Overview of OCBC Bank and the Banking Industry in Malaysia

OCBC Bank is a publicly listed financial services organization with its head office in Singapore. It was formed in 1932 through the consolidation of three banks and has assets of more than 224 billion SGD. OCBC Bank's global network has grown to comprise subsidiaries, branches, and representative offices in 18 countries and territories. It has retail banking subsidiaries in Malaysia, Indonesia, Hong Kong, and China. The study is aimed at the banking industry in Malaysia and analyzes the OCBC bank and its financial system. The banking industry in Malaysia saw encouraging growth for total loan applied and loan approved for the 10-month ended October 2017. Starting from 1st January 2018, the new accounting standard – MFRS 9 has kicked into effect which is likely to post a greater impact on the banking sector by increasing the impairment losses provision.

Introduction
Oversea-Chinese Banking Corporation Limited, abbreviated as OCBC Bank. It is a
publicly listed financial services organisation with its head office in Singapore. OCBC Bank
was born out of the Great Depression through the consolidation of three banks in 1932 - the
Chinese Commercial Bank Limited (incorporated in 1912), the Ho Hong Bank Limited
(incorporated in 1917) and the Oversea-Chinese Bank Limited (incorporated in 1919).
Although publicly listed, OCBC Bank's largest shareholder is the Lee Group of
Companies. Lee Kong Chian and his son Lee Seng Wee also served as OCBC chairman in
the 1930s and 1990s respectively. OCBC Bank has assets of more than 224 billion SGD.
Based on Bloomberg, in 2011 OCBC is the number one of the world's strongest $100 billion
assets banks. It is Singapore's oldest local bank.
The "Oversea-Chinese" usage leads many to believe mistakenly that the bank's name is
misspelled, but this is the correct traditional spelling. The bank's global network has grown to
comprise subsidiaries, branches, and representative offices in 18 countries and territories. It
has retail banking subsidiaries in Malaysia, Indonesia, Hong Kong, and China, and branches
in China, Hong Kong, Japan, Australia, the UK and US. OCBC's Indonesia subsidiary, Bank
OCBC NISP, has 630 branches and offices. In this report, we will analyze the OCBC bank
and its financial system.
The study is aimed at banking industry in Malaysia, background of the company, type
of financial institution and reasoning of this categorization, type of bank and reasoning of this
categorization, items on the balance sheet for year 2016, services and products offered, recent
developments in the respective bank, the type of banking regulations being used, very brief
background of the relevant banks, reasons for merger or acquisition, and benefits and losses
after the merger or acquisition.

Banking industry in Malaysia
In the research for year 2018, on average, the share price of the local banking players
surged about 17%, with the two banking giants – Malayan Banking Berhad and CIMB Group
Holdings Berhad rising close to 24% and 51% respectively. As the banking industry accounts
for about 32% of weightage in FBMKLCI Index, the sector’s prospect would provide
harbinger of the performance for FBMKLCI Index.
PERFORMANCE OF BANKING SECTOR
Banks' Net Profit Growth
HEALTHY LOAN GROWTH

Overall, banking sector saw encouraging growth for total loan applied (+4.2%) and loan
approved (+7.5%) for 10-month ended October 2017 (see figure 2). On the individual bank
level, CIMB Group Holdings Bhd, Malayan Banking Bhd and AMMB Holdings Bhd
registered the strongest loan growth of 9.0%, 7.2% and 5.6% y-o-y respectively (see figure
3). The positive loan growth for Malaysia’s banking industry was a result of the Banks’
leniency in approving loan applications. From figure 4, one can notice that the quarterly loan
approved posted three consecutive quarters of positive growth rate after experiencing 4
continuous quarters of contraction in 2016 as banks seem to have loosened up in their lending
due to the strengthening economic condition in Malaysia. Given the rather pronounced loan
growth, banks’ loan portfolios are likely to expand at a respectable pace which would allow
them to garner more interest income in years ahead.
FIGURE 2: TOTAL LOAN APPROVED AND APPLIED
FIGURE 3: TOTAL LOAN GROWTH FOR RESPECTIVE BANKS

FIGURE 4: QUARTERLY LOAN APPROVED
Starting from 1st January 2018, the new accounting standard – MFRS 9 which required
amendments to the following areas such as impairment, hedge accounting, classification and
measurement for financial instruments has kicked into effect. To a certain extent, the
adoption of the new standard is likely to post a greater impact on the banking sector by
increasing the impairment losses provision.

However, at this early stage, no one could determine exactly what are the impacts on banks’
income statement and balance sheet but the increase in impairment losses provision will be
charged to retained earnings, hence it might have a lesser impact on banks’ earnings as
compared to their balance sheet. As such, one should not overly concern about this as most of
the local banks have strong buffers, with the Tier 1 capital ratios well above the minimum
capital ratio (6%) required by the central bank.
BANKS' TIER 1 CAPITAL RATIO
Background of the company
OCBC Bank is the longest established Singapore bank, formed in 1932 from the
merger of three local banks, the oldest of which was founded in 1912. It is now the second-
largest financial services group in Southeast Asia by assets and one of the world’s most
highly-rated banks, with an Aa1 rating from Moody’s. Recognised for its financial strength
and stability, OCBC Bank is consistently ranked among the World’s Top 50 Safest Banks by

Global Finance and has been named Best Managed Bank in Singapore and the Asia Pacific
by The Asian Banker.
OCBC Bank and its subsidiaries offer a broad array of specialist financial and wealth
management services, ranging from consumer, corporate, investment, private and transaction
banking to treasury, insurance, asset management and stockbroking services.
OCBC Bank’s key markets are Singapore, Malaysia, Indonesia and Greater China. It
has more than 600 branches and representative offices in 18 countries and regions. These
include over 330 branches and offices in Indonesia under subsidiary Bank OCBC NISP and
over 100 branches and offices in Hong Kong, China and Macao under OCBC Wing Hang.
OCBC Bank’s private banking services are provided by its wholly-owned subsidiary
Bank of Singapore, which operates on a unique open-architecture product platform to source
for the best-in-class products to meet its clients’ goals.
OCBC Bank's insurance subsidiary, Great Eastern Holdings, is the oldest and most
established life insurance group in Singapore and Malaysia. Its asset management subsidiary,
Lion Global Investors, is one of the largest private sector asset management companies in
Southeast Asia.
After being actively involved in offering Islamic banking products and services since
1995, OCBC Bank launched its wholly-owned Islamic banking subsidiary, OCBC Al-Amin
Bank Berhad, on 1 December 2008. OCBC Al-Amin offers products and services which are
developed based on the applicable Shariah contract and with the endorsement of the Shariah
Advisory Committee to meet the requirements of both Muslims and non-Muslims alike.
Features such as fixed financing rates and profit sharing have attracted a growing group of
loyal customers who wish to draw from the Islamic principles of fairness, caring and
accuracy.

Type of financial institution and reasoning of this categorization
OCBC Bank is depository and non depository financial institution.
Depository: OCBC Bank accepts deposit from savers.
Non depository: OCBC Bank raise fund by selling security. They are also selling insurance to
their clients.
One further feature that distinguishes monetary financial institutions from other financial
corporation’s lies in the nature of financial contracts:
1. Discretionary: Savers/depositors can make discretionary decisions concerning how
much money they want to hold and for how long the period. Depositors are free to decide the
frequency and amount of their transactions.
2. Contractual: Holding assets from other financial institutions requires a contract
which specifies the amount and frequency of the flow of funds. For example, the monthly
contributions to a pension fund or to an insurance provider are normally fixed at the first
stage of applying.
Type of bank and reasoning of this categorization
Consumer banking, business banking, investment banking, global treasury,
investment management and Islamic banking are the comprehensive service in OCBC Bank.
In addition, the OCBC Group has diverse subsidiaries that are involved in insurance,
financial futures, regional stockbroking, trustee, nominee and custodian services, property
development and hotel management.
Consumer banking is also known as retail banking or personal banking. Consumer
banking offers financial services to consumers usually in small scale nature. These range
from providing convenience in financial transactions and deposits, home loans, credit cards,

personal overdraft, commercial property loans and premier banking to investment
opportunities and insurance. OCBC Bank also has a leading presence in several segments,
including homes loans and wealth management. A variety of different types of banks offer
personal banking services, these include: commercial banks, saving banks, co-operative
banks, building societies, credit unions, and finance houses.
Business banking is also known as commercial banking and occurs when a bank, or
division of a bank, only deals with business. The business banking of OCBC Bank services
small and medium-sized enterprises (SMEs), large corporates, real estate companies,
government bodies and institutional customers. It offers clients a whole range of products and
services from traditional credit facilities and cash management services to more sophisticated
capital raising arrangements in the public debt market. Note that this distinction is not clear-
cut and some banks do not explicitly distinguish between ‘business banking’ and ‘corporate
banking’.
Investment banking act as the intermediary of between securities issuers and
investors. It works closely with the Business Banking division to develop and customize
products and services to meet customers' specific requirements. An investment bank may also
assist companies involved in mergers and acquisitions (M&A) and provide ancillary services
such as market making, trading of derivatives and equity securities, and FICC services (fixed
income instruments, currencies, and commodities).
Islamic banking based on non-interest principles. Islamic Shariah law prohibits the
payment of riba or interest but does encourage entrepreneurial activity. As such, banks that
wish to offer Islamic banking services have to develop products and services that do not
charge or pay interest. Their solution is to offer various profit-sharing-related products
whereby depositors share in the risk of the bank’s lending. After being actively involved in
offering Islamic banking products and services since 1995, OCBC Bank launched its wholly-

owned Islamic banking subsidiary, OCBC Al-Amin Bank Berhad, on 1 December 2008.
OCBC Al-Amin offers products and services which are developed based on the applicable
Shariah contract and with the endorsement of the Shariah Advisory Committee to meet the
requirements of both Muslims and non-Muslims alike.
Transaction banking is the set of instruments and services that a bank offers to trading
partners to financially support their reciprocal exchanges of goods, monetary flows or
commercial papers. Transaction banking of OCBC Bank offers transaction-related services
such as cash management and trade finance to SMEs, large corporations, financial institutions
and government entities. The trade specialists help customers to structure trade solutions for
business banking customers’ import or export needs, while cash management specialists help
streamline operations and optimize cash flows. With state-of-the-art electronic delivery
systems, customers are able to make payments and prepare trade documents with ease, speed
and accuracy. OCBC has received a number of awards for its transaction banking services.
OCBC Bank’s Balance Sheet for year 2016

