estimates of probabilities of default and loss given default. However, this does not mean that banks should wait until all the requisite data is in place. Banks can initiate work to establish the framework for analytical functions.

While the industry survey conducted by Bank Negara Malaysia revealed a strong preference among Malaysian banking institutions to adopt the IRB approach, many had indicated the need to further strengthen their business case and undertake more comprehensive gap and impact analysis. This is indeed a critical process. Of importance is to be able to extract the benefits out of the new accord. This would however, take time even for large and internationally active banking institutions that have made substantial enhancements over the years.

Standardised approach offers benefits with much less complexity

While capital savings from the adoption of the standardized approach may be relatively lower than the IRB approach, the benefits to be gained under the standardized approach are still considerable compared to the current accord. It includes the lower risk weights to be assigned to the mortgage portfolio, which would be reduced from 50% currently to 35% under the standardized approach. Similarly, substantial capital savings could be generated from lending to small and medium enterprises (SME) that would qualify as retail exposures where the risk weights would be lowered from 100% to 75%. The potential impact of lower risk weight for this sector under the standardized approach could result in greater participation by banking institutions in this market segment.

Bank Negara Malaysia’s initial estimates on the impact of the standardized approach indicated that benefits would be derived by individual institutions in terms of capital savings. However, improvements in a number of areas such as loan identification systems as well as collateral management systems would result in higher capital savings for credit risks under the standardized approach. Continuous calibration would be required to ensure that banks under the standardized approach would continue to maximize capital savings for credit risks in view of the requirement for an explicit capital charge for operational risk under the new accord.

While the IRB approaches promise greater capital savings in the longer term, the adoption of the standardized approach in the transition is considered a more pragmatic option even for some internationally active banking groups. Under the IRB approaches, banks would need to reach an agreement with the regulator in the countries they operate on the robustness of group internal estimates and validation. The standardized approach is therefore seen to provide the breathing space for a smooth transition to IRB approaches while at the same time allowing banking institutions to avail themselves of the benefits of capital savings.

Different approaches are adopted by regulators

While there has been global acceptance of the broad principles of the new accord, differing implementation approaches are being adopted by different countries. In some countries, regulators have opted for the accord to be applied to all institutions while in others selected banks are being mandated specific approaches. Some other regulators have given greater flexibility for banks or have extended the timeline for the implementation of the new accord. These reflect the different considerations and priorities accorded by the various regulators in their policy agenda. In essence, the decision by national regulators are based on a number of common factors, namely, the stage of industry development and market infrastructure, the size and types of institutions involved, the regulatory philosophy and priorities, as well as the economic environment. Of importance is to ensure that the implementation of the new accord is consistent with the overall agenda and objectives for the financial sector to facilitate growth and economic expansion.

Implementation principles for Malaysia

In Malaysia the appropriateness of the new accord is being assessed in the context of our own objective to develop a more effective and resilient banking system that is best able to serve the nation. In view of the significant and special role of the banking sector in the economy, a well-capitalised banking system has always been a priority in the regulatory framework. In this context, the principles advocated by the new accord are consistent with our regulatory philosophy that encourages capacity building and enhancing risk management.
Effective Basel II implementation strategies would be premised on the industry having the correct understanding of the new framework. To implement the required changes, it is therefore vital that the management of banking institutions understands the principles of the new accord. One common misperception is that the recognition of financial collateral under the new framework will encourage more collateral-based lending within the banking sector. This is a simplistic conclusion given the stringent minimum standards for the recognition of such financial collaterals before banks can qualify for the capital savings. Moreover, the potential capital savings under the new framework is not from the recognition of financial collateral, but rather from the much lower risk weights attached to higher rated loans.

Indeed, the real benefit to be gained under Basel II environment comes from improved standards of loan underwriting and more accurate quantification of risks that can subsequently translate into enhanced performance. Acceptance of collateral is only to mitigate loss severity should a default take place. In an increasingly more competitive marketplace, the emphasis is on maximizing risk-adjusted returns on capital and maintaining an optimal asset portfolio that reflects the risk tolerance level of the institution. In such an environment, overemphasis on collateral is certainly not viable.

Bank Negara Malaysia will adopt four key principles in the implementation of Basel II in Malaysia:

Firstly, the need to accommodate capacity building efforts, with strong emphasis on gradual enhancement to risk management framework for all banking institutions;

Secondly, a more flexible timeframe that allows capacity building measures to be implemented;

Thirdly, an emphasis on strong business justification instead of regulatory mandate for the adoption of IRB approaches; and

Finally, an enhanced supervisory methodology to assess internal models and advanced risk management systems.

Malaysia will adopt a two-phased approach for Basel II
These principles would be implemented in a two-phased approach. The first phase will begin in January 2008 where all banks will adopt the standardized approach for credit risks and basic indicator approach for operational risks. Banking institutions would be required to submit to Bank Negara Malaysia parallel calculation of capital adequacy on a monthly basis for one year prior to the implementation of the standardized approach.

In Phase I, Bank Negara Malaysia may also allow banking institutions to remain on the current accord if they intend to adopt the Foundation Internal Rating Based (FIRB) approach, instead of the standardized approach. However, Bank Negara Malaysia would require a submission of business case justification as well as a blueprint for implementation that has been approved by the Board of Directors of the banking institutions concerned. These banking institutions would be expected to have undertaken a comprehensive gap and business impact studies to justify their roll-out plans. In this regard, a broad guideline on the required processes and expectations will be issued to facilitate the process.

