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Tag: RHB

  • RHB Bank’s five-year roadmap to strengthen presence in Malaysia

    RHB Bank’s five-year roadmap to strengthen presence in Malaysia

    RHB Bank Bhd, which registered a 16% net profit growth to RM1.95bil for the financial year ended Dec 31, 2017 (FY17), has outlined its strategies in a new five-year plan, FIT22.

    The roadmap entails the bank’s priorities to strengthen its presence in Malaysia and win in targeted segments, as well as to focus on its niche and strength in its overseas operations while exploring partnerships.

    Speaking at a media briefing held in conjunction with the bank’s FY17 results briefing, RHB group managing director Datuk Khairussaleh Ramli said digital enablement would be a core priority within FIT22, following the conclusion of the IGNITE 17 transformation programme last year.

    RHB intends to spend over RM200mil over the next three to five years on digital capabilities and technological investments. “We are now focusing on building scale through an agile way of doing things and believe that we still have room to grow in Malaysia to be able to gain market share and improve profitability,” he said, adding that RHB was now the fourth-largest bank in Malaysia in terms of assets.

    The core component of FIT22 will be the small and medium enterprise (SME) and retail segments to drive growth, as well as to build a connected ecosystem.

    Khairussaleh said that the retail and SME segments were expected to constitute an estimated 75% of RHB’s domestic loan portfolio from the current 69%, while the affluent customer segment will make up 25% of RHB’s retail business by 2022, from the current 18%.

    In addition, RHB aims to boost its return on equity to 11.5%, be the number three bank for SMEs as well as maintain a top-three position for investment banking.

    “We are already number one in the mid-cap segment, so if we can build our ecosystem around this segment, some day the mid-caps will grow to become large-caps for us.

    “That is something that we think can differentiate ourselves from the other banks as well,” Khairussaleh explained.

    Todate, RHB has established relationships with some 57% of mid-cap companies, of which one-third have a lending relationship with the bank.

    Meanwhile, RHB’s 2018 key performance indicator is to achieve an ROE of between 9% and 10%, a loan growth of 6%, as well as a cost-to-income ratio of below 50%.

    On mergers and acquisitions (M&As), Khairussaleh said the bank does not intend to look for any M&As overseas, and will instead focus on expanding its product portfolio across its overseas market.

    Noting RHB’s lacklustre performance in Singapore, Khairussaleh said the bank intends to move towards more secured lending and build a new private wealth business in the republic, targeting mid-tier customers with assets under management of S$1mil to S$2mil.

    In 2018, the Malaysian banking sector is expected to see a recovery in loan growth, primarily from stronger business loans, while capital market activities are also expected to pick up, which would help support the non-interest income of banks.

    RHB’s improved performance in FY17 was largely driven by higher net funding income, lower loan loss impairment and lower impairment losses on other assets.

    However, this was partially offset by higher overheads and lower non-fund-based income.

    The bank has announced a dividend of 10 sen per share, bringing its total dividend per share for FY17 to 15 sen, representing a 30.8% payout ratio.

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  • RHB expands e-Retail solution with MPOS

    RHB expands e-Retail solution with MPOS

    Malaysia’s RHB Bank has expanded its SME e-Retail Solution with the introduction of RHB Merchant Mobile Point of Sale (MPOS), which allows SME retailers to begin operating as quickly as seven days.

    SME e-Retail Solution offers Business Current Account for transactional needs, Reflex Online Cash Management system that enables low cost internet banking, cloud-based electronic point of sale (ePOS) system and remote access to back office analytics and CRM for better management for the proprietor.

    Other features include credit and debit card terminals to enable card transactions, customised SME insurance package specifically for retailers to protect their businesses, and business credit card to help SMEs with expenses and payment plans.

    Its latest offering Merchant MPOS is a wireless device that accepts all types of cards transactions, and is Chip & Pin enabled. Users can receive e-receipts via emails or notifications to their mobile phones.

    The MPOS is integrated to the merchant ePOS system to enable fast and convenient payment collection supporting bluetooth and Wi-Fi.

    Meanwhile RHB’s partnership with SAGE software Asia Pte Ltd will see the introduction of SAGE One cloud accounting software. This cloud solution will be synced to the ePOS terminal to enable automatic updates of transactions. SMEs will then have access to the real-time financial position of their businesses.

