Copyright Notice

All rights reserved. No part of this publication may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of the author, except in the case of brief quotations embodied in critical reviews and certain other non-commercial uses permitted by copyright law. For permission requests, write to the author, at the address below.

Sakmongkol ak 47

ariff.sabri@gmail.com

Tuesday, 4 January 2011

The Blogger and the Banker.


 

Nazir Razak-Group Chief Executive. CIMB group.

Even since Nazir Razak, the youngest brother of the Razak siblings came out with his 'bastardised' NEP shocker, I had wanted to meet him. The opportunity came on the 28th December. I did some background reading.

My motive in meeting him up is to allow me later to portray Nazir Razak as the thinking banker that he is. I find I am in agreement for most part about the whole affair with this NEP thing, special rights and so forth.

I am not going to elaborate on his area of expertise- others have done that copiously elsewhere. My understanding of the banking industry does not extend beyond using the ATM card and check book.

He has attained many accolades which he rightly deserved. I mean as a Malaysian Malay, it's a nice feeling to see his name being mentioned other than hearing the name of boss of Public bank.

When I say he is a thinking banker- I meant it in the sense that his ideas and the things he speaks about, are beyond the topics talked about by a conventional banker. He has 'invaded' areas typically played and preyed on by politicians and social thinkers. The statement about the NEP, the AP issue, and good governance are not normally topics of technical banking.

But I also hope he knows he is also entering a no man's land. Choosing to speak on the matters he did, opens him up for criticisms. Ibrahim Ali for example, representing what's taken as the purest of Malay ideals, struck out at Nazir. He asked Nazir to learn from the 'greats' such as Dr Mahathir and Tengku Razaleigh. These two people speak, claimed Ibrahim from a jiwa dan roh Melayu. The closest translation that I can think of is- being and the spirit of Malay. By that classification, in Ibrahim's books, Nazir Razak isn't quite in 'being and spirit' a Malay.

Who then is Nazir Razak? What is he?

As many of you know, he is the youngest son of Tun Razak. When Tun Razak died, we remember his picture in a classroom with his cousin, a son of Tun Hussein Onn. He went to study at the University of Bristol and then went to read for a master's degree at Cambridge. He worked his way in the banking industry and he is where he is today. His rise is the result of many factors and which one, depends on anyone's inclination to insist on. I will leave it at that.

But I suspect, his meteoric rise to a certain extent, has to do with the father's name. I would however readily concede that his rise to a larger extent has also been due to his merits.

So I made my way to the 10th Floor of the CIMB headquarters. I was ushered into what appeared to be the floor's meeting room and waited for him. In the meantime, I went through my scribbled doctors handwritten notes readying myself.

We exchanged some initial small talk. In attendance was also Mr. J.Pang, McKinsey alumnus and graduate from Stanford. I was in formidable company.

I must caution readers however, the views I interpreted as that coming from Nazir Razak may not be as he intends them to be. Any misinterpretation is entirely mine.


 

The meeting: Part 1

NR: I see you have reinvented yourself as a blogger.

S47: Indeed I have.

NR: Does the PM read your material?

S47: I hope he does. I am UMNO man but consider myself as the resident dissenter and perennial busy body.

NR: I believe he is selective if he does read at all.

S47: Yes, and that would also very much depend of whether my material can get pass his phalanx of advisors.

NR: do you do this being sponsored by some people?

S47: I do this as a labor of love. That gives the space to write.

NR: Yes- I think if he reads some of the material you wrote, he won't want to see you again.

We all let out laughs.


 

Here are some of the issues.

When I asked Nazir Razak, the boss of CIMB, how he views the issuance of new banking licenses, his answer was perhaps a tad standard issue. Before I met him, I listened to his several interviews. One was with World Business where the talk involved basically the banking industry.

Nazir Razak has this idea that the banking industry needs to be rationalized. The way to go is for mergers. We now have 9 large banks, operating in Malaysia. We must fewer larger banks to leverage on the economies of scale.

Perhaps he was thinking about the licenses issued to 5 foreign banks to operate. He sees no contradiction to what he said at the interview. These are intended for some specific purposes- niche areas.

