The merger way
RHB plans more acquisitions to boost overseas presence
KUALA LUMPUR: After the acquisition of OSK Investment Bank, RHB Capital Bhd (RHB Cap) is still interested in further acquisitions to boost its overseas presence.
“It is one of the pieces that is taking us closer to our goals.” RHB Cap group managing director Kellee Kam told StarBiz.
“It is a journey towards our vision to build a leading multinational financial services group with Asean and North Asia as a focus.”
In this context, the group has Hong Kong and China to add to its portfolio.
RHB Cap started off as a group with 96% of its earnings from Malaysia; the inclusion of earnings from OSK reduces that to about 90%.
From an investment bank standpoint, about 80% of the group’s earnings are derived from Malaysia and the balance 20% from regional sources.
“In the overall context of what we are trying to achieve, this is a positive step,” said Kam. “It’s a big step for us and we will still look for opportunities to enlarge that.”
Eventually, RHB Cap’s goal is have to have 40% of its earnings overseas. Currently, that contribution is only 10% for the enlarged entity.
“The appetite (for expansion) is still there,” said Kam. “The immediate goal to complete the OSK transaction, integrate it well with RHB Cap and find the synergies that we believe are there.”
“If we can close off the OSK transaction by year-end, we can achieve the 10% earnings contribution target from overseas. We have made good progress on that and as of the first quarter, we have an overseas earnings contribution of 5%.”
RHB Cap achieved a net profit of RM435.6mil for the first quarter ending March 31, 2012.
The overseas contribution from OSK and PT Bank Mestika (which RHB Cap was eyeing to buy) would take the group past the 10% overseas contribution on a proforma basis that it is currently targeting.
“We are waiting for the official policy from Indonesia to come out so that we can get more clarity, understand the implications and make a decision,” said Kam.
“From our perspective, we are obviously still very interested to be in Indonesia and play a part in supporting the economy there. We have always wanted to be a supportive player in their economy, so we will play by the rules they have set,” he said.
And that decision could mean taking a smaller stake in Bank Mestika
based on the fact that RHB Cap is still very keen on making a presence in the Indonesian banking scene.
Last week, news report said the Bank of Indonesia would be putting a cap on bank ownership for new investments into the country.
Analysts viewed that RHB Cap’s proposal to buy PT Bank Mestika, which had been put on hold following earlier news on the upcoming ruling, could be affected.