HSBC wants to build lifetime bond

HSBC Bank Malaysia Bhd's new CEO Irene M. Dorner plans to create a sustainable relationship between the bank and its customers.

FOR HSBC Bank Malaysia Bhd, growing organically is the way forward, with areas such as Islamic banking, takaful and SME (small and medium-sized enterprises) offering huge growth potential that could rev up earnings for the bank in the future.

Strengthening and broadening of customer relationships in the highly competitive banking sector is key, and that is going to be a major focus area for newly appointed deputy chairman and chief executive officer Irene M. Dorner.

She said the future was about sustaining customer relationships over a lifetime, be it for retail or corporate customers.

“In the past, it was all about pushing products to customers. But the trends are fast changing, as the need to understand the customer and his needs has become increasingly important.

“That can be addressed by engaging more with the customers to enable us to help meet their lifetime needs,’’ she said in her first media interview since taking on the new post on June 1.

She explained that a customer had different needs at different times and HSBC intended to provide solutions at all points. That, to her, is a sustainable way of relationship banking.

“It can be a retail customer or a corporate client and even the SMEs which we hopefully can help all the way – to bring them even to the capital markets at some point,’’ she added.

Dorner is the first woman to helm HSBC Bank Malaysia since it was set up 123 years ago, succeeding Datuk Zarir J. Cama who has a new role in HSBC Holdings plc in Britain.

For the first quarter ended March 31, 2007, the bank reported nearly a 49% jump in pre-tax profit to RM308mil. The bank is expected to announce its mid-year results soon.

In the future, she said, there would be “enormous issues within the banking industry which is hugely competitive.

Customer acquisition would become more aggressive. What would differentiate one bank from the other is essentially the speed of delivery and customer service.

“Customer experience is nothing if within an organisation, things are not right,’’ she said.

She believes that engaging with the employee is as important as engaging with the customer.

A major challenge she and other bank CEOs face in Malaysia is retaining talent. According to her, many Malaysians are lured by good jobs overseas and many institutions are finding it difficult to attract and retain the right talent.

On Islamic banking, she said HSBC Bank via HSBC Amanah was actively pursuing cross-border deals.

HSBC Amanah is also being shaped into an Asia-Pacific regional hub of Islamic banking for the HSBC group. It hopes to get a licence from Bank Negara that will allow HSBC Amanah to become a subsidiary and do much more as an Islamic window of HSBC Malaysia.

While HSBC is hopeful, Dorner is quick to say that “we are quite content to wait.’’

HSBC is the first foreign bank based in Malaysia that applied to Bank Negara for a full-fledged Islamic banking licence.

It is very likely that other foreign banks will follow suit as the Islamic banking sector offers huge potential.

If HSBC Amanah does get the licence, the plan is to have at least 15 HSBC Amanah bank branches in the country over a few years. Planning for the first batch of five branch openings could take six to nine months and the rest may be opened a year later.

HSBC Amanah's global hub is based in Dubai.

Turning to the takaful business, she said: “There is massive opportunity because everyone needs to have protection. We will be doing even more in connection with other banks and insurance companies to build products for the various sectors.’’

On growing the SME business, she said that it would continue to be a major area of growth for the bank with services to SMEs provided in all its branches.

Asked to comment on Malaysia’s liberalisation of its financial services sector, she said: “It was done at the right time and at the right speed, as it had opened up commercial and trade opportunities, including Islamic banking.

“With competition, the level of service is getting better and all this has resulted in the consumer getting a better deal.’’

To her, further consolidation is “inevitable’’ in the sector. As for HSBC, it is “regularly approached (by other companies) worldwide.”

“We never say no and always look at what is offered. Right now we are looking at growing organically in all the segments, including our Islamic banking sector.”

HSBC Bank Malaysia was recently named the best retail bank in Malaysia in The Asian Banker Excellence in Retail Financial Services Award 2007 for its outstanding performance in 2006.

source:biz.thestar.com.my