In so far as these banks operate in niche areas- green technology and that all that esoteric stuff, these banks will not compete with local banks. That means, these banks are allowed to operate on highly regulated areas so that they won't pose a danger.

BNM has come out with they termed as stringent and strict measures. The banks need a capital of USD 1 billion, its management must consist of top quality material. You would think, these are requirements for wagyu beef or something.

In reality then, there wasn't financial liberalization in a strict sense. What you have is a managed regime of specific sectorial banking participation. I mean this is something similar to "you can have any color as long as it's black" for the banking industry.

But actually I was looking at his answer and take on the coming issuance of banking licenses to 2 cooperatives. Angkasa and one other cooperative. The capital requirement is way much smaller and the rationale for asking for licenses can always be thought of by some smart cookies.

Will the issuance of banking licenses to these two coops open the floodgates to more in future? This isn't the wagyu beef variety but more of garden stuff where, such approvals can be used by others to gain banking licenses. The government will be hard-pressed to justify why in the case of these 2 coops, licenses can be issued. You can then have a coop specifically attending to the Indian community coming to the government asking for banking licenses. The Chinese fisherman in Teluk Intan will want to apply for banking license to take care of the sizeable number of Chinese fishermen in the west coast. Or that Nikmat, the fisherman coop can also ask for a banking license to take care of its fishermen members.

19 comments:

Anonymous,  4 January 2011 at 09:22  

You should have put this piece on hold and commented on the Selangor State Sec fiasco?

George Choo 4 January 2011 at 09:53  

Dear Sak, coop running a bank is BIG RISK. Remember CCB - the defunct Coperative Central Bank that went BUST causing its members to lose a lot of their HARD EARN SAVINGS and the staff of the bank to lose their JOBS.

During the early eighties when I was working as an auditor for Hanafiah,Raslan & Mohamad (HRM),I found that Banks that are run by Directors who are not the OWNER are SUBJECTED to HUGE ABUSE by the directors resulting in huge LOSSES.a GOOD EXAMPLE IS BANK BUMIPUTRA.

Why Bank BUMI go under because UMNO members obtained HUGE LOANS but "tak perlu bayar balik" because the directors are appointed by UMNO AND THEY DARE NOT TAKE ACTION TO RECOVER THE LOANS.

Subsequent event like what happen to BANK ISLAM who lose BILLIONS by lending to a ALBANIAN company owned by the relatives and friends of the board of directors prove me right. Look at SIME BANK under ISMAIL ZAKAKRIA.

I am very sure BANK ANGKASA will fail because the bank are owned by members and I hope that ZETI did not issue the licence becuase his FATHER is the founder of ANGKASA.

hishamh 4 January 2011 at 10:00  

Dato',

I find myself in disagreement with Nazir here. There's a good argument for further rationalisation of the banking industry - but there's also a big argument for smaller, more nimble banks:

1. Avoiding the "too big to fail" syndrome, where any trouble WILL require a bail out to avoid systemic collapse;

2. During the initial round of mergers earlier this decade, Malaysia lost most of its "community" banks (e.g. Wah Tat). These were small and very localised banks, serving well-defined niche markets. While their capital bases were small, these banks knew their customers very well - risk of trouble was low.

Historically, It was the medium size banks that have gotten into trouble (Oriental, BSN Commercial, Sime - Bank Bumi was an exception). BNM's strategy of consolidation implies de facto government support in the event of failure (moral hazard), as well as a distancing of banks from their customers.

There's space in the financial landscape for both mega as well as niche banks. What we need to get rid of is the in-betweens, who aren't close enough to their customers, but also don't have the capital to expand and survive.

hishamh 4 January 2011 at 10:05  

Dato',

I find myself in disagreement with Nazir here. There's a good argument for further rationalisation of the banking industry - but there's also a big argument for smaller, more nimble banks:

1. Avoiding the "too big to fail" syndrome, where any trouble WILL require a bail out to avoid systemic collapse;

2. During the initial round of mergers earlier this decade, Malaysia lost most of its "community" banks (e.g. Wah Tat). These were small and very localised banks, serving well-defined niche markets. While their capital bases were small, these banks knew their customers very well - risk of trouble was low.

