Eon Bank targets RM60 bln loan base by 2010

KUALA LUMPUR: EON Bank Group targets RM60 billion in its total loan base by 2010 from about RM29 billion currently, says group chief executive officer Albert Lau Yiong.

He said the cumulative 20 percent growth target was achievable based on the group’s transformation plan called “Project Quantum Leap”, with the bulk of the loans coming from small-and medium-scale enterprises (SMEs) and consumer banking segments.

The three-year plan with 62 initiatives is to leap frog the bank to double the loan base by 2010, he said. For this year, Lau said the bank aimed a 14 per cent loan growth from last year’s 4.9 percent.

“We are optimistic the bank will achieve the reasonable loan growth for this year despite the uncertain high inflation rate due to fuel price hike,” he told reporters at the partnership signing ceremony between the bank and SAS Malaysia.

Other strategies under the transformation plan was achieving sustainable and profitable growth by building scale in retail, commercial and and investment banking businesses and strengthening risk management capabilities, processes and practices.

To achieve the plan, Lau said EON Bank would invest about RM25 million over five years in integrated banking intelligence solutions from SAS Malaysia, a move that would give the bank a better foothold to grow in 2009 and 2010.

Asked whether any decision by Bank Negara on interest rates would affect EON Bank’s target, Lau said: “It should not. In the second quarter of 2008, our loan growth has picked up, so we should see a reasonable growth this year for EON Bank.”

The central bank, to hold its monetary policy meeting later yesterday, had maintained the rate unchanged at 3.5 percent since April 2006. EON Bank chief financial officer Amarjeet Kaur said the bank had set aside about RM30 million to refurbish 30 branches and open five new ones this year. Currently, EON Bank has 135 branches with 5,487 staff.

SAS Malaysia managing director Jimmy Cheah said his company was expected to record about 30 percent revenue growth this year based on the growing demand for business intelligence in Malaysia which was growing at 14.4 percent annually.

“Malaysia is growing fast for the needs of business intelligence than the global rate of 12 percent a year,” he said. Cheah said the projection was also based on the usage of the growing business intelligence in the manufacturing, banking and financial, hospitality and telecommunication sectors.

SAS, the parent company of SAS Malaysia and a global leader in business intelligence software and services, posted US$2.15 billion in total global revenue last year, up 12 percent from 2006.

Source: http://www.newsabahtimes.com.my/nstweb/fullstory/20040