AMP acquires AXA

CEO believes hard work is ahead in takeover.

CRAIG Dunn walked into the spacious foyer of AXA Asia Pacific's headquarters in Melbourne's Docklands yesterday as chief executive of AMP and, for the first time, head of the rival company he had spent more than a year and a half pursuing.

Dunn's arrival was remarkable given that AMP came within a whisker of being financially outgunned by National Australia Bank in the bidding war for AXA Asia Pacific.

But the political and regulatory mood eventually swung away from NAB and towards AMP, allowing the $14.6 billion deal to proceed.

Still, Dunn acknowledges that more than once he faced the real prospect of AXA slipping out of his hands.

''It was a long, drawn-out process and some days you felt more confident than others,'' he told BusinessDay. ''It was always a possibility that we wouldn't be successful, but we were determined to see it through right to the end.''

AMP's board met yesterday in the AXA Asia Pacific headquarters, signalling it was now in charge of the wealth manager. It was also the first meeting for former AXA chairman Rick Allert and fellow director Patricia Akopiantz, who have been invited to join the AMP board.

With AXA's shares cancelled from the stock exchange and its shareholders issued with AMP scrip, AXA Asia Pacific is now a wholly owned entity of AMP.

Dunn, a 47-year old former management consultant, has history against him when it comes to bringing together two large wealth managers with entrenched cultural differences.

''The really hard work starts from now. I don't think we're under any illusions that it's not going to have its challenges,'' he said.

One of these will be keeping financial planners, the key revenue drivers of the business, onside.

AXA-aligned financial planners have already warned of deep culture clashes. This is expected to see AMP tread lightly when it comes to any changes in AXA's aligned distribution channels. This represents the single-biggest erosion of value from the merger.

Dunn acknowledges there will be some attrition of advisers and this has been factored into the acquisition price. But he declined to say what would be acceptable loss versus damaging loss.

While AMP and AXA, which evolved out of National Mutual, were fierce competitors - particularly during the 1980s as retirement savings markets opened up - Dunn argues that the myth about the rivalry has been overdone.

''The more people I meet within AXA, the more I think there's a lot of commonality,'' he said.

Dunn is not shying away from job cuts as the two businesses are melded, but said it was too early to put a number on this.

''We've tried to make as few decisions as we can until we get together, until we benefit from the talent and expertise from both businesses,'' he said.

''There are going to be roles impacted and there are going to be unfortunate consequences of merger, but we've still got to work through that process and we haven't made any decisions.''

With the focus on AXA's 1600 staff in Melbourne, where the company has had its headquarters, Dunn points out one of the benefits of the merger is that AMP is going to have a ''much more significant presence'' in the city. Many national roles will also be based in Melbourne, he said.

''It's important that the merger really does bring the strengths of the businesses together, including the talent of both organisations and the planner and advice force of both organisations,'' he said.

AMP has for years been under pressure from investors to show how it is going to regain its dominance in key markets. The big banks have steadily overtaken AMP by using acquisition to beef up their wealth-management businesses.

Now AMP is again the biggest player in retail superannuation, retirement income products and managed funds. It now also dominates the life insurance market.

Under the deal, AXA shareholders will receive the equivalent of $6.43 a share in a combination of cash and scrip.

This will see AMP's shareholder base increased by more than 200,000 to stand at 980,000 investors.

Dunn expects the merger to take about two years to complete.

The second leg of the acquisition, the sale of AXA's Asian businesses to France's AXA SA, will take place tomorrow, marking the end of Australia's most ambitious adventures to date into Asian wealth markets.

Tussle over EON Cap

Saturday January 9, 2010
Tussle over EON Cap

FRESH into the new year, the sour relations between two major shareholders of EON Capital Bhd – Primus Partners (HK) Ltd and Rin Kei Mei – has erupted into a battleground for control.

Even as EON Cap is still strengthening its capital base and transformation process, Rin has decided to “throw in the towel’’ by grouping up with another major shareholder Tan Sri Tiong Hiew King to consider selling off a combined 31.7% stake to Hong Leong Bank Bhd. Thrown into the package is Khazanah Nasional Bhd’s 10% stake – bringing the larger combined stake under negotiations to 41.1%. The Employees Provident Fund (EPF), an institutional investor in almost every bank, has a 10.7% stake in the banking group. The total stake of these four investors comes up to 51.8%.

