RHB Banking Group banks on Asean business to boost overseas earnings
Malaysia's fourth-largest financial services group, the RHB Banking Group (RHB), is set to become one of Asia's leading multinational financial institutions by 2020. The banking group has grown its asset base from 104.5 billion ringgit (HK$247 billion) in 2008 to 191.1 billion ringgit in 2013 and increased its pre-tax profit from 430 million ringgit in 2006 to 2.5 billion ringgit in 2013.
Malaysia's fourth-largest financial services group, the RHB Banking Group (RHB), is set to become one of Asia's leading multinational financial institutions by 2020. The banking group has grown its asset base from 104.5 billion ringgit (HK$247 billion) in 2008 to 191.1 billion ringgit in 2013 and increased its pre-tax profit from 430 million ringgit in 2006 to 2.5 billion ringgit in 2013.
RHB is deepening its regional footprint outside of Malaysia as it serves its local and international clients across Asean and greater China. Part of its strategy is to raise its overseas revenue from 11 per cent to 30 per cent by 2017 and 40 per cent by 2020. With a regional presence spanning eight countries including Singapore, Hong Kong, Indonesia and Thailand, RHB is taking very serious steps towards achieving its ambitious offshore revenue target.
Apart from intensifying investment activities across the region in chosen markets, Kellee Kam, group managing director of RHB Banking Group, is focusing on growing its Singapore operations as among the group's top priorities. The proposed acquisition of Indonesia's Bank Mestika is expected to contribute another 10 per cent to its revenue base. In addition, Kam believes building a meaningful presence in Hong Kong and the mainland, and a planned entry into the Philippines, will allow the group to achieve the intended target of 30 per cent by 2017.
Growing the regional business
RHB Bank Singapore is the top overseas contributor, contributing approximately 5 per cent of RHB Group's revenue. The group is targeting for its seven branches in Singapore to triple in profitability over the next two years from S$35 million (HK$214.7 million). It recently relocated its Bukit Merah branch to Westgate Mall in Jurong, allowing it to tap into more than 3,000 companies around the International Business Park, and the Jurong and Tuas industrial estates.
Besides expanding further into the syndication credit market, RHB Bank Singapore is also looking to expand its wealth management and small and medium enterprise business from about 10 per cent to over 20 per cent of its revenue base in the next two years.