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Banking & Financial Services
Life On The Job: Process Specialist
Khairil Bin Mustafa, a process specialist tells gradmalaysia.com readers what it's like to be in his shoes!
What did you study in university?
I took accounting and information system due to my interest in accounting and IT. My education in both sectors has helped me in different ways as a project manager and process specialist. At the bank, my job requires me to manage financials and system implementation.
What was your background like?
RHB is my first job after I joined through the Management Associate program (MAP) in 2009. The program is beneficial as it exposed us to the banking industry through classroom training and attachments in different parts of the bank (eg retail branch, business banking and corporate). Later, I worked in the Transformation Management Office as Assistant Project Manager, and focused on managing strategic transformation initiatives. After that, I joined the RHB Bank Managing Director’s Office as an executive assistant to the managing directors of the bank and assisted them in various matters and run projects under their purview.
Tell us a little about your company and job.
I am currently working as Process Specialist. My day-to-day responsibility involves implementing process improvement initiatives that would benefit the bank and its customer. As a project manager, I have to make sure that the project is being delivered on time after taking into account the time, cost and people involved. My current role involves a lot of stakeholder management, data analysis, project management and research.
What are the best and worst bits?
The best part about my job is the need to be dynamic. Whenever a project is completed, I will be assigned to another different project that is totally different from what I have learnt and seen. This gives me the opportunity to learn the mechanism of a bank. The worst part is the stakeholder engagement process as different stakeholder needs to be managed differently and the mismanagement of stakeholder may affect the outcome of the project.
Name your most memorable achievement at work.
My most memorable achievement is to receive the Six Sigma Black Belt certification.
How did you get the job?
I joined RHB MAP in 2009 after going through a vigorous interview process with outsourcing agency, HR and senior management of the Group. The group discussion also requires me to have critical thinking and high confidence level.
Be prepared for...
Steep learning curve, long hours and tight deadline. The expectation on a management associate is always high. You need be a fast learner as you are always being challenged.
What's your advice for graduates?
Attitude and characteristic is priority. Qualification will just be a key to enter the workforce. However, with the right attitude and eagerness to learn, nothing can stop you from striving for the best.
Life On The Job: Analyst, Fixed Income – Credit Research
Tengku Yusnie, Analyst, Fixed Income – Credit Research at CIMB tells gradmalaysia.com readers what it's like to be in her shoes!
What did you do at university?
I read accounting and finance as my undergraduate degree because I wanted to pursue a course that was more analytical and quantitative-based. I knew that having a good background in accounting would be very useful, especially when considering a career in finance in the future. Upon graduating in 2010, I had applied to pursue a Master’s degree whilst waiting for a job offer to arise.
Why did you choose a career in your field?
I wanted to start a career in research as I enjoy carrying out analytical work. I believe that being an analyst would help me enhance my analytical skills as it would require me to consider all possible angles of a problem before arriving to a recommendation. I believe that working for an established organisation like CIMB would provide me with good career progression, as well as a good foundation to build and develop my skills.
What do you do in your job?
I am Credit Analyst for the Fixed Income research team. I am responsible for carrying out periodic reviews as well as monitoring on the companies under my coverage daily. It is critical for us to be constantly up-to-date with current news as we will have to update the fund managers and the research team, should there be any developments that may have a material impact on investment decisions.
What do you like most about your job?
I appreciate how everyone in the department is extremely friendly and always willing to lend a hand. I find that enjoying working with your colleagues is crucial in creating a conducive work environment. Besides this, I am grateful for the opportunity to travel for company site visits and conferences, both locally and abroad.
What skills do you consider to be essential for your job?
Being analytical and comfortable with numbers (especially when analysing companies’ financial statements), general awareness of current issues, and having an inquisitive nature are good skills to have. You have to love to read – this is one of the most basic and important aspects of my job. Networking is also very important as we always meet new people on the job. Most of these skills were developed whilst working.
What are your future plans?
I wish I can say something specific, but who knows what will happen in three years? So, I will stick to being well, successful and happy for now.
What is your advice to graduates?
