Billionaire Leaves Investors in Dark Over Public Bank Succession
(Bloomberg) -- Public Bank Bhd investors seeking clues on who will succeed billionaire founder Teh Hong Piow as chairman of Malaysia’s most profitable lender were left in the dark at an annual meeting on Monday.
Teh, 88, didn’t answer shareholders’ questions on his potential successor at the gathering in Kuala Lumpur, his last before he steps down next year. Chief Executive Officer Tay Ah Lek, 75, told about 6,000 attendees that the plan will be announced at an “appropriate time,” pointing out that it’s subject to central bank approval.
The identity of Public Bank’s next leader is a key question for investors who have enjoyed average annual returns of 19 percent since its 1966 inception. Teh, the country’s second-richest man, has focused on efficiency at the retail lender, which has the lowest ratio of costs to income among major Southeast Asian banks, according to data compiled by Bloomberg. CEO Tay said the proliferation of veterans at the bank will ensure its culture endures.
“You will find most banks leave the door open” to both external and internal candidates, Devanesan Evanson, who leads Minority Shareholder Watchdog Group, an independent shareholder advisory body, said in an interview at the meeting. “Let’s not close the door. Let’s cast a wider net."
Another question for investors is what will happen to Teh’s 23.5 percent holding, now worth 22 billion ringgit ($5.6 billion). The octogenarian is among three people with regulatory approval to hold more than 10 percent of a Malaysian financial institution. Public Bank is also Southeast Asia’s third-most valuable lender, trading at 2.5 times the estimated book value of its assets, data compiled by Bloomberg show.
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