Historically, It was the medium size banks that have gotten into trouble (Oriental, BSN Commercial, Sime - Bank Bumi was an exception). BNM's strategy of consolidation implies de facto government support in the event of failure (moral hazard), as well as a distancing of banks from their customers.

There's space in the financial landscape for both mega as well as niche banks. What we need to get rid of is the in-betweens, who aren't close enough to their customers, but also don't have the capital to expand and survive.

ahli koop,  4 January 2011 at 10:27  

Sak

You should check in depth how bank rakyat service their clients. A typical easy going cultural as they monopoly the gomen servant and coop members loans. all repayment are guaranteed. That's why hey are able to give the highest dividen in the world while the coops just getting a small return.

So when Angkasa apply for bank license to service their coop members and pull out all their money from bank rakyat, it is indeed a shocking wake up call to them.

By Nazir's standard, he won't be bothered by this pasar malam class clients.

FYI Bank Rakyat is using both BNM and Angkasa rules in running their business. This is a big advantage to them, but with their attitude, they will remain there forever.

Anonymous,  4 January 2011 at 10:45  

...My understanding of the banking industry does not extend beyond using the ATM card and check book...

Same here, Dato'.

ATM = Asal Tekan, Muncul.

Best wishes for the new year.

-MAKORANG-

Quiet Despair,  4 January 2011 at 11:00  

Syabas to this no-holds barred blogger. Good one Sak.
I am waiting for series of your verbatim interview with him.
For the meantime, I am attracted to that statement 'jiwa dan roh Melayu.' Spirit and being a Malay.
What exactly is that depends on the UMNO members thinking.
Are they simply thinking of the likes of Ibrahim Ali and others who are shouting orang Melayu mesti itu dan ini.
If that is so, transformation which Najib is touting about should come from UMNO members themselves, not the Malays.
Looks like UMNO still cannot accept people like KJ or Nazir for example. Is it our fault if we are born a diplomat's son or a PM's son?
It's only an accident of birth. Having a great father's name is only to ease your calling in life. But it is wrong to think that Nazir made it just because he is Razak's son.
I understand why KJ merajuk and not contesting in the coming GE.
His services are not valued and is side-lined in favour of Mukhriz or Razali Ibrahim for that matter.
UMNO must be big enough to accept everyone be they from UITM or Harvard or Oxford if it wants to still be the party of choice.
Jaguh kamopung should only apply to Astro's AF winners.

P.S. I love that part about Najib employing selective reading. If it's true, he is still in denial.
But I realy don't think so because in the scholarship issue for example he did utter similar comments on the unfair distribution.
Najib echoed the sentiment that scholarships need not based only on meritocracy but also socio-economy of the poor for fairness.
"He may not want to see you again," says Nazir on you.
I really hope not. I still entertain the hope that you will be an MP representing our state in the coming GE.

Anonymous,  4 January 2011 at 13:59  

we want part 2!

ah beng

Anonymous,  4 January 2011 at 14:25  

Dato', tq very much and I read this article because my liking of your writing and your view, outlook, vision, perception and what not.
Frankly speaking, who care this Razak sibling for the fact that rest assured he is there because of his father's name and off course now he is the brother of Jibby.
Merit! ahaaa...no no no doesn't believe it at all.
Good luck sir for whatever you have at the back of your mind.

Anonymous,  4 January 2011 at 14:44  

sorry, din't get this one

1.Are you telling us about your ordeal with NR and how he gonna revamp the banking industry?

2. The Interview with NR is about what actually? whats the core main question?

3. Co-operative i.e. angkasa and whats the other one? mind telling which one?

You marah dengan angkasa is it dato?

Selamat tahun baru 2011 dato ak47

- Ikan Tongkol -

Anonymous,  4 January 2011 at 21:31  

In Malaysia big is beautiful...
Then you can bring in the branding consultants and do the makeovers..
But service still same..the back office is the same..still takes ages to get things done..the call centres never give "real"answers if u manage to get thru..

