Bank Muamalat Malaysia Bhd (BMMB) is in talks with Pos Malaysia Bhd about a possible collaboration in setting up a postal bank network.
BMMB chief executive officer Datuk Mohd Redza Shah Abdul Wahid said the Islamic financial institution was studying postal bank models in countries such as New Zealand, Singapore and Switzerland.
“We are talking to Pos Malaysia on how we can work together. The postal service is a natural extension in terms of banking services. For example, we can take deposits and provide remittance services,” Redza said yesterday after launching the first Bank Muamalat kiosk at the Giant hypermarket in Kemuning Utama.
The kiosk, which offers services ranging from opening of current and savings accounts to retail, home, vehicle and structured personal financing, is open seven days a week, from 10am to 8pm.
BMMB chairman Tan Sri Dr Mohd Munir Abdul Majid said the volume of banking transactions at the kiosk was equivalent to some Bank Muamalat branches. “The kiosk has generated RM4mil to RM5mil in terms of business since it opened on May 23.”
A second kiosk is due to be opened at the Johor Baru Customs, Immigration and Quarantine (CIQ) complex in July.
“The kiosk is a de facto branch that offers convenience to customers as it is open beyond normal banking hours,” Munir added.
Redza said the bank was aiming to open a dozen such kiosks within the next two years. “Operating a kiosk is five or six times cheaper compared with operating a banking branch.”
BMMB is a unit of DRB-HICOM Bhd, which has a 70% stake in the Islamic lender.(The Star Online)
Thursday, June 30, 2011
Sunday, June 26, 2011
The souring of a mega deal
AN ignominous flop. That may sound harsh but it befits a deal that was trumpeted would create the most valuable Malaysian bank in South-East Asia, steered by the unwaveringly powerful Bank Negara and executed by no less than the country's top influential bankers Datuk Seri Nazir Razak and Datuk Seri Abdul Wahid Omar.
As it turned out, Malayan Banking Bhd and CIMB Group Holdings Bhd's battle to take over RHB Capital Bhd, led respectively by Wahid and Nazir, which had a three-month deadline for completion took merely three weeks to go belly up.
On Thursday, just one week before both banking giants' competing offers were scheduled to land on the table of RHB Cap directors, the banks revealed that they had scrapped talks and were bowing out of the merger plan. Their carefully-crafted statements to the stock exchange, this time around, did little to mask the disenchantment. Based on the expectations of key stakeholders “we do not believe that we will be able to arrive at a value creating merger ... we prefer not to prolong our discussions unnecessarily,” said Nazir.
Maybank's note, as terse as it was, was unusually revelatory; it said it was calling off the talks “in the light of recent developments.” Little guessing was needed to figure out what that was. Wahid elaborates on the “recent developments” to StarBizWeek: “... the recent transaction has set an expectation among certain shareholders on the valuation of RHB. We believe that a transaction that will benefit all stakeholders, including our own shareholders, may be challenging to achieve based on the price expectations that have been created.” On hindsight wisdom, it's near impossible to have two deals a sale of a strategic block and a wholesale acquisition involving the same entity, taking place almost concurrently without jeopardising someone's interest. Therein lay the writing on the wall.
From the glass half-full perspective, an astute corporate observer appears relieved: “I'm pleased that the parties have the discipline not to push ahead when good sense dictates they should stand down. What would be bad is inspite of all these (high) expectations, they went ahead. That would show indiscipline and lack of maturity and would have done injustice to Maybank or CIMB.”
“What would have been ideal is to exchange the shares at realistic prices and reap the gains in the uplift of share price after the merger,” he adds.
The strong arm of the regulator
Bank Negara's regulatory hand, guided by the overriding compass for industry consolidation, in the entire saga is hard to miss right from the start.
Without the central bank's blessings (or was it cajoling?), the two banking juggernauts may not have stepped up to the plate as fast as they did to start merger talks with RHB Cap. Their almost mirrored and closely-timed statements on receiving the regulator's nod to talk to RHB Cap board and its substantial shareholders somewhat reflect this.
Cementing this notion is the twin step late this week by both to bow out of the merger plans. “If one had walked out of submitting an offer while the other stayed, it would be easier to believe that the central bank had little to do with this. They were competing with each other for RHB Cap. But instead, both pulled out together, which is telling,” says an observer.
The merger idea was largely dictated by a single denominator the race for scale. Whichever way it swung (Maybank-RHB Cap or CIMB-RHB Cap), it could have created the largest banking group in the region in terms of market value, a clear market leader in Malaysia and bolster their overseas operations. The merged entity would have also cosied up even closer to three of Singapore's banking heavyweights, which have held the near-indomitable top three spots based on the assets in the region. Now, wouldn't that have been something to cheer about?
Even so, the potential grandeur was somewhat muffled by the murky synergistic benefits and potential substantial duplication issues which could arise from the merger with either one.
Credit Suisse in an earlier report had cited “substantial overlap resulting in excess staff and branches” as a key challenge in the potential merger. Given the upcoming general elections, which it said is likely in 2012, “we doubt authorities would agree to allow either bank to shed excess staff.”
In other words, not many were convinced by the cost synergies to be extracted from the union. It is for this very reason that OSK Research wasted no time (one day after Maybank and CIMB nixed the deal to be exact) to echo a rumour of AMMB entering the RHB Cap merger fray, given it's a better fit, hence a “marriage of equals.”
