KUALA LUMPUR: With a share capital of about RM1.58bil, the highest among foreign banks operating in Malaysia, Sumitomo Mitsui Banking Corp Malaysia Bhd (SMBC Malaysia) is in a comfortable position to provide bigger loans to Malaysian corporates as the bank strategises its business.
President and chief executive officer Yoshimi Gunji said the bank would focus on conventional and Islamic banking businesses to further make its presence felt in the Malaysian market.
As a foreign bank with a strong capital base, SMBC Malaysia was able to meet the financing needs of not only Japanese clients but also Malaysian corporates amid tough market conditions, he told StarBiz.
“Our Malaysian customers are mainly business institutions, conglomerates, multinational corporations and government-linked companies. We hope to serve more Malaysian corporates and those that have business ties with Japanese corporations. Besides this, we are also strong in project financing for sectors like infrastructure, utilities, transportation, construction, retail and wholesale, and manufacturing and can assist their growth in the country,” Gunji said.
On Islamic banking, he said that although it was relatively small, SMBC Malaysia was looking to expand this business going forward, as it provided commodity murabahah, ijarah, istisna ijarah and was currently developing syariah-compliant bank guarantees, shipping guarantees and deposits.
In relation to the recent slower growth in Malaysia, he said that the bank’s basic stance was “not too pessimistic, but cautiously optimistic” and it wished to support both Malaysian and Japanese corporates in the country to contribute to the Malaysian economy.
For the financial year ended March 31, 2015, the bank’s total loans and deposits stood at close to RM2.78bil and RM3.75bil respectively. For the six months ended Sept 30, 2015, total loans and deposits surged to RM4.23bil and RM4.26bil respectively. Gross profit for the six months stood at RM81mil and total capital ratio was about 21%.
SMBC Malaysia was one of the six foreign banks issued commercial banking licences by Bank Negara in 2009-2010 in line with the country’s liberalisation of the financial services sector. The other five were BNP Paribas SA of France, Mizuho Bank of Japan, the National Bank of Abu Dhabi, United Arab Emirates, Industrial and Commercial Bank of China Ltd and PT Bank Mandiri (Persero) Tbk of Indonesia.
Meanwhile, deputy chief executive officer Anthony C. Lim said SMBC Malaysia could leverage on its global and group expertise and provide business matching services to boost bilateral trade between Malaysia and Japan and increase the latter’s foreign direct investments in Malaysia.
The bank, he said, also intends to focus on its non-interest income or fee-based business like advisory, treasury, project financing, trade finance and cash management to boost its revenue base. According to Lim, in collaboration with its global network, SMBC Malaysia also plans to expand its product coverage and enhance its business solutions in areas like transaction banking and cross-selling to meet its clients’ needs, both locally and globally.
He said the bank would be able to sustain its business despite the challenging banking landscape due to its strength and niche in sectoral project financing, among others. He also emphasised the stringent credit assessment it employed before lending as well as adhering to the prudential and regulatory requirements.
Lim said the bank was looking to beef up its staff strength by recruiting the right talent. He said the bank was in a good position to attract experienced staff given the recent downsizing in the banking sector.
To ensure business sustainability and governance, he said the bank was also in compliance with strict risk management practices and had appointed prominent members on the board of directors to provide the right guidance. In December last year, RAM Ratings had assigned a rating of AA1/stable/P1 to SMBC Malaysia based on the strong credit profile of its parent company Sumitomo Mitsui Banking Corp of Japan.
Originally published on www.thestar.com.my