KUCHING: Sarawak’s commercial banking sector is slated to see more competition for market share with global banking player HCBC pulling out its commercial banking arm from the state.
To recap, HSBC Malaysia Bhd (HSBC Malaysia) is winding down its commercial banking business in the state as a result of its wide-ranging commercial review of the bank’s operations in Malaysia.
Industry observers believe that this move will open up more market share in Sarawak, based on the consistent growth of the sector nationwide on a year-on-year (y-o-y) basis.
This was despite a slight dip in manufacturing-related sectors in 2013 mainly due to external factors and slowing exports.
CIMB Group deputy chief executive officer and head of Consumer Banking, Renzo Viegas told The Borneo Post that the present overall growth trajectory for the commercial banking sector will continue into 2014.
This, he said, was driven primarily by domestic demand as well as the services and construction sectors.
“We should also see a gradual recovery in the manufacturing and export related industries due to relatively stronger global demand going forward,” he highlighted in his statement to The Borneo Post.
When asked of CIMB hoped to garner more market share in commercial banking in Sarawak, Viegas said as a long-time stakeholder in Sarawak’s business community, it was important that CIMB extended its support to all companies.
“We would always welcome the opportunity to have discussions with businesses who are seeking additional or alternative financial solutions.”
Currently, CIMB has full-fledged Business Centres located in Kuching and Kota Kinabalu with Business Desks in Sibu, Miri, Tawau and Sandakan which operate alongside 29 retail branches in East Malaysia.
To note, CIMB Commercial Banking and Enterprise Banking collectively provide banking services to about 40 per cent of Malaysia’s SME market.
“As mentioned before, loans growth for the manufacturing and export related industries have slowed in 2013. To some extent, domestic-driven industries and the construction and real estate sectors have compensated, and the overall portfolio is still growing strongly.”
In present circumstances, where global economic recovery is slow and often uncertain, Viegas said it was important for banks to be extra vigilant on asset quality.
“Over the years, CIMB Commercial Banking has established strong portfolio management infrastructure and early alert mechanisms to closely monitor its loan exposures, and we do not see major impediments to sustained growth in Q42013 and 2014,” he explained.