PETALING JAYA: Evergreen Group Holdings plans to apply for an investment banking licence in an Asian country – especially in Asean and possibly Malaysia – within three years.
According to COO Desmond Sim, it is exploring the market landscape of countries in the region and will apply for a banking licence once a decision has been made.
He said it has been mulling over whether to choose a developed country such as South Korea and Japan or a developing country such as Malaysia, Cambodia or Vietnam.
Ultimately, he said there is a strong possibility that they would choose a developing country due to less restrictive criteria for application and competition, with Malaysia being a top contender as well as Cambodia.
“If we were to go to developed countries, the criteria are a lot higher such as requiring proof of funds and so on, compared with developing countries (with lower criteria for application).
“Malaysia is pretty viable from what we have been discussing, that would be exciting because it is closer to Singapore,” Sim told SunBiz, adding that setting up infrastructure as well as adhering to licensing and regulations is expected to be completed within three years.
He said that it will start as an investment bank, before growing into a retail bank as retail banking operates on a bigger scale, which involves higher investment and a different set of compliance requirements.
Citing Singapore’s banking landscape, he said there is a huge gap between investment banking and retail banking as conditions for application for the latter are more stringent compared with the former’s.
He said that while it will operate as an investment bank initially, it will gradually move towards retail banking, albeit noting that it is likely to take more than three years to realise that goal.
“That is our mid-term to longer-term target on the banking side, banking licence and what we want to achieve,” Sim said.
Currently, the Singapore-based company holds a financial institution licence in Cambodia and Vietnam.
Sim said it is a natural trajectory for the group to venture into banking as with its micro loan services, it is already operating as a bank per se, albeit on a smaller scale.
As at September 2023, its financial sector contributed to the bulk of its revenue at S$62 million (RM216.84 million), which mostly includes trade, vendor and invoice financing services in Singapore, Cambodia, Vietnam and South Korea, while its automative business registered S$2.8 million.
At the same time, the group has a total financing amount of S$65 million with a collateral value of S$111.3 million. Sim remarked that the amount showed that the group’s “cushioning percentage is healthy”.
Meanwhile, he said that it plans to enter the Malaysian market through partnering with national housing development companies, offering home financing to end-users or potential homeowners.
He shared that the group is in preliminary talks with companies and has disbursed a “small sum to try out the system”, adding that it might continue its offerings on a long-term basis should it be fruitful.
Sim said it is not in talks with entities directly as discussions are facilitated by Koperasi Rumah Modular Melaka Bhd, which is under the purview of the Malaysian Cooperative Commission. However, it hopes to potentially conduct direct dealings with them in the future.
