KUALA LUMPUR: RHB Capital Bhd (RHBCap), the country’s fourth largest banking group, plans to go into commercial banking in Indonesia, possibly via mergers and acquisitions (M&As).
Group managing director Datuk Khairussaleh Ramli said the bank had the competitive advantage to survive in the largest economy in Asean, where it already provided investment banking and securities.
“Our focus is to harness what we have and to grow the business organically and synergise.
“M&As are possible at the right time and price,” he said after RHBCap’s annual general meeting (AGM), here, yesterday.
It was the last AGM for RHBCap as a listed company before RHB Bank Bhd assumes RHBCap’s listing status in mid-July.
The group has a presence in Singapore, Indonesia, Thailand, Brunei, Cambodia, Hong Kong, Vietnam, Laos and Myanmar, with half the number being investment banking.
Overseas operations contribute 14 per cent of the group’s revenue.
Khairussaleh expects to see more potential in Indonesia’s conventional banking scene versus Islamic finance.
“To expand overseas, we need to chew what we can swallow; we need to understand the size and complexity,” he said, adding that talent was also an important factor.
Khairussaleh said the group remained focused on the domestic opportunities and the scope remained in retail banking, small and medium enterprise (SME) banking, corporate banking, asset management, insurance and others.
On the outlook for loans growth this year, Khairussaleh said it would be moderate across the industry, reflecting the slower economic growth.
“It is also not our main focus during this challenging environment as we want to focus on asset quality, making sure that we have adequate capital and improving the cost efficiency and productivity,” he said, adding that the new entity would make RHB group one of the country’s well-capitalised banks.
He said the successful completion of the group’s rights issue of RM2.343 billion in December last year had strengthened the capital base of the group for growth and regulatory requirements.
Internal reorganisation was completed last month with RM2.49 billion injected into RHB Bank, the new holding company.
Performance-wise, Khairussaleh said RHBCap could see good growth in SMEs and mortgage, which made up 24 per cent of the total portfolio.
Islamic finance has grown to make up 23 per cent of its business and is set to touch 30 per cent next year.
RHBCap will release its results on May 25.
The banking group will also see a new chairman following the retirement of Datuk Mohamed Khadar Merican.