RHB says it offers voluntary exit scheme to employees
RHB Banking Group, Malaysia’s fourth-biggest bank by assets, said on Wednesday it is offering a voluntary exit option to all permanent employees in Malaysia, in a bid to improve productivity.
The offer is valid from Wednesday and will close on Sept 23, 2015, RHB said in a statement to Reuters.
A slowing economy and a weakening currency are squeezing profits at Malaysian banks, reducing loans and consumer spending. Fitch Ratings said there was a risk Malaysia’s credit rating could be downgraded should the Southeast Asia nation’s currency and economy continue to deteriorate.
RHB, which counts Abu Dhabi-based investment management firm Aabar Investments PJS as one of its largest shareholders, has almost 18,000 employees, with the bulk in Malaysia. It did not say how many employees it expects to take up the offer.
RHB’s voluntary exit scheme also comes at a time where investment banking activities have slowed in Southeast Asia. Proceeds from initial public offerings (IPOs) dropped 52 percent to $7.3 billion in 2014 from $15.2 billion in the previous year, according to Thomson Reuters data. In the first seven months of this year, $4.2 billion has been raised through IPOs.
The challenging environment has led CIMB Group Holdings Bhd , Malaysia’s second largest bank, to embark on a cost-cutting exercise in May and had 3,599 employees, or 11 percent of its total workforce in Malaysia and Indonesia, opted for voluntary redundancy.
RHB has been posting consecutive annual net profit growth since 2005. Annual net profit hit record high of 2.04 billion ringgit ($483.87 million) last year, 11.3 percent higher that a year ago, driven by higher total income growth.
But things turned challenging in the April-June period this year. The lender reported a 5.7 percent drop in its second-quarter net profit on Friday, hurt by lower net interest income.