Most people do not know what they want to do when they are in university, and working is almost the same as being in university. You will find yourself lost on your first day but you will eventually find your ground as you learn on the job. My advice to jobseekers is to ace your first impression with your potential employer, be it in person or in writing.
Life On The Job: Group Chief Human Capital Officer
Nora Abd Manaf, Group Chief Human Capital Officer at Maybank tells gradmalaysia.com readers what it's like to be in her shoes!
How did you get started?
My training in accounting gave me the opportunity to serve in diverse disciplines and industries ranging from semiconductor, telecommunications, Academia, consulting and finance. My career in human resource began in telecommunications with Maxis Berhad, followed by Standard Chartered Group and in 2008, I joined Maybank as Head for Group Human Capital. I was subsequently repositioned as Group Chief Human Capital Officer of Maybank and it has been a wonderful journey so far leading the people initiatives and human capital development of the Bank.
What was the turning point in your career?
I had the opportunity to gain different experiences in my career and I credit my exposure to diverse work environments that charted my personal and professional growth to where I am today and to strong individuals who recognized my potential and gave me opportunities.
Can you share some highlights of your job?
I am proud to be leading the people initiative of the largest Bank in Malaysia and one of the largest in the region with 47,000 Maybankers worldwide. The initiatives have resulted in us being recognised nationwide, regionally and globally through many accolades received such as the Malaysia’s 100 Leading Graduate Employers, being named the world’s 13th strongest bank by Bloomberg Markets, and the only Asian organisation inducted into Towers Watson’s Global High Performing Companies, among others. On a personal note, I am honoured to have been inducted into the Global HR50 as amongst the world’s top 50 HR professionals.
What advice do you have for graduates?
Academic qualification provides the foundation for graduates to equip themselves with the required knowledge before entering the workforce. However, one should enhance their professional attractiveness by cultivating strong personal qualities such as having the right attitude, confidence, critical thinking skills and clear articulation of thought. The opportunities provided are only as good as your desire and commitment to achieve the best. Graduates have to take the initiative and be proactive to learn and grow as well as show hunger and desire to be successful and committed to achieving their goals, in tandem to the company’s goals.
Name some key skills for future leaders.
Strategic visioning as well as fierce tenacity to deliver targeted outcomes are key skills that all future leaders need to possess in order to anticipate changes and lead the organisation while staying rooted to the present. As globalisation kicks in, more and more organisations will have a global outlook which will bring changes in work demographics, culture, values and ethics. Having a diverse, global view point which means strong awareness of diversities and the ability to harness the diverse strengths is important to enable leaders to navigate through ambiguity and resilience in tough environments.
Finance Beyond Banking
A career in banking and finance doesn’t always mean having to work in a bank! Nik Yazmin Azman of TalentCorp explains your options.
Take some time to think about what you think your options are in banking and finance. Do they all involve working in a bank? Do they all pay well? And, more importantly, where do you start to get to where you want to get to?
The first thing you must realise is that learning doesn’t stop the moment you graduate. University learning is merely the first step – your education, whether you’re a finance, or engineering or even mathematics graduate, is meant to give you the tools you need to do your work, but you will still need to learn how to do it, and to do it well.
The first few years of your career should be about picking up a broad base of skills, and learning about different industries and sectors. You are expected to pick up most of your technical skills at this point – the ability to read and critique financial statements, to understand the generic inner workings of a company’s finances, and also to start developing your interpersonal and communication skills.
There are, of course, different ways to acquire this knowledge. Joining an accelerated training programme with a bank is one. Spending time in an auditing role also has significant value; it is an arduous and thankless job but don’t underestimate its value in sharpening skills, teaching discipline and technical grounding.
It doesn’t hurt to pick up a professional qualification while you’re at it – depending on where your interests lie, you have options spanning various chartered and management accounting courses. These include the aggressive Chartered Financial Analyst (CFA) and also options like Islamic Finance Qualification (IFQ), Chartered Islamic Finance Professional (CIFP) and Certified Islamic Finance Executive (CIFE) which are scarce and in high demand.