The local research house also expressed that it was not surprised by the turn of events: “This piece of news did not entirely come as a surprise given the fact that the proposed merger with RHB Capital was rumored to have been at the invitation of the central bank rather than initiated by CIMB or Maybank. As such, pricing and the rationale for a synergistic merger were key stumbling blocks from the start.”
While the central bank had steered the banking stalwarts towards a merger with RHB Cap, it was too late to stop Abu Dhabi Commercial Bank from divesting its 25% stake in the country's fifth largest bank, despite the potential red flags. Such concerns turned into grim reality over the week.
The harbinger
The cracks in the merger plans emerged following the RHB Cap stake sale by ADCB to another sovereign-owned agency Aabar Investment Agency PJSC on June 17. The harbinger of a doomed merger was the all-important determinant in the sale, as in any transaction the price tag. At RM10.80 a piece, the strategic block would change hands, from left to right that is, at 2.25 times the book value of RHB Capital.
“It wasn't so much about the price. Remember, this is a merger involving a share swap. CIMB could have been willing to pay RM10.80 per share for RHB Cap on a fully-valued basis. In return, it would also fully value its own shares at say, RM12. Why would it undervalue its own shares while fully valuing that of RHB Cap? This in turn, would determine the swap ratio. The problem is that RHB Cap shareholders were not warmed up to such a plan as their shareholding would be significantly diluted in the enlarged entity,” says an observer.
Still, determined not to allow the exercise to derail the consolidation agenda, Bank Negara slapped two conditions on the deal. Firstly, Aabar must support a merger with another Malaysian bank. But it was the other condition - that the sale price be adjusted accordingly if the merger offer price came in below - which had peeved not just the Middle Easteners but also the keeper of 12 million Malaysians' retirement savings and 45% owner of RHB Cap, the Employees Provident Fund (EPF).
“How can the central bank force non-market conditions on the market? If I were the regulator, I would have allowed Maybank and CIMB to submit their proposals and the RHB Cap board and shareholders to evaluate them. If good, let's merge and if bad, it will be rejected. Free market forces should reign. Not this ...” says an irate source who is close to the deal.
Was the central bank right?
Opinions are mixed depending on who you talk to on whether the central bank did the right thing.
“You can appreciate the central bank's concern. If the transaction is done at an unrealistic price, it would jeopardise the entire merger process. That's a legitimate concern. If it really wanted to interfere, it could have disallowed the sale (of 25% in RHB Cap). Bank Negara has authority to approve all major transactions in respect of banks. This sale involved a related party transaction. It had the right to conclude that the sale, done at a higher price, was impairing the merger possibility, hence it imposed those conditions,” says an astute observer.
In fact, he says, there was no compelling reason to allow a financial investor like Aabar to engage in a strategic stake in a bank, drawing a parallel with buyout firm Primus Pacific Partners' purchase of a 20% stake in EON Cap in 2008. “It's a strategic block. EPF needs a strategic partner not a financial investor. ADCB was at the least, ostensibly, a strategic investor.
“So, in the absence of a strategic partner, EPF needs a strategic merger ...,” he says.
But opponents of the central bank's “encroaching style” say it was unreasonable to set such conditions, especially as ADCB was a public-listed company (it is listed on Abu Dhabi Securities Exchange).
Significant pressure and criticism was piling on the central bank due to the unpopular decision. That was the beginning of the end. And as feared, the transaction posed an insurmountable psychological barrier for the merger plans to move ahead.
“Nazir's a fighter. But things were getting complicated and the truth was getting lost amidst all the spinning. Our best guess was the deal was not doable,” said a source close to the deal.
One meeting, two calls
Those involved, particularly the regulator and bankers, were beginning to feel uneasy. Against this highly-charged backdrop, it is believed that EPF chairman Tan Sri Azlan Zainol met up with central bank governor Tan Sri Dr Zeti Akhtar Aziz and deputy governor Nor Shamsiah Mohd Yunus on Monday (June 20). According to a source, EPF felt as if it did not have enough say in the merger process. The issue of pricing was also discussed as understandably, the Fund was eager to fetch the best valuation for a bank it controlled and successfully strengthened over the years. (EPF also has a 10.4% and 12% interest in Maybank and CIMB respectively. If the deal had happened and involved largely stock, EPF could have ended up with between 17% and 20% in the enlarged entity.)
According to sources, while Maybank had indicated a better offer price for RHB Cap, it was CIMB Group which was deemed a better fit with a stronger management to lead the charge for the merged entities. “Maybank was willing to bid higher. But CIMB's management made it a more compelling partner,” says the source.
At one point of the impasse, it is believed that an idea was floated for EPF instead to acquire CIMB although it cannot be ascertained how far this is true.
“There was a counter proposal. If CIMB deemed 2.25 book for RHB Cap too expensive, then EPF could acquire CIMB for 2.65 times. It would mean a tidy exit for Khazanah and in line with EPF's investment focus on dividend and capital appreciation,” says a source in the loop.
The pitch failed to pique interest but it drove home the point that EPF was keen to remain on the driver's seat of a banking group.
By late Monday, the deal became wobbly. “There was a risk of the merger, which was meant to enhance value, suddenly turning into a value destructive exercise. The regulator was not pleased with the direction of the whole process and had a change of heart after the meeting with EPF,” said a source.
The very next day, on Tuesday, sources said the central bank made two calls - one to Nazir and the other, to Wahid which would be the game changer. The regulator asked both men to pull the plug on the deal with the possibility of revisiting it some other time when normalcy resumed. On late Wednesday, sources said the Finance Ministry had finally given the consent for the deal to be called off.
