Hong Leong Bank

Hong Leong Bank Berhad

Native name	豐隆银行 (Chinese)
Type	Public
Traded as	MYX: 5819
Industry	Financial Services
Founded	1905
Founder	Liaw Yu Rui
Headquarters	Kuala Lumpur, Malaysia
Area served	Malaysia Singapore Hong Kong China Vietnam Cambodia
Key people	Tan Sri Quek Leng Chan (Chairman)
Products	Personal Financial Services Business & Corporate Banking Global Markets Islamic Banking
Revenue	MYR 4.039 billion 2014^[1] MYR 4.007 billion 2013^[2]
Net income	MYR 2.102 billion 2014^[3] MYR 1.856 billion 2013^[4]
Total assets	MYR 170.4 billion 2014^[5] MYR 163.6 billion 2013^[6]
Website	www.hlb.com.my

Hong Leong Bank (MYX: 5819) is a major public listed banking group in Malaysia.

History

Early beginnings

Hong Leong Bank was founded by Liaw Yu Rui and began its operations in 1905 in Kuching, Sarawak under the name of Kwong Lee Mortgage & Remittance Company.^[7] The company granted loans against the security of export commodities such as pepper, rubber and other indigenous products. It also provided the services of remitting money of overseas Chinese to their families in Southeast region of China.

In the initial years, the company went through a difficult period of growth when a number of economic crises occurred. The First World War broke out in 1914 causing panic in the financial circles. A few years after hostilities ended, the post-war Recession of 1920-1921 set in. After the recession, the company opened its branch in Sibu in 1923 and three years later another branch was opened in Singapore in 1926. The year 1929 saw the start of the Great Depression that lasted until 1933. The Depression caused a sharp fall in the export earnings of commodities and many business concerns, including some banks, were in financial difficulties.

Kwong Lee Mortgage and Remittance Company survived all these setbacks because of its strong cash reserves and its conservative operational policy. Immediately after the Depression, on 26 October 1934, the company was converted into a public company under the name Kwong Lee Bank and shortly after, the third branch of the Bank was opened in Sarikei in 1937.

The Second World War caused a temporary disruption in the currency and banking system. After the war the immediate task was one of reconstruction and rehabilitation. In this connection, Kwong Lee Bank played an important role to revive confidence and business activities by providing financing to enable old businesses to be resumed and new ones to be set up. The aftermath of the war saw the continued expansion of the Bank, and in 1964, Oversea-Chinese Banking Corporation of Singapore (OCBC Bank) under the stewardship of Tan Chin Tuan (its then Chairman and Managing Director) acquired a 52% majority stake in Kwong Lee Bank from the Lam family.

In 1973, Kwong Lee Bank opened another branch in Bintangor.

Expansion

In late 1977, Yang Amat Mulia Tunku Osman Ibni Tunku Temenggong Ahmad, a member of the royal family from the State of Johor, came in as a shareholder of the bank and acquired 30% of its share capital from both OCBC Bank and the Lam family. The period subsequent to this saw a change in the direction of Kwong Lee Bank's expansion. From five banking branch offices in Sarawak (Kuching, Sibu, Sarikei, Serian and Bintangor) and one in Singapore, the bank expanded its operations to Peninsular Malaysia when it opened its first branch in Kuala Lumpur in May 1978 and this was followed by another branch in Johor Bahru during the same month. Over the next four years, a total of six branches were opened in Labis, Segamat, Bintulu, Kota Tinggi, Kota Kinabalu and Kluang and on 1 January 1982, the Head Office was relocated from Kuching to Kuala Lumpur.

Acquisitions

In May 1982, Kwong Lee Bank Berhad was acquired by the MUI Group, a corporate group controlled by Malaysian business tycoon Tan Sri Dato Khoo Kay Peng. Exiting shareholders include OCBC Bank (which acquired a stake in the bank in 1964) and members of the Lam family (relatives and descendants of the founder Lam Ji Chiew). Kwong Lee Bank Berhad was renamed Malayan United Bank Berhad on 2 February 1983. Subsequently it was renamed MUI Bank Bhd. Under the MUI banner the bank grew from 11 branches (including Singapore) to 35 branches.

On 3 January 1994, the Hong Leong Group Malaysia acquired MUI Bank Berhad through Hong Leong Credit Berhad and renamed it as Hong Leong Bank Berhad (HLBB). The acquisition of MUI Bank Berhad by Hong Leong Group Malaysia (which is controlled by Malaysian business tycoon Quek Leng Chan) followed shortly after an aborted takeover attempt of the MUI Group by another Malaysian tycoon Tan Sri Dato Vincent Tan Chee Yioun (through his vehicle Berjaya Corporation).

HLBB was listed on the Kuala Lumpur Stock Exchange on 17 October 1994 with its total paid up capital enlarged to RM 470 million. Since then, the growth of the bank has been remarkable.

The consolidation of the banking institution to meet the requirements of Bank Negara Malaysia marks another milestone for Hong Leong Bank Berhad. The completion of the merger of Hong Leong Bank with Wah Tat Bank and Hong Leong Finance with Credit Corporation Malaysia on 1 January 2001 marks the emergence of a larger banking group.

HLBB is a member of the Hong Leong Group. The group has diversified businesses in financial services, manufacturing, property and infrastructure development.

