KUALA LUMPUR (Dec 5): RHB Bank Bhd says it is exiting Hong Kong due to the increasingly challenging brokering environment there.
It said its wholly-owned investment bank, RHB Investment Bank Bhd, will be shuttering its operations in the special administrative region that are being undertaken by wholly-owned RHB Hong Kong Ltd and its subsidiaries.
“Pursuant to the proposed cessation, RHB Hong Kong Group (RHB Hong Kong and subsidiaries) will gradually discontinue offering financial services to its existing and potential clients,” RHB Bank said in a filing with Bursa Malaysia today.
It said Hong Kong presented an increasingly challenging broking environment that has resulted in losses being recorded for RHB Hong Kong Group.
Therefore, it is no longer viable for RHB Hong Kong Group to continue its business operations, it added.
As a result of ceasing its operations, RHB Investment Bank would be allowed to refocus efforts and resources on driving long term growth in other Asean markets, which is in line with the banking group’s broader FIT22 strategy.
RHB said the winding-up of RHB Hong Kong is not expected to have any material impact on RHB’s group level consolidated assets, gearing or earnings for the financial year ending Dec 31, 2019 (FY19).
The proposed cessation is expected to be completed in the second quarter of 2020.
RHB Hong Kong was incorporated in the territory on Oct 18, 2004 as a limited liability company. Its existing issued and paid-up share capital is HK$300 million, comprising 300 million shares.
While RHB Hong Kong’s principal activity is investment holdings, its subsidiaries provide financial services such as dealing and advising on securities, asset management services, corporate finance advisory services, futures contract dealings and money lending.
When contacted by the theedgemarkets.com, RHB Bank said it has no further comment on the matter for now.
Shares of RHB Bank closed 0.18% or one sen lower at RM5.66 today, giving the group a market capitalisation of RM22.7 billion.