Merger still on the cards
Even so, all may not be lost yet. Market wags expect the parties to resume talks again down the road. “It could take a further 3 months, maybe six months ... That may happen,” says a source.
Maybank's statement to Bursa that it has called off the talks “at this juncture” has further fanned such expectations.
“Ultimately, there will be a merger but one that is fair and transparent and mutually agreed by all parties and that is value enhancing for both groups,” says a source.
RHB Cap's counter has had a wild ride this June. Just days after the banking giants announced their merger plans on May 30, the shares surged to an all-time high of RM9.98. In contrast and as testament that the counter's sugar rush in recent weeks was largely on the back of the potential merger, it sufferred a massive smack down this week, losing some 9% of its value or 85 sen to finish the week at RM8.75 on news that the deal has fallen out.
At the current share price of RHB Cap or what one would say pre-merger talk levels, it could be a lot easier to return to the drawing board with RHB Cap's board and shareholders to discuss again merger plans. It's hard to resist the nagging suspicion could this have been part of the plan?
Sadly, even as RHB Cap echoes the cliche that things are very much business as usual, it may be the most impacted from this entire debacle. The auction conducted for ADCB's stake sale earlier had drawn a bid by Japan's largest lender Sumitomo Mitsui Financial Group. But the strategic block landed on Aabar's lap instead as the ongoing merger plans with Maybank and CIMB had created some uncertainty for the prospective shareholders.
Lest you forget, this could also inadvertently disadvantage EPF, whose deadline to pare down its stake in RHB Cap to 30% is looming closer.
Let this episode serve as a lesson on the indelible power of a strategic block, if the “Primus case” hadn't already, especially for a sector as pivotal and ironically as highly regulated as banking.(Star Biz)
As it turned out, Malayan Banking Bhd and CIMB Group Holdings Bhd's battle to take over RHB Capital Bhd, led respectively by Wahid and Nazir, which had a three-month deadline for completion took merely three weeks to go belly up.
On Thursday, just one week before both banking giants' competing offers were scheduled to land on the table of RHB Cap directors, the banks revealed that they had scrapped talks and were bowing out of the merger plan. Their carefully-crafted statements to the stock exchange, this time around, did little to mask the disenchantment. Based on the expectations of key stakeholders “we do not believe that we will be able to arrive at a value creating merger ... we prefer not to prolong our discussions unnecessarily,” said Nazir.
Maybank's note, as terse as it was, was unusually revelatory; it said it was calling off the talks “in the light of recent developments.” Little guessing was needed to figure out what that was. Wahid elaborates on the “recent developments” to StarBizWeek: “... the recent transaction has set an expectation among certain shareholders on the valuation of RHB. We believe that a transaction that will benefit all stakeholders, including our own shareholders, may be challenging to achieve based on the price expectations that have been created.” On hindsight wisdom, it's near impossible to have two deals a sale of a strategic block and a wholesale acquisition involving the same entity, taking place almost concurrently without jeopardising someone's interest. Therein lay the writing on the wall.
From the glass half-full perspective, an astute corporate observer appears relieved: “I'm pleased that the parties have the discipline not to push ahead when good sense dictates they should stand down. What would be bad is inspite of all these (high) expectations, they went ahead. That would show indiscipline and lack of maturity and would have done injustice to Maybank or CIMB.”
“What would have been ideal is to exchange the shares at realistic prices and reap the gains in the uplift of share price after the merger,” he adds.
The strong arm of the regulator
Bank Negara's regulatory hand, guided by the overriding compass for industry consolidation, in the entire saga is hard to miss right from the start.
Without the central bank's blessings (or was it cajoling?), the two banking juggernauts may not have stepped up to the plate as fast as they did to start merger talks with RHB Cap. Their almost mirrored and closely-timed statements on receiving the regulator's nod to talk to RHB Cap board and its substantial shareholders somewhat reflect this.
Cementing this notion is the twin step late this week by both to bow out of the merger plans. “If one had walked out of submitting an offer while the other stayed, it would be easier to believe that the central bank had little to do with this. They were competing with each other for RHB Cap. But instead, both pulled out together, which is telling,” says an observer.
The merger idea was largely dictated by a single denominator the race for scale. Whichever way it swung (Maybank-RHB Cap or CIMB-RHB Cap), it could have created the largest banking group in the region in terms of market value, a clear market leader in Malaysia and bolster their overseas operations. The merged entity would have also cosied up even closer to three of Singapore's banking heavyweights, which have held the near-indomitable top three spots based on the assets in the region. Now, wouldn't that have been something to cheer about?
Even so, the potential grandeur was somewhat muffled by the murky synergistic benefits and potential substantial duplication issues which could arise from the merger with either one.
Credit Suisse in an earlier report had cited “substantial overlap resulting in excess staff and branches” as a key challenge in the potential merger. Given the upcoming general elections, which it said is likely in 2012, “we doubt authorities would agree to allow either bank to shed excess staff.”
In other words, not many were convinced by the cost synergies to be extracted from the union. It is for this very reason that OSK Research wasted no time (one day after Maybank and CIMB nixed the deal to be exact) to echo a rumour of AMMB entering the RHB Cap merger fray, given it's a better fit, hence a “marriage of equals.”
