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1.0 Introduction
Hong Leong Bank Berhad
Hong Leong Bank Berhad (HLB) is one of the largest banking and finance company
that is headquartered in Kuala Lumpur at Malaysia. Hong Leong Bank is a unit of the
Hong Leong Group Malaysia. It operates about 200 branches and sales centre and 16
business centre in its home country. With more than 100 years of banking knowledge
and experience, HLB has a strong market position and a well-recognized business
franchise. HLB is principally engaged in all its aspects of the banking and finance
company businesses which are personal financial services, wholesale banking, Islamic
financial services, electronic banking and the provision of related financial services.
Furthermore, the Bank offers investment banking and private banking. It operates
through its subsidiaries which includes Hong Leong Islamic Bank and Hong Leong
Tokio Marine Takaful. (Hong Leong Bank Berhad, 2007).
The founder of Hong Leong Bank, Mr Lam Ji Chiew began the business in 1905 in
Kuching, Sarawak under the name of Kwong Lee Mortgage & Remittance Company
(Hong Leong Bank, n.d.). In 1934, HLBB was established as Kwong Lee Bank
Limited. After that, Kwong Lee Bank Berhad was acquired by MUI Group in 1982

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and renamed as Malaysia United Bank Berhad on 2 February 1983. In 1989, it was
named as MUI Bank Berhad. Under the Bank, it grew from 11 branches to 35
branches (Hong Leong Bank Berhad, 2007).
Later on 3 January 1994, MUI Bank Berhad acquired by the Hong Leong Group
Malaysia through Hong Leong Credit Berhad and renamed it as Hong Leong Bank
Berhad (HLBB). HLB was then listed on the Bursa Malaysia on 17 October 1994
with its total paid up capital increased to RM 470 million. Since that, the growth of
the company had been noteworthy (Hong Leong Bank Berhad, 2007).
HLB also acquired the financial company business of Hong Leong Finance Berhad in
2004. Lastly, HLB completed the combination with EON Bank Group in 2011. The
combination effectively evolved the Bank into banking group of more than RM 145
million in assets and an expanded network of 329 nationwide of branches (Hong
Leong Bank Berhad, 2011).
HLB proves that the vision together with quality, innovation, unity and the ability to
face the challenges and chances in order to present a powerful and compelling force in
business. Besides that, the slogan of Hong Leong Bank “Reaching Out To You”
which means this is the mission and promise of HLBB to their customers in order to
fulfill the customer satisfaction (Hong Leong Bank Berhad, 2007).
Nowadays, HLB is built on the commitment of a global staff force to quality and
professionalism. In an ever-changing environment, the Bank will continue to drive
towards building a sustainable group of businesses to remain competitive.

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2.0 SWOT
The SWOT analysis is a tool that identifies the strength, weaknesses, opportunities
and threats for understanding and decision making for all sorts of situation in business
and organization. SWOT analysis of the venture and situations in business, strength
and weaknesses are identifying as internal factors, however opportunities and threat
are identifying as external factors (Businessballs, n.d.).
Strengths
Integrated comprehensive financial services group
In the Hong Leong Berhad provide the Hong Leong Group’s banking and financial
service has grown over the years in strength and extensive focused business strategies
aided by strong management an expanded distribution network and financial. Hong
Leong Bank has over 300 branches, 1200 self-service terminals nationwide in
Malaysia, sales and business centre around the Asia such as Malaysia, Singapore,
Hong Kong, Vietnam and so on the service are provide to loyalty customer and
wealth management in local country either overseas to supply financial management.

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Hong Leong Bank Berhad has a comprehensive service range of alternative and
electronic channels that include Hong Leong Phone Banking, Hong Leong Online,
Hong Leong Mobile Banking, Hong Leong Call Centre, self-service terminals and so
on. Nowadays, Organizer of Hong Leong Bank as an investor investing activities in
each year of experience and financial excellence of the global market leverage in long
term businesses. Assumed the mission to create attractive risk-weighted rate of return
and capital value the Group made up of well-trained, experienced investment
professionals, supported by up-to-date information systems and technological
infrastructure. Hong Leong Bank also provide the transformed business franchise with
over 70% gross loan to retail customer and 21% share of the bankable population with
the middle market business community. However, in the financial institutions more
powerful will ensure that the industry will be able to service and funded the
development aspirations of our enterprises and low-income population of the higher
financial needs as the same times more competitive depth and better diversified
portfolio, the better growth of not only credit the cause of reason, but will also crack
down on prudent in the current price war (HLM Takaful, n.d.).
Hong Leong assurance major medical schedule of benefit and premium tables
A lot of time we are looks at our insurance coverage more often than not years ago,
we bought the insurance policy is insufficient to meet current needs especially in the
hospital and surgical medical plan. However, Hong Leong Assurance (HLA) major
medical is substantial and comprehensive health insurance plan that is designed to
cover the cost of hospitalisation and surgical up to age 99 years old. HLA major
medical card can be purchased as a traditional life insurance policy or rider taking of
investment-linked plan. The unique benefit and features of HLA major medical card
are higher annual and lifetime limit as compared to competitor like Tokio Marine
Medic Plus because the treatment costs are fully borne by insurer and multi-level
deductible depending on the choice and affordability of the buyers pretty
comprehensive list of panel in the hospitals. In HLA will has a full pay to the cancer
treatment and kidney dialysis whether not subjected to deductible and you may claim
up to RM 60,000 compared to Tokio Marine Medic Plus only can claim RM 50,000
due to the deductible medical card (Sense of money, 2012).
Features and Benefits of Hong Leong credit card