The table above show the balance sheet of OCBC Bank for year 2016. Balance sheet
record the Assets and Liabilities & Shareholders’ equity of OCBC Bank. Assets are resources
that are formed or controlled by an enterprise or that are expected to give economic benefits
to the enterprise. The Total Cash and Cash Equivalents from Banks is 7,449 MYR millions in
2016 year. Deposits and placements with banks and other financial institutions in 2016 is
2,235 MYR millions, which is about double amount of previous year. Meanwhile, statutory
deposits with Bank Negara Malaysia is 1,673 MYR millions. The financial investments

available-for-sale in 2016 is recorded 8,077 MYR millions that is lesser compared to 2015.
Loans are the major asset for banks. They earn more interest than the amount they have to
pay on deposits, and, thus, are a major source of revenue for a bank. The loans, advances and
financing of OCBC Bank is 57,799 MYR millions in year 2016. Investment in subsidiaries is
558 MYR millions. For the property and equipment is recorded 174 MYR millions and the
Other Assets is 464 MYR millions. Deferred tax assets are 22 MYR millions in 2016. The
Total Assets for year 2016 of OCBC Bank is recorded 81,981 MYR millions.
The so-called liabilities, is due to past transactions or matters caused by the company,
the existing debt, the debt needs of enterprises in the future to transfer assets or provide
services to be liquidated, resulting in the future outflow of economic interests. Shareholders'
equity refers to the rest of the company's total assets, which is also referred to as net assets.
Shareholders' equity is a very important financial indicator, which reflects the company's own
capital. When the total amount of assets is less than the total amount of liabilities, the
company is in a state of insolvency, when the company's shareholders' equity will disappear.
If the bankruptcy liquidation happens, the shareholders will have nothing. The deposits from
customers are recorded 60,988 MYR millions in year 2016 while deposits and placements of
banks and other financial institutions are 8,977 MYR millions. Besides that, bills and
acceptance payable in 2016 is 123 MYR millions. Tax payable and zakat is 11 MYR
millions, about half of the amount in 2015. Other liabilities are recorded 823 MYR millions.
Total liabilities in 2016 is 76,147 MYR millions. The share capital of OCBC Bank in 2016 is
287 MYR millions and the reserves are 5,546 MYR millions. The Total Equity is 5,834 MYR
millions in year 2016 and the total liabilities and equity are recorded 81,981 MYR millions.
Types of services and products that offered by OCBC Bank

OCBC Bank is now offering a wide range of financial services. There are credit cards,
debit cards, deposits, loans, investment, insurance and Islamic Banking.
Credit Cards
Firstly, OCBC bank’s credit cards have categorized into 5 cards, including OCBC 365
MasterCard, OCBC Titanium MasterCard, OCBC Great Eastern Platinum MasterCard,
OCBC Cashflo MasterCard and OCBC World MasterCard. Every credit card requires
cardholders to meet the age limitation which is 21 years old and above.
OCBC 365 MasterCard is the card that does not require an annual fee for the first
three years, but only applicable to first time OCBC Credit Card customers and customers
who last held an OCBC Credit Card more than 12 months ago, and no cap on rebates. To
apply OCBC 365 MasterCard, the cardholder must have an annual income at least
RM24,000. When customer spends up to RM1,000 every month with OCBC 365
MasterCard, there will be 1.0% rebate on all retail purchases. When customer spends above
RM1,000 with OCBC 365 MasterCard, customer is able to earn 0.5% rebate on all
subsequent retail purchases. The rebates are automatically credited into customer’s card
account and will be reflected in monthly statement. Customer is also able to enjoy a 20-day
interest-free period from the billing date on all retail purchases.
OCBC Titanium MasterCard is also a card that does not require an annual fee and no
cap on rebates without any minimum spend required. Similar to OCBC 365 MasterCard, the
cardholder must have a minimum annual income RM24,000. OCBC Titanium MasterCard
has an everyday deal, which means it rebates 7 days a week, and no exclusions that customer
can get the rebates on all the retail spend. Customer can earn 1% rebate on online transaction
and overseas spend, and 0.1% on all other retail spend when the customer uses the OCBC
Titanium MasterCard. Same as OCBC 365 MasterCard, the rebates are automatically credited
and reflected in statement. There is also an interest-free period for customers like OCBC 365

MasterCard. For the convenience of customers, there is a 24-hour concierge which is a
personalized service that answers travel queries, makes restaurant reservations, and books
tickets to concerts and performances.
OCBC Great Eastern Platinum MasterCard also does not require annual fee, has the
24-hour concierge and interest-free period. The cardholder of this card must be a Great
Eastern policyholder who has a minimum annual income of RM24,000. The special features
of this card is there is a complimentary RM100,000 insurance coverage on death or total and
permanent disability for principal cardholder for the first year. To improve convenience of
customer, there is a 12 months’ Auto Instalment Payment Plan for Great Eastern Life and
General Insurance premium of RM2,200 and above via Auto Debit.
OCBC Cashflo MasterCard is a smart cash management card which the instalment
payment is splitted into several months automatically. When customer spends between
RM500 to RM1,000 in retail transactions, the instalment payment is splitted into 3 months.
When the customer spends above RM1,000, the instalment payment is splitted into 6 months.
When the customer spends RM2,200 and above in Great Eastern or Overseas Assurance
Corporation insurance premium transactions, the instalment payment is then splitted into 12
months. To enjoy the benefit of this card, the cardholder must be 21 years and above, and has
at least RM24,000 in annual income. There is no annual fee required, no cap on rebates
without any minimum spend and no exclusions to get rebates. Cardholders can earn 0.5%
rebate on all retail spend by using OCBC Cashflo MasterCard and enjoy the rebates every
day. Similar to the previous cards, the rebates are credited into card account and reflected in
monthly statement. There are also the benefits of 24-hour concierge and interest-free period
for cardholders.
OCBC World MasterCard requires the cardholder to have the minimum annual
income of RM100,000. No annual fee is required, no cap on rebates without any minimum

spend and no exclusions to get rebates while using this card. The cardholder will earn 1.2%
cash back the first spending of RM1,000 on all retail purchases and 0.6% rebate on all
subsequent retail purchases. When the cardholder charges his or her full airfare to the OCBC
World MasterCard, the cardholder is able to enjoy a complimentary travel insurance which
includes free personal accident insurance coverage up to RM2 million. The cardholder also
gets double free access to the KLIA Plaza Premium Lounge every year. Other benefits of
OCBC World MasterCard include 24-hour concierge and interest-free period.
Debit Cards
Secondly, there are two types of debit card offered by OCBC Bank which are Debit
Card and Premier Debit Card. Both of the debit cards provide cash withdrawal and flexibility
to link the account. Debit cards of OCBC Bank are also accepted worldwide. Debit cards take
control of cardholders’ finance by setting daily transaction limits based on their comfort
level. Debit cards also allow cardholders to opt in or out for Overseas and Card-Not-Present
Transactions as these features are blocked by default for security purposes. The debit cards
also have a tighter security as they equipped with secure Chip & Pin technology, secure
online transactions with One-Time Password and cardholders will receive SMS notifications
for transactions.
Deposit Accounts
Next, the deposit that OCBC Bank provide in different accounts are Saving Account,
Starter Savings Account, MoneyMax Savings Account, Basic Current Account, 360 Account,
EasiSave Account, Young Savers Account, SmartSavers Account, MYR Fixed Deposit,
Foreign Currency Account, Foreign Currency Fixed Deposit and Foreign Currency Call
Account. All depository accounts are insured by PIDM.
Saving Account is the accounts that earn interest daily with monthly statements.
Saving Account can be further categorized into 360 Account, Smart Savers Account and

EasiSave Account. 360 Account is the ordinary account with extraordinary rates. RM500 is
needed as an initial deposit for opening a 360 Account, no minimum balance is required and
the interest rates up to 4.1% per annual. SmartSavers Account is a regular savings account
with higher returns, which enable customers to enjoy 2.8% annual interest by saving deposit
RM1,000 monthly into SmartSavers Account with no withdrawals. If a single withdrawal is
made within the month, customers can just only earn 0.25% annual interest. There are some
requirements to open SmartSavers Account which are initial deposit of RM200 and RM20
minimum balance in the account. EasiSave Account, which also known as Basic Savings
Account, is a basic facility ideal for those opening their very first Savings Account. The
features and benefits of opening this account is to earn interest on every Ringgit, the interest
is calculated daily and paid half-yearly. The interest rate of this deposit is 0.25% p.a. The
Monthly Statement is provided to keep track of the account holder’s finances. A Low Initial
Deposit of RM20 is taken to open the account. However, OCBC Bank requires RM150 for
foreigners to open this account. This account also requires a minimum RM20 balance in
account. There is no monthly service fee charged. Due to the nationwide branches, 10,000
ATMs at nationwide and OCBC Online Banking make EasiSave Account have an easy
access. Malaysian citizens, Malaysia PRs and foreigners from 18 years old can create the
account. For children ages of 11 and below, the in-trust accounts can be opened in the parent
or guardian’s name.
Starter Savings Account is an account which provides higher interest rates when
account holders do not make withdrawals. A minimum initial deposit of RM4,000 is required
to open the account. When customers deposit below RM1,000 every month, 2.5% is
rewarded if there is no monthly withdrawal and 1.25% is provided if there is monthly
withdrawal. When customers deposit between RM1,000 to RM2,999.99, the interest rates are
2.6% if no monthly withdrawal and 1.3% if there is monthly withdrawal. By depositing

