PETALING JAYA: RHB Banking Group plans to dispose of its stockbroking business in Singapore by the third quarter of 2020 and consolidate its capital markets and wholesale businesses in the city-state under RHB Bank Singapore.
The decision to exit the stockbroking business was made in view of the increasingly competitive stockbroking environment, which has made the business “no longer viable.”
The banking group’s wholly-owned subsidiary, RHB Investment Bank Bhd, has entered into a conditional share purchase agreement to sell its entire stake in RHB Securities Singapore Pte Ltd (RHBSS) to Phillip Securities Pte Ltd.
The sale will be valued based on the net tangible assets of RHBSS, preceding the completion date and adjustments mutually agreed between RHB Investment Bank and Phillip Securities.
“As part of the proposed transaction, RHB Banking Group will internally transfer its capital markets businesses under RHBSS, encompassing client coverage, research and corporate advisory services, equity capital markets and institutional equities sales to RHB Bank Singapore, which is a branch of RHB Bank Bhd.
“As such, under the proposed transaction, Phillip Securities will only be acquiring RHBSS’ stock broking business, ” it said in a media statement yesterday.
The deal is subject to the approvals of the relevant regulatory authorities.
Datuk Khairussaleh Ramli, group managing director of RHB Banking Group, said that the internal transfer of the capital markets businesses from RHBSS to RHB Bank, Singapore is a natural move to provide a one-stop solution for the banking group’s corporate clients.
“Upon the completion of the proposed transaction as a whole, RHB Bank Singapore will be in a stronger position to deliver integrated value propositions to our clients, leveraging on key strengths of our investment banking team.
“(This is) in line with our five-year FIT22 strategic aspirations.
“The proposed disposal of our Singapore stockbroking business to Phillip Securities would also benefit existing brokerage customers, who would gain from a wider range of broking services, while the transfer of capital markets businesses within RHBSS to RHB Bank, Singapore would enable our corporate clients to have access to a comprehensive suite of capital markets and financing solutions, ” Khairussaleh added.
RHB Banking Group said it will ensure a seamless transition for RHBSS customers affected by the proposed transaction, in particular customers who are holding trading or margin financing accounts.
The banking group further added that the proposed disposal will not have any material effect on its net assets and earnings for the financial year ending Dec 31,2020.