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| HL Bank ventures into consumer lending in China |
| Written by Nadia S Hassan | |||
| Tuesday, 03 November 2009 11:45 | |||
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This marks HLB’s further inroads into China’s financial-services sector after its maiden foray in October 2007 when it acquired a 20% stake in Bank of Chengdu. According to an announcement to Bursa Malaysia yesterday, HLB and Bank of Chengdu will form a licensed consumer finance company known as Sichuan Jincheng Consumer Finance Ltd Liability Co (SJCF). “The business of SJCF will principally be in consumer financing. The registered capital will be 320 million yuan [RM161 million] while HLB’s contribution shall be 156.8 million yuan, which will be financed from internally generated funds,” said HLB. HLB will hold 49% of SJCF while its associate Bank of Chengdu will hold 51%. “The proposed JV represents a strategic alliance between HLB and Bank of Chengdu in order to tap the promising and growing financial-services sector of China,” said HLB. It represents another step in HLB’s regional expansion. The banking group already has a presence in Singapore and Hong Kong, and aims to open a bank in Vietnam’s Ho Chi Minh City by year-end. For its latest venture in China, HLB will provide SJCF with personnel, technical expertise and support in areas such as product development, risk management and information technology. Bank of Chengdu has 31 branches and 116 outlets in Chengdu, the capital of Sichuan province. It also has the fourth-largest banking network in the locality and its presence extends to 12 districts in Chengdu. Chengdu was declared the high technology, business and trade, finance as well as transportation and communication hub by the State Council of South-West China. For FY2009, Bank of Chengdu contributed RM99 million in net profit to HLB Group. “SJCF is not expected to have any material effect on the net assets and earnings of HLB for the financial year ending June 30, 2010 but is expected to contribute positively to the future earnings of the group,” HLB’s statement said. HLB said Bank Negara Malaysia had given its approval for the incorporation of SJCF, and it was now awaiting the nod from the China Banking Regulatory Commission and other relevant authorities. Meanwhile, in a separate statement, HLB said it had been recognised as one of Malaysia’s top companies in The Wall Street Journal Asia’s “Asia 200 Most Admired Companies” in an awards ceremony in Beijing recently. HLB group managing director Yvonne Chia said the bank was placed in the Top 5 for the Financial Reputation category and the Top 10 for the Corporate Reputation category and overall, the bank was recognised as one of Malaysia’s Top 10 companies. This article appeared in The Edge Financial Daily, Nov 3, 2009.
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