Kenanga Investment Bank CEO Tunku Afwida Malek has been busy transforming the company since joining it over a year ago. The group plans to expand abroad and grow its domestic businesses.

Q: What will be the income drivers for Kenanga Investment Bank?

A: It's mainly equities and broking at the moment because the market was so good in the first half. Even though the investment banking activity was more in the first half than the same period of last year, the stronger market has eclipsed the better banking revenue.  

 Q: What sort of ratio do you expect between investment banking and broking?

A: We were looking at banking contributing 40% this year, but we won't see this because of the huge volumes from equity broking in the first half. Broking accounts for between 70% and 80% of revenue.  

 Q: What is Kenanga Investment Bank doing to smoothen its earnings base?

A: The investment banking side was supposed to do that. Investment banking income is better than last year, but we were not expecting such huge volumes on the stock market in the first half. That is a bonus for us. Banking, private equity and treasury activities are supposed to smoothen that. That is slowly coming on stream. By next year we should see a higher contribution from the banking side.

Tunku Afwida Malek
 
Q: How much have you invested in growing your investment banking business?

A: A lot. We have taken in a lot of people. We have added on at least 25 to 30 frontline people, and that is without the back office processes such as risk management, internal audit and compliance.  

There are more people in those departments and we are taking in more people. We have invested in a lot of human capital and systems.

 Q: How is Kenanga Investment Bank going to create its niche in Malaysia?

A: I am not sure whether many investment banks here can provide overseas service to customers. Most of them are very local and that is not what we do. We look abroad. We are giving our clients a choice. It's not limited to Malaysian demand.  

 Q: What about Islamic investment banking work?

A: Most of our guys have done a lot of sukuks. The people we have brought in have a lot of experience in Islamic instruments. We are exploring opportunities with a host of corporates, not just domestically.

Q: What is a target you want to reach?

A: There is a profitability target that the shareholders want to see. I think 15% is a good target for return on equity for a bank. That's our first target, and to achieve that and how to achieve that are the role of the CEO.

We will also like to make Kenanga Investment Bank into a nice medium-sized investment bank with a global reach. We are looking at other platforms in Asia and also Europe to a lesser extent.

By JAGDEV SINGH SIDHU

Source : thestar.com.my