The banking and finance sector itself is multifaceted – each sector has subsectors requiring specific skills and knowledge. The key in succeeding within this sector is specialisation, and ensuring you find a career path that has the greatest compatibility with your abilities and interests.
BFS Sectors At A Glance
- Dealing with cash management and internal financial issues.
- Requires basic financial analysis skills, interpersonal skills, and tax and legal knowledge.
- Important to know your company’s products, both in breadth and depth.
- Easy to become complacent in a routine, and effort must be made in order to shine.
- Similar to corporate finance in terms of roles, but with greater size, scope and pace.
- Career path is not for the faint-hearted, and much is expected of those that take it.
Islamic Finance and Banking
- Spans all areas of corporate finance, commercial banking and investment banking.
- Knowledge of Islamic aspects of banking crucial, but currently scarce in the market – leading to great opportunities for progression.
Corporate finance practitioners are interested in the management of funding, whether debt or equity. Positions exist on both the corporate side (big companies more so than small start-ups) and also on the financial advisory side, including Mergers & Acquisitions (M&A) specialists.
Roles include financial analysts who look at the well-being of the company from a market perspective, and treasury functions that focus more on cash management and internal financial issues. M&A specialists, in particular, require broad skills encompassing financial analysis and strong interpersonal skills, as well as jurisdictional and regional tax and legal knowledge which may affect deal-making.
Commercial banking offers various opportunities, by virtue of the wide scope of its operations – from front-end client facing work, to credit management and operations. The key to succeeding in the commercial banking environment is to know your products – this is usually why commercial banks have very demanding management training programmes. The biggest challenge in commercial banking is to remain hungry for success – it is easy to just get comfortable and settle into a routine. To succeed, you need to outperform others to get noticed.
Investment banks (IBs) offer the most glamorous and lucrative career paths, but at a very high and intense price. IBs are concerned with large-scale transactions involving securities – buying, selling, or exchanging of large chunks of shares between two parties, be it in willing agreements or hostile takeovers. This career path is not for the faint-hearted – those intending to do well are expected to learn, adapt and work at a fast pace. Roles in this space include trading, client management, and other work similar to those required in corporate finance. In fact, some corporate finance practitioners see IB as the next step up in their career progression – doing what they’ve been doing at the company or mid-market level and extending the size, scope, and pace to the bigger market.
Islamic Finance and Banking
Islamic finance and banking spans the three previously discussed aspects of finance and banking – Islamic finance specialisations exist in corporate finance, commercial banking and investment banking. In essence, those practising Islamic finance and banking need all the skills of their conventional counterparts, as well as knowledge of the Islamic aspect of a transaction. This combination of skills is highly prized due to scarcity in the market, and bankers and financial practitioners who have this specialised knowledge are able to out-earn and overtake their peers very quickly.
Outside these four big sectors, various specialised opportunities exist with private equity and venture capital firms, as well as hedge funds, financial planning, insurance, and of course, the oft-downplayed public accounting sector. Take time to learn about these sectors, and match them up with yourself as a person. Above all, be passionate in what you do and always be hungry for more.
Remember, if you only do what is required in your job description, you will never outgrow your role enough to progress.
Preparing For A Career In Banking
Banking is a tough old world, but Kellee Kam, Managing Director of RHB Capital Berhad speaks to Ng Juan Hann about how to make it in this demanding and challenging career.
Kellee Kam knows what it takes to succeed in the arena of banking.
In an eight-year career with RHB, he has taken on increasingly strenuous positions of responsibility, from general manager of Group Finance and Group CFO to his current position of CEO and Managing Director of RHB Capital.
Kam thinks that employers themselves have become more enlightened with regards to qualifications. A law graduate with an MBA and a Master of Arts from the United Kingdom, he believes that employers are now willing to accept a wider range of disciplines compared to when he first joined the workforce in 1998.
He said that your degree is important because ‘it’s a tangible outcome of your attributes…but it’s not the end-all of the selection process’. The process now aims to test the ability of the candidate to grow into the job; for example, the candidate’s social, analytical and communications skills.
