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Hong Leong Bank allocates RM115 mln for digital expansion
Last update: 04/07/2018

KUALA LUMPUR, July 4 (Bernama) -- Hong Leong Bank Bhd has allocated RM115 million or 50 per cent of its capital expenditure (capex) to improve the bank’s offerings on the digital platform in the financial year ending June 30, 2019.

Chief Executive Officer and Group Managing Director Domenic Fuda said the huge allocation was in line with strong customer adoption of its digital platform.

"We also expect strong continued growth in banking transactions as we increase our offerings of products and services on digital platforms," he said after launching Hong Leong Bank's Digital Day 2018 campaign here today.

The bank had set aside RM30 million of its capex to convert 50 of its existing 250 branches to the new digital format in the current financial year, which would translate into savings in operational cost.

"This new format will provide more space for customer servicing area. Previously, 50 per cent of the outlet's space was dedicated for backroom (deposits machine, etc) operations but now it will be reduced to 25 per cent," he explained.

Fuda said Hong Leong bank's branches, which currently occupy 4,000 square feet each, would be reduced to 2,200 square feet.

"As the service and financial landscape changes rapidly with the increasing use of technology, staying attuned to customers needs and desires become even more critical, hence we adopted the approach of re-imagining banking by embedding digital considerations throughout the entire bank," he said.

Commenting on the outlook for the domestic banking industry, he said this year was expected to be stronger than the previous years, riding on the growth in housing loans, small and medium enterprise (SME) loans as well as commercial loans.

"Since the general election is over and the Goods and Services Tax  (GST) has been taken away, we can see loans growth.

However, ahead of the introduction of the Sales and Services Tax (SST), we do foresee some pick-up some two to three months after the SST is re-introduced. Thereafter, loans growth will slow down," he said.

Hong Leong registered a better loans growth momentum in the last quarter of its financial year ended June 30, 2018 due to the zero-rated GST. 

"We attribute the better performance to growth in corporate and SME lendings and mortgages," he elaborated. 



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