Thursday, April 8, 2010

Kuwait Finance House embarks on 5-year to strenghten ops plan

By Habhajan Singh

Kuwait Finance House (M) Bhd, which had recently directed a number of its staff to go on leave to pending internal investigations into 'transactions and contractual arrangements that have been undertaken over the years', has embarked on a five-year business plan to strengthen its operations in the country.

KFH Malaysia CEO Jamelah Jamaluddin told reporters yesterday that the plan would allow the Islamic banking unit to enhance its credit quality, lower non-performing financing, strengthen corporate investment banking and equity while looking at opportunities in retail business.

"Our due diligence audit is expected to take at least six weeks," she told a media briefing yesterday, reported Bernama, which acced that the audit aimed to obtain an accurate picture of certain transactions and contractual arrangements that have been undertaken over the years.

On April 29, The Malaysian Reserve reported the KFH Malaysia new boss, who came on board just under two months ago, has directed more than a dozen staff to go on leave pending the internal investigations.

In an email response, Jamelah told The Malaysian Reserve that the bank was "taking a proactive approach and conducting a due diligence status audit, in light of the different and more challenging economic environment". In that email, she added: "This is aimed at obtaining an accurate picture of certain transactions and contractual arrangements that have been undertaken over the years. Some employees have taken leave to help facilitate the exercise and the Bank will be guided by pragmatism and act accordingly as per the recommendations of the audit team conducting the due diligence status audit."

The Monday report also said that in a communication with staff on March 19, it was understood that Jamelah had asked a number of staff, including at least one head of department, to go on leave to enable the Kuwait-based Islamic banking unit to conduct its internal investigations.

In the briefing yesterday, Bernama also quoted her as saying: "We expect to experience modest business growth this year, not more than 10%," she said, adding that it registered 8% growth last year.
She said the bank would adopt KFH Kuwait's business model in order to sustain growth in terms of risk management and take full advantage of opportunities in the region, Bernama added.
On Friday, RAM Ratings said it had met with the senior management of KFH Malaysia to seek further clarification on the matter. The rating agency was made to understand that an "internal reorganisation exercise has been put in place to strengthen the Bank’s credit team and processes, with the intention of improving asset quality."

(This story appeared in The Malaysian Reserve on 2 April 2010. The Malaysian Reserve is a daily business/finance newspaper published out of Kuala Lumpur, with a sectoral page on Islamic finance on Mondays, edited by Habhajan Singh)

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