Banking institutions intending to adopt the FIRB approach are expected to do so by January 2010. This is when the second phase of implementation will commence. These institutions will be required to submit to Bank Negara Malaysia parallel calculation of capital adequacy on a monthly basis for one year prior to implementation. However, during the second phase, banks on the standardized approach will not be mandated to migrate to the FIRB approach. For purposes of regulatory validation and approval, Bank Negara Malaysia would expect that all parameters and assumptions used for the FIRB approach will be based on local data inputs.

Conclusion – capital is key, but not the sole factor to ensure soundness

Despite the increased sophistication of the regulatory capital framework and internal economic capital model in banks, capital remains the last line of defence. Capital regulations will have to be complemented with prudent banking that includes enhanced underwriting standards, effective internal controls and risk management, as well as strong corporate governance. In achieving your future goals and aspirations, significant benefits can be derived from Basel II provided that your institutions undertake the necessary efforts to align your strategy and business orientation with the new standards. Your interest, participation and decisive actions on the new accord are therefore important in positioning your institution in this increasingly competitive and more dynamic environment.


Source :© Bank Negara Malaysia, 2010. All rights reserved.

Basel II - Introduction

International Convergence of Capital Measurement and Capital Standards: A Revised Framework Introduction

1. This report presents the outcome of the Basel Committee on Banking Supervision’s (“the Committee”)1 work over recent years to secure international convergence on revisions to supervisory regulations governing the capital adequacy of internationally active banks. Following the publication of the Committee’s first round of proposals for revising the capital adequacy framework in June 1999, an extensive consultative process was set in train in all member countries and the proposals were also circulated to supervisory authorities worldwide. The Committee subsequently released additional proposals for consultation in January 2001 and April 2003 and furthermore conducted three quantitative impact studies related to its proposals. As a result of these efforts, many valuable improvements have been made to the original proposals. The present paper is now a statement of the Committee agreed by all its members. It sets out the details of the agreed Framework for measuring capital adequacy and the minimum standard to be achieved which the national supervisory authorities represented on the Committee will propose for adoption in their respective countries. This Framework and the standard it contains have been endorsed by the Central Bank Governors and Heads of Banking Supervision of the Group of Ten countries.

2. The Committee expects its members to move forward with the appropriate adoption procedures in their respective countries. In a number of instances, these procedures will include additional impact assessments of the Committee’s Framework as well as further opportunities for comments by interested parties to be provided to national authorities. The Committee intends the Framework set out here to be available for implementation as of year-end 2006. However, the Committee feels that one further year of impact studies or parallel calculations will be needed for the most advanced approaches, and these therefore will be available for implementation as of year-end 2007. More details on the transition to the revised Framework and its relevance to particular approaches are set out in paragraphs 45 to 49.

3. This document is being circulated to supervisory authorities worldwide with a view to encouraging them to consider adopting this revised Framework at such time as they believe is consistent with their broader supervisory priorities. While the revised Framework has been designed to provide options for banks and banking systems worldwide, the Committee acknowledges that moving toward its adoption in the near future may not be a first priority for all non-G10 supervisory authorities in terms of what is needed to strengthen their supervision. Where this is the case, each national supervisor should consider carefully the benefits of the revised Framework in the context of its domestic banking system when developing a timetable and approach to implementation.


1 The Basel Committee on Banking Supervision is a committee of banking supervisory authorities that was established by the central bank governors of the Group of Ten countries in 1975. It consists of senior representatives of bank supervisory authorities and central banks from Belgium, Canada, France, Germany, Italy, Japan, Luxembourg, the Netherlands, Spain, Sweden, Switzerland, the United Kingdom, and the United States. It usually meets at the Bank for International Settlements in Basel, where its permanent Secretariat is located.
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Part 1: Scope of Application I. Introduction 20. This Framework will be applied on a consolidated basis to internationally active banks. This is the best means to preserve the integrity of capital in banks with subsidiaries by eliminating double gearing. 21. The scope of application of the Framework will include, on a fully consolidated basis, any holding company that is the parent entity within a banking group to ensure that it captures the risk of the whole banking group.3 Banking groups are groups that engage predominantly in banking activities and, in some countries, a banking group may be registered as a bank. 22. The Framework will also apply to all internationally active banks at every tier within a banking group, also on a fully consolidated basis (see illustrative chart at the end of this section).4 A three-year transitional period for applying full sub-consolidation will be provided for those countries where this is not currently a requirement. 23. Further, as one of the principal objectives of supervision is the protection of depositors, it is essential to ensure that capital recognised in capital adequacy measures is readily available for those depositors. Accordingly, supervisors should test that individual banks are adequately capitalised on a stand-alone basis. II. Banking, securities and other financial subsidiaries 24. To the greatest extent possible, all banking and other relevant financial activities5 (both regulated and unregulated) conducted within a group containing an internationally active bank will be captured through consolidation. Thus, majority-owned or -controlled banking entities, securities entities (where subject to broadly similar regulation or where securities activities are deemed banking activities) and other financial entities6 should generally be fully consolidated. 25. Supervisors will assess the appropriateness of recognising in consolidated capital the minority interests that arise from the consolidation of less than wholly owned banking, 3 A holding company that is a parent of a banking group may itself have a parent holding company. In some structures, this parent holding company may not be subject to this Framework because it is not considered a parent of a banking group. 4 As an alternative to full sub-consolidation, the application of this Framework to the stand-alone bank (i.e. on a basis that does not consolidate assets and liabilities of subsidiaries) would achieve the same objective, providing the full book value of any investments in subsidiaries and significant minority-owned stakes is deducted from the bank's capital. 5 “Financial activities” do not include insurance activities and “financial entities” do not include insurance entities. 6 Examples of the types of activities that financial entities might be involved in include financial leasing, issuing credit cards, portfolio management, investment advisory, custodial and safekeeping services and other similar activities that are ancillary to the business of banking.
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