    “We are the first financial institution in Malaysia to offer a total connectivity solution for SMEs. The SME e-Retail Solution offers SME retailers a holistic solution for seamless connectivity. SMEs are able to achieve cost reduction and increase efficiency in their businesses,” said RHB Bank director of group business and transaction banking Datin Amy Ooi.

  • Differentiation can make or break Singapore brands as competition heats up

    Differentiation can make or break Singapore brands as competition heats up

    Consumers are hungry for novelty, innovation.

    Tight competition online and a tough operating environment have pushed many offline retailers—especially in the footwear and apparel sub-sectors—to downsize or flee Singapore.

    However, RHB noted in a report that brands that are able to spin unique selling point will weather the sector headwinds well, as consumers continue to be attracted to novelty and differentiated experience.

    “H&M, for instance, has numerous sub-collections each year to refresh its inventories. It also rolls out special collections each year, which are tie-ups with famous brands’ designers or style icons… Uniqlo, on the other hand, is known for its product innovation including HeatTech and AIRism technologies catered specially for cold and warm weather, respectively,” RHB stated.

    Meanwhile, BreadTalk comes out on top in terms of product innovation and willingness to experiment.

    “BreadTalk launched a new bakery concept every four years to maintain a fresh brand image. It also rolled out 50 new products along with its latest concept launch,” RHB noted.

    “Furthermore, the group is also up to date in using technology to engage customers. It is planning to build a new integrated system that allows the public to view its kitchen baking processes on external screens. The new system will also allow consumers to get alerts when new buns are up on the shelves,” it added.

  • RHB Bank to assess opportunities in Indonesia

    RHB Bank to assess opportunities in Indonesia

    RHB Bank Bhd, which saw its bid to acquire a stake in Indonesia’s PT Bank Mestika Dharma Tbk fall through, is optimistic about the prospects in that country and and will assess the opportunities.

    Group Managing Director, Datuk Khairussaleh Ramli, said the Indonesian market was good with banks recording stronger credit growth and higher return on equity compared to Malaysia’s.

    It has been reported that, on average, an Indonesian bank’s return on investment was between 15% and 20% compared with Malaysia’s 9) and 11%.

    “(However) at this point there is nothing on the table for us to look at and when it does we will have to evaluate the opportunity,” he said after announcing RHB Bank’s first-half 2016 financial results here on Wednesday.

    He said the recent bilateral agreement signed between Indonesia Financial Services Authority (IFSA) and Bank Negara Malaysia would pave the way for banks to have greater access in both countries.

    In 2009, RHB Bank, which was then the banking unit of RHB Capital Bhd had, proposed to acquire 80 per cent of PT. Bank Mestika Dharma Tbk for RM1.16 billion but IFSA’s move to limit the foreign ownership to 40 per cent emerged as a stumbling block for the deal to be signed.

    The second bid to acquire a 40% stake, also fell through after RHB Capital did not get the Indonesian authorities’ approval before the deadline of the sales and purchase agreement on June 30, 2014.

    Also under its own corporate exercise, on April 14, 2016, RHB Bank emerged as the new group’s holding company and it was listed on Bursa Securities on June 28, 2016.

    For the first half-year ended June 30, 2016, its pre-tax profit fell by 12.7% to RM1.22bil due to a one-off impairment on a corporate bond in Singapore. For the first-half of 2015, it reported a pre-tax profit of RM1.40bil.

    Revenue for the six months of 2016, however, rose to RM5.42bil from RM5.37bil.

    Khairussaleh said the financial market would remain challenging due to the macro-economic uncertainties in most parts of the world.

    “The risks of external demands and softer consumer sentiments are expected to moderate Malaysias gross domestic product growth in 2016 to 4% from 5% last year.

    “The banking sector growth too is expected to remain modest, attributable to a deceleration in corporate loans market and ongoing consolidation of household loans sector,” he said.

    He said although the bank’s performance in the second quarter was affected by one large impairment on securities, RHB was on track to achieve its long-term objectives set under the reframed strategy of focusing on performance.

    For the second quarter ended June 30, 2016, pre-tax profit stood at RM469.33mil, down from RM724.9mil a year ago. Revenue increased to RM2.68bil from RM2.65bil previously.

    “The group will stay on course in executing the various initiatives under its transformation programme, while continuing to be vigilant amid a challenging macro environment and volatility in the market place,” he said.

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