When asked about the relevance of qualifications such as economics or banking, he said: ‘If you had a very relevant qualification but you did badly, it’s going to hamper your chances (of getting the job).
‘What’s important is what you’ve done during the period you’ve been in university and through your formative years’ – for example, showing initiative through doing an internship, or other extra-curricular activities that would enhance your career prospects, skills or attributes.
Kam believes that ‘skills we (the employer) can teach, we can learn, but as for your own personal attributes and attitude, by the time you come to the workforce, you are who you are’. He said employers spend a lot of time now looking at attributes instead of only skills.
Of these attributes, an ethic of hard work features high on the list. However, hard work without an objective is just spinning your wheels, said Kam. He tells graduates to be ‘mindful of the objectives you’re trying to drive’.
Respect is another, as it shows a level of maturity that is needed for this line of work, an appreciation for the customer, your colleagues, your peers and your team members.
Kam believes that selflessness breeds professionalism, as nothing should stand in the way of discharging your duty to the customer. If faced with the question of putting oneself or the organisation first, he said, ‘as much as possible you should always say, put the organisation first’.
And where all attributes are equal, it’s your level of preparedness that will get you the job. He advises graduates not to take interviews lightly, saying that ‘interviewers can sense when you’re just shopping for a job, versus you wanting to be in there and having prepared for it’.
‘If you believe a life in banking and finance is going to be the life for you, take an interest in reading what’s happening in the economies around the world,’ recommended Kam.
Preparation shows that the graduate truly desires the job, and that in itself is important. According to Kam, the job becomes progressively easier if the graduate actually likes what he or she is doing.
Kam listed out several areas that graduates could choose to go into. A popular area is investment banking, as ‘everyone wants to be an investment banker, although the reality is it may not be suited for everybody. It depends on your personality’.
In reality, there are several roles within investment banking itself, from the front office people ? who ‘meet clients, spend time with them, understand their issues and bring them the correct solutions’ ? to the back office, the ‘technical guys who craft out all these interesting structures and schemes’.
Ten years ago, Islamic banking was relatively obscure in terms of career opportunities. Today, ‘it’s one of the fastest growing sectors in Malaysia, which means that the demand for Islamic banking skills have hit an all-time high’.
Another area of banking which is still obscure is that of risk management, an area that ‘very few graduates consciously pick’, said Kam. However, bearing in mind the financial crises of 1997 and 2008, risk management ‘has taken a huge leap in terms of being an incredibly viable area to build a very solid career’, Kam believes.
When it comes to competition, the banking sector is harsh in two ways. The business environment itself is unforgiving and competitor organisations are constantly seeking to outdo each other.
Secondly, there is a large pool of talent vying for a limited number of jobs. Part of this is due to the better-than-average compensation that the banking sector pays. Kam admits that ‘the financial sector generally pays better as a whole’.
But it doesn’t get easier. Kam warned that ‘as you move up the ladder, the opportunities get less and less’. Truly outstanding performers become department level heads within six to eight years, managing 30 to 40 people, and would potentially be running business lines within 15 years.
Asked if this process is results-oriented, Kam said, ‘Yes, always. That’s the only way.’
Kam offers encouragement to determined and hardworking graduates wishing to forge a successful career in the industry.
However, these words of encouragement are tempered with the fact that candidates should be prepared for a significant amount of hard work to achieve those standards of excellence.
Insurance 101: How To Identify An Excellent Employer In The Insurance Sector?
Lenard Cheong from a leading insurance company explains on how the insurance industry of Malaysia promises plenty of new exciting career opportunities and describes the hallmarks of a good insurance organisation.
All companies, insurance or otherwise, usually hire to either fill on a new vacancy or replace staff who have resigned. There are many insurance companies out there – life, general, life reinsurance, takaful, etc – for fresh graduates to choose from but the question is how do they know if they are making a sensible and informed choice when it comes to identifying and selecting the right employer?
Excellent employers usually display a specific set of qualities that differentiates them from others. Fresh graduates who wish to work in the insurance sector should keep a look out for these qualities.