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Hong Leong bank has won numerous awards and honours. In year 2006, Hong Leong
has won Asia’s Best companies, Best E banking Project in 2007 and Best Credit Card
Product Award in 2006 and 2011 by Asian banker. Nowadays, all EX-EON bank
credit cards have converted to Hong Leong credit card by non-interest balance
transfer plan can request their savings or current account to deposit cash and treat it
like a short term loans. Hong Leong bank away update new promotion and privileges
to new credit card and existing card holders such as provided Hong Leong club
rewards exclusively for priority banking to customer, travel insurance
coverage, discounts to exclusive business partners and free travel inconvenience
insurance compensation. In addition, Hong Leong bank special designed Hong Leong
Essential Credit Card combined with the most significant feature of each credit card
so cardholder can enjoy the best of both worlds of benefit of having multiple cards
and convenience. The main benefits of the basic credit card unlimited cash back 1%
to 2% of the low fees, cash advance, a higher credit limit, and lifetime free. Besides
that, cash advance transaction fee at a minimal of 2% amount advanced compared to
other’s bank credit cards would charges as 5% of the amount withdrawal. Hong
Leong bank Essential Credit Card also provide 10.8% per annum interest on cash
advance of the outstanding amount calculate basic on daily transaction date but
other’s bank credit card would charges 18% per annum on cash advance.
Best e-banking project 2007 for Hong Leong bank
Hong Leong Bank is recognized as a region has won many honours over the year its
brand strength, good quality products and services, management and results of
operations. In March of 2007, Hong Leong Bank award by Asian Banker's as Best e-
Banking Project 2007 for the superior efficiency, convenience and speed of
transaction delivered to its customers and users. Hong Leong Online bested regional
submissions illustrious IT Implementation Award recognizes the best emerging
technology practices and benchmarks in Asia Pacific banks (Hong Leong Bank, 2011).
Today, the demand of the online banking has increased there are 4.5million register
internet banking customer the growth rate of 40.6% in Malaysia. HLB online provide
the comprehensive suite of features to customer and the Corporate Internet Banking
facility is extended for small and large corporations for the financial transactions they
include funds transfer, credit card services, e-bill payment, account maintenance and

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so on. Trends and statistics tracking network HLB is positioned to catch up with
emerging trends in network development in order to promote innovation in the area of
customer experience and takes online banking steps further than competition by
constantly innovating on its offerings and introducing even more aggressive
promotions to ensure attracting even more new customers (Cyber Village, 2008).
Weaknesses
Poor of service management
Slogan of Hong Leong Bank “We Focus on You” as priority to the customer service.
First of all, the customer service center didn’t provide the best service to the customer.
The staff in Hong Leong bank’s some has less particle and training in the center. It’s
because the customer has make complain about the staff has spell and less skill
problem they especially English pronunciation when communication with the
customer. Besides that, poor management in the customer application the staff has
made the promise with the customer. Almost 2 month the applicants still didn’t
received the card from the Hong Leong bank and some of the applicants cam
complain about the applies for Essential Card but the worker given they classic card.
However, Maybank service management are more fast and efficient than the Hong
Leong because they didn’t give any hassle to the customer.
Problems caused during transactions
Online banking provides customer conduct financial transactions such as funds
transfer, credit card services and e-bill payment to able customer perform a verity of
banking transaction online with secure website operated. Sometimes, Hong Leong
bank also facing intermittent interruption of its computer system which has affected