The local research house also expressed that it was not surprised by the turn of events: “This piece of news did not entirely come as a surprise given the fact that the proposed merger with RHB Capital was rumored to have been at the invitation of the central bank rather than initiated by CIMB or Maybank. As such, pricing and the rationale for a synergistic merger were key stumbling blocks from the start.”
While the central bank had steered the banking stalwarts towards a merger with RHB Cap, it was too late to stop Abu Dhabi Commercial Bank from divesting its 25% stake in the country's fifth largest bank, despite the potential red flags. Such concerns turned into grim reality over the week.
The harbinger
The cracks in the merger plans emerged following the RHB Cap stake sale by ADCB to another sovereign-owned agency Aabar Investment Agency PJSC on June 17. The harbinger of a doomed merger was the all-important determinant in the sale, as in any transaction the price tag. At RM10.80 a piece, the strategic block would change hands, from left to right that is, at 2.25 times the book value of RHB Capital.
“It wasn't so much about the price. Remember, this is a merger involving a share swap. CIMB could have been willing to pay RM10.80 per share for RHB Cap on a fully-valued basis. In return, it would also fully value its own shares at say, RM12. Why would it undervalue its own shares while fully valuing that of RHB Cap? This in turn, would determine the swap ratio. The problem is that RHB Cap shareholders were not warmed up to such a plan as their shareholding would be significantly diluted in the enlarged entity,” says an observer.
Still, determined not to allow the exercise to derail the consolidation agenda, Bank Negara slapped two conditions on the deal. Firstly, Aabar must support a merger with another Malaysian bank. But it was the other condition - that the sale price be adjusted accordingly if the merger offer price came in below - which had peeved not just the Middle Easteners but also the keeper of 12 million Malaysians' retirement savings and 45% owner of RHB Cap, the Employees Provident Fund (EPF).
“How can the central bank force non-market conditions on the market? If I were the regulator, I would have allowed Maybank and CIMB to submit their proposals and the RHB Cap board and shareholders to evaluate them. If good, let's merge and if bad, it will be rejected. Free market forces should reign. Not this ...” says an irate source who is close to the deal.
Was the central bank right?
Opinions are mixed depending on who you talk to on whether the central bank did the right thing.
“You can appreciate the central bank's concern. If the transaction is done at an unrealistic price, it would jeopardise the entire merger process. That's a legitimate concern. If it really wanted to interfere, it could have disallowed the sale (of 25% in RHB Cap). Bank Negara has authority to approve all major transactions in respect of banks. This sale involved a related party transaction. It had the right to conclude that the sale, done at a higher price, was impairing the merger possibility, hence it imposed those conditions,” says an astute observer.
In fact, he says, there was no compelling reason to allow a financial investor like Aabar to engage in a strategic stake in a bank, drawing a parallel with buyout firm Primus Pacific Partners' purchase of a 20% stake in EON Cap in 2008. “It's a strategic block. EPF needs a strategic partner not a financial investor. ADCB was at the least, ostensibly, a strategic investor.
“So, in the absence of a strategic partner, EPF needs a strategic merger ...,” he says.
But opponents of the central bank's “encroaching style” say it was unreasonable to set such conditions, especially as ADCB was a public-listed company (it is listed on Abu Dhabi Securities Exchange).
Significant pressure and criticism was piling on the central bank due to the unpopular decision. That was the beginning of the end. And as feared, the transaction posed an insurmountable psychological barrier for the merger plans to move ahead.
“Nazir's a fighter. But things were getting complicated and the truth was getting lost amidst all the spinning. Our best guess was the deal was not doable,” said a source close to the deal.
One meeting, two calls
Those involved, particularly the regulator and bankers, were beginning to feel uneasy. Against this highly-charged backdrop, it is believed that EPF chairman Tan Sri Azlan Zainol met up with central bank governor Tan Sri Dr Zeti Akhtar Aziz and deputy governor Nor Shamsiah Mohd Yunus on Monday (June 20). According to a source, EPF felt as if it did not have enough say in the merger process. The issue of pricing was also discussed as understandably, the Fund was eager to fetch the best valuation for a bank it controlled and successfully strengthened over the years. (EPF also has a 10.4% and 12% interest in Maybank and CIMB respectively. If the deal had happened and involved largely stock, EPF could have ended up with between 17% and 20% in the enlarged entity.)
According to sources, while Maybank had indicated a better offer price for RHB Cap, it was CIMB Group which was deemed a better fit with a stronger management to lead the charge for the merged entities. “Maybank was willing to bid higher. But CIMB's management made it a more compelling partner,” says the source.
At one point of the impasse, it is believed that an idea was floated for EPF instead to acquire CIMB although it cannot be ascertained how far this is true.
“There was a counter proposal. If CIMB deemed 2.25 book for RHB Cap too expensive, then EPF could acquire CIMB for 2.65 times. It would mean a tidy exit for Khazanah and in line with EPF's investment focus on dividend and capital appreciation,” says a source in the loop.
The pitch failed to pique interest but it drove home the point that EPF was keen to remain on the driver's seat of a banking group.
By late Monday, the deal became wobbly. “There was a risk of the merger, which was meant to enhance value, suddenly turning into a value destructive exercise. The regulator was not pleased with the direction of the whole process and had a change of heart after the meeting with EPF,” said a source.
The very next day, on Tuesday, sources said the central bank made two calls - one to Nazir and the other, to Wahid which would be the game changer. The regulator asked both men to pull the plug on the deal with the possibility of revisiting it some other time when normalcy resumed. On late Wednesday, sources said the Finance Ministry had finally given the consent for the deal to be called off.