Primus owns 20.2%. EPF will make its decision on Hong Leong’s yet-to-be submitted proposal to buy the assets and liabilities of EON Cap purely as an investor, bearing in mind, that it is also a majority shareholder of Hong Leong Bank and other banks.

The advantage that Hong Leong has is that it is likely to bid for the assets and liabilities of EON Cap. That means it does not have to make a general offer. If a simple majority of shareholders vote to sell the assets and liabilities of EON Cap, the deal is done. The billion ringgit question is at what price will the major shareholders accept Hong Leong’s offer.

Primus appears to be deliberately keeping its cards close to its chest. Sources say it is not pleased by the turn of events, more so because it was caught by surprise when news of the potential stake sale was announced. But the bigger issue really is that having bought EON Cap at RM9.55 per share or at 55% premium (above the market price then of RM6.20) in early 2008, Primus would be mindful of any proposal that values the banking group at below that price.

At what price?

Like many other banking stocks, the recent financial crisis triggered by the US subprime mess had weighed heavily on EON Cap shares, sending it to a low of RM3; on the back of news of a potential takeover in recent weeks, the stock has risen significantly to a high of RM7 (on Friday).
Hong Leong, it is believed, is looking at an offer price of RM6 per share or slightly more than one time (1x) book value, a level that has sparked off strong protests from banking analysts as well as Primus, no doubt.

“A lot of strategic partnerships – Temasek/Alliance Financial Group; Bank of East Asia/Affin Holdings Bhd and EPF/RHB Capital Bhd – were done above one time book value. (The exception was Primus that bought its stake in EON Cap at more than two times book value).

“But those involving mergers or other forms – CIMB Bank Bhd merger with Southern Bank Bhd; privatisation of AmInvestment Group Bhd (AIGB) by AMMB Holdings Bhd; privatisation of CIMB by Bumiputra-Commerce Holdings Bhd and RHB Cap’s purchase of RHB Bank from Khazanah Nasional Bhd – were done at above two times book value,’’ a banking analyst points out.

Among the more recent deals, the Australian and New Zealand banking group (ANZ) had bought AMMB at 1.7 times book.

So, why should EON Cap be “sold cheap”, they question?

Even at the height of the financial crisis, Malaysian banks were not trading cheaply. EON Bank made a net profit of RM217.1mil for financial year (FY) ended Dec 31, 2007, and RM133.8mil for FY08; its return on equity is not very high but targeted to reach 15% in three years.

“The new senior staff they have recruited from various banks are high performers and will be out there to realise their aspirations,’’ says the analyst, adding that he will not be surprised if the bank manages to double its profits in five years.

“One can’t expect to pay just slightly over one time book value, and assume full management control,’’ scoffs another analyst.

“There are probably bankrupt companies on the cheap but there are no bargains in the Far East. There could have been at one time in the United States and Europe, where even the 100-year-old Lehman Brothers fell.’’

Divergent interests

Hong Leong’s Tan Sri Quek Leng Chan had sold 80% of his Hong Kong-based Dao Heng Bank Group Ltd to Singapore’s DBS Bank for HK$41.9bil cash windfall, via his overseas flagship Guoco Group Ltd. Reports estimate Guoco to be sitting pretty on RM18.9bil cash.

Doesn’t he have to spend it some day and why is he still so tight-fisted?

Analysts point out that Hong Leong Bank has been consistently paying out 24 sen dividend per share over the last five years even though its profit had doubled.

“If it doesn’t buy anything over the next two years, it will have to return that money to shareholders,’’ says an analyst.

Initially, market expectation for the takeover price was not exceeding 1.3 to 1.4 times book value or RM6.50 to RM7. That expectation is now raised to not more than 1.5 times or RM7.50.
Even if Rin and Tiong had bought their shares way below the so-called RM6 offer price, many regard it as a giveaway to sell below market price.

On the other hand, while Khazanah which already owns 28.4% in CIMB Bank, may want to rationalise its bank holdings it will still not give in to just any price or scheme.