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some automated teller machines (ATM) operations especially all the braches and
business daily could not withdraw money at all even. Since the transactions has been
happen but the customer and some corporate customer of Hong Leong bank compliant
the staff was not settle the situation well, didn’t info and notification about what to do
and failed to keep they promise to fixing the problem by a specified time. In the cases,
this problem will made big influence the customer emergency used to made a
transaction such as pay salary advance to employee, withdraw money medical
treatment and so on. In addition, Hong Leong bank’s used facing theft problem
electronic payment systems during transactions and closed to the smart card. However,
this happened will affect the customer’s mentality about the unsafe and danger of the
expenditure entire bank balance.
Impoverished of facility in Hong Leong bank
Nowadays, Hong Leong bank has over 300 branches and 1200 self-service terminals
nationwide in Malaysia but the requirement and equipment of bank still unsatisfied to
the customer. Hong Leong Customer’s has complied with the only one branch in Miri
and the customer need to take long time to find the car park. In the Miri, the bank only
provides 2 ATM, cash deposit and 1 cheque deposit machines and also deposit
machine out of service when in encountered several times. In addition, impoverished
of facility in Hong Leong bank which the bank didn’t has cash deposit machine
compared to other bank such as Public bank, CIMB and Maybank. Cash deposit
machine can real time access to your account balances and transaction activities 24/7
and cheque management including cheque status enquiry, stop cheque request and
new cheque book request. The advanced to provide greater convenience and control,
realize greater efficiency and improve decision making and improve transaction
turnaround time. However, customer of the Hong Leong bank can’t enjoy with the
deposit machine to efficiency and take longer time to make money transaction to 3rd
party because the customer need to register when he or she to make the transaction in
Hong Leong bank.
Lowest net interest margins ( NIMs ) among peers of Hong Leong

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Hong Leong Bank's net interest income growth as a precondition to lower cost of
funds focused on high-yield loans reconstruction and a better current account and
savings account (CASA) management of NIMS. Hong Leong bank has one of the
lowest NIM levels they has note about bank strategy focus on higher yielding loans
such as credit cards and personal loans to ensure NIMs strengthen (eInvest, n.d.).
However, HLB expect to improve NIM over time due to its exposure to higher
yielding loans. As the same time with growth in low-cost deposits, cost of funds is
expected to be lower and net interest income to be the key driver to earnings for Hong
Leong bank. NIM improved significant to 2.1% in one quarter of a fiscal year 08 from
1.6% in 4 quarter of a fiscal year 07 due to higher asset yield and lower cost of funds.
Competition for low-cost deposits will intensify forcing the net interest margin further
(eInvest, n.d.).
Opportunities
Opportunities to attract more customers as Malaysia’s Gen Y
Opportunities which are external chances to improve performance in the environment
such as make greater profits. Recently, Hong Leong Bank has launched a new sub
brand which is Mach by Hong Leong Bank where the products and services are
customized for the Generation Y customers. Mach by Hong Leong Bank can
categorized as a new banking experience for a new generation. According to the
group consumer banking general manager Mark Tan, Mach Hong Leong Bank were
plenty to lure the Gen Y customers as Malaysia’s Gen Y population which was
getting savvier in information technology, especially in mobile banking. Mach by
Hong Leong Bank is targeted to attract Generation Y customers in order to expand the
profit. While, the initial investment for Mach was costly in investing on technology
and e-banking services, however, it could help the bank save the bank 30 per cent in
terms of cost. Bring to the market a new concept in the brand with the “bricks and
clicks” dedicated life is starting to adapt their product packaging and the next
generation of consumers to provide the best service.
Introduction of these new and innovative products
Hong Leong Bank‘s Hello Kitty Debit Card which is the “first-to-market” that
launched by the Hong Leong Bank where designed to invoke young ladies and

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women with young children. The introduction of these new and innovative products is
in line with Bank Negara Malaysia’s continuous effort in promoting cashless payment.
Hong Leong Bank Hello Kitty Debit Card arouse the market disturbance which
attracting many young generation and women apply for savings account in order to
get the limited edition Hello Kitty Debit Card. One of the benefits of Hong Leong
Hello Kitty Debit Card is offers security and peace of mind as the purchase liability
loss in limited to RM150 only in the event which the card is lost or stolen. Besides,
card members can view their own Debit Card transactions online for free and can
enjoy the special prerogative ranging from beauty to fashion, health and fitness and so
on (cited as Kuala Lumpur, 18 October 2011, Hong Leong Bank News). This will
increase Hong Leong Bank profit thus also increase the price share.
Eon Bank was legally and fully vested into Hong Leong Bank on 1 July 2011 which
enables to with a more powerful provide customers, a wider range of products,
services and solutions through extensive network 329 branches and more than 1400
self-service terminals. The new structural basis can create more market focus and
customer-oriented, innovative and universal banking group positioned to utilize on
growth opportunities in the country and region.
Regional expansion to Hong Kong possible for Hong Leong bank
Hong Leong Bank is the first bank to be allowed to offer comprehensive Islamic
banking services in Hong Kong. However, the aim for the bank to tap the markets of
mainland China and West and North Asia through this platform leveraging on Hong
Kong’s status as an international financial centre. To attract potential as an Islamic
financial centre, Hong Kong Government has demonstrated the territory from the
booming economies in the Middle East petrodollars. Hong Kong Financial Services
and the Treasury Deputy Secretary of State said that the launch of Hong Leong
Islamic Bank is compatible with the regulatory framework in Hong Kong.