Hv a look at HSBC Amanah and CitiBank,,there you get service thats prompt and efficient.

CIMB,MayBank,Bank Islam,,rebranding is only sheep in wolves clothings.

So,they make easy money by getting cheap deposits and lending out at big margins..by wiping out the smaller niche banks that knows their customers.

Big is not necessarily good.

sniper,  4 January 2011 at 22:48  

Sak

why suddenly you make a U-turn on Alcatel - Telekom case and change the hot topic on Nazir Tun Razak.

Is it because Norraessah and KJ is the consultant.

Damage control or divert attention instruction by KJ ?

To me KJ or NR, if it's wrong then it's wrong. no cover up please. enuf lah Sak.

Bongek,  5 January 2011 at 00:01  

Dato
I hope you managed to ask DNR what do he think of Sime Darby after the consolidation initiated by him. The deal of biblical proportion can only be executed by him and gave him personally some short term benefits at the expense of ASB investors. I do hope that you dare to suggest to him to take over and clean up Sime Darby mess as he is a party to the mergers of 3 well run PNB outfits.

Dasa 5 January 2011 at 10:16  

Whether NR is at his place right now because of his merits or the father's name, nobody really knows. In reality, it is more a combination. But for sure, if the bank's overseas operations show consistent better performance than that of the rivals, only then we can start to believe than he is a man of his own.

Anonymous,  5 January 2011 at 11:35  

Pada hemat saya kalau kita hebat kita tidak perlu ada penasihat dari "Ivy League" disebelah kita.

Anonymous,  6 January 2011 at 01:22  

Si Yatim tu begitu berlagak di tv dan youtube - satu kali aku tengok dia marah reporter yang cakap Inglish. Apa salah tu? Kan Inglish kita buruk...patut practise lah.

Beruk tua tu patut bersara secepat mungkin. Dah tua, produktiviti dah jatuh...apa dia buat di kantor?

Polis boleh siasat sampai masa khiamat tapi beruk tua tu tentu tak bersalah. Polis mana tau keadilan untuk rakyat? Polis hanya tau buat kerja macam robot...apa BN/UMNO suruh, patuhi je mereka.

Kalau benar2 beruk tua tu merogol amah dia, biar dia mampus secepat mungkin- di udara ke, di laut ke atau di jalanraya.

Begitu berdosa...nampak muka dia macam perogol yang botak!!!! Isteri queen control macam Quiet Despair kata, jadi makin desperate lah dia....kerana tak dapat rasa pompuan2 lain!

Nak keluar rumah cari ayam, takut orang kenal. Nak keluar negeri cari pompuan, isteri nak ikut. Jadi, paling senang, bila naik gatal, tarik lah amah yang agak cun tu.

Kalau tak benar, mana wikileaks dapat berita? Jangan ingat orang atasan di BN/UMNO boleh tutup mulut...tentu ada dalang/lalang punya.

Biar si yatim tu mampus lah....buat malu aje umat Muslim. Dia di lindungi oleh puak BN/UMNO, jadi dia tak takut....masih berlagak.

bangsat Yatim!!

ikan tongkol

Anonymous,  6 January 2011 at 06:52  

Nazir Razak is one of the most suitable candidate to lead Permodalan Nasional Berhad (PNB).

I wish he reads this comment

Anonymous,  6 January 2011 at 20:15  

Anon 1:22

Wah didn't know I have struck a few follower to the extend got a spin off

So much anger the way you comment

Anothe epic Spinning.

I do mind you using me as a spin off.

- Ikan Tongkol -

Anonymous,  8 January 2011 at 09:52  

DSNR is a visionary and performance oriented CEO. See what he has done for CIMB in Malaysia, Spore, Indonesia, Cambodia and Thailand. I am sure he believes in a more equitable Malaysia. We need more "DSNR" type of politician in Malaysia. I wish him well

  © Blogger templates Newspaper III by Ourblogtemplates.com 2008

Back to TOP