KUALA LUMPUR, April 24 — Restoring a culture of trust based on strong ethical standards is vital to securing a bright future for a purposeful financial industry, says Permodalan Nasional Bhd Group Chairman Tan Sri Abdul Wahid Omar.
He said there was no doubt that Malaysia’s financial sector has contributed tremendously to the nation’s growth, however, there was still room for improvement.
“It is shown that by strengthening the corporate governance and investor protection frameworks, we are able to enhance the resilience of our economy to global financial shocks.
“This, can be achieved if all agencies involved in the financial sector play their roles, which is to remain steadfast in upholding the principles of trust and integrity,” he said at the Business Ethics Conference here today.
During a 30-minute sharing session titled “Contribution of the Financial Sector to the National Economy and the Importance on the Industry’s Reputation”, Abdul Wahid said that the Malaysian financial sector represented an important industry that has evolved immensely.
He noted that the sector has contributed immensely to the growth, dynamism and development of the nation since independence, particularly since the 1997/98 Asian financial crisis.
“The financial services sector currently contributes 6.7 per cent to Malaysia’s Gross Domestic Product.
“Our gross national income (GNI) per capita has surpassed US$10,000 in 2014 (RM34,839) before falling to US$9,096 in 2016, but still signifying that the economic and social progress is significant considering that five decades ago, our GNI per capita was only US$300.
“Furthermore, in purchasing power parity terms, our GNI per capita did increase from US$24,900 in 2014 to US$26,557 in 2016,” he said.
Going forward, he said the vision was for the financial sector to serve as the foundation from which Malaysia’s transformation into a high value-added, high-income economy can be achieved through effective and efficient domestic and regional financial intermediation.
This, according to him, would comprehensively mobilise diverse savings towards a wide spectrum of investment activities in Malaysia and across borders, hence increasing Malaysia’s reputation for the financial sector.
“We are fortunate that Malaysia learnt well from the Asian financial crisis where Bank Negara Malaysia implemented necessary measures to instil; greater trust and confidence in the financial system.
“Among the measures undertaken included consolidating some 60 financial institutions of various shapes and sizes into 10 large banking groups that were well capitalised, well managed and effectively supervised and regulated by BNM,” he added.
Meanwhile, after joining the Malaysia’s leading fund management company for about nine months, Abdul Wahid said PNB today was the largest fund management company in Malaysia with some RM266 billion of funds under management, having grown by 13.2 per cent compound annual growth rate since 1981.
Two-thirds of the funds or RM180 billion were invested in Malaysian public equities representing 10.8 per cent of the total market capitalisation of companies listed on Bursa Malaysia.
This included the six strategic companies of Maybank, Sime Darby, UMW Holdings, SP Setia, CCM and MNRB.
“Plus many other core companies where we own at least 10 per cent shareholding or RM1 billion in value,” he said.
Last year, the company announced its Strategic Plan 2017-2022 aimed at transforming PNB into a distinctive world class investment house.
The plan involved executing 15 initiatives under 3 strategic pillars of ‘Enhancing Sustainable Returns’, ‘Effective Investment Management’ and ‘Driving Operational Excellence’. — Bernama