Business

Saturday November 8, 2008

Banks taking steps to ensure sustained growth

By DALJIT DHESI


Diversification and enhancing fee income among initiatives

PETALING JAYA: Banks in Malaysia have been busy implementing initatives to sustain growth amid an expected slowdown in loans growth next year.

Citi Investment Research analyst Julian Chua said he expected slower domestic loans growth of about 6% next year versus an estimated 8% this year.

AmBank Group chairman Tan Sri Azman Hashim said he expected “next year’s loans growth to be lower proportionately in line with the lower GDP growth forecast (next year).”

The Government recently slashed its gross domestic product (GDP) growth forecast to 3.5% next year from the previous target of 5.4%.

Tan Sri Azman Hashim

AmBank Group, which also expects moderately lower loans growth for the remaining year, is embarking on initiatives in various areas, such as retail and business banking, investment banking and insurance, to sustain growth.

“Diversification of investment banking and product mix will enhance returns and reduce concentration on fixed income activities by leveraging forex and derivatives, and other investment banking businesses,” Azman said. “The insurance business will help us boost the group’s profits. We will also focus on transactional businesses such as cash management, trade finance, remittance and others.’’

“We are also focusing on accelerating our growth in current and savings account deposits,” he said.

RHB Banking Group head of commercial product management Amy Ooi said product differentiation, driving deposit growth and enhancing fee income were some of the measures the bank had been focusing on to minimise the impact of the global economic slowdown.

Ooi said RHB Bank’s loan growth had slowed but remained relatively resilient at 6.7% year on year.

Michellina Triwardhany

Citibank Bhd country business head for consumer banking Michel-lina Triwardhany said innovation and creativity would continue to be key in these challenging times.

“We have a broad range of products and services that we believe will help our customers stretch their ringgit even further and deliver value,” she said.

“Through our co-branded credit cards, for example the AirAsia credit card, we can provide consumers a chance to enjoy their lifestyles, and at the same time able to save, obtain privileges and (enjoy) great discounts or rebates.”

Citibank had also been trying to drive home loans by offering flexible options at competitive rates, she said.

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