Thursday February 4, 2010
EON Bank can survive without M&A, says CEO
KUALA LUMPUR: EON Bank Bhd can stand alone with or without merger and acquisition (M&A) offers, says group chief executive officer Michael Lor.
“We are in a strong position today to grow, (regardless of) whether there are offers or not.
“As far as the management is concerned, it is business as usual for us,” he said after unveiling EON Bank group’s wealth management campaign for this year.
Lor said the bank’s performance indicators improved steadily over the last 12 months as a result of its transformation programme, aggressive promotions and marketing strategy.
Over the last 12 months, he said, the bank’s credit card segment grew in excess of 20%, hire purchase up by 3%, loan loss coverage rose to 86% from 56% and gross non-performing loans improved to 2% from 4%.
“Based on these growth numbers, the value of the company has significantly appreciated.
“That’s why the board has taken the stand that the Hong Leong Bank Bhd (HLB) offer has significantly undervalued the EON Group,” he said.
Khazanah Nasional Bhd, the Government’s investment arm, with 10% stake, had agreed to sell is equity to HLB. The Employees Provident Fund (EPF) was also prepared to sell its 10.7% stake.
Other shareholders of EON Capital Bhd include Hong Kong-based private equity fund Primus Pacific Partners which held 20.2% stake.
EON Capital is the holding company of EON Bank, which has a network of 140 branches, while HLB is the country’s sixth-largest lender, with 199 branches and sales centres.
It was reported earlier the combined assets of HLB and EON Capital worth RM121.41bil would enable the grouping to overtake assets of the country’s fourth-biggest lender, RHB Capital Bhd, which stood at RM110.5bil.
On EON Bank’s bancassurance segment, Lor said it expected a 19% year-on-year growth to RM200mil from RM105mil last year.
Lor said EON Bank was confident of achieving the target as more innovative products and services would be launched soon with its strategic partners to increase customer loyalty. — Bernama