RHB Capital Bhd (RHBCap) has no plans for any mergers or acquisition (M&A) deals in the near term, as it looks to grow organically based on its reframed strategy, a top executive with the bank said
The clarification comes amidst speculation that RHB Capital Bhd had been in merger discussions with AMMB Holdings Bhd. Besides, earlier this year, the proposed three-way merger involving RHB, CIMB Group Holdings Bhd and Malaysia Building Society Bhd was called off due to unfavourable conditions.
The banking group said there it was not contemplating any M&A deals but will focus on executing its reframed strategy for internal reorganisation announced Friday, in a media briefing.
“M&A opportunities must make sense in the form of being value accretive and complementary, not just for the sake of becoming a bigger group,” RHBCap chief executive officer and group managing director Khairussaleh Ramli said.
“We believe that we can roll on our own at this point of time. What is key is to focus on our fundamentals, improving our businesses,” he told local media, after announcing the group first-half 2015 financial results.
Khairussaleh reiterated that RHBCap has no current plans to enter into merger talks with AMMB Holdings Bhd, which was earlier reported to have stalled. saying that the former would prefer to focus on its restructuring exercise and reframed strategy for now.
Moving forward, the bank will focus on value creation for shareholders, anchored on boosting revenue, differentiating its customer experience and digital ecosystem and engaging talent redeveloping teams.
Among the areas that Khairussaleh noted for enhancement were services for the SMEs, for its Singapore operations, asset management and treasuries.
“Our Singapore business has grown 85 per cent in the past year, contributing over 80 per cent of our overseas revenue,” he noted.
Khairussaleh also said the group targets to complete its rationalisation plan by November, and restructure RHB Bank Bhd as the new operating holding company in January.
For that, RHB Bank will take over RHBCap’s listing status on the Main Market of Bursa Malaysia in January, after completing a proposed rights issue to raise gross proceeds of up to MYR2.5 billion, and the internal reorganisation of streamlining RHBCap’s subsidiaries to RHB Bank.
The proceeds raised will be utilised to capitalise RHB Bank and finance working capital requirements for RHB Bank Group.
The group aims to achieve an annualised return on equity (ROE) of 13 per cent in 2017 and 15 per cent ROE in 2020. For loan growth, RHBCap is targeting to achieve between 6% and 7% for 2015.