The push factors would include the fact that EON Cap is trying to restructure but many others such as CIMB and Alliance Banking groups have gone way ahead.

Some analysts also view that EON Cap does not have a strong market share or a significant franchise in lending and deposit taking.

“Besides the pressure to top up capital, more investments are required in branding and information technology.

“From the reports surfacing, one gets the impression that different shareholders seem to want things run in different ways, which makes it difficult to see a smooth uptrend ahead,’’ says an observer.

But that does not necessarily entail selling on the cheap although it may not be easy to find a good buyer with solid cash and background in the same industry.

Going gets tough

The scenario for banks in Malaysia is not expected to get any easier, particularly post financial crisis. Observers speculate that this could be another reason behind Rin and Tiong’s decision to exit the bank (apart from the widely known hostility between them and Primus). As seasoned businessmen, they may be able to see the threats looming in the horizon which may also involve coughing up more money to beef up the bank’s capital position.

Scale and size will matter even more. While Malaysian banks are going regional, EON Cap, which has similar aspirations is still rather domestic centric and may end up playing a catch-up game.
There is also a sense that Primus had done a few misteps that were not highly favoured by the central bank. For instance, Primus had failed to honour its subscription of a large bonds-cum-warrants issue, proceeds of which would have been used to redeem a US-dollar subordinated debt.

Subsequently, some analysts worry how the authorities might view Primus, whose subsequent warrant issue was rejected by Bank Negara, if this Hong Leong deal does not go through.

Quite clearly, Bank Negara would like to see further consolidation in the sector even as it hands out licences to world class foreign and Islamic banks, a move many regard to be a subtle message to local banking groups to buck up.

What could happen

Over the week, Hong Leong received the nod from the central bank to start talks with the boards of EON Capital and EON Bank. (EON Cap wholly owns EON Bank) to acquire its assets and liabilities. Sources say the pricing depends on various factors. For one, it depends on the deal structure – will it involve a total cash or share transaction (this may be unlikely as it may bring to rise dilution concerns)? Or a cash and/or share transaction?

“There are shareholders who may prefer to swap their holding in EON for exposure to the enlarged Hong Leong group. They may prefer that than to exit altogether. So, the deal may likely involve a cash/share deal,” says an analyst.

When CIMB launched a takeover for Southern Bank Bhd (SBB), it used a similar assets and liabilities route that had a share exchange offer where SBB shareholders were allowed to receive shares, if they chose to.

The advisors for Hong Leong for this deal is CIMB. Details on the offer may emerge over the next week or so.

Hong Leong’s plan, which involves the purchase of assets and liabilities, requires a 50% approval from shareholders plus one share, which may mean that the deal can go through even without the support of Primus. Collectively, Rin, Tiong, Khazanah and EPF own 52.4% in EON Cap and if these four parties agree to accept the offer put forth by the Hong Leong group (or any other, for that matter,) it is very much a done deal.

Yet, industry observers say Primus can still frustrate the deal by dragging the process, given that it exerts significant influence on the board of EON Cap. And the premise may even be justifiable – the board should hold out for a better offer.

What is imperative however, says an observer, is that ultimately, even if the board is split on the deal, the offer ought to be put to shareholder vote: “The board is free to make their recommendation. This is why they hired Goldman Sachs and Ethos & Company. But ultimately, shareholders ought to be given a chance to express their views on the deal.”

“If for some reason, the board of EON Cap decides not to put the takeover bid up to shareholders to vote, all is not lost. Shareholders having 5% of the shares can call for an EGM to remove the board,’’ says a banker.

“But that’s a messy route and is not likely to happen ...,” he adds.

http://biz.thestar.com.my/news/story.asp?file=/2010/1/9/business/5438019&sec=business

Merger with EON Bank will put HLB on 4th spot

Saturday January 9, 2010
Merger will put HLB on 4th spot

THE potential “marriage” between Hong Leong Bank Bhd (HLB) and EON Capital Bhd (EON Cap) will help to boost the former’s growth domestically and put it in a stronger competitive position in the face of liberalisation.

The merger will catapult HLB into the fourth largest bank in terms of assets in the country from its current sixth position.

The scale and size will also provide HLB with greater financial muscle to meet its aspirations as a regional player.