RM3,000 and above, 2.9% is awarded without monthly withdrawal and 1.45% is given with
monthly withdrawal. This account requires a minimum RM1 balance in account.
Young Savers Account, a savings account tailored for children below the age of 18.
RM500 is required to open Young Savers Account, but it is just RM1 for students under the
National School Adoption Programme to open the Young Savers Account. With the first
RM50,000, the account holders can earn a high savings interest of 2.9% p.a., for the balance
range above RM50,000, the account holders will be paid an interest rate of 0.30%p.a. The
children below 18 years of age have the eligibility to open this account but they must be
accompanied by their parent or legal guardian who is above the age of 18. Similar to
EasiSave Account, the interest is calculated daily and paid semiannually. The account holders
are also able to get 5% bonus interest if no withdrawals are made within a year. There is
another benefit for account holder which is the cash awards. Account holder who is doing
well in public examinations will be rewarded. Account holder who graded 5A and above in
UPSR is rewarded RM50, 7A and above in PT3 is rewarded RM100, and 8A and above in
SPM is rewarded RM150 under the conditions of the account must be opened more than 1
year and results must be submitted within 2 weeks from the announcement date. To enable
the account holders to manage their account easier, monthly statement are provided.
MoneyMax Account is another saving account provided by OCBC Bank. A low
initial deposit amount of RM250 is needed for opening the account. If customers have
Rm100,000 and below amount in account, 0.25% p.a. is provided. Interest of 0.35% p.a. is
given when the amount in account is up to RM500,000. The account which has amount above
RM500,000 is able to earn 0.95% p.a. The interest is calculated daily and credited half-
yearly. Furthermore, there is a 5% bonus interest on interest earned during the year if account
holders increase their saving by RM50,000 and above from the previous year.

Basic Current Account, an account which is the ideal account for those who opening
their very first Current Account. A Low Initial Deposit of RM500 is taken to open the
account. The monthly e-statement to keep track of the account holder's finances and
unlimited cheque will be provided in Basic Current Account. Due to the nationwide branches,
10,000 ATMs nationwide and OCBC Online Banking make Basic Current Account has an
easy access. Malaysian citizens, Malaysia PRs and foreigners from 18 years old can create
the account. An introducer is required to open this account.
MYR Fixed Deposit is the perfect beginning for long term savings. This account helps
you to decide your tenure, and how you want the interest to be paid. Account holders can
choose the terms from 1 to 60 months for FD placement. With a minimum amount of
RM5,000 for FD placement of 1 month, the account holder will be paid an interest rate of
2.9% p.a. The account holders will also be paid an interest rate of 2.9% for the minimum of
amount of RM1,000 for FD placement of 2 months, 3% p.a. for of 3 months, 3.1% p.a. for 4
to 5 months, 3.15% p.a. for 6 months, 3.25% p.a. for 7 to 12 months, 3.3% p.a. for 13 to 17
months and 3.35% p.a. for 18 to 60 months. It is applicable for Malaysians, Malaysian
permanent residents, non-residents and corporations. Malaysians, Malaysia PRs and
foreigners who aged 18 years old and above are qualified to apply for this account. An
overdraft facility is provided to give quick access to funds as and when the account holders
need it.
Foreign Currency Account enables account holders to get higher returns on 9 different
foreign currencies. Foreign Currency Account can be further classified into Foreign Currency
Call Account and Foreign Currency Fixed Deposit. Foreign Currency Call Account, the
account for customers to save foreign currency with the option to withdraw anytime. This
account helps to diversify portfolio up to 9 foreign currencies, protect against the exchange
rate fluctuations, avoid double exchange rate conversions for foreign remittances. The

currencies minimum initial deposits are 2,000 AUD, 2,000 CAD, 2,000 EUR, 2,000 NZD,
2,000 SGD, 2,000 USD, 1,000 GBP, 200,000 JPY, and 10,000 CNY. The interest rates of
0.75% p.a. will be paid for AUD; 1.30% p.a. interest rate will be paid for NZD and 0.4% p.a.
interest rates will be paid for CNY. Foreign Fixed Deposit Account is an account which
provided the convenient way to invest in foreign currency. It provides a wide range of
currencies and flexible FD periods up to 12 months. The minimum opening amounts are
10,000 AUD, 10,000 CAD, 10,000 EUR, 10,000 NZD, 10,000 SGD, 10,000 USD, 10,000
RMB, 5,000 GBP and 1,000,000 JPY. The interest rate up to 2.3% p.a. will be paid for
different currencies and different maturities. The interest of Foreign Currency Call Account is
credited monthly while the interest of Foreign Currency Fixed Deposit is credited at maturity.
Besides, a fee of US$20 is charged for Foreign Currency Call Account every 6 months
whereas there are no fees charged by Foreign Currency Fixed Deposit.
Loans
In everyone’s life, there must be a situation when all of a sudden you need a huge
amount of cash, be it for pursuing your dreams, furthering your studies, paying for medical
bills or even buying something that you have been wishing to own for a long time. The
problem arises when you do not have a good amount of money at particular time. However, it
does not simply mean that you have no right to see dreams and to fulfill your desires on time.
There is a solution for these queries. OCBC Bank offers you different varieties of loans
which can be categorized into four dominant groups, which are education loan, overdraft,
home and property loan and other loan services.
OCBC Bank provides OCBC Earn&Learn Education Loan which is study loan that
customers get double amount of pledged Fixed Deposit amount. For example, when a
customer pledged a Fixed Deposit amount of RM50,000, the customer will get RM100,000
education loan. The more the cash is deposited, the wider the education choices customers

have. The RM50,000 Fixed Deposit you pledged to OCBC Bank will earn interest. This is
concept of earning interest by Fixed Deposit and get education loan to study. The maximum
education loan provided by OCBC Bank is RM500,000. To make customers’ repayment
easier, they can stretch their tenure up to 10 years. No legal fees are incurred. Only
Malaysians who are between 23 to 60 years old and have a minimum income of RM7,500 are
eligible to apply this education loan. Only selected Universities or Colleges are eligible for
the OCBC Earn&Learn Education Loan.
Overdraft, which means customers pledge asset to get extra cash, is one of the loans
offered by OCBC Bank. Customers can use Fixed Deposits, unit trusts, property, shares,
single-premium insurance policies and structured investments to secure on overdraft. The
interest is only charged on amount used, depending on collateral pledged.
If you are considering of getting a new home for your family, you can consider OCBC
Bank Home & Property Loans. Home & Property Loans include OCBC Home Loan, My
First Home Scheme, Special Housing Loan Scheme, Overseas Property Financing and
Renovation & Refurbishment Loan.
Home Loan is also known as Standard Housing Loan. The interest is calculated daily
and variable rates pegged to Base Rate (BR). The current Base Rate effective from 2nd
February 2018 is 4.08%. The amount of borrowing is from RM100,000 to 90% of valuation.
Borrowers are able to redraw funds that have been repaid. If the borrower is Malaysian, the
repayment period is up to 35 years or age 70, whichever is earlier. The Home Loan can
include or be converted to overdraft facility. There is also available financing for Mortgage
Reducing Term Assurance (MRTA) premiums. Standing instruction on monthly instalments
is available for customers.
My First Home Scheme is a perfect programme to help the first-time home buyer to
own their first home as My First Home Scheme is up to 100% financing. The amount that can

be borrowed from My First Home Scheme is from RM100,000 to RM500,000 under the
condition of property value between this range. This housing loan can be used for residential
properties either under construction or completed. The repayment period is up to 35 years or
age 65, whichever is earlier. Only Malaysians who are 40 years old and below, a permanent
worker for at least 6 months and the first time to buy house are eligible to apply for My First
Home Scheme. The income requirement for joint application with combined gross income is
up to RM10,000 per month. Single borrower's gross income does not exceed RM5,000 per
month.
Special Housing Loan Scheme is a housing loan designed for low-cost residential
property. Special Housing Loan Scheme finance for Mortgage Reducing Term Assurance
premiums and finance up to RM250,000 in Peninsular Malaysia and RM300,000 in East
Malaysia. The repayment period of borrowers is up to 30 years or age 65, whichever is
earlier. There are free standing instructions on monthly instalments.
Overseas Property Financing is a housing loan to expand investment portfolio for
residential properties in United Kingdom and Australia either in completed or building-
under-construction status. This Overseas Property Financing is only for investment purpose,
not for dwelling. The loan amount that can be borrowed is up to 70%. Throughout the whole
monthly repayment, the loan is MYR-denominated and risk free from foreign exchange risks.
The interest is calculated from date of first release of loan on daily rest basis. Borrowers have
a repayment period of 35 years or up to age 70, whichever is earlier and an option to repay
and withdraw as and when they need to. No processing fee is needed to apply this loan.
Another housing loan is Renovation & Refurbishment Loan, a loan that is used on
renovation for new houses. Borrowers are able to apply up to 30% of standby funds for
renovation, refurbishment and personal contingencies. No monthly or maintenance fees are
required. Borrowers can enjoy a flexible repayment period of 10 years or up to age 70,

whichever is earlier. They also have an option to start instalment up to 1 year after loan
disbursement.
There are also other loan services like Credit Facility (Home Xtra). Credit Facility
(Home Xtra) is a financing option for new homebuyers. It is provided on top of your housing
loan at a maximum amount of RM150,000. No processing fee is collected and there is no
lock-in period in this housing loan. Similar to Overseas Property Financing, the interest
calculation is based on daily rest basis. The repayment period can be as long as 7 years.
Life Insurance Financing for Home Loans is a best choice for those that have had to
pay large down-payments, renovations or other expenses to purchase a home. Customers can
get their annual premium life insurance policy financed which the policy that is used to cover
their outstanding mortgage. The whole-life and term life policies are underwritten by Great
Eastern. The minimum period financed is 5 years. There is no initial out-of-pocket cost in this
loan. This Life Insurance Financing for Home Loans are no applicable to Shariah-based
loans.
Legal, Valuation & Stamp Duty Financing is another loan service provided by OCBC
Bank. When borrowers receive an OCBC home loan, they do not need to pay up-front cash
for fees incurred on the loan documents such as legal fees, valuation fees and stamp duties.
All fees arising from the loan facility can be financed together with their OCBC home loan.
These fees will comprise part of the home loan amount, and will be disbursed to the
appointed solicitors, valuers and stamp duties offices upon the first release of the housing
loan.
Investment
OCBC Bank also provided a wide range of investments which are Unit Trust, Dual
Currency Investments, Equity-linked Convertible Investments, Bonds and Credit-linked
Investments.

