Wednesday January 6, 2010
Alliance Bank: There’s no change in operations
By YAP LENG KUEN
PETALING JAYA: Amidst intense speculation over the position of Datuk Bridget Lai, group chief executive of Alliance Bank Bhd, the bank issued a statement yesterday to confirm that she had not resigned and that it was business as usual.
“Datuk Bridget Lai has not resigned. There is no change in the bank’s operations and we stress that it is business as usual for our customers, stakeholders and employees,’’ Alliance Bank said in its statement to Bursa Malaysia.
“The bank carries out investigations as part of its due diligence on corporate governance and board oversight,’’ the statement added.
Sources told StarBiz that Lai’s contract was approved by Bank Negara for renewal in September.
A tide of rumours had surfaced since Monday regarding Lai who is on annual leave, as group chief operating officer Shim Kon Teck is also said to be on leave.
The acting CEO is Choo Joon Keong, head of corporate banking.
A news report yesterday said Alliance was believed to have placed several of its top managers on forced leave pending completion of an internal probe.
The report went on to say that at least one senior official had offered to resign over “the matter’’.
In reaction, parent Alliance Financial Group’s shares shed 18 sen or 6.67% to close at RM2.52 yesterday, on a volume of 26 million shares.
Industry watchers are in shock and wondering what could have happened to the “Iron Lady of consumer banking.’’
It is said that Lai spent some time at Bank Negara yesterday morning explaining the situation; however, in matters pertaining to governance issues, it is the chairman and the bank’s board that will clarify on the position of their CEO.
In a statement, Lai said: “I am aware that rumours are circulating in the market that I have resigned from my post as group CEO of Alliance Bank. I wish to confirm that this is wholly untrue and that I have not resigned from the bank.
“I am aware that the rumours circulating are highly defamatory in nature and I wish to state that the rumours are again wholly untrue and without basis.
“The business of the bank continues and will continue as usual,’’ she added.
Starting as a bank teller, Lai became the first Malaysian to head Standard Chartered Bank’s consumer business, and was headhunted in 2005 by Temasek Holdings Pte Ltd which had bought a 29% stake in Alliance.
She rose through the ranks to become StanChart’s group head of sales, marketing and distribution for its global network.
She was based in Singapore when Temasek spotted and courted her for half a year before she decided to quit a successful career at StanChart spanning three decades.
Alliance Financial registered a net loss of RM201mil for the financial year ended March 31, 2006 but has since recorded net profits of RM107mil (2007); RM380.1mil (2008) and RM228.9mil (2009).
Since 2005, the number of Alliance branches has grown from 77 to 102; business centres from seven to 26; and sales force from 90 to 1,500.
In July this year, Lai said after an AGM that the bank had taken pre-emptive measures by making a provision of about RM145mil in fiscal year ended March 31, 2009 for potential credit losses but there was a likelihood that some of them could be written back eventually.
On the RM12.85mil worth of unhedged contracts as at end-March, she said it was immaterial to the bank’s bottom line as the exposure to treasury products was limited.
Alliance Financial’s net profit for the second quarter ended Sept 30 surged 43% to RM78.04mil from RM54.64mil in the previous corresponding period due to lower allowance for losses on loans and financing. Its revenue, however, decreased to RM370.45mil from RM404.92mil, while basic earnings per share stood at 5.10 sen against 3.60 sen previously.