On the homefront, HLB will end up with a wider deposit-taking and loans franchise via a network of 338 bank branches nationwide (HLB and EON Cap currently has 199 and 139 bank branches respectively).

It will also enable the group to achieve better economies of scale in certain areas such as CASA (current account savings account) deposits, hire purchase (HP) and mortgages thus providing better pricing for consumers.

For individual segments, EON Cap has an estimated market share of 8.1% in the auto loan segment, while HLB’s is about 4.0%.

On a combined basis, the merger will raise the auto loan market share to a substantial 12.2%.
TA Research notes that EON Cap can help boost HLB’s small and medium enterprise (SME) business, which had not been growing very significantly over the past year.

HLB’s market share in the SME segment currently stands at a paltry 2.5% while EON Cap has around 4.8% of the industry’s total SME loans as at Sept 30, 2009.

In addition, AmResearch estimates that HLB’s market share of residential mortgage will be lifted to 10.3% from 7.1%.

“HLB’s profile of loans in terms of variable versus fixed rate loan will be rebalanced to 65.8% variable rate loan from the high of 75.6% currently,” it notes.

HLB’s current share of the local deposit market is 6.3%, but with this merger it will be boosted to 9.4%.

In terms of non-performing loans (NPLs), EON Cap’s transformation exercise which started in mid-2007 has helped to reduce its NPLs.

The group’s kitchen sinking exercises have resulted in a lower net NPL of 2.5% in the third quarter of 2009 (3Q09) versus 4.2% in 4Q07 and loan loss cover raised to 84.9% in 3Q09 (4Q07: 58.1%).

This will help to ensure that HLB’s asset quality, said to be one of the best in the banking sector, is not compromised.

ECM Libra points out that loan loss provisions have hardly made a dent in HLB’s earnings every quarter as it remains relatively small - RM162mil for financial year ended June 30, 2007 (FY07), RM159mil for FY08 and RM190mil for the nine months ended Sept 30, 2009 - in comparison with its total loans portfolio of over RM35bil.

“HLB’s net NPL ratio continues to improve, falling to 1.22% in the first quarter ended Sept 30, 2009 from 1.34% in the fourth quarter ended June 30, 2009, an achievement made all the more remarkable given the tepid growth in its loans book,” ECM Libra says.

EON Cap’s liquidity appears to be rather tight with a loan-to-deposit (LD) ratio in excess of 96% while HLB’s LD ratio hovers around 55%, the lowest in the industry.

The merger will help boost HLB’s low LD ratio which has resulted in a weakening in net interest income in recent quarters as well as EON Cap’s loans growth which is limited by its high LD ratio.

That said, OSK cautions that EON Cap’s inferior capital position and liquidity ratios will dilute HLB’s superior capital ratios.

Moreover, EON Cap’s weaker asset quality can give rise to a potential increase in NPLs and provisions, it notes.

Some analysts opine that apart from the kitchen-sinking of non-performing loans, EON Cap’s transformation programme had not improved its market positioning and franchise strengths.

“HLB’s transformation programme has worked very well for it. Given time, EON Cap’s transformation may be just as good especially if the merger takes place,” an analyst reckons.
HLB’s Business Transformation Programme which started in 2004 was a success and had helped the bank to make its first billion in pre-tax profit in FY08 as well as reduced NPLs.

The programme which focused on sustainable profitable growth scaled up the bank’s infrastructure and foundation and developed new capabilities.

http://biz.thestar.com.my/news/story.asp?file=/2010/1/9/business/5429585&sec=business

More competition and new entrants with financial liberalisation

Monday January 4, 2010Tougher year for insurers
More competition and new entrants with financial liberalisation

PETALING JAYA: Insurers in the country are bracing for tougher competition this year with more players joining the race for a slice of the growing domestic insurance business.
The liberalisation of the financial services sector announced earlier this year is expected to result in new entrants to the market until 2011.

With this in mind, existing insurers are aggressively strategising to grow their businesses amid rising competition.

Some of the areas of focus are agency, bancassurance and niche products. Prudential Assurance Malaysia Bhd (PAMB), among others, is expanding the number of its bumiputra agents to further penetrate the bumiputra market which it views as a potential growth area.