Unit Trust, a diverse range of Unit Trust Funds to suit the investor’s investment
objective. A unit trust is a pool of money managed collectively by professional fund
managers. This product helps investors to diversify their investment at a lower cost in
multiple asset classes in various markets. It also helps to diversify the investment risk which
leads to less risky and more consistent returns. Investors have 3 ways to invest in unit trust
which are Lump Sum Investment, OCBC StabiliserProgramme and Monthly Investments.
Lump Sum Investment means one-time investment on a fund and take immediate advantage
of the underlying market. OCBC StabiliserProgramme is a systematic investment programme
that spreads out one-time unit trust investment amount over a 6-month or 12-month period. In
OCBC StabiliserProgramme, investors can select the fund of their own choice, invest
regularly through market fluctuations and take advantage of dollar cost averaging, and they
are guaranteed 3% cash bonus at the end of their investment term. The OCBC
StabiliserProgramme Savings Balance is a deposit and insured by PIDM. Meanwhile with the
method of monthly investments, investors make regular investments from as low as RM100 a
month and even out market risks in the long run. It is very convenient and affordable to the
investor because the investors can start the investment at the initial investment amount of
RM2,000 and able to stop an investment plan without any penalty charges. Investors get to
control by deciding how much they want to invest each month. The money is set aside for
investment regularly and monthly investment sum will be deducted automatically for the
convenience of investors. As the Unit Trust Funds are managed by a team of professional
fund managers whom are well equipped with research, analytical tools and experienced, the
investors can tap into inaccessible markets and enjoy a hassle free investment scheme.
The Dual Currency Investment provides investors with a higher return than regular
Foreign Currency Deposits. Investors can choose from nine different currencies, duration of
investment and their preferred strike price. They can choose a currency pairing namely the

base currency like USD and an alternate currency like EUR for this investment. Moreover,
the investor may receive the principle plus interest earned on the maturity date either the base
or alternate currency at a pre-agreed exchange rate. Investors also obtain the alternative
currency they need at a lower exchange rate relative to the exchange rate on the day they
invest. However, there are some risks in Dual Currency Investments. One of them is foreign
exchange risks associated with politics, economics and current affairs. There is also risk of
losing part of principal if alternative currency returned to investors at maturity continues to
depreciate and investment is terminated before maturity.
Investors are able to earn potentially higher interest from equities in this equity-linked
investment. They are free to choose from more than 70 entities listed on FBM Kuala Lumpur
Composite Index. On maturity, they will receive the principal plus interest credited to their
account depending on the scenario. This equity-linked investment is suitable to investors who
are receptive to receiving investment returns in either base currency or selected underlying
equity at the end of the investment period. This investment product is customized investment
with the flexibility to select your preferred underlying equity and strike price. In other words,
it is an opportunity for investors to purchase shares at a discounted price on maturity of the
Equity-linked Convertible Investment. Yet, investors have to be willing to take on market
risks that can be affected by factors such as underlying equity fundamentals, politics,
economics and current affairs. Another risk is that this is not a principal-protected investment
with the possibility of losing all or part of principal on maturity of investment. If investors
withdraw the investment prior to maturity, they will receive an amount that is substantially
less than the principal amount depending on the prevailing market condition.
Bonds, an investment instrument for the maturity of medium and long term. So, the
investors should be prepared to invest their funds in bond for the full investment tenor.
However, investors may enjoy potentially higher returns than Fixed Deposit when they

enhance their investment with bond. Bonds are issued to raise funds and investors are paid a
fixed interest in return on the principle amount of the bond at a predetermined frequency.
OCBC Bank allows investors a choice between local and foreign currency bonds to earn
regular coupon payments from. The investor will receive the face value when the bonds were
matured. There is also a possibility of capital gains by selling the bond investment if it
appreciates in market value. Of course, high risk, high return. There is no assurance of the
protection against a default by the issuer or guarantor in respect of repayment obligations.
Investors are facing to credit risk where their bond investment may be at risk if the issuer is
unable to make payment or goes into default. Furthermore, interest rate and bond price have a
reverse relationship, hence a rise in interest rates will cause bond prices to fall. By looking at
maturity perspective, the face value amount will only be repaid if and only if bond investment
is held to maturity, otherwise there might be a partial loss to the face value amount.
Credit-linked investment is a security with an embedded credit default swap allowing
the issuer to transfer a specific credit risk to credit investors. This investment product is
designed for investors who have the view that a credit event will not occur on the reference
entity and comfortable with the credit risk of the issuer. Investors enjoy stable income based
on the creditworthiness of strong and solid global names. As long as no credit events occur
throughout investment period, the full principal amount and accrued interest will be payable
upon maturity. Investors are able to capitalize on opportunities to enjoy consistent returns.
Similar to bonds, credit-linked investment has quarterly payouts if another organization or its
credit instrument does not experience a credit event. Another benefit of investing in credit-
linked investment is investors are free from exchange rate risk as the returns are payable in
MYR. Although it is free from exchange rate risk, it contains credit risk of reference entity
and bank. The market value is subject to many factors, including, but not limited to interest
rate yield curve, levels of interest rate volatility and the implied future direction and liquidity

of such factors. If investors withdraw the investment prior to maturity, they will receive an
amount that is substantially less than the principal amount depending on the prevailing
market condition. OCBC Bank also retains the right to terminate the investment early.
Insurance
OCBC Bank also offered insurance to its customer. Insurance is a contract which
protect its policyholder against certain insured event. OCBC Bank will pay an agreed amount
of money as compensation to its policyholder if the insured events occurred. OCBC Bank
offers a variety range of insurance, including life insurance, endowment, cancer protector,
home insurance and travel insurance.
Life insurance offered by the bank is an insurance that protect policyholders’ life and
give them and their family the comfort of protection in the event of death or total and
permanent disability. There are two types of coverage in life insurance offered by OCBC
Bank, which are Term Life Coverage and Whole Life Coverage. In Term Life Coverage,
policyholders enjoy higher protection for their life with affordable premiums. Depending on
the policy, policyholders receive a one-time payout upon death, total and permanent
disability, terminal illness or critical illness during the policy term. They also have flexible
coverage terms to suit their financial needs. By looking in Term Life Coverage, two plans are
offered by OCBC Bank which are MaxMoney Back and 1Malaysia Micro Protection Plan. In
MaxMoney Back, OCBC Bank guarantee that they will refund the premium at maturity if no
claims were made during policy term. The MaxMoney Back covers death or total and
permanent disability and there is an additional benefit equivalent to 200% of sum assured in
the case of accidental death or total and permanent disability. The premium rates are fixed
and policyholders have a flexible coverage terms of 10, 15, 20, 25 or 30 years. Customers
who are between 30 days and 60 years at the next birthday are qualified to apply for
MaxMoney Back Life Insurance. Meanwhile, 1Malaysia Micro Protection Plan is a

renewable term assurance plan with affordable premiums and an easy application process
with simple health declarations which the renewable coverage is up to age 66 years at the
next birthday and affordable premiums from RM10 a month. This protection plan covers
death or total and permanent disability. It also includes hospital income benefit. Customers
who are between 18 and 60 years at the next birthday are eligible to apply for this 1Malaysia
Micro Protection Plan. On the other hands, policyholders enjoy lifelong protection against
death, total and permanent disability in the whole life coverage. Depending on the policy,
policyholders can customize their protection by choosing from a list of supplementary
benefits which include coverage for personal accident & hospital benefits. The only plan that
is offered in whole life coverage by OCBC Bank is MaxVantage. Policyholders will get
guaranteed cash payment of 5% of sum assured every 3 years. The premiums are payable up
to age 54 years at the next birthday and the life coverage is up to age 88 years at the next
birthday. The entry age for this plan is from 30 days to maximum 50 years at the next
birthday. All the insurance plans are underwritten by Great Eastern Life Assurance
(Malaysia) Berhad.
An endowment is a donation of money or property to a non-profit organization, which
uses the resulting investment income for a specific purpose. Most endowments are designed
to keep the principal amount intact while using the investment income for charitable efforts.
The endowment plan that is offered by OCBC Bank is MaxYield. MaxYield is a universal
life endowment plan that provides guaranteed cash payment, guaranteed policy issuance,
guaranteed maturity benefit, guaranteed protection on death and total permanent disability up
to policy maturity and age 69 years respectively. Policyholders have a flexible payment term
that they are free to choose to pay insurance premium for 5 or 7 years. The minimum basic
annual premium for is RM6,000 and maximum is RM150,000. With MaxYield, policyholders
will receive a percentage of their Basic Annualised Premium at the end of each policy year by

way of Guaranteed Cash Payment, providing them with an extra annual income. At the end of
policy year of year 1 to 5, the percentage of basic annualised premium for 5-year premium
payment and 7-year premium payment are both 5%. At the end of policy year of tear 6 to 7,
the percentage are 13% for 5-year premium payment and 5% for 7-year premium payment.
At the end of policy year of year 8 to 13, the percentage are both 13%. In short, 5-year
premium payment will get 129% of basic annualised premium and 7-year premium payment
will get lesser which is 113%. MaxYield offers the flexibility of choosing either 5 or 7 years’
payment term, with 13 years’ coverage. According to OCBC Bank, in 5-year payment plan,
for example, a male policyholder, who is a non-smoker and 40 age in his next birthday, pays
an annual premium of RM20,000 consistently for 5 years. Great Eastern Life will then pay
him the guaranteed cash payment annually. As the information given above, he will get 5% in
the first 5 years and 13% in the remaining years. Also, he will receive maturity benefit after
13 years. By calculation, the total cash payout he will get is
(5%×RM20,000)×5+(13%×RM20,000)×7+RM219,214=RM152,414. Same goes to 7-year
payment plan, if he pays an annual premium of RM20,000 for 7 years, he will then earn
(5%×RM20,000)×7+(13%×RM20,000)×5+RM190,107=RM210,107 from annual guaranteed
cash payment by Great Eastern Life and maturity benefit when his policy matures at the end
of year 13. The minimum age requirement for proposer which is also known as policy holder
is 17 years old, while the minimum age required for life assured is 30 days old attained age
and maximum age is 65 years old.
Cancer protector that is provided by OCBC Bank provides comprehensive cancer
cover for all stages and 100% of Basic Sum Assured or total premium paid without interest,
whichever is higher, will be payable to policyholder. In early stage coverage, including
Carcinoma in situ ("CIS"), Early Prostate Cancer, Early Thyroid Cancer, Early Bladder
Cancer, Early Chronic Lymphocytic, Leukaemia, policyholders will receive 50% of the Basic