Merger still on the cards
Even so, all may not be lost yet. Market wags expect the parties to resume talks again down the road. “It could take a further 3 months, maybe six months ... That may happen,” says a source.
Maybank's statement to Bursa that it has called off the talks “at this juncture” has further fanned such expectations.
“Ultimately, there will be a merger but one that is fair and transparent and mutually agreed by all parties and that is value enhancing for both groups,” says a source.
RHB Cap's counter has had a wild ride this June. Just days after the banking giants announced their merger plans on May 30, the shares surged to an all-time high of RM9.98. In contrast and as testament that the counter's sugar rush in recent weeks was largely on the back of the potential merger, it sufferred a massive smack down this week, losing some 9% of its value or 85 sen to finish the week at RM8.75 on news that the deal has fallen out.
At the current share price of RHB Cap or what one would say pre-merger talk levels, it could be a lot easier to return to the drawing board with RHB Cap's board and shareholders to discuss again merger plans. It's hard to resist the nagging suspicion could this have been part of the plan?
Sadly, even as RHB Cap echoes the cliche that things are very much business as usual, it may be the most impacted from this entire debacle. The auction conducted for ADCB's stake sale earlier had drawn a bid by Japan's largest lender Sumitomo Mitsui Financial Group. But the strategic block landed on Aabar's lap instead as the ongoing merger plans with Maybank and CIMB had created some uncertainty for the prospective shareholders.
Lest you forget, this could also inadvertently disadvantage EPF, whose deadline to pare down its stake in RHB Cap to 30% is looming closer.
Let this episode serve as a lesson on the indelible power of a strategic block, if the “Primus case” hadn't already, especially for a sector as pivotal and ironically as highly regulated as banking.(Star Biz)
Thursday, June 23, 2011
Exim Bank: SMEs should be prudent
Local small and medium-enterprises (SMEs) have been advised to conduct feasibility studies and due diligence before planning to export their products or services.
Exim Bank assistant vice-president, product development Zulkipli Md Yunos said the most important thing that they had to identify was export destinations.
He said upon identifying the export destinations, they had to study who were their buyers or importers in the respective countries and methods of payments involved. “But, the most important aspect is to choose countries which are politically stable with a conducive business environment,” said Zulkipli yesterday.
He was speaking on the topic SMEs Going Abroad' at the forum held at the Grand Paragon Hotel in conjunction with The Star Outstanding Business Awards (SOBA) 2011 themed From Mediocre to Merit'.
Zulkipli said as a government-owned bank, its main objective was to promote exports and to assist local exporters in their quest to expand their businesses globally. He said the Government encouraged local companies including the SMEs to move away from their comfort zone and look at ways to grow and expand their businesses by going abroad.
Branding Association of Malaysia vice-president Datuk Yusra Sabar said the SMEs had to be willing to allocate and spend money on brand building.
He said many of the famous brands and big corporations in the world today such as Google, IBM, McDonalds, Coca-Cola, and Nestle started as SMEs and they continued in brand building despite their status now. Yusra said many of the SMEs had the mindset that it was not necessary to spend money on brand building citing financial constraints as their setback. He said without branding, a company could not survive. “Branding has to start with the owner of the company and brands must be simple enough for people to remember, recognise and even say,” he said.
SOBA is an award programme which pays tribute to the SMEs striving to carve a niche for themselves in the world of business and also to recognise the contributions of outstanding businesses to Malaysian communities and the overall economy.
It is organised by The Star with Exim Bank as the main presenter and BMW Malaysia as the gold sponsor while Bernama TV is the official TV news partners, Shang Hai the official business magazine and 98.8FM the official radio station.The event is supported by Bursa Malaysia and audited by BDO Binder.
The next SOBA forums will be held on July 5 in Penang, July 13 in Kuching and July 26 in Kuala Lumpur. (Star Biz)
Exim Bank assistant vice-president, product development Zulkipli Md Yunos said the most important thing that they had to identify was export destinations.
He said upon identifying the export destinations, they had to study who were their buyers or importers in the respective countries and methods of payments involved. “But, the most important aspect is to choose countries which are politically stable with a conducive business environment,” said Zulkipli yesterday.
He was speaking on the topic SMEs Going Abroad' at the forum held at the Grand Paragon Hotel in conjunction with The Star Outstanding Business Awards (SOBA) 2011 themed From Mediocre to Merit'.
Zulkipli said as a government-owned bank, its main objective was to promote exports and to assist local exporters in their quest to expand their businesses globally. He said the Government encouraged local companies including the SMEs to move away from their comfort zone and look at ways to grow and expand their businesses by going abroad.
Branding Association of Malaysia vice-president Datuk Yusra Sabar said the SMEs had to be willing to allocate and spend money on brand building.
He said many of the famous brands and big corporations in the world today such as Google, IBM, McDonalds, Coca-Cola, and Nestle started as SMEs and they continued in brand building despite their status now. Yusra said many of the SMEs had the mindset that it was not necessary to spend money on brand building citing financial constraints as their setback. He said without branding, a company could not survive. “Branding has to start with the owner of the company and brands must be simple enough for people to remember, recognise and even say,” he said.
SOBA is an award programme which pays tribute to the SMEs striving to carve a niche for themselves in the world of business and also to recognise the contributions of outstanding businesses to Malaysian communities and the overall economy.