Chief executive officer Charlie E. Oropeza said that with more bumiputra agents on board, the company would be able to boost its takaful as well as its conventional business.

In an interview with Starbiz, he said between 15% and 20% of Prudential’s business at present was derived from takaful or Islamic insurance.

PAMB hoped to double its bumiputra agency force to about 3,000 by end of 2009 from the 1,500 in 2008.

Oropeza said the company would not compromise on the quality of its agents as the company increased their numbers.

In this regard, PAMB has been training its agents to become wealth planners so that they advise their clients based on their needs and risk profiles instead of merely selling products.
He described the bumiputra market as lucrative but underserved.

“More than half the population in the country consist of bumiputras and penetration rate of insurance for this segment is in a single digit range. We will also be opening up branches in areas where we see there is potential market for Bumiputras,’’ Oropeza said.

PAMB currently has a total agency force of 11,000, of which about 3,000 are bumiputra agents.
The company had recruited between 4,000 and 5,000 new agents this year, and plans to take in the same number next year.

The insurer has 39 branches nationwide, including East Malaysia.

Bancassurance is another area in which Oropeza hopes to expand with the right partners.

At the moment, Standard Chartered Bank Malaysia distributes PAMB’s insurance products.

Oropeza is confident that PAMB would be able to perform better next year compared with this year.

The insurer’s full year results for 2009 would be out in February.

One of the areas that would boost profitability going forward would be from investment-linked funds, he said.

Prudential’s conventional investment-linked business grew 27% to RM295mil in the first nine months, which was one of the highest in the industry despite the unfavourable economic climate.

Koh Yaw Hui, the CEO of Great Eastern Life Assurance (M) Bhd, the largest life insurer in Malaysia, said the company would be adopting a multi-distribution strategy to reach out to different customer segments.

He added that more focus would be put on the tied agency channel as it was the most dominating channel contributing to more than 80% of the insurer’s business.

Great Eastern currently has about 17,000 agents.

In terms of asset size, Great Eastern is the largest with close to RM40bil, with a base of more than 2.8 million policyholders.

“We will focus on improving the professionalism, leadership and selling skills of our agents in line with our Agency Transformation Programme initiated in 2008.

“Our goal for 2010 is to attract at least 50% of new recruits from graduates and professionals out of the additional 5,000 target set for our agency force,” Koh said.

To beef up its bancassurance business, the company has tied up with OCBC Bank to distribute its products. Moving forward, Koh said he expected this channel to contribute “handsomely” to the company’s overall business.

Apart from this, he added that the company was currently considering opening new branches at various strategic locations.

Great Eastern is also looking at the underserved segment of the younger population and new entrants to the job market with a lower disposable income.

Koh said the company has designed unique products to cater to this segment’s needs, including providing critical illness/medical coverage and long-term savings products starting from as low as RM100.

Great Eastern is targeting double-digit growth next year.

“Up to the third quarter (2009), our total weighted new business premium has grown by 17%,” he said.

“We are very confident in meeting our goals of RM800mil in total weighted new business premiums set for 2009.”

http://biz.thestar.com.my/news/story.asp?file=/2010/1/4/business/5325061&sec=business

EPF, Khazanah exit EON Cap

Monday January 4, 2010

EPF, Khazanah exit EON Cap
Move likely to end with Hong Leong Bank in control

PETALING JAYA: Institutional investors, Khazanah Nasional Bhd and the Employees Provident Fund (EPF), are believed to have agreed to sell their combined 20.7% stake in EON Capital Bhd, sources told StarBiz.

This followed an earlier decision by two major shareholders – Rin Kei Mei and Tan Sri Tiong Hiew King – to seek permission to negotiate with Hong Leong Bank for the sale of their combined indirect stake of 31.7%.

“The pending deal for Hong Leong Bank’s proposed buyout of EON Capital Bhd seems to have reached a tipping point,’’ a source said. “The move of placing an additional 20.7% of EON Cap shares, on top of the combined indirect 31.7% held by Rin and Tiong, into Hong Leong’s hands would appear to seal EON Cap’s fate of being absorbed into an enlarged Hong Leong banking group.’’