Sum Assured, easing their burden to cover the expensive treatment, right from the start.
However, Early Stage Cancer Benefit can only be claimed once and the premium shall
remain the same upon a claim on Early Stage Cancer Benefit. In intermediate and advanced
stage coverage, policyholder will receive 150% of the Basic Sum Assured subject to the
deduction of any previous claim paid for Early Stage Cancer Coverage or total premium paid
without interest whichever is higher. Intermediate stage cancer includes Mastectomy for CIS
Breast and Prostatectomy for Early Prostate Cancer. Whereas advanced stage cancer means
any malignant tumour positively diagnosed with histological confirmation and characterized
by the uncontrolled growth of malignant cells and invasion of tissue. The policy shall
terminate upon death, intermediate stage or advanced stage cancer claim payout, whichever
occurs first. Other than cancer coverage, OCBC Bank provides recovery benefit, death
benefit and maturity benefit in the cancer protector plan. Recovery benefit is a lump sum
RM20,000 per life will be payable for being diagnosed of intermediate stage cancer and
advanced stage cancer, enabling the policyholders to have extra financial support on their
path to recovery. Death benefit means upon death of the life insured, policyholder’s partner
will receive the total premium paid without interest, or cash value, whichever is higher.
Policyholders will also enjoy the maturity benefit which is 100% of the Basic Sum Assured
or total premium paid without interest, whichever is higher, upon maturity of their policy on
the survival of the life assured's age at 80 years next birthday.
Mortgage insurance is term life insurance that provides a lump sum to pay off
policyholders’ mortgage in case of the unexpected. With the range of mortgage insurance
plans, policyholders can keep their dream home and maintain their family's lifestyle, reduce
their family's financial burden and reduce the amount of capital they may lose. They are able
to safeguard their mortgage payments with their choice of 3 plans which are Mortgage Level
Term Assurance (MLTA), Mortgage Reducing Term Assurance (MRTA) and MaxHome

Sure. Mortgage Level Term Assurance (MLTA) is a single-premium reducing term assurance
which helps to pay off the remaining balance of the housing loan should something
unexpected happen to the borrower. The sum assured payable is constant until policy ends.
The borrowers have an option to attach critical illness, accidental death benefit and refund of
premium rider upon policy maturity. The benefit of MLTA is the one-time payment covers
the entire loan duration. Borrowers who are between 17 to 68 years at the next birthday are
qualified to apply for MLTA. Mortgage Reducing Term Assurance (MRTA) is a reducing
term insurance for added protection of borrowers’ home and family. MRTA helps borrowers
and their family avoid serious financial liability such as death or total and permanent
disability by paying off remainder of housing loan if the unexpected happens to the loan
borrower. There is also an option for borrowers to select a “Refund of Premium” rider upon
policy maturity. Same as MLTA, the one-time payment covers entire loan duration and
borrowers age between 17 to 68 years at the next birthday are eligible to apply for MRTA.
On the other hand, MaxHome Sure is a specially designed reducing term assurance plan that
can be tailored to suit policyholders’ needs. Policyholders have a flexible limited premium
payment term of 5 or 8 years and they are free to choose a coverage term of 10, 15 or 20
years to suit their financial needs during the mortgage-paying years. Besides, a guaranteed
premium refund at maturity if the optional refund of premium rider is attached, if no claims
are made during the term of the policy. The premium rates of MaxHome Sure are fixed.
Customers who are between 17 years and 60 years at the next birthday are able to apply for
MaxHome Sure Plan.
For travel insurance, OCBC Bank provides TravelMate which is including two
options for their customer to make decision that suitable for them. They can choose to buy
value plan that provides basic coverage or signature plan that provides enhanced coverage.
The insurance’s medical and compassionate benefits are covering up to RM1,000,000. It also

covers accidental death, permanent disablement, the loss of luggage, travel documents and
money. Flight cancellation, delay, missed departure and other travel inconveniences are also
covered under this insurance. To apply for travel insurance, policyholders and their spouse
must be Malaysians or permanent residents or work permit holders who are legally employed
in Malaysia, and between 18 and 70 years of age. Their children must be aged between 1
month and 18 years old or 23 years old, if they are in tertiary education. They can only
purchase one policy for the same journey, where each trip must begin and end in Malaysia
and where the maximum period for any one journey is 90 days. Also, they must buy travel
insurance at least 14 days before their trip and OCBC Bank will compensate them for
irrecoverable travel and accommodation expenses in the event of unexpected and
unavoidable cancellation of a planned journey.
Islamic Banking
If you are a Muslim and you wish to find a bank which products and services are
compliance to Shariah rule, OCBC Al-Amin may be your choice. The Shariah compliant
products and services offered by OCBC Al-Amin are for Muslims and also non-Muslims.
Just like OCBC Bank, OCBC Al-Amin gives out Debit Card-i and Premier Debit
Card-i. Both of them are worldwide accepted on purchases of goods and services regardless
at shop or through online. Card holders are able to withdraw cash at local and overseas ATMs
for their convenience. They are also flexible to link their account of their choice in order to
pay bills and transfer funds.
For Savings Account-i, they have the selection of 360 Account-i, SmartSavers
Account-i, Aqil Savings Account-i and Imad Young Savings Account-i. Savings Account-i is
a capital guaranteed deposit account. It adopts the Shariah principal of Tawarruq. They
require a low initial deposit from RM20 and depositors are able to earn up to 4.1%.
Moreover, Aqil Savings Account-i is based on the Shariah principle of Qard defined as

contract of lending money by a lender to a borrower where the latter is bound to repay an
equivalent replacement amount to the lender and Bai Al-Sarf.
For Current Account-i, depositors have two options which are Mumtaz Current
Account-i and Wafi Current Account-i. The Current Account-i is a Shariah compliant
checking account. Cheques service is provided when depositors open this account. The
minimum initial deposit for Mumtaz Current Account-i and Wafi Current Account-i are
RM500 and RM50 respectively. Similar to Aqil Savings Account-i, Wafi Current Account-i
is also based on the Shariah principle of Qard where the latter is bound to repay an equivalent
replacement amount to the lender and Bai Al-Sarf (buying and selling of currencies).
For Fixed Deposit-i, which is formerly known as CMGIA-i, offers a fixed profit rate
to help customers plan their wealth better. Customers can choose to deposit a minimum
amount of RM5,000 for 1-month placement or RM1,000 for 2 to 60 months’ placement. They
can also manage their funds in a more flexible way as it has 1 to 60 months’ tenure for
selection. All depository accounts are insured by PIDM.
They also provide several kinds of loans or in other word is financing services in
Islamic Banking. One of the financing service is Manarat Home-i, an alternative to Islamic
Mortgage financing product based on Shariah concept of IjarahMuntahiah bi Al-Tamlik.
Under the structure of IjarahMuntahiah bi Al-Tamlik, the bank purchases the property from
the customer and subsequently the bank leases the property to the customer under the Ijarah
contract. The customer pays the rental to the bank and at the end of the financing tenure, the
bank sells the property at nominal value to the customer. In Manarat Home-i, OCBC Al-
Amin offers three plans including Idaman-i, Impian-i and Warisan-i. Among these, Idaman-i
is similar to My First Home Scheme as they both are designed for those who want to buy
their first home.

OCBC Al-Amin provides Unit Trust-i that allows customer to diversify their investment
into multiple asset classes at a lower cost. Hence, the risk of the investment may be lower and
the return may be higher. The Unit Trust-i funds are managed by a team of expertise fund
manager hence investors can enjoy a hassle-free investment scheme. Investors can choose
lump sum investment which make a one-time investment on a fund and take immediate
advantage of the underlying market or OCBC Al-Amin ARIP-i which is a systematic
investment programme that spreads out one-time Unit Trust-i investment amount over a 6
months’ period.
OCBC Bank provides insurance while OCBC Al-Amin provides takaful. The takaful plans
that are offered including i-Great Raudhah, i-Great Bakti, Group Credit Family Takaful
(GCFT) and Mortgage Reducing Term Takaful (MRTT). All the takaful are underwritten by
Great Eastern Takaful Sdn Bhd. Instead of premium, policyholder pays contribution from as
low as RM90 per month.
Recent development in the respective bank
OCBC Bank is the longest establishes Singapore bank which was formed in 1932
from the merger of three local banks. It was also known as an “International Bank” that
provide cross-border services such as Malaysia, Indonesia and Greater China. It also has
more than 600 branches and representative office in 18 countries and region. In this current
year, OCBC Bank is the second largest financial services group in Southeast Asia by assets
and one of the world’s most highly rated banks, with an Aa1 rating from Moody’s. In
addition, OCBS Bank also achieved the World’s Top50 Safest Banks by Global Finance and
has been names Best Managed Bank in Singapore and the Asia Pacific by The Asian Banker.
The financial performance of OCBC Bank in Malaysia was improved in year 2017. It
achieved net profit after tax of RM707 million for the financial period ended 30 September

