EON Bank can stand alone without merger offer: CEO

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KULA LUMPUR: EON Bank Bhd is in a strong position as a financial group and can stand alone with or without merger or acquisition offers, says group chief executive officer Michael Lor.

HIGHER TARGET: File photo shows a Proton Savvy on display. Proton Holdings Bhd aims to sell 165,000 Proton cars this year from 148,027 units last year.

HIGHER TARGET: File photo shows a Proton Savvy on display. Proton Holdings Bhd aims to sell 165,000 Proton cars this year from 148,027 units last year.

“We are in a strong position today to grow, (regardless of) whether there are offers or not. As far as the management is concerned, it is business as usual for us,” he said after unveiling EON Bank’s wealth management campaign for 2010 here yesterday.

Lor said the bank performance indicators improved steadily over the last 12 months as a result of its transformation programme, aggressive promotions and marketing strategy.

Over the last 12 months, he said, the bank’s credit card segment grew in excess of 20 per cent, hire purchase by three per cent, loan loss coverage rose to 86 per cent from 56 per cent and gross non-performing loans improved to two per cent from four per cent.

“Based on these growth numbers, the value of the company has significantly appreciated. That’s why the board has taken the stand that the Hong Leong Bank offer has significantly undervalued the EON Group,” he said.

Last month, EON Capital Bhd, the holding company of EON Bank Group, received Bank Negara’s approval to start merger talks with Hong Leong Bank Bhd.

If the merger had materialised, EON Bank Group would be the fourth largest bank in the country behind Maybank, CIMB and Public Bank.

Hong Leong Bank Bhd had offered to acquire the entire assets and liabilities of EON Capital for RM4.9 billion cash or RM7.10 per EON Cap share.

Hong Leong Bank obtained approval to enter into talks with EON Capital’s two major shareholders — businessman Rin Kei Mei and Sarawak billionaire Tan Sri Tiong Hiew King.

Both owned a combined indirect stake of 31.7 per cent held via Kualapura Sdn Bhd and Lintang Emas Sdn Bhd with 15.4 per cent and RH Development Sdn Bhd with 16.3 per cent.

Khazanah Nasional Bhd, the government’s investment arm, with 10 per cent stake, had agreed to sell its equity to Hong Leong Bank Bhd.

The Employees Provident Fund (EPF) was also prepared to sell its 10.7 per cent stake.

Other shareholders of EON Capital include Hong Kong-based Private Equity Fund Primus Pacific Partners which held 20.2 per cent stake.

EON Cap is the holding company of EON Bank, which has a network of 140 branches, while Hong Leong Bank is the country’s sixth largest lender, with 199 branches and sales centres.

It was reported earlier the combined assets of Hong Leong Bank and EON Capital worth RM121.41 billion would enable the grouping to overtake assets of the country’s fourth biggest lender, RHB Capital Bhd, which stood at RM110.5 billion. — Bernama