Reputation in the market
This is important to ensure the stability of the organisation as the liability of insurance company is high. Just like a bank, you will only put your finances in a bank once you are assured of its reputation and stability. As a rule of thumb, insurance companies with a larger asset base and a larger policyholder base are likely to be more stable as they are better positioned to deal with a potentially higher number of claims.
Life insurance products should reach out to serve the different protection and/or investment needs of the public. The products should always be innovative as modern society's lifestyle – and thus, their protection/ investment needs – is always changing.
As the insurance industry is a service-oriented industry, the organisations have to demonstrate that they are focused on developing their employees. Good training and development not only enhances the work and life of the employees, it also translates to the way that they will serve their clients or do their jobs.
Progressive organisations not only keep their employees happy by developing them (and promoting employees with good track records and potential), but also implement employee engagement activities to boost motivation and morale as well as improve the overall well-being of employees.
Another hallmark of a good company is that it should be established and has been around for a period of time. That is usually a sure indicator of stability and it shows that the company has solid backing for their operations. Good reputation also comes from the company being in service for a long time. After all, one will want to put their faith and confidence with a company that has a long-standing positive track record of delivering to all its stakeholders.
Did you know?
Channels of insurance distribution
In Malaysia, this is the main channel of distribution for insurance products. Most insurance companies distribute their products through a trained agency force; agents are
independent entrepreneurs – not usuall employed by the insurance company – who commit to selling a particular insurance company's products. Often they group up under a leader to form an agency. They are assisted by the business development team of the insurance company by conducting training programmes, refresher courses, incentive programmes, as well as setting up agent recruitment events and product roadshows.
The second channel is bancassurance, whereby the insurance companies sell some of their products through a partner bank. Life insurance companies usually form a working relationship with a bank to help distribute their products to the bank's customers. This is a channel of growing importance leveraging on the increasingly large number of Malaysians with bank accounts.
The third channel would be group insurance whereby insurance products are sold to companies. These are normally called Group Term Life and Group Personal Accident (PA), in which the company is covered for damages, or loss of their staff as per agreed in the policy term and conditions.
Wealth Management – More Than Just Managing Money
Nowadays, wealth management is multi-faceted and not just confined to high net-worth individuals. United Overseas Bank explains what this sector covers today.
Traditionally, we think of a banker as the one who takes our deposits and in turn, gives us loans. Bankers act as the middlemen, take credit risks, and earn the difference between the interest made from loans and the interest paid to depositors.
The last few years have seen a dramatic shift of focus from traditional banking, as earlier described, to wealth management. This is also observed to be the fastest-growing business within consumer banking. This is not surprising as we see wealth and riches around us, and each year there are more and more new millionaires.
Traditionally, wealth management is something that is confined to high net-worth clients within the private-banking space – typically those individuals defined as having at least US$3mil.
Not anymore. Deregulation in the areas of investments and treasury products have progressively availed products to the mass market. Product innovations have also reduced the minimum size required for each purchase or placement to be within reach of investors. Such developing trends will further enhance wealth-management business opportunities for the average person on the street.
Areas of work in wealth management
Wealth management is typically broken down into the following areas:
This is protecting one’s wealth, and strictly speaking, it is protection of one’s lifestyle in the event of contingencies. The development of Bancassurance allowed bankers to act as independent advisors to clients on their protection needs. Typically, this is considered the foundation piece of overall wealth management. One must be adequately insured to provide a safety net first and foremost. Once this is achieved, the remaining wealth can be used for other purposes. To achieve this, a variety of insurance products or even low-risk investments products can be used.
This is simply making the money work harder within the risk-taking tolerance of the clients. True to the notion of no-risk-no-gains, in this area, it is about growing wealth over the longer term to meet needs such as children’s education and retirement. In some cases, it can also involve short-term trading in currencies, stocks and derivatives to make short-term gains. Typically, this would require a spectrum of products from investments to treasury to alternatives, and even some types of insurance products as well.