2017; a growth of RM60 million or 9.3%. Net interest income increased to RM1 billion; a
RM66 million or 6.7% growth against last year mainly due to lower interest expense on
customer deposits of RM103 million offset by lower loans, advances and financing interest
income of RM80 million following the drop in BNM’s Overnight Policy Rate by 25 basis
point in July last year. Income from Islamic banking operations reduced to RM334 million; a
RM27 million or 7.5% decrease against last year mainly due to a smaller higher yielding
unsecured portfolio. Net fee and commission income rose by RM62 million or 32%
contributed mainly by better unit trust fee income and arrangement fees. Impairment
allowances and provisions reduced by RM50 million or 60.7% mainly due to net collective
impairment allowance written-back of RM35 million and lower net individual impairment
allowance charge of RM25 million.
OCBC Bank in Malaysia also introduced a biometric authentication for business
banking mobile app at 10 April 2017 to cope with it recent development. The launched of the
Business Mobile Banking app enable all of the iPhone users to complete tasks such as
viewing balances for business accounts, current accounts, time deposits and checking the
status of incoming and outgoing funds at the touch of a finger. The app, also known as OCBC
OneTouch which use Apple’s Touch ID technology may allow Malaysian to perform their
account balances and transactional activities by using fingerprint recognition. Thus, the
innovation of the digital and technology may benefit to all of the banking customers because
they do not need to go to bank directly to view their balance and check on their transaction
information. Moreover, business banking customers can share their top priorities are to be in
control of their company’s operating cashflow, to have the assurance that payments are made
and funds received. (Media Release , 2017)
OCBC Bank (Malaysia) Bhd and its subsidiary OCBC Al-Amin Bank Berhad also raised the
interest rates in January 2018. Their base rate (BR), base lending rate (BLR) and base

financing rate (BFR) will be increased by 0.25% and all loans and financing based on BLR
and BFR respectively will correspondingly increase by the same rate. Moreover, all fixed
deposit (FD) board rates will also increase by 0.25% the same day,” it said.
(OCBC to hike interest rates from Friday, 2018)
Respective Regulatory Authority for the Bank
There are 59 licensed financial institution under the regulation of Bank Negara Malaysia.
However, OCBC Malaysia is a foreign financial institution because it is privately owned by
Bank of Singapore. In this case, the regulatory authority of OCBC Malaysia is Bank of
Singapore. Since its incorporation in 1994, OCBC Malaysia has grown to become one of
Malaysia’s largest foreign banks by total assets and non-bank loans.
Its Islamic banking subsidiary, OCBC Al-Amin Bank, was the first Singapore-based Islamic
Bank established in Malaysia in 2008.
As part of the liberalization efforts of the Malaysia Government, locally incorporated foreign
banks in Malaysia including OCBC Malaysia were granted licenses to open new branches
from 2006. This allowed OCBC Malaysia to grow its total network size to over 40 branches,
comprising of more than 30 conventional branches and over 10 Islamic Banking branches up
till today.
Type of banking regulation being used (Basel II or Basel III)
Basel II is an international business standard that requires financial institutions to maintain
enough cash reserves to cover risks incurred by operations. The Basel accords are a series of
recommendations on banking laws and regulations issued by the Basel Committee on
Banking Supervision (BSBS). The name for the accords is derived from Basel, Switzerland,
where the committee that maintains the accords meets.

Basel II improved on Basel I, first enacted in the 1980s, by offering more complex models for
calculating regulatory capital. Essentially, the accord mandates that banks holding riskier
assets should be required to have more capital on hand than those maintaining safer
portfolios. Basel II also requires companies to publish both the details of risky investments
and risk management practices. The full title of the accord is Basel II: The International
Convergence of Capital Measurement and Capital Standards - A Revised Framework.
The three essential requirements of Basel II are:
1. Mandating that capital allocations by institutional managers are more risk
sensitive.
2. Separating credit risks from operational risks and quantifying both.
3. Reducing the scope or possibility of regulatory arbitrage by attempting to align the
real or economic risk precisely with regulatory assessment.
Basel II has resulted in the evolution of a number of strategies to allow banks to make risky
investments, such as the subprime mortgage market. Higher risks assets are moved to
unregulated parts of holding companies. Alternatively, the risk can be transferred directly to
investors by securitization, the process of taking a non-liquid asset or groups of assets and
transforming them into a security that can be traded on open markets.
In this case, OCBC Bank Malaysia coped with their recent development by using Basel II
because it has broken through the traditional banking restriction and may improve the
development of the banking industry. OCBC Bank Malaysia also disclosure it Basel II Pillar
at 30 June 2017. In this report, it mentioned about the credit risk, market risk, equity
exposures, credit exposures and securitization exposures.
Basel III is an internationally agreed set of measures developed by the Basel Committee on
Banking Supervision in response to the financial crisis of 2007-09. The measures aim to
strengthen the regulation, supervision and risk management of banks.

Like all Basel Committee standards, Basel III standards are minimum requirements which
apply to internationally active banks. Members are committed to implementing and applying
standards in their jurisdictions within the time frame established by the Committee. The
central bank governors and regulators from all over the world agreed to adopt the new Basel
III rule after meeting in Switzerland. The bank will raise the core level capital ratio to 4.5%
as planned. In addition, they must further "2.5%" of the "anti-cyclical" capital protection
buffer. Any bank that does not meet the new requirements is expected to no longer pay
dividends to shareholders until the balance sheet has been improved. However, OCBC Bank
Malaysia do not implement Basel III to cope with their recent development. (Basel II and
Basel III Norms - All that you Need to Know, 2014 )
Conclusion
OCBC Malaysia is one of the public listed financial institutions and it offers private banking
services under the Bank of Singapore (OBCB Singapore) which serve high net-work
individuals and wealthy families. Banking services such as consumer banking, business
banking, investment banking, Islamic banking, transaction banking and treasury. Moreover,
OCBC Malaysia also operated its insurance business under its 87% owned subsidiary which
is Great Eastern Holdings. Great Eastern is the largest insurance group in Singapore and
Malaysia in terms of assets and market share.
In the other hand, conclude all the information that we have found from above, OCBC
Malaysia has improved it performance and development by introducing digital banking such
as OCBC OneTouch. According to the financial annual report of 2017, OCBC Malaysia also
improved it financial performance such as net profit after tax, net interest income, lower
expense on customer deposits, advance and financing interest income, net fee and
commission income.

OCBC Malaysia also achieved awards in the year of 2017 such as Best SME Bank Malaysia,
Aon Best Employer and Top Direct Debit Acquirer. In this case, we believe that OCBC
Malaysia will achieve higher goals in the future year and also improve their financial
performance and development.

2. Analyse the banking industry in Malaysia and based on your findings give two
examples of any Mergers or Acquisitions that took place in the banking industry
in Malaysia. Your analysis should consist of:
The Background of Public Bank Berhad
The Public Bank Group is widely acknowledged for its performance in achieving the
highest net return on equity, lowest cost to income ratio and best asset quality amongst
Malaysian banking groups.
Founded in 1966 by its Founder and Chairman, Tan Sri Dato’ Sri Dr. Teh Hong Piow,
Public Bank enters into its 50th year of operations in 2016. Today, the Public Bank Group is
the third largest banking group in Malaysia with an asset size of RM363.76 billion as at the
end of 2015. Listed on the Main Board of Bursa Malaysia in 1967, the Group is the third
largest company with a market capitalisation of RM71.90 billion as at the end of 2015. With
five decades of sustainable growth, the Group employs more than 18,000 staff and serves
more than 9 million customers across the region.
To date, the Public Bank Group provides a comprehensive range of financial products
and services comprising personal banking, commercial banking, Islamic banking, investment
banking, share broking, trustee services, nominee services, sale and management of unit trust
funds, bancassurance and general insurance products. The Group’s strategy remains focused
on organic growth in the retail banking business, particularly on the retail consumers and
small and medium enterprises (“SMEs”). As one of the top-tier banks in Malaysia, the Group
is committed to sustain its strong business momentum and leading market positions. Public
Bank reaches out to its customers via a network of 259 well distributed branches and over
2,000 self service terminals in Malaysia. In addition to its strong domestic operations, the
Group has extensive branch network in the region with a network of 83 branches in Hong

Kong, 3 branches in China, 28 branches in Cambodia, 7 branches in Vietnam, 4 branches in
Laos and 3 branches in Sri Lanka.
The Public Bank Group remains committed towards improving the quality of life of the
workforce and their families as well as the community and society at large. Through its
Corporate Social Responsibility initiatives, the Group continues to focus on nation building,
enhancement of the market place, promotion of the workplace and environment conservation.
These initiatives are implemented through the Group’s participation in programmes involving
education, graduate employment, professional development, healthcare as well as support of
the underprivileged. The Group will continue to seek ways to create a better community and
corporate environment for everyone involved.

Background of Hock Hua Bank BHD
HHB Holdings Bhd( formerly Hock Hua Bank Berhad) was founded by a group of
Foochow businessmen and doctors in Sibu and subsequently in 1968, the finance company,
Hock Hua Finance Bhd (HHF), was formed. However, in 1999, HHF was acquired by HHB
and merged into its operations.
HHB took another major step in the banking consolidation exercise on 26.6.2000 when
it entered into an agreement with Public Bank Bhd to merge their commercial banking
businesses. On 25.9.2000, approval of the SC was obtained. The proposal is subject to the
approval of the MOF, BNM, other regulatory authorities, shareholders and the High Court.
The company is engaged in the provision of banking and financial services. It was
established in November of 1951 as Hock Hua Bank Limited. The registered business address
of the company is located in Sarawak, Malaysia.
The bank provides a wide range of financial products to private clients, government
sector, as well as corporate sector. It provides checking and savings accounts, Automated
Teller Machines (ATMs), time deposits, remittances, telebanking and mobile banking, bills
payment, credit cards, direct deposit payroll, and debit cards, as well as various loan products
such as mortgage, personal and business loans.

