By Jose Barrock
Over the past few days, Malayan Banking’s stock has shed some 45 sen, bringing it down to RM9.85, at the closing bell today.
Tengku Zafrul Tengku Abdul Aziz
While it is true that the banking sector has fared badly lately, and Maybank’s bumper 22.5 sen dividend went ex on Tuesday, the dip could be linked with the departure of its investment bank’s chief executive officer Tengku Zafrul Tengku Aziz, to join rival CIMB.
Along with him there were a couple of other resignations but these were not as high profile as his.
To recap Zafrul’s impending move to CIMB, comes on the back of a deputy chief executive officer Charon Wardini Mokhzani of CIMB leaving the banking outfit as he is taken in by state-controlled investment arm Khazanah Nasional as an executive director.
“Charon wanted a change; he was getting burnt out at IB (investment banking), he’s a thinker, a reader…he could be more suited to Khazanah. But to his credit, Charon maintained CIMB’s position as the top investment banking outfit, or at least one of the top investment banking outfits in the country,” a veteran banker said.
It is noteworthy that Mohd Zainal Shaari, the former chief operating officer of Khazanah and Nungsari Ahmad Radhi executive director has also left.
Maybank without Zafrul
Nevertheless views are mixed as to how Maybank will fare without Zafrul.
“For the longest time Maybank’s investment banking arm (Maybank Investment Bank Bhd) was lethargic and often looked upon as second tier…Zafrul changed this perception,” a market watcher said.
To his credit Zafrul was instrumental in Maybank bagging such deals as the merger between SapuraCrest Petroleum Bhd and Kencana Petroleum, which created the RM20 billion behemoth known as SapuraKencana Petroleum.
Similarly the Westports Holdings initial public offering which is slated for next month was Maybank’s, largely due to Zafrul, industry players said.
So is his leaving really loss to Maybank?
A seasoned banker takes the view that Maybank’s merchant banking arm contributed very little to its bottom line.
For its six months ended June, Maybank posted pre-tax profits of RM3.2 billion from RM16.9 billion in revenue. According to its notes which accompany its financials, the investment banking arm registered pre-tax profits of RM249.3 million for the six months in review, which works out to less than eight percent of pre-tax profits.
John Chong
“IB (investment banking) is not a big business for Maybank…the company has a huge balance sheet…so Zafrul’s departure while a blow for morale may not really impact the bottom line.
“And it is not like John Chong (Zafrul’s successor) is greenhorn, wet behind the ears and clueless about how to handle things….if you talk about relationships, hire strong marketing people… the CEO need not be the one with all the contacts,” the seasoned banker said.
Chong is a 20 year veteran of merchant banking, and insiders say that other than not having much exposure on the regional front, Chong should have little difficulty being the head honcho of Maybank Investment Bank.
Top positions to fill at Maybank
Khairussaleh Ramli (left) and Abdul Farid Alias
Other than Zafrul, Maybank also has a vacancy brought about by its Bank Internasional Indonesia head Khairussaleh Ramli, leaving after deputy president Abdul Farid Alias was appointed Maybank’s new chief executive, following the departure of Abdul Wahid Omar to take up a position as the Minister in the Prime Minister’s Department.
Both Zafrul and Khairussaleh were shortlisted for the top job at Maybank, with Khairussaleh vying neck to neck with Abdul Farid.
Although not etched in stone, Khairussaleh is understood to be joining RHB Capital’s wholly owned unit RHB Bank as deputy chief executive officer before taking over the reins of the fourth largest banking group in the country.
Both Khairussaleh and Zafrul are understood to have lobbied very hard for the job and were disappointed at not bagging it.
Zafrul’s had the likes of former cabinet minister Raja Nong Chik Zainal Abidin who is his uncle and politician Jamaluddin Mohd Jarjis among others in his corner.
“Of course he (Zafrul) was disappointed, but the lobbying was done on a voluntary basis…they are his family and friends,” a Maybank insider said.
But the Maybank insider said that the top brass at CIMB, especially chief executive officer Mohd Nazir Razak and Zafrul were friends and they had often jokingly spoken of Zafrul joining them.
“When it sure that Charon was leaving, the official offer came…it was only two or three weeks ago,” the Maybank insider said.
A boon for CIMB?
Another market watcher said that Zafrul’s move to CIMB was engineered for him to eventually take over from Nazir, as head honcho of CIMB.
Nazir Razak
This however is not painting an accurate picture as according to CIMB insiders, there are at present four people under Nazir, who are in the running to take over, with Zafrul joining as the fifth.
“Actually it takes the heat of Nazir…there’s now someone else in merchant banking. Zafrul’s entry reduces dependence on Nazir,” an analyst familiar with CIMB said.
Apparently a clearer succession plan for CIMB is something that investors have favoured.
A friend of Zafrul’s added that he (Zafrul) felt that he could learn more from Nazir, who is now 47 and take over when he retires, than from Abdul Farid.
Irrespective of the reasons for his moving, it is clear that both Zafrul and Maybank will be in the crosshairs for the near term at least.
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