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Malaysia's best domestic bank 2018: Hong Leong Bank

Hong Leong Bank

The Quek clan’s Hong Leong Bank is Malaysia’s oldest local bank, founded in 1905 to serve the Chinese traders of Borneo, but it feels like the country’s newest bank thanks to the arrival of digital-obsessed chief executive Domenic Fuda, HLB’s first Western boss, two years ago.

It is evident in the prototype branch on the ground floor of HLB’s head office in suburban Kuala Lumpur, the model for the transformation Fuda is steadily rolling out across HLB’s 250-strong branch network.

With an atmosphere that is more atelier than abacus, HLB 2.0 is part groovy café, part premier banking suite. And this is a normal branch, as HLB’s high net-worth banking is tucked discreetly out of regular public view.

Cash isn’t much in evidence here either; seven out of 10 staff in the new-look HLB branches are customer-facing, often wielding iPads so that customers’ details are just a tap away. The digital transformation has HLB, Malaysia’s fifth-biggest bank, vaulting ahead of scandal-wracked AmBank in sixth place and challenging fourth-ranked RHB, whose planned $9 billion merger with AmBank fell through this year.

At HLB, profit generated per customer is up about 12%. Other key indicators are moving in the right direction; HLB’s cost-to-income ratio is now the second-best among Malaysian banks, as is its level of non-performing loans. The bank says its headcount is down about 10% and overall revenue growth is up 6%. The market likes it too, as stock analysts move HLB from a sell/hold to a buy.