MALAYSIA BAILS OUT ANOTHER COMMERCIAL BANK
Malaysia's central bank said it
acquired a 59.2 pct stake in ailing <United Asian Bank Bhd>
(UAB), the sixth largest commercial bank in the country, to
rebuild public confidence in it.
    UAB called for a rights issue last November to raise 152.49
mln ringgit to rectify its capital deficiency following an
accumulated loss of 107.61 mln ringgit at end-1985, the central
bank, Bank Negara, said in a statement.
    But only 16.99 mln ringgit in shares was taken up by
shareholders, mainly local Indian and Malay businessmen and the
Indian Government.
    Bank Negara said it subsequently took up the unsubscribed
shares, totalling 135.5 mln of UAB's new paid-up capital of
228.74 mln ringgit.
    It said the shares, held in trust, will be eventually sold.
    The central bank early this week also announced that it had
bought 49.4 pct stake in another troubled commercial bank,
<Perwira Habib Bank Malaysia Bhd>, after the latter raised its
capital to 405 mln ringgit from 105 in mid-January this year.
    Bank Negara said it does not intend to hold on to the
shares of the two banks.
    "The injection of capital in PHB and in UAB including the
recamp of management in these banks are some of the measures
taken by the bank to strengthen public confidence in the
stability of the these banks," it added.
    The central bank said it is invoking Section 39A of the
Banking (Amendemnt) Act 1986 empowering it to grant loans to an
ailing bank or to buy a stake in it.
 REUTER
