Business

Monday October 5, 2009

Asian banks set sights on Malaysia


PETALING JAYA: Some world-class Asian banks without any presence so far in Malaysia may start operating in the country in two years.

“There is room for a big Chinese and Indian bank each,” HSBC Bank (M) Bhd treasurer Piyush Kaul told StarBiz.

With the strong economic ties and investment flows, it makes sense for a large bank from each of these two powerful Asian economies to set up operations here.

It has been reported that a consortium of Indian banks – Bank of Baroda, with a 40% stake in the consortium, Indian Overseas Bank (35%) and Andhra Bank (25%) - hope to set up India BIA Bank to undertake commercial operations in Kuala Lumpur, after securing the approvals.

By Dec 31, submissions are expected for the setting up of at least three world-class foreign banks.

“Many of these banks have good networks,” Piyush said, adding they could serve as a driving force for existing players to further build their networks.

Mostly unfazed by this new development, foreign banks in Malaysia view that customers require strong and stable financial partners to continue supporting their business growth well into the future.

Standing in good stead would be highly-liquid and well-capitalised banks with a huge global presence and deep local knowledge, said Standard Chartered Bank (M) Bhd chief financial officer Raymond Wong.

Differentiation will be key. “We will be going into areas of specialisation, for example, agriculture financing,” said United Overseas Bank (M) Bhd managing director, global markets and investment management division, Michael Beh.

Overall, additional entrants to the Malaysian financial markets will add competition and, hopefully, improve products and services.

“Besides increasing the range of choices, there is a measure of emphasis here to bring in foreign banks that will lend greater direction to our Financial Services Master Plan,” said OCBC Bank (M) Bhd head of global treasury Gan Kok Kim.

Following the financial crisis, many “global” banks had lost out. From now on, business would be distributed among the strong global, regional and local banks, said Piyush.

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