Is the EPF Competent Enough to Run Banks?

The EPF as the most strategic fund manager is ill advised to consider taking a controlling stake in a local bank.

Let us not forget the Sime Darby story where one of Malaysia’s leading companies took over a local bank and then found it really caused them massive losses.

Compared to the recent Southern Bank saga where the bank was practically forced onto the merger bed, it seems the authorities have now adopted a "can do" attitude with these two parties.

As a fund manager, the EPF should focus on the deployment of funds and getting the optimum returns for its stakeholders. It should not be operating companies, as I do not think they have the expertise and experience to do so.

I understand that most mutual funds do not invest in more than 10% of any company to reduce risk and it comes as a surprise that the EPF wants to control RHB Bank

The role of EPF in this instance could be to loan funds to other companies that may want to take over this bank.

I am just glad they do not have any more of my money.
But if they still have your money, it would be wise to find out what type of due diligence is done and how the stake is evaluated.

photo: http://www.theepochtimes.com/news_images/2005-7-1-malaysia-stocks.jpg

PS. While searching "banks" this picture turned up so I would like you to share the view.





photo: http://www.myclassiclyrics.com/artist_biographies/Tyra_Banks_Biography.jpg