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Threats
New modern technology
Threats are the external elements in the environment that could cause the trouble for
the business or project. Nowadays, the advanced technology is more developed. The
fraud detection technology in Hong Leong Bank is not good enough in detecting
cheats and perfect, it cannot detect fraud immediately and fraudulent transactions
which occur frequently, attractive and comfortable and a thief in possession of stolen
or counterfeit credit card information on the consumption boom. In addition, it has the
right customers to verify the suspicious transactions and it will prevent further
account. The technology is costly and request more time and effort to develop human
resources training. Therefore, the rule-based system is not fraud intelligent detection,
but there is also a very high false positive rate.
Challenges in the financial industry
Nowadays, CIMB Bank, Public Bank, Maybank, RHB Bank and AM Bank which are
the major competitors of Hong Leong Bank. Maybank, which is listed as a top 10 in
Malaysia. Besides, Maybank also is the second largest bank in Malaysia Stock
Exchange and Bursa Malaysia. Within these few years, competency between Hong

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Leong Bank and Maybank is one of the clear examples of the rising competition.
Maybank have 374 domestic branches and 90 international branches. While, Hong
Leong Bank manages more than 150 branches in Malaysia and 1 branch in Singapore.
Maybank has the correspondent banking relationship with 700 foreign bank
throughout the world as well as strong performance as the experts in their industry
share their experience with the employees. In addition, Maybank have many others
investments from other companies if compare with Hong Leong Bank.
Improvement the electronic payment system
Hong Leong Bank still needs the enhancement because this is one of the threats of
Hong Leong Bank which will cause the trouble and lead the customers will feel
unsecured when using the electronic payment system. Customers will apply the new
accounts in others bank such as Public Bank or Maybank which there have a strong
protection in electronic payment system. Today, fraud is on going concern. Internet
and e-commerce fraud would continue to maintain a threat due to hacking, key stroke
records and other forms of dishonest attacks where consumers at risk when
performing such transaction. An electronic payment system is identity theft which is a
great risk involves in the theft or the closing of the smart card. If the card is in unsafe
hands, the customer’s entire bank balance was danger.
Competitive rates could pressure margins of Hong Leong
Net interest margin (NIM) the pressure of competition but the short-term impact of
the policy interest rate cut may be further exacerbated. Particularly for Alliance
Finance Group Bhd (AFG) and Hong Leong Bank (HLB value) net interest margin
compression the main dip. Management in Hong Leong has turned somewhat cautious
given the rising external risks. However, Management margin from the intense loan
and deposit market rates competitive pressures. Management margin from the intense
loan and deposit market rates competitive pressures. The bright spot is the increase in

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trade flows in the ASEAN region. Overall, the group’s strategic thrusts are to increase
operating efficiency and be more customers.
3.0 Competitor Analysis
Hong Leong bank is categorized as banking industry. The banking industry in
Malaysia started off since in the early 1990s when the economy is growing rapidly in
the country. From the profits of rubber plantation and tin industry, Malaysia have
succeeded in opening the first domestic bank during 1913, which is Kwong Yik
Banking Corporation which is now known as MAYBANK. Since then, Malaysia
banking industry has continued its growth they it manage to expand more other
banking institutions as option to the citizens. Due to numerous bank in the country, a
central bank (Bank Negara Malaysia) was establish to control all the banks activities
and operations (Banking Industry in Malaysia [BIiM], 2012). In Malaysia, the types
of financial institutions consist of commercial banks, merchant banks, Islamic banks,
foreign banks’ representative’s offices, finance companies and discount houses. The
evolution of banking industry in Malaysia has led to conventional banking products
and services which also includes deposits and hire purchases. Besides that, the
banking industry also involve with the features facilitated with advance technological
developments such as phone banking, auto pay, auto debit, ATMs , online shopping
and much more (BliM, 2012).