The potential merged entity of Hong Leong Bank and EON Cap will create Malaysia’s fourth largest bank after Malayan Banking Bhd, CIMB Bank and Public Bank.

The sale by Khazanah and EPF of their respective stakes in EON Cap to Hong Leong will not come as a surprise to market watchers, given that the two state institutions have long mulled rationalising their bank holdings.

Khazanah and EPF already have a 28.4% and 57.5% respectively in CIMB Bank and RHB Capital Bhd.

According to a source familiar with the takeover bid, Hong Leong’s offer is likely to be pegged at RM5.50-RM6 per share.

“Khazanah and EPF are making this move to be in step with the larger government agenda of inducing market-driven consolidation of the banking sector, which many see as still lacking in scale and capital to meet the challenges of the next decade,’’ the source commented.

So far, Hong Leong Bank has approval from Bank Negara to negotiate with Rin through his private vehicles – Kualapura (M) Sdn Bhd and Lintang Emas Sdn Bhd – and Tiong via RH Development Corp Sdn Bhd.

Hong Leong is also believed to have asked for permission to talk to EON Cap as an institution, and not to individual or targeted shareholders, on its proposed takeover.

That approval is said to be still pending.

It is believed that the board of EON Cap, which met on Thursday, was advised to seek approval to negotiate on an institutional level with Hong Leong Bank on the latter’s proposed buyout offer.
Primus Partners (HK) Ltd, the private equity firm that had bought 20.2% of EON Cap at RM9.55 per share or RM1.34bil, is said to be very sore at the turn of events which involves an offer price from Hong Leong that values EON Cap at less than 1.3 times book value. The stock closed at RM6.84 on Thursday.

Primus, according to sources, is suggesting that it is better to go to the open market where EON Cap may fetch a higher counter bid and minority shareholders may also get a better deal.
Last week, StarBiz reported that Primus was believed to have approached Singapore’s Temasek Holdings Ltd for a joint-bid potentially through the Alliance banking group, in which Temasek holds 29.27%.

Some observers said the proposal was likely to be put to shareholders for their vote.


http://biz.thestar.com.my/news/story.asp?file=/2010/1/4/business/5402776&sec=business

New banking laws for swift action during future economic crisis

Friday November 27, 2009
New banking laws for swift action during future economic crisis

PETALING JAYA: The new Central Bank of Malaysia Act 2009, which repeals one of the oldest laws in Malaysia, the Central Bank of Malaysia Act 1958, is to strengthen Malaysia’s resilience to financial crises in a globalised environment.

According to a Bank Negara statement, the new Act provides comprehensive provisions to ensure swift and orderly resolution in the event of an imminent financial crisis to reduce its impact and costs to the domestic economy and to sustain public confidence.

“Provisions have been made for heightened surveillance, pre-emptive actions and resolution powers including the extension of liquidity assistance to entities not regulated by the central bank but which pose risks to the overall financial stability,” it said.

The new Act also provides for Bank Negara to have oversight over the money and foreign exchange markets, payment systems and for enhanced arrangements for cooperation with other supervisory authorities.

The exercise of the powers for the purposes of achieving financial stability shall be decided by the Financial Stability Executive Committee (FSEC) established under the Act.

The FSEC will comprise the governor, a deputy governor and at least three other members to be appointed on the recommendation of the bank’s board of directors.

Meanwhile, monetary policies, which are to maintain price stability while giving due regard to developments in the economy, would be formulated and implemented autonomously by a Monetary Policy Committee (MPC) established under the Act.

The new Act clearly outlines that the MPC would comprise seven to 11 members, including the governor and deputy governors, who will meet no less than six times a year.

“The members of the MPC must be persons of probity, competence and sound judgment with relevant expertise and experience,” the new Act states.

Other extensive safeguards of the new Act prescribe that monetary policy would only be formulated at a formally convened meeting of the MPC with a quorum of not less than two-thirds of its members.

As part of its efforts to enhance the governance framework to be more robust, the Board Governance Committee, the Board Audit Committee and the Board Risk Committee, consisting only of non-executive directors, would be established to assist Bank Negara’s board of directors in its oversight role of the management and performance review of the bank.

