Affin completes talks with Bank of East Asia


Affin Bank Bhd's parent company Affin Holdings Bhd has concluded its negotiations with the Bank of East Asia Ltd (BEA) for the latter to take up a stake in the holding company.
"All the negotiations have been finalised," said Affin Bank managing director and chief executive officer Datuk Seri Abdul Hamidy Abdul Hafiz, adding that it would "soon" make an announcement on the matter.
Asked on the stake that BEA could be taking up in Affin Holdings, he said: "I think at a minimum it has to be 20%. They want more, but for a minimum it has to be 20%, because then, they can equity account."
Affin Bank is wholly owned by Affin Holdings, which in turn is 63% owned by Lembaga Tabung Angkatan Tentera.
Speaking to reporters on the sidelines of the 11th Malaysian Banking Summit yesterday, he said it was the bank's shareholders' plans for it to remain a niche bank but did not exclude the possibility that they may have other plans for it.
"As it is now, the bank has already carved it out, organised itself that it can stand on its own," he said.
Abdul Hamidy said he was a strong believer of commercialism and said the liberalisation of the financial services sector meant that every player faced competition.
"That is why we have to differentiate ourselves and think differently from others. I can assure you that we will survive because we got our numbers right," he said.
He said that it was important to note that Affin had made its turnaround without having to resort to its shareholders for financial assistance and that it was independent of them in terms of meeting its financial obligations.
Asked if he was concerned that BEA might bring in its management and expertise into Affin later, Abdul Hamidy said: "Not that I know of, but we always welcome talented management. Whoever comes in on the shareholding side, we welcome them to help us out. We are not good in every aspect."
Meanwhile, presenting his paper titled "The Emergence of Niche Banks: How Smaller Banks are Managing Competition" at the summit, Abdul Hamidy said smaller banks needed to target and focus on selected group of customers and must differentiate themselves from bigger players to survive in a changing landscape.
"They must have product differentiation and proper delivery, services must have more value-add, good distribution channels and improvement in the technology being used."
"The smaller niche banks could also benefit by addressing the needs of the unserved and under-served segments as well as those who are taken for granted. We must understand that against big players, we cannot compete on global presence or branch network, and we cannot match their large customer and capital base," he said.
Abdul Hamidy said smaller, niche banks had several advantages against larger players as they were flexible enough to meet customer needs, make decisions swiftly, maximise value and be more efficient.
"We serve a (customer base) size that is manageable. We are big enough to know the business and small enough to care for customers," he said.



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