Acquisition of EON Bank

On 6 May 2011, Hong Leong Bank announced that it has completed its acquisition on EON Capital Bhd's assets and liabilities, making EON Bank part of Hong Leong Bank Group.

Within close to 8 weeks, the legal vesting was concluded where all assets and liabilities of the former EON Bank was vested into HLB. The merger creates the country’s fourth-largest bank with an asset size of more than RM140 billion with a total of 329 branches.^[8]

Business division

Personal financial services

The principal business activities cover the provision of retail loans, deposit products, wealth management and priority banking services to individuals.

Business and corporate banking

The principal business activities are in the provision of business banking solutions including working capital and term loans, deposit and liability management products, cash management and trade finance services as well as debt capital market solutions to businesses and companies.

Global markets

Global Markets assist customers on their investments and hedging needs through various treasury products, ranging from foreign exchange, money market, derivatives including interest rate swaps and interest rate swap options to structured investment products.

ISLAMIC financial services

The Bank’s subsidiary, Hong Leong Islamic Bank focuses on Shariah compliant commercial banking, Islamic wholesale and investment banking as well as Islamic wealth management.

^[9]

Regional subsidiaries

Hong Leong Bank has been expanding its footprint in the Asian region. HL Bank Singapore, the Singapore Branch is a recognised boutique investment bank offering principally investment banking, private banking and treasury services. The Bank’s branch in Hong Kong also operates a Treasury and Wealth Management business model. It is the first bank in Hong Kong to launch an Islamic banking window. Hong Leong Bank Vietnam Limited commenced green field operations in October 2009. The Bank is the first Malaysian and Southeast Asian bank to be granted a license to incorporate and operate a wholly owned commercial bank in Vietnam. A subsidiary of the Bank, Hong Leong Bank Vietnam Limited is geared towards becoming a locally embedded and full-fledged commercial bank in Vietnam. Hong Leong Bank (Cambodia) PLC commenced operations in July 2013 as a wholly owned subsidiary to carry out full commercial banking operations. The Bank is offering a full range of personal financial services and business banking products. The Bank has a 20% shareholding in Bank of Chengdu Co., Ltd (“Bank of Chengdu”) and is proud to be the first Malaysian bank to make a strategic investment into China. Bank of Chengdu is a leading city commercial bank in Western and Central China with its base in Chengdu, the capital of Sichuan Province. With a network of over 120 branches and outlets, it carries out a full-fledged commercial banking business. In March 2010, the Bank together with Bank of Chengdu, obtained regulatory approval to commence the operations of Sichuan Jincheng Consumer Finance Ltd. Co., a 49:51 joint-venture company. In February 2014, the Bank established a representative office in Nanjing. ^[10] ^[11]

Industrial relations

In 2013, the Bank embarked on the Centers Hubbing and Relocation Exercise which involved 373 Managerial, Executive, Officer, Clerical and Non Clerical employees. By February 2013, all employees affected by the exercise were informed about their relocation and a notice of transfer was issued in June 2013 with an initial transfer date of 18 September 2013. This date of transfer was subsequently deferred until 18 November 2013 to provide affected employees with more time to make the necessary preparations. Prior to the date of transfer, a reminder was issued to all affected staff on 6 November 2013 on the date of transfer effective 18 November 2013. On 18 November 2013, staff who did not report to their new centres were issued a notice of reminder to report for duty accordingly. By 19 November 2013, the Bank and the union were called for a reconciliation meeting by the Director General of Industrial Relations (DGIR) of which the Bank, upon request by the authorities to review the Centers Hubbing and Relocation, reverted to the authorities on 27 November 2013. This was followed by another notice of reminder on the same date to all affected staff to report to their new centres immediately. After the notice provided, staff who continued not to report for duty were issued show cause letters for their explanation on 2 December 2013 for refusing to comply with the Bank’s transfer order. A second reconciliation meeting between the Bank and the union was held by the DGIR on 4 December 2013. As there was no amicable settlement of the trade dispute, the matter was reported to the Human Resource Minister who referred the dispute to the Industrial Court on 6 December 2013. On 13 December 27 employees were issued final show cause letters and were given until 17 December 2013 to provide valid explanations for their absence. On 18 December 2013, employees who were still not able to provide a valid explanation had their employment with HLBB terminated. Since November 2013, several pickets organised by NUBE have been held across the nation in protest and a trade dispute against HLBB over the bank’s rationalisation exercise was lodged by the union to the Industrial Relations Department for conciliation. The union continued to picket until January 2014 despite the trade dispute being referred by the Minister to the Industrial Court at the same period. ^[12] ^[13]

References

External links

Hong Leong Bank Online

FBMKLCI companies of Malaysia

As of 20 December 2013

AMMB Holdings Astro Malaysia Holdings Axiata Group British American Tobacco (Malaysia) CIMB Group Holdings Digi.com Felda Global Ventures Holdings Genting Genting Malaysia Hong Leong Bank Hong Leong Financial IHH Healthcare IOI IOI Properties Group Kuala Lumpur Kepong Malayan Banking Maxis MISC PETRONAS Chemicals Group Petronas Dagangan Petronas Gas PPB Group Public Bank RHB Capital SapuraKencana Petroleum Sime Darby Telekom Malaysia Tenaga Nasional UMW Holdings YTL Corp

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