Business

Published: Monday November 23, 2009 MYT 12:36:00 PM
Updated: Monday November 23, 2009 MYT 2:37:48 PM

MIDF cautiously optimistic of better growth next year


KUALA LUMPUR: The Malaysian Industrial Development Finance Bhd (MIDF), well positioned to be a niche player, is cautiously optimistic of better growth next year.

Group Managing Director Mohd Najib Abdullah said 2010 would be a better year compared to 2009.

"For 2010, we have positioned ourselves to take advantage in certain sectors of the economy. In each of our operations whether in SMEs or investment banks, we are focusing on what we have invested in.

"We are focusing on institutional companies that will bear fruit in 2010, that's why we feel the numbers will turnout better next year," he told BERNAMA in an interview.

Mohd Najib said MIDF would continue with what it was doing right now.

"We are going to be a niche player and profitable. We don't want to do deals that just talk about market share or whatsover," he said.

Mohd Najib said MIDF would be more passionate about its customers and "we are organised in such a way that we adapt towards the company as it grows.

"It's a different business model that other institutions take because we don't act in terms of our product offerings.

"It is very seamless in terms of the company goes in its life cycle. So the model that we have put in place and be able to take advantage as the changes in economy comes along," he said.

On MIDF's performance this year, he said: "I do foresee this year, with the current economic climate, will have an impact on our Investment Bank Division," he said.

"Last year our revenue was RM373 million. I think due to the impact on the Malaysian corporate sector, I think the amount will be lower this year.

"We have announced to the public for the first half of this year, our revenue for the Investment Bank was about RM121 million," he said.

Mohd Najib however said the country's economy would turn around in 2010 as shown in the 2010 Budget and also from various market feedback.

"I think the Investment Bank will do better in 2010, he said, adding that the numbers are getting better although it would not be as good as last year.

"Last year was a good year. This year will be a bit lower so as everybody else. We have just submitted our nine months performance to Bank Negara for approval."

Mohd Najib said MIDF was formed in 1960 based on the recommendation by a World Bank study.

The bank did the study for Malaysia when Malaysia was about to gain independence and how would the economy develop "The World Bank recommendation was to establish an institution for medium-to long-term financing for Malaysian companies," he said.

MIDF has three core businesses -- Investment Bank, Asset Management and Development Finance.

After 50 years in existence, Mohd Najib said the MIDF had undergone several transformation and restructuring in line with market changes.

"We have to go along with the market and changes in the economy. What weare trying to do currently is to restructure and transform the organisation intoan efficient organisation.

"It is not easy. This is the second company that I am involved in and it is not easy because of the ever changing financial landscape," he said.

Mohd Najib said the group strategic position was to place MIDF as a diversified financial institution " whereby we are able to assist companies through its life cycle."

He said companies could start off as a small and medium enterprises.

"We have our Development Finance division to assist these companies later to its growth stages. A company may grow with different type of services at our Investment Bank," he said.

Najib said as the company matures, they would probably need different type of services.

"And that's where our Asset Management Division comes in," he said.

On competition, he said MIDF's investment banking sector was fairly a competive sector.

"To us not just investment banking sector but in all our businesses we seek to find what we know as a differential advantage.

"So for each of the businesses that we are in, we need to find that differential advantage that will differentiate us from our competitors," he said.

"Our strategy in investment banking is that we want to be the trusted advisors of these companies and to do that, you need to understand these companies and be compassionate about their businesses.

He pointed out that the Development Finance Division is the longest-serving division in the MIDF Group.

When MIDF was formed, the purpose was to assist the corporate sector providing medium-and long-term financing.

"That is where the Development Finance comes into place. It is to execute government's agenda in trying to restructure the economy of the country," he said.

Since August 2002, the net approval that the Development Finance Division had approved was RM540 million to 870 applicants under the small and medium enterprises fund that was allocated to SME Corp.

Of the RM540 million, RM495 million had been disbursed to SMEs.

Under the Ninth Malaysia Plan, the MIDF was given RM481 million for various schemes whether for SMEs, automation and modernisation, automotive or international branding.

Of the total, approvals were given for RM356 million. - Bernama

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