RHB to further expand ‘Easy’ banking outlets

RHB’s ‘Easy’ banking outlets contributed close to six per cent of new loans drawn down over the past nine months.

According to OSK Research, the group started with just two ‘Easy’ banking outlets at the beginning of 2010. Given its relatively low start-up cost structure and pent-up demand, the group had expanded the number of outlets to 100 as at the third quarter of the financial year 2010 while bringing down its costs to income ratio from 42 per cent to 40 per cent.

OSK Research highlighted that most of the loans from RHB Capital ‘Easy’ outlets were small, individual Amanah Saham Bumiputera-linked consumer loans that were secured against liquid government-linked ASB funds, which lowered its risk profile.

The research house stated that the success of its ‘Easy’ outlets was reflected in the group’s enlarged 14.4 per cent market share of the ASB market compared with 9.4 per cent as at end-2009.

OSK Research pointed out that the group’s ability to innovate and develop a relatively higher yielding and under-penetrated banking system via a low-cost distribution channel had certainly paid off, as its ninth month of the financial year 2010  return on equity of 15.1 per cent had already beaten consensus’ financial year 2011 expectations.

The research house stated that given its aggressive rollout plans in expanding the number of ‘Easy’ outlets to 400 by 2012 from the current 120 and its ability to expand the distribution of higher ROE fee income banking products via its enhanced distribution network was likely to lift the group’s ROEs in the longer term, said the Borneo Post.