Yvonne Chia, Hong Leong Bank Bhd group MD and CEO answers the 10 questions posed to her by our readers.
What lessons can the Hong Leong group derive from the current slowdown? – Beng, Selayang
The current slowdown has highlighted the fundamental issue of integrity of leadership. Some of the CEOs at the helm of financial institutions have compromised their organisations by going for short-term gains to the detriment of the business franchise, many of which have been around for 100 years. This is a real shame.
Liquidity and funding are critical to sustain a bank’s operations. Over and above this, having a weak credit culture is dangerous.
In Hong Leong, we have a key affirmative pillar that is a central hallmark of the way we do business, that is, the protection of the franchise at all costs. We are sometimes chided for being overly conservative and that is precisely guided by this mantra of sustainable profitable growth that can withstand the downside of economic cycles and allow us to be opportunistic even during difficult economic times.
Also for everyone, a lesson learned – that the downside scenarios and “black swans” deemed unlikely and academic has happened and, well, if we do not heed the lessons, it will happen again.
Hong Leong Bank used to be the premier bank, with excellent services and innovative products. However, over the last few years, it appears that other banks have gone ahead in terms of services and products. What are your plans to catch up? – Lilian Teh
I am surprised at this perception. We have a lot of work to do to make sure that our marketing spending targets the right segments. Despite that, your question is being taken seriously and I am listening.
The facts of the matter are that we have stepped up our marketing activities to reach out to customers through the national media and the Internet, as well as capitalising on our branch network.
In fact, we have been very active in mounting carnivals, product programmes, open houses (especially for mortgage and credit card products), corporate and commercial efforts, economic seminars, and investment series.
In business banking, we collaborate with various trade organisations and chambers of commerce on products. We also extend advisory services to SMEs throughout the country.
If you look at credit cards and mortgage, we have been growing ahead of the industry growth. Our trade volume has also been increasing, up to a high of over 9% in market share at its peak.
In the last four years, we have grown to become a top four player in mortgages and a top five player in credit cards. We added half a million new customers over the same period.
We were also the fastest growing wealth management brand last year with a top three institutional unit trust agency ranking.
Our foreign exchange volume has also grown 2.5 times, with more underlying customer activities and flows. Global online statistics also show that our Internet banking service is now among the top three most popular Malaysian online banking website, based on reach and page views by customers.
More importantly, despite our mid size, we are among the top three for total deposits from individuals in the customers. This growth and market share are indications that we remain relevant in the marketplace.
It is a continuing strategy to improve and enhance our service excellence at the branches and other outlets.
You’ve worked closely with two prominent businessmen, Tan Sri Rashid Hussain and Tan Sri Quek Leng Chan. How different are they in terms of vision and style? (Before joining Hong Leong Bank in 2003, Chia had been MD and CEO of RHB Bank Bhd.) – Nita, KL
Both are wise tycoons who have done extremely well in building businesses. I am grateful and humbled to have the opportunity to work with them.
With Tan Sri Rashid, I learned conviction and boldness, and that relationships and networking matter.
From Tan Sri Quek, it is about building and protecting our integrity and reputation as we go about conducting business, and that creating value for customers is profoundly important.
I also learned about the discipline of executing business strategies well, which must always be competitively differentiated. This will then create prime value for our franchise for profitable growth. That’s why we can be opportunistic even in times of crisis.
This is also with an ethos that growth matters in everything we do.
With the liberalisation of the financial sector recently announced by Bank Negara, do you see the need for another round of mergers involving local banks? – Marsha, Puchong
Any mergers, in my opinion, will be dictated by market forces. The well-run banks with superior management quality, banks with good deposit franchise and well-capitalised banks will be able to seize market share and grab opportunities. Any mergers, in my opinion, will be market-driven.
As an investor in your bank, I would like to know why the share price has hardly appreciated in the recent bull market as compared with Malayan Banking Bhd, Bumiputra-Commerce Holdings Bhd, Public Bank Bhd, AMMB Holdings Bhd, RHB Capital Bhd and even Alliance Financial Group Bhd? – Sonny Wong, KL
Hong Leong Bank (HLBB) is long-term player. Management manages the long-term interest of the shareholders rather than play to the daily gyrations of the stock markets.
We believe that on total shareholder return, we are stable and safe investment stock. Admittedly HLBB appears to have underperformed relative to the Finance Index for the past one month. However, if you look at the performance over the past six months and 12 months, you will find that HLBB has generally outperformed the KLSE Finance Index.
During the market turmoil, the investors did not sell down HLBB stock. Therefore, it is to be expected that when the market rebounded, HLBB rebounded less.
How do you justify late-payment charges imposed by banks on overdue accounts in view of the fact that every business needs to be paid on time if it were to function optimally and yet no other business can penalise its customers for being late in paying? – Marisa Demori, Ipoh
Banks and financial institutions are not the only ones that charge for late payments.
Property developers, manufacturing and trading companies, and educational institutions also do this. While the rationale is the same across industries, the banking business is a bit more complex.
Banks pay interest on the retail and wholesale deposits and the interbank funding that fund the loans we give out and our investments in other assets. Banks have to make timely payments towards these interest obligations.
A delay in payment from loan customers mean a loss in funding cost, which in our normal cash flow, we would’ve already planned to utilise to pay down or fund lending and other asset growth.
What is your favourite piece of jewellery? It is also understood that you like to decorate your home. What is your taste like? Who is your favourite interior decorator? – Jane, PJ
I like pearls as a whole, but there is pair of red and green jade earrings that I happen to particularly like – the green jade for the classic look and the red jade to mix with the contemporary.
I do enjoy visiting beautiful homes. I like American classic and contemporary because of the warm and cozy ambiance – not too simple nor too formal. My favourite interior decorator happens to be my friend, Mimi Merican. She is very low-profile but she has quietly created many homes of the famous worldwide.
She brings new inspiration to classic contemporary designs. She is very involved in the restoration of old medieval items, and has an eye for detail. She has a stunning collection of furniture, and what is significant is that none is a replica or a reproduction.
Each creation is her unique design of the old and contemporary. She is amazing and I believe her greatest potential is yet to be seen.
What are the three most important qualities you would like to nurture in your children? – Candice Lum, Kuching
I hope that as they are now adults, they have embraced the values of integrity and conviction in whatever they do. And that they have humility when interacting with different people and levels of society.
Women are constantly seeking a balance between our families and careers. I’m sure you have made personal sacrifices to reach the pinnacle of your career. What advice would you give working mothers on what not to sacrifice? – AK, Damansara
I still have my role as a mother and a wife despite being a working woman. There are advantages and opportunities to having a full-time career, although sometimes I have to make choices, especially on time spent with family. I believe it is about balancing choices in each situation and at the appropriate time.
How do you juggle your time between a successful career and a family? – Lim, Puchong
I have been blessed with abundant energy, healthy kids and a great support structure at home. It makes making the choices easier.
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