RHB Cap to expand in Vietnam

Friday June 19, 2009
RHB Cap to expand in Vietnam

It has set its sights on a full banking licence there

KUALA LUMPUR: RHB Capital Bhd (RHB Cap), the fourth largest financial services group in the country, plans to expand its presence in Vietnam eventually, through a full banking licence.

The group currently has a 49% stake in retail brokerage Vietnam Securities Corp which it acquired in November last year.

Outgoing group managing director Michael Barrett told a press briefing after the group’s AGM yesterday that for now, RHB Bank Bhd had representative offices in Ho Chi Minh City and Hanoi.

He added that it was the long-term intention of the group to obtain a full banking licence in the country. Barrett said this would come “in due course” when the banking and financial landscape became more open.

He also did not rule out the possibility of raising RHB Cap’s stake in Vietnam Securities. Barrett said current regulations did not allow the group to acquire a majority stake in a Vietnamese financial firm.

“We’re looking at taking a local retail brokerage that has the capabilities to do investment banking and corporate finance to expand our initiatives,” Barrett said, adding that the group was also interested in expanding its presence in the South-East Asian region.

Meanwhile, he expects loans growth of between 5% and 7% for the current financial year as “significant signs of recovery” began to show in the fourth quarter.

He said home loans, personal financing and credit cards were areas in which the group saw growth but motor vehicle loans and loans to small and medium-scale enterprises were down due to the more challenging economic environment.

He said non-performing loans (NPLs) increased to 2.57% in the first quarter but had come down recently. For the financial year ended Dec 31, 2008, NPLs were lower at 2.24% against 2.43% 2007 while loan-loss coverage rose to 90% from 71% previously.

Barrett said although NPLs were higher in the first quarter, the absolute number had not gone up. He said this was largely due to the lower loan base in the quarter.

http://thestar.com.my/news/story.asp?file=/2009/6/19/business/4148210&sec=business