Hong Leong Bank to expand domestic footing

With acquisition of EONCap, the lender has greater distribution channels with additional 300 branches nationwide.

Hong Leong Bank Bhd is expected to strengthen its domestic footing and have greater distribution channels of over 300 branches with the acquisition of EON Capital Bhd (EONCap).

“EON Bank Bhd's (a wholly-owned subsidiary of EONCap) strength is in credit cards, personal loans and hire-purchase.

“There are two-pronged benefits of this takeover where the enlarge size of Hong Leong would also serve as a catalyst for the banking group to expand in the region,” a banking analyst told StarBiz.

Hong Leong completed the takeover of EONCap last week at RM7.30 per share ($2.43) or RM5.06bil ($1.68 billion), excluding the special dividend of 45 sen ($0.14) a share.

The combined entity of Hong Leong and EON Bank made it the fourth largest banking institution in Malaysia with asset size of over RM140bil ($46.63 billion), 1,200 self service terminals and 12,000 employees.

HwangDBS Vickers Research expects the acquisition to be earnings accretive by 5% for Hong Leong in financial year 2012 ending June 30, after incorporating EONCap's earnings contribution (annualised for FY11 and FY12).

View the full story in The Malaysian Star.

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