Consistent with the goal to promote Malaysia as an international centre for Islamic finance, the Act also gives due recognition to both the Islamic and conventional financial systems operating in parallel in Malaysia.

The new Act also provides for an enhanced role of the Syariah Advisory Council on Islamic Finance (SAC) whose members are appointed by the Yang di-Pertuan Agong on the advice of the finance minister after consultation with the bank.

The SAC “shall be the authority for the ascertainment of Islamic law for the purposes of Islamic financial business”, the new Act states.

Key changes under the new Act:

1. A more robust governance framework
2. Comprehensive provisions to ensure swift and orderly resolution in the event of an imminent financial crisis
3. Heightened surveillance, pre-emptive actions and resolution powers
4. Central bank to have oversight over the money and foreign exchange markets, payment systems and for enhanced arrangements for cooperation with other supervisory authorities
5. Monetary policy is to be formulated and implemented autonomously by a Monetary Policy 6. Committee established under the Act
6. Due recognition to both the Islamic and conventional financial systems operating in parallel in Malaysia


http://biz.thestar.com.my/news/story.asp?file=/2009/11/27/business/5194496&sec=business

Overseas Banks in Malaysia

1. OCBC
Oversea-Chinese Banking Corporation Berhad (OCBC Bank) was born out of the Great Depression with the merger of three banks in 1932 - The Chinese Commercial Bank Limited (1912), the Ho Hong Bank Limited (1917) and the Oversea-Chinese Bank Limited (1919). OCBC Bank flourished to become one of the largest banks in Singapore and Malaysia. OCBC Bank was also the only foreign bank to have branches in China in the 1950s - its long history in China dates back to 1925 when it opened its first branch in Xiamen, the first Singapore bank to do so.
The Ho Hong Bank was a Malaysian bank established in (1917 - 1932) to provide banking services that prior to 1912 were solely delivered by European Banks. The Ho Hong Bank was founded by Lim Peng Siang, Dr. Lim Boon Keng and Seow Poh Leng all of whom were, before that time, officers of The Chinese Commercial Bank.


2. UOB
United Overseas Bank (UOB) was founded on 6 August 1935 by Sarawak-born Datuk Wee Kheng Chiang together with 6 other Chinese businessmen, under the name of United Chinese Bank (UCB). Through a series of acquisitions, UOB is now a leading bank in Asia.
In 1965, UCB changed name to United Overseas Bank and opened its first overseas branch in Hong Kong. In 1971, UOB acquired a majority interest in Chung Khiaw Bank Limited and its branch network in Singapore, Malaysia and Hong Kong, and introduced its red five-barred logo still in use today. In 1973, it acquired 100% shareholding in Lee Wah Bank Limited and its branch network in Singapore and Malaysia. UOB subsequently acquired Far Eastern Bank Limited in 1984, and Industrial & Commercial Bank Limited in 1987. Chung Khiaw Bank became a wholly-owned banking subsidiary of UOB in 1988. UOB acquired Westmont Bank in Philippines and Radanasin Bank in Thailand in 1999. In 2001, UOB acquired 100% shareholding in Overseas Union Bank Limited, and ICB in 2002. In 2005, UOB acquired a controlling stake of 53% in PT Bank Buana in Indonesia and renamed the bank to PT Bank UOB Buana (UOB Buana) in 2007.
Lee Wah Bank was incorporated in Singapore in 1920 and opened its first Malaysian branch in 1956.

3. Standard Chartered
The Standard Chartered Group was formed in 1969 through a merger of two banks. The Standard Bank of British South Africa founded in 1863, and the Chartered Bank of India, Australia and China (The Chartered Bank). The Chartered Bank was founded in 1851/1853 following the grant of a Royal Charter from Queen Victoria. It opened its first branches in 1858 in Calcutta and Bombay and soon after in Shanghai. The Standard Chartered Bank first began operations in Malaysia in Penang in 1875. The Bank has evolved from a bank supporting the trading community to a one-stop financial centre today, offering a full range of banking products and services in retail and wholesale banking. It has three core businesses namely Consumer Banking, Corporate and Institutional Banking and Treasury.