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Among the banking institutions listed in Malaysia, we will be analyzing 3 top
competitors that Hong Leong Bank will be facing which are Maybank, Public Bank
and CIMB Bank and RHB Bank
Malayan Banking Berhad (MayBank)
Malayan Banking Berhad (Maybank) as a financial service provider in Malaysia has
the largest network all over Malaysia was founded by Mr.Khoo Teck Puat in1960s. In
1970s, Maybank have started to add more branch every year. The expansion of the
company have lead them form its own investment banking subsidiary and by 1980s,
they had expanded to the international market. Maybank have begun to enter to
Singapore, Brunei, Hong Kong and London to start of their operational branches
(Maybank, 2012). Their main activity are offering a full range of commercials,
corporate and private banking services Maybank set a wide network of more than 450
branch offices and more than 2,500 of ATM machines. Besides that, Maybank also
operates a number of specialized subsidiaries in the insurance, investment banking
and assest management, and finance sectors (Maybank,2012). The group’s
subsidiaries also include Maybank General Assurance, Maybank Life Assurance and
Maybank Takaful. They have later focus on developing insurance products which are
compatible with the Moslem law which also known as Maybank Islamic banking.
Comparing to other competitors, Maybank have apply NFC using the mobile visa
wave payment. NFC is a short range wireless radio frequency that requires at least
4cm or less to initiate a connection. The function of NFC allows it user to share a
small payloads between a NFC tags and Android-powered device (Android
Developers, 2012). The new systems were also collaborated together with Maxis
Communication Berhad and Nokia. Started out in 2004, the pilot test for Maybankard
Visa Wave-enable in a phone is a two in one product. With the Nokia 3220 model
connected to the Maxis network, users could wave and pay wherever a Visa Wave
Sign display (Vivotech, 2012). Consumers could easily identify that Maybank’s
mobile visa wave payment are only available for Maybank account user (Clark, 2008).
To convince their customer even more, Maybank is using Total Content Management
(TCM) to manage their software. TCM is a set of integrated software facilities that
capture, manage, store and deliver different content that help to supports processes
and the operations in e-business (INFOMAX, 2012). By using TCM, customer feels

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more secure on how their data were kept in the system. The customer could easily
gain the latest information about program and scheme which they are interested. The
storage of data in TCM helps the customer care consultant to work more efficiently
and this will gain the customer trust and loyalty (CBSA, 2012). Furthermore,
Maybank has been partner with Visa International to enhance better in features in
their smart card system. Visa International unveils the new redesigned card that not
only could improve the security features but also will make counterfeiting more
difficult. Being the member in Visa International, Maybank have the privilege to get
updated from the Visa International, thus Maybank even have become the first to
introduce the new card design in Malaysia which is ‘Wave enabled’ (Andreare
Selected Press Releases, 2006). Based on these three features that Maybank have
introduced, it has definitely help the corporate to beat other banks in the industry. The
innovation and differentiation that shows by Maybank have overcome others banks,
plus with their history of being the first bank in Malaysia for more than 50 years will
build customer reliance towards them.
Public Bank Berhad
Public Bank established in Malaysia in the year 1966, has been founded by Sri Dato’
Sri Dr. Teh Hong Piow. Public Bank also deals with other banking operations such as
Hong Kong, China, Cambodia, Sri Lanka, Vietnam and Laos. The Public Bank Group
have more than over 17,160 staff, and 90% of these staff operates in Malaysia while
the rest are in overseas operations which include Hong Kong and China, Cambodia,
Vietnam, Laos and Sri Lanka. In term of size, Public Bank is the third largest
domestic bank in Malaysia. It has been well known for its prudent management,
superior customer service, uncompromising service delivery standards and strong
corporate governance and corporate culture (Public Bank, 2012). The Public Bank
main activities are retail commercial banking, corporate banking, investment banking,
stock broking, funds management, wealth management services and Islamic banking.
In Malaysia, Public Bank is an industry leader in home mortgage financing, vehicle
hire purchase financing and commercial lending to small-sized and medium-sized
enterprises. For domestic operations, Public bank have also place 1,308 ATMs and
other self-service machines such as Cheque Deposit Machines and Cash Deposit
Terminals. Not only that, Public Bank have also provide internet banking and mobile

