The press conference lacked the tears and self-abasement seen after some recent Japanese bank failures but management was certainly contrite. "It's obvious to everyone that we're not very good at banking," said Sime Darby chief executive Nik Mohamed. "We're good at making tyres and owning plantations."
A few days earlier the Malaysian central bank, Bank Negara, had announced that Sime Darby's subsidiary, Sime Bank, had lost M$1.8 billion (US$493 million) in six months and needed recapitalizing to the tune of M$1.2 billion. The non-performing loans of the country's sixth-biggest financial institution stood at 18%.
Sime Darby, Malaysia's premier conglomerate, took the hit and announced that, as a result of its 60% owned bank's suicidal performance, it had lost M$1.1 billion between July and December - its first loss in living memory. The psychological blow to corporate Malaysia was huge. Sime Darby is an emotional stock. It was British-owned until 1976 when it fell into patriotic Malay ownership. It became a focal point of Malaysia's New Economic Policy - a policy that seeks to promote corporate ownership by Malays (Bumiputeras) in a country where the Chinese minority has long dominated the economy.