This typically refers to a period following the accumulation phase and it may be during one’s retirement. After building up a nest-egg, to have the peace of mind to enjoy the ‘golden days’, it is important that the risk is ratcheted down to conservative exposures only, and that the portfolio should be income-orientated so that it can provide regular payout to support one’s lifestyle and medical needs. A combination of low-risk fixed-income portfolio and insurance-based annuity and pure deposits
can be used.
We may wish to leave something of a legacy or inheritance behind for our loved ones. In some cases, it could be for other noble causes like establishing an education fund for the poor, or to ensure that one’s dependants are taken care of even after the client passes on. This may require some form of will writing, estate planning, and even establishment of special-purpose vehicles to hold assets under management.
The Win-Win-Win situation
To the bank
This development is beneficial as more and more institutions develop their fee-income strategy to tap into this growing trend. In fact, looking at the private bank, it is conceivable that fee income from wealth management can be a significant contributor to overall profit. Some banks have also grown associated capabilities such as asset management, structuring capabilities, insurance subsidiaries, brokerage subsidiaries, and so forth, to support and avail the full suite of products needed for such a business. Therefore, the spinoff is wider than the act of providing wealth-management services and products.
To the client
The benefits of a private bank are brought to the consumer bank. For most clients, they would still have needs in wealth protection, wealth accumulation, and wealth draw-down. By consolidating this under one advisory framework in a consumer bank, the client would derive greater synergy, instead of going to different institutions for different needs. Working with one institution also enables a more meaningful and longer term relationship to be built. Consumer banks have also in the last few years developed highly valuable affluent segments which target clients with US$150,000 investible assets and more. This is made possible with the trend of unitisation of products where the minimum entry amount is now as low as US$10,000. Such value, when delivered properly, matching the needs and the risk profile of the clients, creates a strong client value proposition.
To the staff
A staff benefits with this development from the perspective of greater employment options, progressive training and development opportunities starting from a more basic level of advisory and product knowledge to more complex and sophisticated understanding. Good staff are naturally well-remunerated and given a well-defined career progression either upwards to more affluent client segments, or upwards to team/desk management roles, or upwards to areas of specialisation in wealth-planning advisory, investments, insurance, and treasury advisory. Lateral moves from wealth-management advisory to other areas such as product manufacturing, and wholesaling, among others, are also possible.
To the market
Collectively, this has also sprouted centres of excellence within the Asia Pacific region. Singapore and Hong Kong have taken the lead in such services where they cater to local demands as well as attract offshore banking clients from other parts of Asia and from as far away as the Middle East, Europe, and even North and South America. Other emerging markets, such as Malaysia, have also gained a significant foothold in this business with rapid de-regulation, which has attracted the attention of global asset managers, investment bankers, and commercial banks to set up and grow their wealth-management services.
Restructuring And Insolvency
Not everything is gloomy in the world of restructuring and insolvency. Mok Chew Yin, Head of Insolvency and Forensic at BDO Binder Malaysia, provides insight into these areas and how professional services firms can help companies weather the storm of recession.
The terms ‘restructuring’ and ‘insolvency’ are frequently whispered alongside ‘bankruptcy’ and ‘termination’. Terms like that do not inspire confidence, particularly in a business context. Despite negative connotations, these activities happen not only during bad times but in good times as well.
During economic downturns, restructuring may involve reorganising a financially distressed company, or a group of companies, in order to achieve its objectives including making its business viable. It usually includes job cuts, reduction of overheads, waiver of debts by banks and creditors, conversion of debts to equity or loan stocks, injection of cash by stakeholders, selling off or closing down unprofitable divisions, mergers, or even splitting up a company.
In favourable times, companies also restructure for various reasons such as:
- for tax effectiveness
- for control purposes
- for initial public offering (IPO) purposes
- to streamline cash flow
- to organise the growing divisions within a company.
When faced with severe financial difficulties or insolvency, companies would restructure for survival reasons and to make them viable again, but only if they have a genuine chance for survival.
Insolvency refers to the lack of financial resources to sustain a company, indicated by its inability to repay debts or having negative net assets. The two main insolvency procedures are winding up (also known as liquidation) and receivership.