15. 15
banking services to convenient their customers to access their account. The Public
Bank branches have expanded more than 248 branches in Malaysia (Public Bank,
2012).
In Public Bank, they have launched a card known as ‘PB Day2Day Visa Card’. This
card functions as a Visa Debit card and ATM Card. It is directly linked to the Public
Bank Savings Account maintained by the cardholder. The card is available to
individuals aged 12 years old and above and no income documents are required for
registration. Customers can use the card for retail purchases, shopping, dining or
entertainment at any establishment that accept Visa or Bankcard or MEPS locally or
globally, face to face or over the internet. The card can also be used for bill payment
and fund transfers. The ‘PB Day2Day Visa Card’ is accepted at all Public Bank self-
service terminals, ATMs displaying the Visa or Plus logo and any MEPS Member
Bank's ATMs. It had increases the convenience to customers while minimizing the
hassles and risk to customers who need access to their cash. The introduction of this
‘PB Day2Day Visa Card’ offers customers the opportunity to enjoy instant savings
while they shop. Customer can also enjoy unlimited Cash Back of up to 0.3% on other
retail purchases charged to their ‘PB Day2Day Visa Card’. Other than that, Public
Bank have boost up the development of Small and Medium Enterprises (SMEs). The
bank has offer a complete range of products and services to serve the SMEs. The
SME development unit delivers much kind of services such as carry out the market
research on the needs of SMEs, formulating different lending products and scheme to
meet up with SMEs necessity, support business development and joint promotion with
relevant establishments such as SMI Association Malaysia and other business-related
associations and chambers and much more. Furthermore, Public Bank also give out
business support services such as advisory services, training on banking and trade
financing, economic and business review, and Forex and market money updates.
Based on the strong support given by Public Bank on the SMEs, other banks are not
able to induce it as successfully as them (Public Bank, 2012).
CIMB Bank
Commerce International Merchant Bankers Bhd or CIMB Group is a universal bank
that operating in high growth economies in ASEAN. The group runs under several
corporate entities which include CIMB Bank, CIMB Investment Bank, CIMB Islamic,

16. 16
CIMB Niaga, CIMB Securities International and CIMB Thai. The bank’s primary
business activities are Consumer Banking, Comprising Investment Banking,
Wholesale Banking and Corporate Banking.
CIMB Bank is a small unit of the CIMB Group that providing retail banking services
to over million customers in 324 branches nationwide. The bank straightly covers the
countries of Singapore, Malaysia and Cambodia. The bank also has some branches in
London and Hong Kong, as well as the representative offices in Yangon, Shanghai
and Mumbai. As the second largest consumer bank in Malaysia, CIMB Bank carries
significant market shares across all consumer banking products. The bank also
awarded the Bank of the year Award 2012 by The Banker and The Best Bank by
Euromoney (CIMB, 2011).
There are several elements may post some challenges to Hong Leong Bank in terms
of product or service range. The Bank had offered different types of cards. The cards
consist of credit card and debit card (CIMB, 2011). According to Hamilton (n.d.), one
of the most popular credit cards issued by the bank is the CIMB Smart Drivers
Package. The function of credit card is works as a regular credit card. The Touch ‘n
Go Visa Card, without charging any annual fee and the payment of registration fee
and approach to all services of Touch ‘n Go with free GCS movie ticket for the
respective Platinum Credit Card holders and some purchases can be paid by points
earned (Hamilton, n.d.). Furthermore, CIMB Petronas MasterCard with 5 percent of
rebate on the first month and 2 percent rebate on the other days and discount from
Starbuck and hypermarkets (Hamilton, n.d.).
CIMB also post challenging by keep expanding the outlet and services location to
make it more convenient which Hong Leong Bank not really have it. The purpose is
to remain competitive. CIMB also act the second growth bank in Malaysia that the
bank starting to involve in the growth property investment, internet banking services
which is up-to-date and having strong impact to public society (CIMB, 2011).
RHB Bank Berhad
RHB Bank Berhad is a commercial bank based on Kuala Lumpur, Malaysia. The
bank specializes in Business banking, Islamic banking, Group transaction banking,

17. 17
Retail Banking, Global financial banking and Corporate and investment banking,
Commercial banking and International banking services (RHB, 2011). RHB Bank was
the 3rd largest bank in Malaysia, with 200 offices in Malaysia. The bank was also
awarded the Best Domestic Bank by both Finance Asia and Euromoney in 1997
(Wikipedia, n.d.).
RHB Bank also post some challenge to Hong Leong in terms of credit card. As we
know, the bank specializes as a commercial bank, international bank and as a
corporate and investment bank. RHB bank issues other credit cards with additional
benefits to cardholders as Hong Leong Bank unable to do so. According to Hamilton
(n.d.), the co-branded credit card, when the customers use the Tesco-RHB credit card
that has offer a 2 percent cash back in Tesco Malaysia stores and earns 1 point for
every purchases that cost RM 2. RHB Evo credit card is geared to youth market with
a stylish and functional card that earns reward points when used (Hamilton, n.d.).
4.0 Business Strategy
Like any other banking industry out there, Hong Leong bank generate most of its
income in receiving interest out of loans, according to Hong Leong bank annual report,
Hong Leong bank major revenue are acquired through payback of interest from
individual loans and small to mediums enterprises(SME’s) business loans, partially
are from credit cards interest and securities investment. In this part of assignment we
will focus on how Hong Leong bank form its business strategy to compete with other
banking industry to acquire more market share in other to gain more loans.
In banking industry credibility and security are very important aspects of business
criteria. From customer taking loans to customer saving money, each one of them are
entrusting the bank in securing their transactions. Based on our threat report in the
SWOT analysis we discover that Hong Leong bank still lack in giving the full
confidence in customer compare to other Malaysia major bank for example Maybank
or public bank especially in the part of electronic payment. Although Hong Leong
bank faces a lot of pressure in competing with other bank, it’s business strategy
through these years of advancement had allowed Hong Leong bank to maintain an
uprising market share and penetration within the banking industry of many nation.

