Thursday 28 Mar 2024
By
main news image

KUALA LUMPUR (Oct 21) : Hong Leong Financial Group Bhd (HLFG) and its subsidiary Hong Leong Bank Bhd (HLB) saw their shares prices dipped more than 1% and among the top ten losers this morning, after HLB had surprisingly joined its peers to announce a workforce cut, intensified fears a slowdown in banking sector.

Shares in Hong Leong Financial Group opened at the lowest point in early trades, down as much as 22 sen or 1.47% to RM14.72. As at 9.40am, the counter was the top three losers, in which dropped 20 sen or 1.34% to RM14.74. It saw 47700 shares traded, valued at RM15.7 billion.

Hong Leong Bank (HLB) also stayed in negative territory, fell 12 sen or 0.84% to RM14.12. The counter was the top 7 losers which saw its shares plunged 16 sen or 1.12% to the lowest point of RM14.08 earlier. The counter saw 7700 shares crossed-hands, bringing its market capitalisation to RM25.6 billion.

Hong Leong Bank’s managing director and executive officer Tan Kong Khoon announced the implementation of a mutual separation scheme (MSS) yesterday to strengthen the banking group’s productivity and efficiency.

The spokesman of the group refer that this measure is appropriate for the bank to review its structure and manpower requirements given the economic challenges and opportunities for change.

“The MSS exercise which is entirely voluntary in nature is also due to the requests or feedback from employees requesting for the same,” she said in an email yesterday.

HLB’s move had surprised the head of research as this may indicate a bigger challenge for growth in banking sector.

When contacted by theedgemarkets.com, a head of research from local investment bank saw this as a move for the bank to maintain cost and to achieve better cost efficiency during economic downturn.

“It’s not surprise that more banks will follow suit, as Hong Leong Bank is a bank which has better cost control,” he added.    

Based on HLB’s report, the bank’s total overhead cost for the fourth quarter ended June 30, 2015 was RM471 million, while staff cost stood at RM261 million. HLB has one of the lowest cost to income ratio of 45.2%.

      Print
      Text Size
      Share