Grandfathers, disruption, and Malaysia’s banking scene

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Hello reader,

The other day, it occurred to me that my late grandfather, who passed away in 2018, would have been 100 years old this year. He was born in 1922, and he lived long enough to see the world transform in ways that must have been truly mind-boggling. When he was a young man, things were so different – I often wonder what he’d think of apps like Shopee, Zoom, and TikTok.

You’re probably wondering where I’m going with this opening segment. Well, in the latest edition of his column Dan Lain-Lain, my colleague Emmanuel talks about the grandfathering rule in the Malaysian banking world and how disruption in the industry is well on its way.

That’s it – that’s the reason. Now on to the rest of the newsletter.

Today we look at:

• Banking granddads, disruption, and what’s next for Malaysia’s banking scene
• Doctor Anywhere’s latest acquisition
• Other newsy highlights such as Delhivery’s acquisition of Algorhythm Tech and layoffs at Chope

Premium summary

Times are changing

Image credit: Timmy Loen

In Malaysia, no one can own a stake larger than 10% in a local financial institution. But three men are exempted from this rule: Hong Leong Bank’s Quek Leng Chan, AmBank’s Azman Hashim, and Public Bank’s Teh Hong Piow, who died on December 12.

They are the exception because they already held outsized control of their banks when Bank Negara Malaysia (BNM) started enforcing the law on bank ownership. However, things are going to change.

• It ends with us: Known as the grandfathering rule, this exemption cannot be passed down, not even to ​​family members. This means that these men and their families will have to figure out what to do with their stakes when the time comes.
• Some options: Aside from the family trust route (which is what the industry thinks will happen with Teh’s stake), the other option is to sell one’s stake, as is the case with Azman of AmBank. Grab is reportedly eyeing that piece of the pie, which in turn could give it control of AmBank – but it will need proxies or friends to help it, given that it can’t hold more than 10% stake in the bank.
• Disruption in sight: No matter what happens, times are certainly changing in the Malaysian banking world. Digital banking licenses, new fintech tools and services, and an increasingly savvy population mean that the future will certainly be an exciting one.

Read more: Of Malaysian banking granddads and disruption

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