18. 18
Prospector Strategy
Prospector strategy is considered as the most aggressive among the four business
strategies. It typically involves active programs to expand into new markets and
stimulate new opportunities. New market development is vigorously pursued
and offensive marketing warfare strategies are a common way of obtaining
additional market share. They respond quickly to any signs of market opportunity,
sometimes even entering a market without or with little research and analysis. When
using this strategy, the risk of product failure or market rejection is high. Their market
domain is constantly in flux as new opportunities arise and past product offerings a
trophy.
Business user of prospector strategy value being the first in an industry, thinking that
their “first mover advantage” will provide them with premium market opportunities
and high margins. In Hong Leong bank cases, first mover strategy allowed them to
recaptured the market share from competitor and to target new market.
Advertising, sales promotions, and personal selling are a major concern for prospector
strategy user to penetrate the market with a high percentage of targeted audiences.
Among the banks in Malaysia no one is as aggressive as Hong Leong bank might be,
always seeking to expand its business abroad and seeking for new market segment
even becoming a first mover in other financial product to gain ahead of competitor.
For example of gaining a first mover advantages is the introducing of hello kitty credit
and debit card which we had mention in the opportunities section of this report, the
aim is attract young ladies and mothers for young girls as potential target market. This
strategy is among the brightest strategy ever use in banking in Malaysia, the concept
behind the strategy is due to the user of credit cards loans consist 60% of female than
male, the strategy was able to capture the female market and started from a young age.
Sign up for credit card since young would ensure a future percentage of profitable
market. Though successful, our group questions the ethics behind the strategy.
Although currently this first mover strategy is very successful as it reported in share
gain of increasing in credit card sign up especially among young ladies. This strategy
increases the Banks credit card market as the launches first mover financial product,
but at the same time the strategy from the bank are subjected to the risk of failure,
since no experts can ensure that young ladies or mother of young ladies would choose

19. 19
a Hello Kitty credit/debit card, as it is not one of the criteria mostly one seeks in the
function of such.
Besides that, Hong Leong Bank react agile to signs that indicates a potential market.
According to Hong Leong Bank Chief Operating Officer Mr Hor Kwok Wai, in an
annual conference last year, He mention that although the Malaysian market are
proven to be very stagnant for Hong Leong Bank, it never stops to expand it business
internationally to gain market share in another country, currently he as the Global
Markets Operating Officer, had been focusing its business in Singapore, Hong Kong,
China and Vietnam, Besides that he clarify their future plan for Hong Leong Financial
Group (HLFG) is to turn its target towards China, as there are a lot of potential market
for Hong Leong to expand. According to the star newspaper entitled Hong Leong’s
strategy for China banking unit published in October 13 2011, Hong Leong will eject
its full investment into China market and expending its business especially in the rural
area where they estimated a market share of RM143.6mil in return. As strategic the
strategy may sounds expanding in China are actually much more competitive than
Malaysia, beside more competitive, rural area of China where the group are targeting
does not necessarily ensure profit as they are more conservative compare to cities folk,
especially financial loans. Furthermore, the cost of setting up branches in rural area
are more higher than in cities area since it involve a lot of transportations fees and
employees reposition. Those are subjected to the risk Hong Leong is taking. Although
the potential in China rural are high, the risk accompanied is higher as well. By taking
the prospector strategy, Hong Leong are expecting the returns to followed by high risk.
Cooperative Strategies
Cooperative strategy is defined as a strategy in which firms work together to achieve a
shared objective. In this cases, Hong Leong Bank had a lot of alliances such as
restaurants outlet, cinemas, theme park and so-on to gain a part of market share from
competitors, one of the most successful alliance for Hong Leong Bank is the alliance
with GSC (Golden Screen Cinema). One of the cooperative strategy develop by Hong
Leong is called the GSC-Hong Leong Gold and Platinum Credit cards. GSC being
Malaysia most widely stationed cinema can be found in every corner of shopping
malls in Malaysia, in partnership with GSC Hong Leong can ensure that millions of
fans of GSC will turn the tide in subscribing Hong Leong debit/credit card to obtain

