Hong Leong Bank Builds Further Platforms in China
1. Hong Leong Bank and China Development Bank Enter into a Finance Development Co-operation Agreement
Kuala Lumpur, 4 November 2009- Hong Leong Bank Berhad ("HLB") recently signed a Finance Development Co-operation Agreement ("Co-operation Agreement") with China Development BankCorporation ("CDB"). Ms. Yvonne Chia, Group Managing Director / Chief Executive, Mr. Kua Wei Jin , Chief Operating Officer, Wholesale Banking of HLB andMs. Saw Ann Ping, Head of Islamic Investment Banking were in Beijing for the signing ceremony.
The Co-operation Agreement sets the platform for the HLB Group, including its subsidiary Hong Leong Islamic Bank Berhad ("HLISB") and CDB to collaborateand co-operate with each other in various areas including funding, financing opportunities, currency swaps, personnel exchange and training as well asinformation exchange.
"This agreement effectively enables HLB to work closely with CDB, one of the three policy banks in China and one of the largest banks in China . It formsthe basis to co-ordinate with each other for CDB to expand and extend its funding capacity, financing support and financing channels into our localeconomic projects and financial system. To this end, HLB will assist CBD in market penetration, due diligence and co-ordination," commented Ms. YvonneChia, Group Managing Director / Chief Executive of HLB.
"HLB will be working hand in hand with CDB to share and enhance bilateral knowledge on the policies, regulations, financial market and economic developmentof both countries," Ms. Chia added.
"China is a global economic superpower. The upside and opportunities are immense. China is today a key market for the Group and through our 20% equitystake in Bank of Chengdu Co., Ltd. and the Co-operation Agreement with China Development Bank, we have specific platforms to participate on the growth andupside potential of the market in China . We are very excited with these developments and are bullish on the prospects," Ms. Chia continued.
Business queries, opportunities and further clarification may be directed to the following:
Ms. Saw Ann Ping / Ms. Chan Leng Kei
Tel: + 603 2164 3939 ext 3066
Email: email@example.com / firstname.lastname@example.org
2. Proposed Joint Venture between Hong Leong Bank and Bank of Chengdu to Operate a Licensed Consumer Finance Company in China
On Monday, Hong Leong Bank Berhad ("HLB" or "Bank") announced that the Bank had, on 2 November 2009, entered into a joint venture agreement with Bank of Chengdu Co., Ltd ("BOCD") to form a joint venture company to be known as Sichuan Jincheng Consumer Finance Limited Liability Company ("JV Co") to operate alicensed consumer finance company in Chengdu, Sichuan, China ("Proposed JV"). The JV Co's business will principally be in consumer financing.
HLB will have 49% equity interest whilst BOCD will have the balance 51% equity interest in the JV Co. HLB currently has 20% equity interest in BOCD, acommercial bank with 31 branches and 116 outlets in Chengdu , Sichuan.
The Proposed JV represents a strategic alliance between HLB and BOCD to tap the promising and growing financial services sector in China . It furthercements our strategic partnership in BOCD and affirms our vision and belief in the huge China potential.
China Banking Regulatory Commission's objectives are to regulate and develop unsecured consumer financing and promote consumer spending targeted at themiddle and lower income groups. 4 cities have been selected for the pilot – Chengdu , Beijing , Shanghai and Tianjin . BOCD was shortlisted to form a JV Cowith a strategic partner who has the relevant consumer financing expertise.
"We are delighted and honoured that through this JV Co, we have the opportunity to further build on our strategic partnership and future options with BOCD.Strategtically, it will allow us to expand and diversify our consumer banking capabilities into a new segment in a new market. We will ride on BOCD'sembedded presence and established brand in the Chengdu community to quickly expand the JV Co's reach and customer relationships. It is a win-winpartnership," commented Ms. Chia.
Both HLB and BOCD will leverage on their respective advantages to grow and position the JV Co in carrying out its business.
3. Hong Leong Bank and the China Potential
"Hong Leong Bank is serious about China and we are convinced of the huge upside. We have the right partners in China and we want to grow with them.
Our 20% equity stake in Bank of Chengdu has already turned in a maiden profit of RM 99 million in our last financial year. We can only expect even moregrowth from this investment.
In August 2009, Hong Leong Bank partnered with the Industrial and Commercial Bank of China Ltd. ( Singapore ) to launch and offer trade settlement servicesin Yuan for our trade customers. At present, the pilot cross-border trade services are applicable to selected enterprises and restricted to Shanghai ,Guangzhou , Shenzhen, Dongguan and Zhuhai.
And today, with our strategic partnership with China Development Bank to develop cross-border financing and funding opportunities as well as the proposedJV with Bank of Chengdu to develop consumer financing, you can see that at Hong Leong Bank, we are moving to position ourselves in the China growth story.We are very excited, and if we get our act right, in 3 to 5 years, we would have transformed the Bank's profile as an embedded bank in the region," Ms.Chia concluded.
Press Release - 04/11/2009