Published: on 30 May 2012
KUALA LUMPUR: Hong Leong Bank Bhd is setting its sights on the country's small and medium enterprises (SMEs) sector now that the merger with EON Capital has been completed.
“If you look at the contribution of SMEs to the economy, ours is at about 31% and is projected to reach 41% by 2020. There is still a long way for our SMEs to grow. In countries like Singapore, Hong Kong and Thailand, their contribution to GDP is far larger,” the bank's chief operating officer of group business banking Peter Chow told StarBiz at the sidelines of Invest Malaysia 2012.
“We have set up 49 of our branches to be turned into SME branches and by September we should have 51 of them,” he said, adding that 145 branches would eventually be set up.
“In terms of coverage we have the edge over our competitors. SMEs' needs are rather simple, such as term loans to buy machinery or for working capital, so the key is a fast turnaround time.”
Chia and COO global markets Hor Kwok Wai at the exclusive interview.
“In many ways our SMEs have become global SMEs, which speaks very well for the Malaysian business psyche. I've seen a lot of our clients reach that calibre,” she said.
Hong Leong Bank ranks second in Malaysia in terms of its branch network, and post-acquisition of EON Cap, the fourth largest bank by assets and customer deposits.
Chia is also upbeat that the investments created by the Economic Transformation Plan would have a spillover effect on the SME sector.
“I hope to benefit from the supply chain, the mom and pop businesses that will be hired as the subcontractors from the various projects,” she said.
On Bank Negara's responsible lending guidelines, COO of personal financial services Moey Tan explained: “The new guidelines have definitely had their desired effect and have taken a toll on consumer loans in general. I don't think we've seen the full impact yet, we will see it in the next three to six months.”
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