20. 20
the privileges in GSC outlet. All of the perks and advantages can be gain by
subscribing in GSC-Hong Leong Gold and Platinum Credit cards are enormous
including a huge discount in movie and the priority in buying tickets without having
to queue with other customer.
One of the forms of cooperative strategy is called Joint venture. Joint venture is define
as a business agreement in which parties agree to develop, for a finite time, a new
entity and new assets by contributing equity. They exercise control over
the enterprise and consequently share revenues, expenses and assets. Joint venture is
one of the most common business strategy in international business expanding
(Investopedia, n.d.). When Hong Leong decided to expand in to the mainland of
China, it realizes its expertise are not without limit. As such it cooperate with Bank of
Cheng Du (BOCD).
To form a Joint venture company called Sichuan Jincheng Consumer Finance Limited
Company or (JV CO) where Hong Leong owning 49% of total equity and BOCD
owning 51%. According to the press release of Hong Leong Bank, their expertise
which possess a wealth experience in consumer finance and the alliances with BOCD
which posses a vast knowledge and experience in the banking market of China will
form a strategic Joint venture that will focus on central and western area of China.
HLB(Hong Leong Bank) further explain in the press release of their upcoming future
plan with BOCD is to form alliances with local major electric appliances chain store,
reputable consumer electric and computer stores to offer financing to consumer for
the purchase of consumer durables. Loan applications are carried out in the site of
purchase, with a modified procedure by JV Co it provide conveniences for applicants
including a low turnaround time. In the second stages of their Joint venture, they will
expand their business to furniture goods chain and offer general loans to consumer for
travel, wedding and education.
From the business strategy and Joint venture above we can see that Hong Leong Bank
had decided to advance its business into the market of China, beside with BOCD,
Hong Leong Bank had also form a strategic alliances with Industrial and Commercial
Bank of China Ltd which is a Bank originated from Singapore company, to launch
and offer trade settlement services in Yuan for trade customers, furthermore Hong
Leong Bank also partner with China development bank to develop cross-border

21. 21
financing and funding opportunities. Hong Leong Bank is targeting China very
aggressively, and plan for a market share before any bank could join in. In this section
of cooperative strategies no other bank form Malaysia can form a more successful
strategies than Hong Leong Bank.
5.0 Conclusion
In conclusion, Hong Leong Bank has the ability to become a strong and stabile bank if
the bank maintains its current business activities and planning. Besides, the bank must
enhance and develop some new policies and procedures in order to remain
competitive. The biggest income of Hong Leong Bank is come from the loans. Other
than that, Hong Leong proves that the vision together with determination, innovation
and the power to respond to challenges and opportunities to present a powerful and
compelling force results in growth and success in business Hong Leong Bank is
practicing the Banking and Financial Institution Act 1989 and Islamic Banking Act
1983.
Usually, the comprehensive SWOT analysis of Hong Leong Bank provides an in-
depth strategic analysis of the companies businesses and operations. The strengths and
weaknesses and the potential opportunities and threats has been complied bringing a
clearly and an unbiased view of the company. The SWOT analysis helps the company
to formulate strategies that augment the business by enabling the company that to
understand their partners, customers and competitors better.

22. 22
One of the Hong Leong strengths is the best e-banking project in 2007. We able to
know that its brand strength, good quality products and services, management and
results of operations. Totally, this shows a significant result to the bank in terms of its
business performance. However, Hong Leong is also facing rising competition from
major competitors such as Maybank, Public Bank, CIMB Bank and RHB Bank.
Because of poor customer services will lead to dissatisfaction of potential customers.
Therefore, we recommend Hong Leong Bank should let its coordinators to have more
training and knowledge in how to handling the complaints from customers.
Hong Leong Bank use the prospector strategy. It is considered as the most aggressive
among the four business strategies. It respond fast to any signs of market chances,
sometimes even entering a market without or with little research and analysis. When
using this strategy, the risk of product failure or market rejection is high. Their market
domain is constantly in flux as new opportunities arise and past product offerings a
trophy.
Besides that, Hong Leong Bank is using cooperative strategies in their business
strategies to predict their future plans and prospects. The partnership with GSC Hong
Leong can ensure that millions of fans of GSC will turn the tide in subscribing Hong
Leong debit/credit card to obtain the privileges in GSC outlet. In addition, the strategy
joint venture also important for the Hong Leong. Sometimes, a company joint venture
with the highly potential other firm, it will be increase its market share. Hong Leong
decided to expand in to the mainland of China, it realizes its expertise are not without
limit. As such it cooperate with Bank of Cheng Du (BOCD).
Lastly, Hong Leong Bank still has plenty room for improvement, especially on the
customer service. Hong Leong should continue move forward to keep this ability in
competencies. It is important to understand and keep tracking on the competitors such
as Maybank, Public Bank, CIMB Bank and RHB Bank.

23. 23
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