KUALA LUMPUR, July 8: RHB Capital Bhd is targeting 20-25 per cent profit growth in 1997 and the next few years after completing one of the biggest mergers in Malaysia's corporate history, executive chairman Rashid Hussain said.

RHB Capital, formerly DCB Holdings Bhd, has become one of Malaysia's biggest financial groups after a restructuring and merger with Kwong Yik Bank Bhd, he told Reuters in an interview after a ceremony to formally launch the company.

"We can talk about 20-25 per cent (growth). That is what we are very comfortable with," Rashid said.

He said the local banking industry has yet to catch up with Malaysia's soaring economic growth of more than eight per cent a year for the last nine years, which gives the group a lot of room to move fast.

Sources in RHB said the group could record a combined pre-tax profit of more than one billion ringgit ($400 million) in the year to June 30, 1997.

For the year to December 31, 1996, RHB Capital, then DCB Holdings, reported a net profit of 349 million ringgit against 279.22 million the previous year. In the year to June 30, 1996, Kwong Yik Bank Bhd announced a net profit of 88.98 million ringgit versus 67.03 million.

Rashid said the group could acquire more companies as part of its efforts to grow into a regional giant.

"You can assume that it (acquisitions) is an ongoing business. I have none (targeted) at the moment, but one of the ways to grow is through acquisitions," he said.

Rashid said the group will initially attempt to acquire banking licences in the capitals of all members of the Association of South East Asian Nations (Asean).

Asean groups Brunei, Indonesia, Malaysia, the Philippines, Thailand, Singapore and Vietnam. Laos, Cambodia and Burma are expected to join later this month.

"We are trying get a banking licence in Singapore," Rashid said. The group already has a branch in the Philippines, a 20-per cent stake in PT Bank Niaga of Indonesia, and a broking joint venture in Singapore.

"We are already here, we understand the market, we understand the people, we understand the networking," he said, explaining the reason for the group's regional ambitions.

He said there were also plans to tap the capital market for growth by listing some of the group's subsidiaries in the future.

"Eventually, there are one or two potential candidates (for listing in the group). But I don't think I would like to deal with them immediately. It could be two years ahead," he said.

In the immediate future, the group plans to list its subsidiary RHB Sakura Merchant Bankers Bhd, formerly DCB Sakura, through an offering of 28.52 million shares to the public and 50.73 million shares to the group's employees and directors.

RHB Capital was formally launched on Monday to be the holding company for one of Malaysia's biggest diversified financial services group. This follows the completion on July 1 of Kwong Yik Bank Bhd's merger with DCB.

RHB Capital has total assets of 44.1 billion ringgit and shareholders equity of 3.8 billion ringgit.

RHB Capital is 58 per cent owned by Rashid Hussain Bhd following the group's restructuring.

"(RHB) is the second largest bank in Malaysia in terms of profits, ranks third in total assets and, with 138 offices, has one of the largest branch networks in Malaysia," Rashid said in a speech at the launch of the bank.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.