It is organised by The Star with Exim Bank as the main presenter and BMW Malaysia as the gold sponsor while Bernama TV is the official TV news partners, Shang Hai the official business magazine and 98.8FM the official radio station.The event is supported by Bursa Malaysia and audited by BDO Binder.
The next SOBA forums will be held on July 5 in Penang, July 13 in Kuching and July 26 in Kuala Lumpur. (Star Biz)
CIMB gives to Hua Zong building fund
KUALA LUMPUR: CIMB Foundation has contributed RM200,000 to the Federation of Chinese Associations Malaysia (Hua Zong) for the construction of its new 12-storey building in Seri Kembangan, Selangor.
The contribution was part of the group’s ongoing efforts to work with the Chinese community in support of the development of its culture, education and social-economic standing, said CIMB Group chief executive officer Datuk Seri Nazir Razak.
“We are glad we are able to aid Hua Zong in its quest to better serve its members and the community by having its own building after having operated under the roof of the Kuala Lumpur and Selangor Chinese Assembly Hall for the past 19 years,” he said at a press conference here yesterday.
Nazir also announced a personal donation of RM5,000 to the RM55mil building which will house a Chinese museum, library, reading room, information and research rooms, meeting rooms, conference hall and a multi-purpose banquet hall.
The public can also donate directly to Hua Zong’s building fund via CIMB Cares, the bank’s online donation portal.
CIMB Bank customers can donate a minimum of RM10 via their personal accounts on CIMB Clicks, while customers of other banks can also participate through CIMB Clicks, facilitated by the MEPS FPX mechanism (debit payment for internet banking).
Hua Zong president Tan Sri Pheng Yin Huah said the movement had raised RM39mil for the construction of the building, and he hoped more funds could be collected.
“Hopefully, we can hold the groundbreaking ceremony by August while the entire project is expected to be completed in two years’ time,” he said.
For information on how to contribute towards Hua Zong’s building fund via CIMB Cares, visit www.cimbclicks.com.my or call 1300-880-900.(theedgemalaysia.com)
The contribution was part of the group’s ongoing efforts to work with the Chinese community in support of the development of its culture, education and social-economic standing, said CIMB Group chief executive officer Datuk Seri Nazir Razak.
“We are glad we are able to aid Hua Zong in its quest to better serve its members and the community by having its own building after having operated under the roof of the Kuala Lumpur and Selangor Chinese Assembly Hall for the past 19 years,” he said at a press conference here yesterday.
Nazir also announced a personal donation of RM5,000 to the RM55mil building which will house a Chinese museum, library, reading room, information and research rooms, meeting rooms, conference hall and a multi-purpose banquet hall.
The public can also donate directly to Hua Zong’s building fund via CIMB Cares, the bank’s online donation portal.
CIMB Bank customers can donate a minimum of RM10 via their personal accounts on CIMB Clicks, while customers of other banks can also participate through CIMB Clicks, facilitated by the MEPS FPX mechanism (debit payment for internet banking).
Hua Zong president Tan Sri Pheng Yin Huah said the movement had raised RM39mil for the construction of the building, and he hoped more funds could be collected.
“Hopefully, we can hold the groundbreaking ceremony by August while the entire project is expected to be completed in two years’ time,” he said.
For information on how to contribute towards Hua Zong’s building fund via CIMB Cares, visit www.cimbclicks.com.my or call 1300-880-900.(theedgemalaysia.com)
Monday, June 6, 2011
Bank Simpanan Nasional reaching out to high-end segments to be more competitive
AFTER 37 years of maintaining its social mandate of inculcating savings and providing banking accessibility to all community segments in the country, Bank Simpanan Nasional (BSN) is now reaching out to the mass affluent and high net worth segments.
In general, mass affluent is a marketing term used to refer to the high-end mass market while a high net worth individual is a person typically defined as having investable assets in excess of US$1mil but the amount varies accordingly.
According to its head of corporate services Joannita Zaleha Yusof, while BSN takes its mandated roles seriously, it is also aware of the need to remain competitive and relevant in the current banking industry.
“BSN, as a retail savings bank, remains relevant by being sustainable and profitable as well as constantly looking into innovative opportunities to expand our business.
“We have moved from brick and mortar' to click and mortar' strategies when enhancing our service deliverables and banking channels.
“As a retail bank, we offer total banking products and services to our customers who are predominantly those who might not necessarily have the opportunity to bank with the usual banks.
“On the same token, we are expanding our reach to mass affluent and high net worth segments while we make efforts to strengthen customer retention,” she told StarBiz recently.
Joannita said BSN aimed to increase its market penetration - eyeing 25% share of the government sector for personal loans while it explored other segments.
She added that BSN would soon launch its branchless banking services - a new banking strategy to increase customer outreach to financial services at “un-banked” areas.
“It's a new banking service that involves increasing customer outreach and access to financial services without setting up the physical branch infrastructure.
“BSN also offers competitive rates and now has an internet banking facility to remain current and relevant,” she said.
BSN was incorporated in 1974 under the Finance Ministry where BSN took over all the duties and responsibilities of a post office savings bank.
Prior to BSN's incorporation, savings with the post office savings bank had grown steadily where in 1949 it had 229,652 depositors with a credit balance of RM47.2mil. At the time of the launching of BSN, it had more than 2.5 million depositors.
For the financial year ended Dec 31, 2010, BSN's group net profit year-on-year grew by 3.4% to RM372.8mil on the back of a revenue of RM1.5bil, a 7.1% increase from 2009. In 2010, BSN chalked up a total of RM3.75bil in loans business where personal loans constituted 88.2%, mortgage loans at 10.7% and hire-purchase made up the balance.
