This article first appeared in The Edge Malaysia Weekly on September 23, 2019 - September 29, 2019

RHB Bank Bhd says it has no plans to sell its asset management (AM) business, calming rumours in certain quarters that it may be mulling a sale following a wave of resignations since last year.

“There are no plans to exit the AM business. The AM business remains an important part of the group’s strategic initiative, FIT22, in supporting the growth of the group’s wealth business,” managing director of RHB Asset Management (RHBAM) Eliza Ong tells The Edge via email.

She acknowledges that there were some staff movements in Malaysia and Singapore, but attributes this to normal attrition, performance management and a general strengthening of the team.

“Over the last 18 months, departure of personnel within the group’s AM business was, in our view, a normal attrition. In any event, these personnel had been replaced by equally, if not more qualified, experienced and capable fund managers and client-servicing professionals who are able to deliver greater value to our clients and drive our strategic aspirations under our FIT22 roadmap,” she says.

FIT22 is the group’s five-year strategic plan that runs from 2018 to 2022.

According to Ong, as at July, the group’s AM business was backed by 290 staff members in Malaysia, Singapore, Indonesia and Hong Kong.

RHBAM currently manages RM52.3 billion, making it the fourth largest AM player in town. Of its assets, 77% are conventional and the rest, Islamic.

The business is a profitable one for the group. It posted an audited after-tax profit of RM33.9 million last year, down slightly from RM34.5 million a year earlier. For the current year-to-August, profit stood at RM23 million, she says.

It is understood that among key staff members who have left since last year are Ng Hwee Jan (the regional head of equity research for RHBAM) and Felix Ho (head of Hong Kong and China equity) in May 2018, as well as Cholis Baidowi (chief investment officer at RHBAM Indonesia) in April. According to sources, at least five investment professionals have left RHBAM Singapore since last year while the Indonesian operation is without a chief investment officer (CIO).

Ong, in stressing that the business has key people in place, says RHBAM Malaysia currently has two CIOs — Mohd Fauzi Mohd Tahir for equities and Michael Chang for fixed income.

“To further strengthen our senior leadership team, especially for our Islamic funds, Mohd Farid Kamarudin was appointed CIO for Islamic Fund in June 2019,” she says.

In RHBAM Singapore, Tan Jee Toon was appointed in April 2018 as the head of Singapore as well as the CIO of equities for Asia-Pacific. “He comes with more than 19 years of experience in the AM industry, managing funds for sovereign wealth funds, pension funds and insurance as well as retail and high-net-worth clients,” Ong says. The team is also supported by the other investment offices in the region, she adds.

Over at RHBAM Indonesia, Ong says the investment team is under the joint supervision of the head of equity research, Achmad Syariel, who was appointed in January, and the lead portfolio manager for equity and fixed income, with oversight responsibilities by the president director.

Meanwhile, RHBAM Hong Kong is headed by Ben Chan Chi Boon, who joined RHB Asset Management Ltd in July last year as the head of Hong Kong/China equity. He is responsible for the overall equity research, investment strategy and portfolio management.

On the whole, Ong says RHBAM is well resourced with 11 equity fund managers who are supported by 15 equity analysts. “Our fixed income team consists of seven fund managers and eight credit research analysts located across Malaysia and the region,” she says.

The investment team grew from 36 people last year to 41 as at July 31 this year.

Analysts say while the trend has been for banks to exit non-core businesses like insurance and AM, this has not really caught on in Malaysia. “The business is still important to local banks, so we haven’t really seen that trend catch on. It makes more sense for them to form an AM partnership with major non-bank players,” a banking analyst observes.

Recall that last year, CIMB Group Holdings Bhd divested a 20% stake in CIMB-Principal Asset Management Bhd and a 10% stake in CIMB-Principal Islamic Asset Management Sdn Bhd to US-based Principal Financial Group for a total sum of RM470.3 million. This left CIMB with a 40% ownership in each of the joint-venture asset management units.

RHB is currently in negotiations with Japanese insurer Tokio Marine Asia Pte Ltd for the sale of up to 94.7% of its stake in its insurance arm, RHB Insurance Bhd. Ong says RHBAM saw 6.5% growth in asset assets under management (AUM) to RM52.3 billion as at end-July from a year ago across retail, high-net-worth, corporate and institutional clients.

RHBAM’s Malaysia AUM of unit trust funds stood at RM29.5 billion as at end-July 2019, up 12.6% from end-2018. “This has outperformed the unit trust industry growth of 10.4% for the same period by 2.2%,” Ong says.

As for returns, she says its top global and local bond funds have done well, with returns ranging from 7.46% to 9.9% year on year, and from 5.57% to 8.26% year to date in July 2019.

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