RHB Banking Group, the country's fourth largest fully integrated financial services group, expects to have a presence in almost all Asean countries by the end of this year, the year which marks its regionalisation path.
Group managing director Kellee Kam said the Group's regional expansion, which takes place between now and 2015, is not just about opening new or more businesses but also ensuring its talent, risk management and governance frameworks are efficiently in place.
He noted that on the banking side of the Group's business, it now has seven branches in Singapore, nine in Cambodia, one in Thailand, one in Brunei and a representative office in Vietnam.
RHB Thailand is also in the process of applying with Bank of Thailand to open two more branches by the end of the year.
The Group has applied to open offices in Laos by the end of the year, and is also trying to gain access into Myanmar and Vietnam.
"So, by the end of this year, we want to be in almost all Asean countries," he said, adding that for its investment banking business, Hong Kong will be used as gateway to the China market.
In an interview with Business Times, here, recently, Kam said the group's aspiration for a regional presence begun as early as 2007 and the recent merger between its investment banking arm with OSK Investment Bank has given the Group regional access but "not yet the size".
"In the longer term perspective, we have done the first part of becoming a regional financial group and now we are building on that platform," he said, adding that the Group is still holding on to its target initiated in 2007 that by 2020, at least 40 per cent of its revenue would be derived from outside Malaysia.
Currently, international business contributes about 11 per cent to the Group's total revenue, which for the first half of this year stood at RM4.6 billion.
"Many of the companies we have been servicing have businesses outside Malaysia and by being regional ourselves, we can better serve them.
"Also, we want to play our role of facilitating the Asean economies when the Asean Economic Community comes into place in 2015," said Kam.
He added that in the last five years, the Group has strived to make its domestic business stronger, for "without a solid home base it would be hard to branch out".
"We have been quite aggressive in building our domestic business, especially in 2011 and 2012, by increasing our branches, automated teller machines (ATMs), cash deposit machines (CDMs) and cheque deposit machines (CQMs). We tripled the number of our ATMs, CDMs and CQMs between 2007 and now to more than 2,300 units and these have brought convenience to our customers."
Kam said while the Group understands the importance of becoming regional, it will not lose sight of growing the domestic business and will continue to invest in it.
One business he sees as having great potential to bring the Group to greater heights is the syariah-compliant business.
"Syariah-compliant banking no doubt has great potential and we haven't fully realised it. But we are growing well and we intend to make it a larger part of our business," Kam said, pointing out that Islamic banking contributes about 15 per cent of the Group's total loans and financing. The Group is targeting to raise it to 30 per cent in the next three to four years.
"Malaysia is fast becoming a global Islamic financial centre and we are fortunate to be here. We want to grow our syariah-com-pliant business, not just domesti-cally but regionally as well," Kam said, adding that the group be-lieves the appointment of Ibrahim Hassan as the new chief to head RHB Islamic Bank would accelerate the growth of a competitive and sustainable syariah-compliant business.
He said the Group is looking to tap the Indonesian market for its Islamic banking business as "we see a lot of opportunity for us there".
He said the Group's presence in Indonesia is limited to investment banking and it is attempting to get on the banking side of the Indonesian financial industry through the acquisition of PT Bank Mestika.
"We are hoping to complete that. There have been a couple of changes to regulation (in Indonesia) and we have since resubmitted our proposal to Bank Indonesia," he said, adding that the Group is hopeful the acquisition will go as planned by next year.