Background of Hong Leong Bank
Hong Leong Bank Berhad is a regional financial services company based in Malaysia,
with presence in Singapore, Hong Kong, Vietnam, Cambodia and China. The Bank is
technology-focused and emphasises the development of financial capabilities to serve its
clients across the five geographies. Hong Leong Bank Berhad (“HLB” or “the Bank”) is
listed on Bursa Malaysia and forms part of the Hong Leong Group. Headquartered in Kuala
Lumpur, the Bank has a strong Malaysian entrepreneurship heritage.
In year 1905, Hong Leong Bank was originally incorporated as Kwong Lee Mortgage
and Remittance Company in 1905 in Kuching, Sarawak and later as Kwong Lee Bank
Limited in 1934, bearing heritage of the oldest local financial institution in Malaysia. Kwong
Lee Bank Berhad was acquired by the MUI Group in May 1982 and renamed Malayan
United Bank Berhad on 2 February 1983. In 1989, it was renamed as MUI Bank. Under the
MUI Bank banner, it grew from 11 to 35 branches nationwide.
In 1997, Hong Leong Bank acquired Bolton Finance and merged it with its wholly-owned
subsidiary, Hong Leong Finance. Next, Hong Leong Bank Berhad merged with Wah Tat
Bank Berhad and Hong Leong Finance Berhad merged with Credit Corporation (Malaysia)
Berhad in 2001. In 2004, Hong Leong Bank Berhad completed the merger of Hong Leong
Finance Berhad which is the finance company business of its subsidiary with its commercial
banking business (Um, H. ,2017). Due to the acquisition of 19.99% stake in the Bank of
Chengdu Co., Ltd in Chengdu, China, Hong Leong Bank Berhad became the first Malaysian
bank to enter the banking sector in China in 2008. In the same year, Hong Leong Bank
Berhad attempts into Vietnam. In 2009, Hong Leong Bank Vietnam was established and
commenced operations. In 2011, Hong Leong Bank became the fourth largest bank in
Malaysia in terms of total assets of the merged bank after completed the acquisition of EON
Bank Group.

Nowadays, Hong Leong Bank have about 329 branches and more than 1500 self-service
terminals. Due to its fully loaded CETI ratio at 11.6% among the highest in the bank industry,
now, Hong Leong Bank is one of the well-capitalised banks in the Malaysia. Hong Leong
Bank now is the fifth largest bank in Malaysia with Market Value of 7.07 billion USD and
the total assets of 47.14billion USD.

Background of Eon Bank Group
In 1965, EON Bank was founded by Ling family as a small bank with the name Kong
Ming Bank Berhad in Sibu, Sarawak. In 1990, Kong Ming Bank was one of the smallest
banks compared to another 23 domestic banks Malaysia together with two other East
Malaysian-based banks, Wah Tat Bank and Hock Hua Bank (Sabah). In 1991, due to
EdaranOtomobil National (EON) has acquired 5.15 million shares out of RM 94.6 million,
EON Bank was able to tap into financing for Proton vehicles.
In the 1999-2002 Malaysian Banking Consolidation, EON Bank become one of ten anchor
banks in Malaysia after the merger with Oriental Bank, Malaysia International Merchant
Bankers Bhd (MIMB), Perkasa Finance and City Finance (Um, H., 2017)
In October 2002, EON Bank becomes a unit of EONCap through a share swap exercise. In
2007, EON Bank makes the first attempt to take over its biggest competitor, RHB Capital
Bhd but it did not win the bid for RHBCap. Since Primus was able to acquired DRB-Hicom
stake in EONCap, Primus became the EONCap’s single largest shareholder in the banking
group in February 2008.

The merger and acquisition between Public Bank and Hock Hua Bank Bhd
Public Bank is known for its prudent management, strong profitability, stable leadership,
strong asset quality, healthy capitalisation and service excellence. A top-tier bank in
Malaysia, Public bank has the best overall financials among local banks. Based in year 2000,
as one of the ten anchor banking groups, Public Bank is completing the merger with Hock
Hua Bank. Upon the completion of Public Bank merger with Hock Hua Bank, the enlarge of
Public Bank Group ca clearly see that an increase in its domestic branch to 381 branches in
Malaysia from 345 branches, comprising 213 commercial bank branches and 168 finance
company branches. The completing of merger between Public Bank Group and Hock Hua
Bank can clearly see that Public Bank Group in Sarawak the operation is significantly
enhanced where Hock Hua Bank in their original state has an established customer in the
retail customer and commercial sectors.
In addition to synergetic advantage, there are immediate gains from economies-of-scale
savings in the significant investments made in the past few years by the Public Bank Group in
its Information Technology infrastructure. Public Bank's systems have been installed in all
Hock Hua Bank's branches and, together with the training already given to the staff, these
Hock Hua Bank branches are ready to operate as Public Bank branches immediately on the
first day of the completed merger. Public Bank Group offers continued employment to all
staff of Hock Hua Bank and Advance Finance Berhad, whose finance company business was
acquired by Public Bank on 31 December 2000. With the enlarged customer base arising
from the merger, and further growth in the Public Bank Group's lending business to generate
increasing returns to scale and efficiency, the issue of staff retrenchment normally
experienced in corporate business mergers would not arise. In its effort to continue being an
active partner in progress in Malaysia's transformation into a knowledge-based economy, the

Public Bank Group has already established a dedicated E-Banking team to develop its
initiatives in e-banking, including internet banking.
As a result, the merger between Public Bank and Hock Hua Bank cause the profit before tax
in 2004 is RM2975 million compare with RM1379 million in the previous year. While the
profit after tax also increase from RM1028 million in 2003 to RM2238 million in 2004. The
rise in profit after tax cause the bank have more ability to operate their bank and the risk of
liquidity fund will decrease. The operating profit also rises from RM1498 million to RM3369
million. This growth in operating profit is mean that public bank has ability to improve their
sells and control their cost.
After merger or acquisition, the total assets and the deposit from customer
have increase. The total assets grow up 53.3% from RM57962 million in 2003 to RM88855
million in 2004. While the deposit from customer have raise 66% to RM68622 million in
2004. The total liabilities of public bank in 2004 is RM80448 million, it has growing up
59.37% compare with RM50480 million in 2003. The total assets exceed the total liabilities
so the public bank has get profit in the strategic change. (Public Bank Annual Report, 2004)
In the share information, the earning per share (EPS) increase 33.8sen from 2003 to
69.5sen in 2004, represent the growth in EPS year-on-year. The EPS server as an indicator of
bank’s profitability. The growth of EPS help the bank can attack more and more foreign
investor spend their money to invest in the bank. The gross dividend in 2004 is 90sen, it has
raise 68sen compare with 22sen in 2003. In the profitability ratio, the net return on equity,
return on average assets and return on average risk-weighted assets are increasing 16.6%,
1.4% and 1.8 respectively. (Public Bank Annual Report, 2004)
The Hock Hua Bank agree the merger with Public Bank because they think it is a
good chance for them to improve their competitiveness with other banks. After merger, the
bank can combine the rules and principle in the bank and attack foreign investor made

investment in our country. Then, the economic level of Malaysia and the foreign direct
investment will increase. The currency of Ringgit Malaysia also grow up. Then, the financial
performance and financial position also improve.

Financial Highlights
2004
Group
2003 2004
Ban
k 2003
PROFITABILITY (RM’Million)
Operating revenue 5,045 4,318 3,669 2,55
6
Operating profit 2,115 1,850 3,369 1,49
8
Profit before tax expense 1,848 1,415 2,915 1,37
9
Profit after tax expense and minority interests 1,267 974 2,238 1,02
8
KEY BALANCE SHEET DATA
(RM’Million)
Total assets
92,087 64,577 88,855 57,9
62
Dealing and investment securities 9,078 5,980 6,933 7,35
1
Loans, advances and financing 55,719 45,540 53,856 27,2
66
Total liabilities 83,149 55,382 80,448 50,4
80
Deposits from customers 72,246 50,217 68,266 41,1
21
Shareholders’ equity 8,571 8,618 8,407 7,48

3
Commitments and contingencies 19,781 14,246 19,535 13,2
49
SHARE INFORMATION
Per share
(sen) Basic
earnings
39.4 32.0 69.5 33.8
Diluted earnings 38.7 31.2 68.3 33.0
Gross dividend 90.0 22.0 90.0 22.0
Net tangible assets 238.3 245.6 235.6 225.
0
FINANCIAL RATIOS (%)
Profitability Ratios
Net interest margin on average interest bearing
assets
4.0 4.1 2.8 2.5
Net return on equity 1 18.3 14.4 34,1 17.5
Return on average assets 2.4 2.2 4.0 2.6
Return on average risk-weighted assets 3.6 3.3 6.8 5.0
Capital Adequacy Ratios
Core capital ratio 13.9 17.5 13.8 15.0
Risk-weighted capital ratio 17.9 19.3 15.3 15.0
Asset Quality Ratios
Net non-performing loans ratio (3-month
classification)
2.1 3.0 2.2 3.0

Loan loss coverage 80.6 70.6 76.1 66.3
Gross loan to deposit ratio 78.9 93.5 80.6 68.1
Deposits to shareholders’ funds (times) 8.4 5.8 8.1 5.5
Valuation on Local Share
Gross dividend yield 12.7 3.9 — —
Dividend payout ratio 166.5 52.5 94.3 49.7
Price to earnings multiple (times) 18.0 17.7 — —
Price to book multiple (times) 3.0 2.3 — —

Five-Year Group Financial Summary
Year ended 31 December 2004 2003 2002 2001 2000
OPERATING RESULTS
(RM’Million)
Profit before tax expense
1,848 1,415 1,230 1,243 1,249
Profit after tax expense and minority
interests
1,267 974 761 720 724
KEY BALANCE SHEET DATA
(RM’Million)
Total assets
92,087 64,577 61,833 53,309 45,280
Loans, advances and financing 55,719 45,540 37,535 30,698 24,394
Total liabilities 83,149 55,382 53,538 45,528 39,534
Deposits from customers 72,246 50,217 47,986 39,782 33,877
Paid-up capital 3,356 3,207 2,315 1,834 1,195
Shareholders’ equity 8,571 8,618 6,962 6,391 4,509
Commitments and contingencies 19,781 14,246 12,316 12,147 9,762
SHARE INFORMATION
Per share
(sen) Basic
earnings
39.4 32.0 26.4 26.2 30.2
Diluted earnings 38.7 31.2 26.2 26.0 29.8
Gross dividend 90.0 22.0 18.0 18.0 15.0
Net tangible assets 238.3 245.6 280.1 325.8 371.8

