TEFD: What are your expectations for 2012, for your bank and the industry?
Teh: The Malaysian banking system is relatively insulated from the adverse impact from the weakened external environment and is expected to remain stable in 2012, underpinned by strong capitalisation, healthy liquidity position and relatively strong asset quality.
Growth in the Malaysian banking sector will be largely driven by domestic economic activities in the coming year. Loan growth should remain moderate, supported by consumer loans and accelerated implementation of the projects under the 10th Malaysia Plan and the Economic Transformation Programme. Low financing cost is expected to continue to support lending activities. Competition will continue to be intense with pressure on interest margin. Furthermore, with the implementation of the Second Financial Sector Masterplan, the Malaysian banking sector is expected to see greater dynamism and innovation.
The Public Bank group will remain entrenched in our organic growth strategy and further grow our core businesses in the consumer and small and medium enterprise [SME] lending, core customer deposits and fee-based revenue. We will continue to capitalise on our strong PB brand, extensive retail franchise, excellent customer service, and leverage on our leading market position in the residential properties financing, vehicle financing, SME financing and unit trust business to sustain our growth momentum for 2012.
While the challenging external environment could present downside risk to Malaysia’s growth prospects, we will continue to remain steadfast and prudent in our business policies and practices and manage our business efficiently in order to achieve our 2012 key business targets and the expectations of our stakeholders.
What impact, if any, do you expect from the euro crisis?
The risk to global economic growth has increased following the intensification of the euro debt crisis. The weaker external environment could affect the overall growth prospects of the Malaysian economy. However, resilient domestic demand is projected to continue to support economic growth. The Malaysian banking sector, in which the Public Bank group largely operates is expected to experience moderate growth. Furthermore, the group’s banking business model, which is based on prudent banking practices, will continue to deliver long-term sustainable growth to the group and its shareholders. The group will continue to enhance its risk management framework and practices, in line with the increased complexity and globalised nature of the banking and financing businesses today.
Will Bank Negara Malaysia’s recent tightening of consumer borrowing have an impact?
The recent issuance of Guidelines on Responsible Finance is aimed at fostering a healthy and sustainable credit market. The guidelines are a pre-emptive measure to ensure stability of the financial system. It is not expected to curtail lending activities, but will increase the level of prudent banking practices by banking institutions. Furthermore, some requirements in the guidelines are not entirely new as some of the banks are already practising them.
What are your group’s plans and focus for the coming year?
The Public Bank group will remain focused on its organic growth strategies to continue to grow its retail loans, core customer deposits and fee-based businesses. In particular, the group’s lending business will continue to be supported by growth in home mortgages, hire purchase financing for passenger vehicles and retail commercial loans to SME. To further enhance its profitability, the group will continue to intensify efforts to grow fee- and transaction-based revenue by promoting sales of unit trust funds, bancassurance and wealth management products.
The group will also continue to expand its Islamic banking business by focusing on Islamic consumer financing and retail commercial financing to SME. For its funding base, the group will continue to promote core customer deposits to ensure that it continues to maintain a healthy and liquid balance sheet. Also, the group remains committed to expanding its overseas operations, particularly its Hong Kong and Cambodian operations.
To sustain its strong market position, the group will further leverage its wide distribution network, strong sales and marketing force and efficient multiple delivery channels. The group will also continue to enhance its customer relationship management to further enhance customer experience.
In addition to providing competitive, innovative and differentiated products and services, efforts to further strengthen the group’s superior service delivery standards, such as excellent customer service and fast loan processing turnaround time, will continue to be intensified. Also, the Public Bank group will remain focused on maintaining its risk management practices to ensure that it continues to maintain the best asset quality and remain vigilant due to the economic uncertainties.
This article appeared in The Edge Financial Daily, December 20, 2011.
Teh: The Malaysian banking system is relatively insulated from the adverse impact from the weakened external environment and is expected to remain stable in 2012, underpinned by strong capitalisation, healthy liquidity position and relatively strong asset quality.
Growth in the Malaysian banking sector will be largely driven by domestic economic activities in the coming year. Loan growth should remain moderate, supported by consumer loans and accelerated implementation of the projects under the 10th Malaysia Plan and the Economic Transformation Programme. Low financing cost is expected to continue to support lending activities. Competition will continue to be intense with pressure on interest margin. Furthermore, with the implementation of the Second Financial Sector Masterplan, the Malaysian banking sector is expected to see greater dynamism and innovation.
The Public Bank group will remain entrenched in our organic growth strategy and further grow our core businesses in the consumer and small and medium enterprise [SME] lending, core customer deposits and fee-based revenue. We will continue to capitalise on our strong PB brand, extensive retail franchise, excellent customer service, and leverage on our leading market position in the residential properties financing, vehicle financing, SME financing and unit trust business to sustain our growth momentum for 2012.
While the challenging external environment could present downside risk to Malaysia’s growth prospects, we will continue to remain steadfast and prudent in our business policies and practices and manage our business efficiently in order to achieve our 2012 key business targets and the expectations of our stakeholders.
What impact, if any, do you expect from the euro crisis?
Teh: Public Bank will remain entrenched in our organic growth strategy and grow our core businesses in consumer and SME lending, core customer deposits and fee-based revenue.
The risk to global economic growth has increased following the intensification of the euro debt crisis. The weaker external environment could affect the overall growth prospects of the Malaysian economy. However, resilient domestic demand is projected to continue to support economic growth. The Malaysian banking sector, in which the Public Bank group largely operates is expected to experience moderate growth. Furthermore, the group’s banking business model, which is based on prudent banking practices, will continue to deliver long-term sustainable growth to the group and its shareholders. The group will continue to enhance its risk management framework and practices, in line with the increased complexity and globalised nature of the banking and financing businesses today.
Will Bank Negara Malaysia’s recent tightening of consumer borrowing have an impact?
The recent issuance of Guidelines on Responsible Finance is aimed at fostering a healthy and sustainable credit market. The guidelines are a pre-emptive measure to ensure stability of the financial system. It is not expected to curtail lending activities, but will increase the level of prudent banking practices by banking institutions. Furthermore, some requirements in the guidelines are not entirely new as some of the banks are already practising them.
What are your group’s plans and focus for the coming year?
The Public Bank group will remain focused on its organic growth strategies to continue to grow its retail loans, core customer deposits and fee-based businesses. In particular, the group’s lending business will continue to be supported by growth in home mortgages, hire purchase financing for passenger vehicles and retail commercial loans to SME. To further enhance its profitability, the group will continue to intensify efforts to grow fee- and transaction-based revenue by promoting sales of unit trust funds, bancassurance and wealth management products.
The group will also continue to expand its Islamic banking business by focusing on Islamic consumer financing and retail commercial financing to SME. For its funding base, the group will continue to promote core customer deposits to ensure that it continues to maintain a healthy and liquid balance sheet. Also, the group remains committed to expanding its overseas operations, particularly its Hong Kong and Cambodian operations.
To sustain its strong market position, the group will further leverage its wide distribution network, strong sales and marketing force and efficient multiple delivery channels. The group will also continue to enhance its customer relationship management to further enhance customer experience.
In addition to providing competitive, innovative and differentiated products and services, efforts to further strengthen the group’s superior service delivery standards, such as excellent customer service and fast loan processing turnaround time, will continue to be intensified. Also, the Public Bank group will remain focused on maintaining its risk management practices to ensure that it continues to maintain the best asset quality and remain vigilant due to the economic uncertainties.
This article appeared in The Edge Financial Daily, December 20, 2011.
