Malayan Banking Bhd., Malaysia’s biggest lender by assets, said it plans to set up its first overseas investment banking operations, starting with its Asian neighbors Singapore, Indonesia and Hong Kong.

“Our clients are going regional and we need to support them in those markets,” Tengku Zafrul Tengku Abdul Aziz, chief executive officer of the group’s investment banking arm, Maybank Investment Bank Bhd., said in an interview. “Malaysia is very competitive.”

Maybank lost its standing as Malaysia’s leading underwriter of equity and rights offers last year to local rival CIMB Group Holdings Bhd., according to data compiled by Bloomberg. It has since narrowed the gap with eight equity offerings, including some of the country’s biggest share sales this year.

It has a 20.6% market share in underwriting Malaysian equity and rights offerings this year, up from 13.2% in 2009, data compiled by Bloomberg show. CIMB has extended its lead to 27.3% this year from 20.5%, Bloomberg’s underwriting league table shows.

Maybank helped arrange Sunway Real Estate Investment Trust’s 1.5 billion ringgit ($644 million) initial public offer in July, Southeast Asia’s biggest this year. It also underwrote the Kuala Lumpur listing of CapitaMalls Malaysia Trust, partly- owned by Southeast Asia’s biggest developer, which raised about half the amount also in July. Both stocks fell below their offer prices and have since risen, with CapitaMalls gaining 12% from its share sale.

CIMB’s Head Start
Maybank’s overseas ventures in markets such as Singapore and Indonesia have excluded investment banking without permits for those services. CIMB had a head start after buying the stock-broking business of Singapore’s G.K. Goh Holdings in 2005, which gave it presence in Singapore, Indonesia, Hong Kong, Thailand, the UK and US

“We don’t target ourselves against CIMB,” Tengku Zafrul, who joined the lender in June this year, said yesterday. “Our aim for the next three years is to make sure that we’re among the top three in all segments of investment banking every year: equity capital market, debt capital market, mergers and acquisitions, IPOs, and equity stockbroking.”

Maybank aims to set up investment banking operations in Singapore, Indonesia and Hong Kong by June next year as a start to its regional expansion, Tengku Zafrul said. In Indonesia, it may either buy a stockbroker or apply for its own license. It plans to request for a new permit in Singapore and reactivate an old license in Hong Kong, he said.

‘Mega Deal’
Investment banking accounted for 2.7% of Maybank’s net income in its last financial year ended June 30. By comparison, corporate and investment banking contributed 15.9% at CIMB, Malaysia’s second-largest lender by assets.

“Last year was essentially the story of one mega deal, Maxis, which determined where you ended up on the league tables,” CIMB Chief Executive Officer Nazir Razak said in an e-mail this week. “This year, you need to be part of many deals to do well, which makes it much tougher on the marketing teams.”

Maxis Bhd., Malaysia’s biggest mobile-phone operator, raised 11.2 billion ringgit last year in the country’s largest initial public offer. CIMB was lead arranger for the sale, which Maybank also participated.

Stock sales, including placements, in Malaysia have amounted to 10.5 billion ringgit so far this year, compared to 17.9 billion ringgit last year, according to data compiled by Bloomberg.

More Deals
Maybank has more equity deals in the pipeline for the next six months up to the first quarter of next year, Tengku Zafrul said. It is arranging the initial share sale of MISC Bhd.’s heavy engineering unit, set to list by the end of October. MISC is the world’s biggest owner-operator of liquefied natural gas tankers.

“We’re not seeing signs of a double-dip from the deals flow that we are getting so far,” Tengku Zafrul said. “I don’t have visibility for the second quarter yet.”

RHB Capital Bhd., Malaysia’s fourth-biggest lender, ranks third in Bloomberg’s underwriter league table for equity and rights offerings this year with a 17.7% market share.

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