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WHOLESALE BANKING | Cesar Tordesillas, Malaysia

RHB to further boost overseas presence after OSK deal

RHB Capital will make further overseas acquisitions after acquiring OSK Investment Bank.


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 RHB Cap group managing director Kellee Kam. “The immediate goal to complete the OSK transaction, integrate it well with RHB Cap and find the synergies that we believe are there.”

 “It is a journey towards our vision to build a leading multinational financial services group with Asean and North Asia as a focus,” Kam noted.

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.


“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, understandthe implications and make a decision,” said Kam.

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 on ownership percentage of Indoneisan banks, could be affected.

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