STANCHART BRANCH CLOSURE
LETTER TO BANK NEGARA
Tan Sri Dato' Dr. Zeti Akhtar Aziz
Bank Negara Malaysia
Jalan Dato' Onn
50480 Kuala Lumpur
28 September 2001
CLOSURE OF STANDARD CHARTERED BANK BRANCHES IN SARAWAK
We express our serious reservations and grave concerns on the approval
by Bank Negara Malaysia to allow SCB to close down Bandar Sri Aman and
Sarikei Branch and open new Branches in High Growth areas in West
1. SCB is sacrificing the interest of customers in small towns in
its cruel and relentless drive to generate more and more profits. This
is not in line with the Sarawak government policy in setting up rural
growth centres in Sarawak. The bank's move will further accelerate the
rural urban migration. We also note that there are other small
branches in West Malaysia that the Bank could have closed, instead of
those in Sarawak.
2. SCB has demonstrated that it need not have physical branches in any
particular location to be able to service a particular populace.
Further, given the Bank's policy on direct marketing through
outsourcing and use of marketing agents, the need for new branches in
high growth areas will be redundant; especially in West Malaysia where
communication and infrastructure are much more advanced.
3. The Branches that the bank intends to close are long-existing
branches that are viable and generating reasonable profits. Branches
in Sarawak are crucial deposits gathering branches.
4. SCB's, Sarawak Branches account for 26.55 % of total
liabilities but only 5.9% of the total assets (year 2000).
Balance per account in Sarawak for S/A, C/A, and credit cards are
higher in Sarawak compared with Bank Wide, indicating lower cost of
deposits. Total deposit per employee in BSA and Sarikei at
RM7.5 Million and RM10.2 million respectively are much higher than the
Malaysian average of less than RM5 million.
5. The figures clearly show that the deposits gathered in Sarawak
generate profits for the Bank in West Malaysia.
6. With the Financial Sector Master plan, there is no urgent need to
sacrifice existing Branches to open up new branches, as Foreign
Branches should be able to open new branches in 2004.
7. The bank is only interested in profits, not service to the
community in which it has made and repatriated, so much profits over
last 77 years of operations in Sarawak. (RM210 million repatriated
in 1999 alone and retain profits of over RM600 million as at 31 Dec
8. It is shocking that Bank Negara can disregard national and State
policy and succumb to the whims and fancies of foreign Banks. Your
decision will further put local banks at a disadvantage. The
Financial Sector Master plan is designed to prepare local banks for
competition when the sector opens up in 2005. What BNM is doing is to
allow foreign Banks in the Country to have a head start.
We therefore call on you to rescind your approval.
ANDREW LO KIAN NYAN
YAB Dato' Seri Dr. Mahathir Bin Mohamad
Prime Minister / Minister of Finance, Malaysia
YAB Datuk Patinggi Tan Sri Haji Abdul Taib Mahmud
Chief Minister, Sarawak