There are three types of winding up, ie members’ voluntary liquidation, creditors’ voluntary liquidation and Court liquidation. Both types of voluntary liquidations are initiated by the company while Court winding-up may be commenced by the company, its shareholders, creditors or the regulatory authorities such as Bank Negara or the Registrar of Companies. A members’ voluntary winding-up involves only solvent companies.
Members’ voluntary liquidation
A members’ voluntary liquidation (MVL) route is pursued when a solvent company chooses to cease operations voluntarily and is able to pay off its debts in full within 12 months of its winding up. This is usually because the company has ceased operations or has completed its objectives. Occasionally, the MVL may be the result of disagreements among the company’s shareholders which lead to a mutual decision to wind up the company.
Creditors’ voluntary liquidation
When the directors of a company believe that the company is unable to continue its business due to its liabilities, they will initiate a creditors’ voluntary liquidation (CVL) by making the necessary declaration, appointing the provisional liquidator and resolving to wind up the company voluntarily.
There are various circumstances in which a company may be liquidated or wound up by the Court. The most common is that the company is unable to pay its debts. Others include directors having acted in their own interest, oppression of minority shareholders, suspension of business by company, regulatory non-compliance, and the company’s banking or insurance licence having been revoked.
Receivers and managers may be appointed privately by a debenture-holder to take control of the relevant assets and then to sell or realise them. The proceeds are then given to debenture-holder. The appointment of the receivers and managers occurs when the company defaults, eg through late payment or not complying with the loan agreement.
Receivers and Managers may also be Court appointed by parties concerned about protecting the assets of the company. In this case, their powers will be determined by the Court.
History and background
According to Mok, most restructuring and insolvency services in Malaysia started in the early 1970s. Such services are likely to have originated from the UK as Malaysia’s Companies Act legislation is very similar to those in the UK and other Commonwealth countries. During the mid-1980s, there was a significant number of insolvency administrations, particularly receiverships, as most banks had debentures at the time.
Mok added that the economic downturn in Malaysia seems to go through a 12-year recession cycle. There was a slowing of the economy in the early 1970s followed by the recession in 1985 and the Asian Economic Crisis in 1997. Now, approximately 12 years later, we are experiencing another downturn.
During the 1997 crisis, there were fewer formal insolvency administrations compared to 1985, as most banks had granted loans on a clean basis due to intense competition. Hence, many insolvency issues faced by companies at that time were resolved through restructuring. It is a good option as companies will be able to continue if it is successful. This time round, most banks will have debentures and/or other securities but we have not seen many receivership appointments yet.
‘The ability to appoint receivers and managers in the event of a default will give a bank more assurance that its loans will be repaid or it will at least enjoy priority over unsecured creditors. With this assurance, it should encourage banks to continue lending money to companies,’ said Mok.
For a company that has become insolvent, a restructuring scheme may be developed and implemented. If successful, it will enable the company to continue. If it cannot be saved, the company can be wound up by a liquidator in an orderly manner, so as to maximise returns to creditors in accordance with legislation.
Working in the field
‘The demand depends on the economy,’ said Mok. ‘During a recession, the market (for insolvency) is good and most insolvency divisions are busy and recruiting.’ Mok added that accountants may be trained with various skills. For example, they may be involved in insolvency engagements during an economic downturn and corporate finance or other advisory services during better times.
Accountants who are involved in insolvency should have specialised skills, experience or knowledge. They should aspire to become approved liquidators. In addition to a recognised professional accounting qualification and technical insolvency knowledge, those who aspire to excel in this field should also have legal knowledge, commercial skills and passion.
Communications skills and patience are also crucial. ‘Restructuring or liquidation is often administered during stressful times. You will face many awkward situations, especially when you have to terminate employment and manage stakeholders who, in most cases, did not see it coming. So, people skills are very important to address the tense situation,’ said Mok.
‘Ultimately, the job satisfaction, remuneration and career opportunities outweigh the challenges and difficulties that come with the job.’ Those who dare to take up the challenges are in for an exciting career.