4. HSBC
The Hong Kong and Shanghai Banking Corporation (HSBC) was established in Hong Kong in March 1865 to finance the growing trade between China and Europe, with an office opened in Shanghai during April of that year. HSBC's presence in Malaysia dates back to more than 125 years. The Hongkong and Shanghai Banking Corporation Limited established its first branch in Malaysia in 1884, on the island of Penang, with privileges to issue currency notes. Thereafter, it opened branches in Ipoh in 1909 followed by branches in Malacca, Johore Bahru and Kuala Lumpur in 1910. The Kota Bharu branch was opened in 1912. By 1959, The Hongkong and Shanghai Banking Corporation Limited had embarked on a programme of acquisitions - including The Mercantile Bank and alliances and has network of 40 branches throughout Malaysia. Through the acquisition of The Mercantile Bank, which started operations in Malaysia in 1860, HSBC is indirectly the oldest bank in Malaysia.
The Mercantile Bank of India, London and China was established in October 1853 in Bombay (now Mumbai), but its headquarters moved to London in 1858.


5. RBS
The Royal Bank of Scotland was founded in 1727, with the first premises in the Old Town of Edinburgh, and has become one of the largest financial services groups in the world. During the 1900’s, it acquired several English banks including Williams Deacon's Bank, Glyn, Mills & Co and Drummonds Bank. In 1969, it merged with National Commercial Bank of Scotland to achieve a greater market share in Scotland. In 2000, it acquired National Westminster Bank (NatWest) in the biggest banking takeover ever in Britain and so inherited a rich heritage covering more than 200 banks that had made up NatWest. In 2007, in the biggest takeover in banking history, it led a unique consortium to acquire the Dutch bank ABN Amro.
ABN Amro was a prominent international bank, which traces its origins to Nederlandsche Handel-Maatschappij or Netherlands Trading Society (NTS) which was founded on the initiative of the Merchant Monarch, King Willem I, in the Hague on 29 March 1824. The object was to resuscitate national trade and industry in the wake of the period of French rule (1795-1813). NTS was an import/export company set up to expand existing trade relations and open up new channels. The growing concentration of banking in the Netherlands reached a climax in October 1964 when a merger between two of the Big Four Dutch bank, NTS and Twentsche Bank merged to become Algemene Bank Nederland (ABN Bank). A very important acquisition occurred in 1979 with ABN Bank’s take-over of Chicago-based LaSalle National Bank. This take-over laid the foundation for what would become the second home market of the bank. Founded in 1927 as National Builders Bank of Chicago, LaSalle Bank gave ABN its first firm foothold in the US Midwest. In 1990, Exchange Bancorp of Chicago was incorporated in LaSalle.
ABN Bank and Amro Bank decided in mid-1990 to combined forces, and the merger was completed rapidly after ABN AMRO Holding N.V. made a successful bid for the shares of both banks in August 1990. On 22 September 1991, the new ABN AMRO Bank was established, with its head office in Amsterdam.
Twentsche Bankvereeniging (TB) was established in Amsterdam on 24 June 1861 targeting the textile industry in the Twente region in the eastern part of the Netherlands and on financing textile exports to the Dutch East Indies. TB's first major post-war takeover was Van Ranzow's Bank in Arnhem in 1950, followed in 1952 by Van Mierlo en Zoon in Breda. The latter, however, continued to trade under its own name.
Amsterdam-Rotterdam Bank (Amro Bank) was created in 1964 between the merger of Amsterdamsche Bank (AB) and Rotterdamsche Bank (RB), after plans for a merger in 1939 were shelved due to the Second World War.
Rotterdamsche Bank (RB) was founded in Rotterdam on 16 May 1863 by a group of businessmen and bankers. On 19 April 1911, RB merged with Rotterdam's Deposito- en Administratie Bank (est. 1900) to form Rotterdamsche Bankvereeniging (Robaver).
Amsterdamsche Bank (AB) was established in Amsterdam on 5 December, 1871 by a group of mainly German banks led by Bank für Handel und Industrie of Darmstadt. Amsterdamsche Bank and Incasso-Bank signed an agreement in October 1947 under which the two banks merged. This considerably expanded AB’s branch network.


References:
http://www.rbs.com/about-rbs/g2/heritage/our-story/history-highlights.ashx