Nazir: Too early to say if mart's bottomed out

By Jeeva Arulampalam
Published: 2009/05/09

While there are some positive indicators of the market bottoming out, leading banker Datuk Seri Nazir Razak says it is too early to tell.

"Anecdotal evidence seems to support the suggestion, i.e. we are getting feedback from customers that the order books are being replenished," the group chief executive officer of Bumiputra-Commerce Holdings Bhd (BCHB)(1023) told reporters after its annual general meeting in Kuala Lumpur yesterday.

Nazir said that if the market did bottom out, the coming earnings of local companies and the non-performing loan ratios of banks might not be as bad as earlier forecast.He also said that there was a divergence between macro data, such as export and gross domestic product figures, and theperformance of banks, which have held fairly steady.

BCHB is due to release its first quarter results next week.Meanwhile, the banking group will invest RM600 million over the next three to four years to integrate its information technology platform across its regional units."We will invest in a new core banking system and applications to create this one bank across Asean," Nazir said.

He also said that BCHB's Indonesian operation will contribute some 42 per cent of overall earnings by 2014 or 2015, driven by organic growth."We will probably be more Indonesian than Malaysian in terms of contribution of earnings and assets given the expected growth trajectory of those countries," he said.

Malaysia is expected to contribute 40 per cent, while the balance will come from the group's operations in Singapore and Thailand.When asked about further possible acquisitions, Nazir indicated his reluctance."To be fair to shareholders, we certainly wouldn't be adding onto the number of countries until we demonstrate momentum," he said.

On the recent liberalisation of the financial services sector, Nazir said the group viewed it positively and it was testament to BCHB's rush in regionalising.He also emphasised that the liberalisation did not necessarily mean lower margins for local banks.