To be more flexible, BSN has also adopted risk-based pricing as one of its key strategies that will enable it to react effectively to market changes while its campaign launches and other activities are expected to amplify customer awareness and generate excitement in the market.
Risk-based pricing charges different interest rates on the same loan to different people, depending on their credit score and other factors.
Another area of growth for BSN is Islamic banking. In 2010, its Islamic banking assets grew 9.2% from 2009, contributing to an increase in reserves to RM489mil. Currently, BSN has 45 Islamic banking branches nationwide.
Going forward, Joannita said the bank planned to introduce more Islamic banking products such as home financing based on a floating rate.
BSN banking facilities are extended to under-served communities throughout the country as part of its social mandate.
“To date BSN is the only bank with)branches in Tioman, Song and Belaga (remote towns in Sarawak),” Joannita noted.
BSN is one of the financial institutions with the largest network of branches nationwide.
BSN has 385 branches, 896 auto teller machines and 166 units of cash deposit machines, apart from mobile bank units that also do its rounds of banking services in Kelantan, Terengganu, Sabah and Sarawak.
BSN's mandate is not only confined to under-served communities as it also assists in the development of the small businesses via microfinance facility.
“The National Small and Medium Enterprise Development Council in 2006 mandated BSN to be a specialised microfinance facilities provider.
“There has been positive response from the public as we have received more than 56,000 applications since we launched our micro financing scheme in 2007,” she said.
It was initially very challenging for BSN to operate by focusing on its social mandate alone.
However, BSN has been able to successfully strike a balance between social dividends while remaining financially independent and strong.
“We realise that our consumers are increasing from day to day and are becoming more discerning and demanding. To satisfy these expectations, BSN must bridge the gap between operating as a savings bank and focus its efforts on value-added services and provide more choices for the customers,” she said.(thestar.com.my)
In general, mass affluent is a marketing term used to refer to the high-end mass market while a high net worth individual is a person typically defined as having investable assets in excess of US$1mil but the amount varies accordingly.
According to its head of corporate services Joannita Zaleha Yusof, while BSN takes its mandated roles seriously, it is also aware of the need to remain competitive and relevant in the current banking industry.
“BSN, as a retail savings bank, remains relevant by being sustainable and profitable as well as constantly looking into innovative opportunities to expand our business.
“We have moved from brick and mortar' to click and mortar' strategies when enhancing our service deliverables and banking channels.
“As a retail bank, we offer total banking products and services to our customers who are predominantly those who might not necessarily have the opportunity to bank with the usual banks.
“On the same token, we are expanding our reach to mass affluent and high net worth segments while we make efforts to strengthen customer retention,” she told StarBiz recently.
Joannita said BSN aimed to increase its market penetration - eyeing 25% share of the government sector for personal loans while it explored other segments.
She added that BSN would soon launch its branchless banking services - a new banking strategy to increase customer outreach to financial services at “un-banked” areas.
“It's a new banking service that involves increasing customer outreach and access to financial services without setting up the physical branch infrastructure.
“BSN also offers competitive rates and now has an internet banking facility to remain current and relevant,” she said.
BSN was incorporated in 1974 under the Finance Ministry where BSN took over all the duties and responsibilities of a post office savings bank.
Prior to BSN's incorporation, savings with the post office savings bank had grown steadily where in 1949 it had 229,652 depositors with a credit balance of RM47.2mil. At the time of the launching of BSN, it had more than 2.5 million depositors.
For the financial year ended Dec 31, 2010, BSN's group net profit year-on-year grew by 3.4% to RM372.8mil on the back of a revenue of RM1.5bil, a 7.1% increase from 2009. In 2010, BSN chalked up a total of RM3.75bil in loans business where personal loans constituted 88.2%, mortgage loans at 10.7% and hire-purchase made up the balance.
To be more flexible, BSN has also adopted risk-based pricing as one of its key strategies that will enable it to react effectively to market changes while its campaign launches and other activities are expected to amplify customer awareness and generate excitement in the market.
Risk-based pricing charges different interest rates on the same loan to different people, depending on their credit score and other factors.
Another area of growth for BSN is Islamic banking. In 2010, its Islamic banking assets grew 9.2% from 2009, contributing to an increase in reserves to RM489mil. Currently, BSN has 45 Islamic banking branches nationwide.
Going forward, Joannita said the bank planned to introduce more Islamic banking products such as home financing based on a floating rate.
BSN banking facilities are extended to under-served communities throughout the country as part of its social mandate.
“To date BSN is the only bank with)branches in Tioman, Song and Belaga (remote towns in Sarawak),” Joannita noted.
BSN is one of the financial institutions with the largest network of branches nationwide.
BSN has 385 branches, 896 auto teller machines and 166 units of cash deposit machines, apart from mobile bank units that also do its rounds of banking services in Kelantan, Terengganu, Sabah and Sarawak.
BSN's mandate is not only confined to under-served communities as it also assists in the development of the small businesses via microfinance facility.
“The National Small and Medium Enterprise Development Council in 2006 mandated BSN to be a specialised microfinance facilities provider.
“There has been positive response from the public as we have received more than 56,000 applications since we launched our micro financing scheme in 2007,” she said.
It was initially very challenging for BSN to operate by focusing on its social mandate alone.
However, BSN has been able to successfully strike a balance between social dividends while remaining financially independent and strong.