Share price as at 31 December (RM)
– Local 7.10 5.66 3.64 3.20 2.90
– Foreign 7.60 6.20 4.16 3.40 2.92
Market capitalisation (RM’Million) 24,329 18,669 10,966 9,356 7,041
FINANCIAL RATIOS (%)
Profitability Ratios/Market Share
Net interest margin on average
interest bearing assets 4.0 4.1 4.1 4.3 4.3
Net return on equity 1 18.3 14.4 12.8 14.5 17.9
Return on average assets 2.4 2.2 2.1 2.5 2.8
Return on average risk-weighted
assets
3.6 3.3 3.4 4.2 4.9
Gross loan to deposit ratio 78.9 93.5 81.3 81.0 76.1
Net non-performing loans ratio
(3-month classification) 2.1 3.0 3.2 5.0 4.3
Domestic market share in:
Loans, advances and financing 11.1 9.6 8.2 6.4 5.2
Deposits from customers 11.6 8.9 9.3 8.2 7.0
Capital Adequacy Ratios
Core capital ratio 13.9 17.5 19.4 22.0 21.6
Risk-weighted capital ratio 17.9 19.3 21.2 23.8 23.5
Valuation on Local Share
Gross dividend yield 12.7 3.9 4.0 3.6 2.6
Dividend payout ratio (Bank level) 94.3 49.7 49.8 71.4 38.8
Price to earnings multiple (times) 18.0 17.7 13.8 12.2 9.6

The merger and acquisition between Hong Leong Bank and Eon Bank
In year 2011, Hong Leong Bank has completing of the acquisition of Eon Capital Bhd’
assets and liabilities. Eon Bank is now becoming a part of Hong Leong Bank group. The
merger is about the value creation for all skateholders. It creates a systematically stronger
banking group with an asset size of more than RM140 million to achieve the vision and
objective under Bank Negara Malaysia’s Financial Sector Master Plan. Hong Leong Bank
will be able to reach their community better with an expanded distribution network of more
than 300 branches and 1200 self-service terminals.
On 3rd January 1994, Hong Leong Group acquired MUI Bank Berhad through Hong
Leong Credit Berhad (now known as Hong Leong Financial Group Berhad) and renamed it
Hong Leong Bank Berhad. The Bank was listed on the Kuala Lumpur Stock Exchange (now
known as Bursa Malaysia Berhad) on 17th October 1994 and since then has grown by leaps
and bounds, organically as well as through mergers and acquisitions. Its merger with EON
Bank Group in 2011 placed Hong Leong Bank as Malaysia’s fifth largest banking group;
with over RM180 billion in assets as at 30 June 2016.
Since April 2011, the merger between EON Bank and Hong Leong Bank in Malaysia was
effectively developed. However, they will continue to operate as two different bank’s name.
Thus, the customers of EON Bank could continue their banking transaction at EON Bank
branches like usual even after the merger. EON Bank and Hong Leong Bank were only
merging banks for over one year but it cannot be denied that the merger between EON Bank
and Hong Leong Bank in April 2011 had brought a lot of benefits to relevant stakeholders of
the banks. The stakeholders from both banks start to enjoy the banking welfare after the
merger of the two banks.
Due to the acquirement of the EON capital of RM5.06 billion by Hong Leong Bank, the
merger between these two banks made Hong Leong Bank to become a stronger banking

group with combined asset of more than RM140 billion as it may increase the capital to
operate the business in long term, and it stand out as fourth largest banking group in Malaysia
and thus, it enhances the bank capital to invest and meets the evolving needs and demands of
the consumers, businesses and public institutions.
Apart from these, the merger of EON Bank and Hong Leong Bank may produce long term
benefits to Hong Leong Bank Group. Although there are some short-term earning risks
arising from the merger, such as management distraction, attrition of managers and
customers, agency problem and so on, the long term benefits able to offset the risks faced by
the merger.
The duo effects of Hong Leong Bank's strong deposit franchise and EON Bank's high
utilization of funds could lead to top-line synergies with improving net interest margin. In
terms of longer term benefits, the residential mortgage, which is Hong Leong Bank’s area of
strength, can be also improved and advanced to achieve a higher performance. The merger of
the banks helps to put the Hong Leong Bank’s excess liquidity to more efficient use, leading
to higher yields for the merger entity.
The strategic change in bank helps the profit before tax increase over the 2011. The
profit before tax of Hong Leong Bank have attained RM 2423 million in 2012. It has growth
8.99% compare with the RM 2223 million in 2011. The growth of profit before tax reflect the
bank have higher ability to operate their daily work and can competitive with other bank.
Then, the total income has reach the RM 1 billion in 2012 as increase 66% over 2011. This
growth can reflect the bank’s position and growth in member base. Moreover, the net interest
income also increases 85% to reached RM 778 million in 2012. The net interest income raises
by growth in customer loans and deposits. (Hong Leong Bank Announces Second Quarter
FY2012 Results, 2012)

After merger or acquisition, the total assets are increase 9.02% from RM156260 in 2011
to RM170347 in 2012. The shareholders’ fund in 2011 is RM7471, it raises 12.34% to RM
8393 in 2012. The earning per share (EPS) increase 87.9sen from 2011 to 123.7sen in 2012,
represent the growth of 40.7% year-on-year. The EPS server as an indicator of bank’s
profitability. The growth of EPS help the bank can attack more and more investor spend their
money to buy the share of bank. Due to the strong value creation, book value per share
increased by 60%, from RM5.03 in 2010 to RM8.07 in 2012.
The deposit from customer has increase 7.38% from RM114749 in 2011 to RM123217
in 2012. The return on equity have fall 10% from 26.4% in 2011 to 16.4% in 2012. The
return on average assets also decline 0.6% from 1.3% in 2011 to 0.7% in 2012. As a result,
the net dividend per share also fall from 26.4sen in 2011 to 25sen in 2012. Then, the cost and
income ratio has increase 14.1% from 36.6% in 2011 to 50.7% in 2012.
Many banks think merger or acquisition is a good opportunity to help them achieve their
goal in economic. After merger, the bank can scale up their operation quickly and easy to
obtain a larger number of customer instantly from the other bank. Moreover, merger or
acquisition can help the bank upgrade their team and attack more investor spend their money
to invest in our bank. It will cause the net income, net profit after tax, total capital and others
can increase quickly. Then, bank can ensure their liquidity of fund is good and they have
higher ability to competitive with other banks.

FIVE YEAR GROUP FINANCIAL HIGHLIGHTS
The Group
2008
RM’Mill
ion
2009
RM’Mill
ion
2010
RM’Mill
ion
2011
RM’Mill
ion
2012
RM’Mill
ion
Statements of Financial
Position
Total Assets 83,601 86,409 94,221 156,260 170,347
Net Loans 35,091 35,498 38,522 82,240 89,121
Total Liabilities 77,454 79,655 86,703 145,997 157,800
Deposits from customers 62,062 67,262 69,481 114,749 123,217
Shareholders’ Funds 4,108 4,497 5,219 7,471 8,393
Statements of Income
Revenue 2,225 2,270 2,459 3,666 4,132
Profit before tax 1,120 1,150 1,451 2,223 2,423
Net Profit 826 962 1,206 1,727 2,072
Profit attributable to owners of
the parent
549 632 861 1,674 1,155
Key Performance Indicators
Book Value per Share (RM) 3.96 4.34 5.03 7.20 8.07
Earnings per Share (sen) 52.9 61.0 83.1 161.4 111.1
Net Dividend per Share (sen) 17.1 17.3 18.8 26.4 25.0

Financial Ratios (%)
Profitability Ratios
Return on Equity 13.9% 14.7% 17.7% 26.4% 14.6%
Return on average assets 0.7% 0.7% 1.0% 1.3% 0.7%
Cost/income ratio 42.5% 42.9% 42.7% 36.6% 50.7%
Asset Quality/Loan Ratios
Gross loans to deposits ratio 58.0% 54.0% 56.6% 73.9% 74.3%
Gross impaired loans ratio 2.3% 2.2% 1.9% 2.3% 1.7%

References
Latest overview for Malaysia banking industry
https://www.fundsupermart.com.my/main/research/-View-Banking-Sector-2018-
%E2%80%93-A-Bullish-Year-For-Malaysia%E2%80%99s-Banks-9256
OCBC website
https://www.ocbc.com.my/group/group-home.html
“Public Bank.” Public Bank Corporate Homepage - Corporate Profile,
www.publicbankgroup.com/About-Us/Corporate-Profile.
HOCK HUA BANK BHD. (n.d.). Retrieved March 03, 2018, from
https://listofcompanies.co.in/2012/01/22/hock-hua-bank-bhd/
About Us. (n.d.). Retrieved March 03, 2018, from
https://www.hlb.com.my/en/personal-banking/about-us.html
Public Bank And Hock Hua Bank Agree To Merge. (n.d.). Retrieved March 03, 2018, from
http://ww1.utusan.com.my/utusan/info.asp?
y=2000&dt=0627&pub=Utusan_Express&sec=Business&pg=bs_01.htm
“EON Bank Group is now part of Hong Leong Bank Group.” Hong Leong Bank,
www.hlb.com.my/en/personal-banking/news-updates/eon-hlb.html.
F., K., K., T., & Y. (n.d.). Http://eprints.utar.edu.my/1037/1/BF-2013-1004591-1.pdf. Retrieved
from http://eprints.utar.edu.my/1037/1/BF-2013-1004591-1.pdf