OSK Holdings Bhd is capitalising on its universal broker privileges as much as it can in order to expand its income base, said group managing director Ong Leong Huat.
He said much of the diversification undertaken by the company in the past year was now taking shape, and the maturing businesses would reduce the companys dependency on equity trading.
Diversifying into other financial services such as fund management, corporate finance, bond trading, and financial planning would ensure that OSK was on a satisfactory footing even if the equity market remained depressed, he said.
We can be a three-in-one now. We can be merchant banker, discount house and stockbroker. The only thing we cant do is collect deposits, Ong said after the company's AGM in Kuala Lumpur on Wednesday.
He said universal brokers had to start exploiting the privileges given to them, as opposed to sticking to the old broker position, as these privileges would place them in a better position to compete.
As an example, he said, OSK-UOB Unit Trust Management Bhd had achieved pre-tax profit of RM4.2mil last year as it expanded its total fund size by 28% to RM811mil from RM635mil the prior year.
OSK is also actively working to expand its other financial services units, which Ong believes can be profit-generating, albeit perhaps less than that generated by the bigger more established players. OSK, which already has a chain of 45 outlets, does not plan to expand further.
The company returned to profitability last year. From a loss of RM12.2mil in 2001, it recorded a net profit of RM36.7mil, though about half its net earnings were due to the sale of OSK Asia Corporation Ltd, which netted RM18mil.
Nonetheless, Ong is confident the worst is over. In terms of operating profit, 2003 cant be worse than last year. It should be better, it cant be worse, he said.