“We realise that our consumers are increasing from day to day and are becoming more discerning and demanding. To satisfy these expectations, BSN must bridge the gap between operating as a savings bank and focus its efforts on value-added services and provide more choices for the customers,” she said.(thestar.com.my)
Exim eyes RM1bil loans
Bank aims to reach target by the end of the year
KUALA LUMPUR: Export-Import Bank of Malaysia Bhd (Exim Bank) has targeted to disburse loans worth RM1bil by year-end and offer new initiatives in line with its capacity building programme.
Managing director and chief executive officer Adissadikin Ali (pic) said the financing was for small and medium enterprises (SMEs) and corporates who were looking for export markets overseas.
Over the last five years, the bank had provided total financing worth RM3bil to companies, of which 80% were SMEs and the remaining corporates, according to Adissadikin.
During this period, Exim Bank had also offered financing to more than 500 borrowers and close to 2,000 trade credit insurance policies were issued in facilitating cross-border ventures. Trade credit insurance is to prevent losses that may be incurred by local exporters in the event foreign buyers default payments.
“With the bank's assistance, Malaysian companies have been able to expand their businesses to 100 countries globally. Our role is to complement commercial banks and plug the gap in terms of financing when companies fail to secure from the former,'' he said in an interview.
According to Adissadikin, the RM1bil target for financing would be achieved by creating awareness on the bank's available facilities as well as via targeted marketing, especially to corporates. Exim Bank is the official presenter of the upcoming The Star Outstanding Business Awards 2011 (SOBA 2011).
He said being the presenter for the event was relevant to the bank as it provided financing for SMEs venturing abroad and at the same time, the event would generate awareness in areas such alternative financing and trade credit insurance coverage.
For its capacity building programme, Exim Bank plans to expand the scope of services offered to include import financing and advisory services.
Adissadikin said for import financing, it would be confined to two areas, namely import of semi-finished or raw materials which would add value to exports and import of strategic goods for consumption.
On advisory services, Exim Bank has set its sights on providing full-fledged global consultancy services in the next two years where it would be able to furnish information and add value to facilitate imports and exports.
At present, the bank provides funding needs to customers who have business operations in 100 countries, of which about 60% are in Asia, 20% in the Middle East and North Africa region and the balance elsewhere in the world.
Currently, the bulk or about 60% of funds given are to construction or infrastructure-related projects.
The bank is also collaborating with some regional export-import banks and other regional development banks in a bid to support local exporters.
For example, Adissadikin said that by working closely with the Asian Development Bank whose aim is to eradicate poverty, Malaysian exporters or companies could lend their expertise in various areas to address this issue and hence also benefit from the rendering of their services and expertise.
He said the bank had also recently tied up with the Islamic Development Bank (IDB) to launch IDB-Exim co-financing to spur trade between Organisation of the Islamic Conference member countries and Malaysian businesses. (thestar.com.my)
KUALA LUMPUR: Export-Import Bank of Malaysia Bhd (Exim Bank) has targeted to disburse loans worth RM1bil by year-end and offer new initiatives in line with its capacity building programme.
Managing director and chief executive officer Adissadikin Ali (pic) said the financing was for small and medium enterprises (SMEs) and corporates who were looking for export markets overseas.
Over the last five years, the bank had provided total financing worth RM3bil to companies, of which 80% were SMEs and the remaining corporates, according to Adissadikin.
During this period, Exim Bank had also offered financing to more than 500 borrowers and close to 2,000 trade credit insurance policies were issued in facilitating cross-border ventures. Trade credit insurance is to prevent losses that may be incurred by local exporters in the event foreign buyers default payments.
“With the bank's assistance, Malaysian companies have been able to expand their businesses to 100 countries globally. Our role is to complement commercial banks and plug the gap in terms of financing when companies fail to secure from the former,'' he said in an interview.
According to Adissadikin, the RM1bil target for financing would be achieved by creating awareness on the bank's available facilities as well as via targeted marketing, especially to corporates. Exim Bank is the official presenter of the upcoming The Star Outstanding Business Awards 2011 (SOBA 2011).
He said being the presenter for the event was relevant to the bank as it provided financing for SMEs venturing abroad and at the same time, the event would generate awareness in areas such alternative financing and trade credit insurance coverage.
For its capacity building programme, Exim Bank plans to expand the scope of services offered to include import financing and advisory services.
Adissadikin said for import financing, it would be confined to two areas, namely import of semi-finished or raw materials which would add value to exports and import of strategic goods for consumption.
On advisory services, Exim Bank has set its sights on providing full-fledged global consultancy services in the next two years where it would be able to furnish information and add value to facilitate imports and exports.
At present, the bank provides funding needs to customers who have business operations in 100 countries, of which about 60% are in Asia, 20% in the Middle East and North Africa region and the balance elsewhere in the world.
Currently, the bulk or about 60% of funds given are to construction or infrastructure-related projects.
The bank is also collaborating with some regional export-import banks and other regional development banks in a bid to support local exporters.
For example, Adissadikin said that by working closely with the Asian Development Bank whose aim is to eradicate poverty, Malaysian exporters or companies could lend their expertise in various areas to address this issue and hence also benefit from the rendering of their services and expertise.
He said the bank had also recently tied up with the Islamic Development Bank (IDB) to launch IDB-Exim co-financing to spur trade between Organisation of the Islamic Conference member countries and Malaysian businesses. (thestar.com.my)
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