SME Bank to be separated from Bank Pembangunan

25 January 2008New Straits Times

SMALL and Medium Enterprise Bank Bhd (SME Bank) will be upgraded and made a separate entity from its parent company, Bank Pembangunan Group, beginning this April.

Second Finance Minister Tan Sri Nor Mohamed Yakcop said the decision was in line with the government's plan to provide a better support to the small and medium-sized enterprises (SMEs).

He said with the move, the government expected SME Bank to be more efficient.

Nor Mohamed said SME Bank would continue with its core business of providing financing to SME players while Bank Pembangunan would focus on bigger and long-term financing services.

"The move is meant to strengthen the capacity, efficiency and the effectiveness of both banks in helping their targeted sectors," he said.

However, Nor Mohamed said the separation process was merely a move to enhance SME Bank's services and did not involve major structural changes in both organisations.

"With the separation, SME Bank will be given the autonomy to make its own decisions without having to go through Bank Pembangunan," he said after opening SME Bank's latest branch in Seberang Jaya, Bukit Mertajam, yesterday.

The branch is its second in Penang and 19th nationwide.

Present at the event were SME Bank chairman Datuk Gumuri Hussain, its managing director Datuk Azmi Abdullah, Bank Pembangunan group president and managing director Datuk Tajuddin Atan and state exco Datuk Jahara Hamid.

Bank Pembangunan is a wholly owned subsidiary of the Finance Ministry (MoF).

Following the separation, the SME Bank will be another subsidiary under the MoF.

The SME Bank was formed three years ago following the merger between Malaysian Development and Infrastructure Bhd and the Malaysian Industrial and Technological Bank Bhd.

Gumuri said SME Bank had distinguished itself not only in providing financing, but also consultancy, problem-solving and guidance services to its customers.

Up to November last year, the SME Bank had approved financing for 1,539 projects nationwide worth RM2.9 billion.

Meanwhile, Tajuddin said the separation would enable Bank Pembangunan to focus on providing financing facility to three core sectors - maritime, infrastructure and high-tech industries.

http://www.smebank.com.my/news_detail.asp?id=87