KUALA LUMPUR: Excerpts from the exclusive interview with AmBank (M) Bhd group chief executive officer Datuk Sulaiman Tahir.
Q: Your aspiration for the bank is to become a Top 4 bank in Malaysia by 2020. How will you measure your progress?
A: As you can see over the last decade, the number of banks out there has shrunk significantly. There used to be 48 banks. Today we only have eight anchor groups. We are currently placed sixth. Therefore, in order for us to chart our path, we have to at least be Top 4.
Our financial results are a key measure of the bank’s performance following the implementation of our Top 4 strategy. Already, we have seen marked improvements, which indicate that we are on the right track. Beyond that, we are also measuring our progress in terms of the 63 initiatives that are to be executed group-wide between now and 2020 as part of the strategy.
As an example, to drive growth in our SME (small and medium enterprise) segment, we now have 36 dedicated staff members at selected branches servicing SMEs, with more in the pipeline. We also just rolled out new SME Portfolio Guarantee products.
In terms of our hire purchase, credit card and large corporate segments, we have very strong fundamentals in these franchise and there is potential to tap this even further. Meanwhile, for fintech, our digital banking platform was recently completed and we are targeting to launch this soon.
Additionally, we recently revamped our AmGraduate Programme, where we hired 16 international and local graduates. These are just a few of the “quick wins” we have achieved that are a measure of the progress we have made.
Without a doubt, there is much more to be done but we are making strong headway and are set to stay the course. We already have the necessary infrastructure. We will focus on growing our human capital and maintain a strong corporate culture that will create an AmBank that will grow from strength to strength.
Q: After over a year, how would you describe your relationship with the chairman?
A: Tan Sri Azman (Hashim) is a trailblazer and he has driven AmBank to great heights over the last 40 years. When I was growing up in the banking world in Malaysia, he was the person to emulate. I consider myself fortunate to have this opportunity to work with an amazing banker and great entrepreneur. As we work to transform the bank and run the bank better, it has been good to have his support in implementing our new initiatives.
Q: Do you think the local banking landscape will get tougher, more so as global economic conditions remain dampened?
A: Certainly, the state of the global economy will have a strong impact on the Malaysian banking industry. That is why it is vital for AmBank to have our Top 4 strategy in place. Our four-year strategy focuses on our aspirations in becoming a “Top 4” key player in key growth segments and products.
Our Top 4 strategy revolves around 10 matrices, of which seven are financial and three non-financial. We will focus on four segments and four products, namely the mass affluent, affluent, SME and mid-corp segments. The four products we will be focusing on are the cards and merchants, transaction banking, markets/FX (foreign exchange) and wealth management.
These target areas are still on a growth trend, growing at a rate faster than the projected industry growth of four to five per cent. That is why we chose to focus on these areas, by virtue of the fact that they are expanding.
We have a strong and realistic strategy in place. It is a matter of focusing on our end-goal and aligning our efforts to our strategy.
Q: All in all, how well did the bank perform last year?
A: We saw some positive, tangible successes as a result in the 2016 calendar year. For instance, we clocked in PATMI (profit after tax and minority interest) growth of 9.2 per cent for second quarter of financial year 2017 compared with the preceding quarter. These results were underpinned by stronger trading income and prudent expense management seeing that we have been proactively managing our cost of funds to stabilise margin compression.
We look to continue managing our margin by focusing our loans growth and building up CASA (current accounts, savings accounts) on our preferred segments. Despite macroeconomic headwinds, our balance sheet remains sound and we have sustained our asset quality. More significantly, our indicative Basel III financial holding company CET (common equity tier) 1 ratio increased to 11.2 per cent with room for capital optimisation.
Clearly, our Top 4 strategy is impacting our results positively even in the face of moderating growth affecting the market. We are focused on continuing on this positive trajectory.
Q: What is in the pipeline for the group this year?
A: We have several projects in line to be launched this year. One key focus is to strengthen our digital banking segment, in order to be on par with the best available for our customers. Some of the initiatives we are looking at include:
- Leveraging mobile banking to capture more account holders.
- Providing more targeted customer offerings via our mobile app.
- Launching a merchant portal, which is an online merchant self-service portal, with the potential ability to provide specific merchant funded deals to customers.
- Collaborating with other mobile wallet and mobile solution providers.
- Looking at data analytics behaviour driven offerings.
Our new mobile application was developed to bypass the desktop version. We are very excited for its upcoming launch. The launch will probably happen in the latter half of the year. I have made it clear to the internal team that the design of the user interface must definitely prioritise customers’ needs. This will make mobile banking very smooth, easy and convenient.
You will also see more SME-centric products in the future. We have 175 SME-ready branches to serve the SME segment. These are just a selection of our range of activities planned. The main thing is that our strategy is in place and we are committed to driving the group further.
Q: In terms of mergers and acquisitions (M&As), are there any plans?
A: Right now, no M&A exercise is on the table, as part of our Top 4 strategy. Our Top 4 strategy is premised on a two-pronged approach. We want to run the bank better and with this, to change the bank where needed. The plan is to grow organically for now.
This is all the more relevant given that we are very clear on our growth path and the segments we will be focusing on. Additional reporting by Amir Hisyam Rasid