Showing posts with label Maybank. Show all posts
Maybank, the world's 13th strongest bank
Malayan Banking Bhd (Maybank) has become the first Malaysian bank to enter into the world's top 20 strongest banks based on a financial evaluation undertaken by 'Bloomberg Markets' magazine.
Maybank was ranked 13th in the elite global group of banks of assets of over US$100 billion based on, among other things, its capital strength, asset quality, strong reserves as well as deposit and funding strength.
Other factors where Malaysia's largest bank scored highly in 'Bloomberg Markets' third annual ranking of the world's strongest banks included cost efficiency and risk managemnent, the magazine said in a report published on the Bloomberg website.
Maybank's president and chief executive officer, Datuk Seri Abdul Wahid Omar, attributed the ranking to tough supervision by Bank Negara Malaysia and new stress testing and risk-control measures inside the bank.
Qatar National Bank came out tops in the ranking. It was followed by Oversea-Chinese Banking Corp Ltd (Singapore), which fell from first place in 2012 and 2011, Canadian Imperial Bank of Commerce, Royal Bank of Canada, DBS Group Holdings, United Overseas Bank, Bank of Nova Scotia (Canada), Toronto-Dominion Bank, Citigroup and Hang Seng Bank (Hong Kong).
In 11th to 20th place were Svenska Handelsbanken (Sweden), China Construction Bank, Maybank, Credit Suisse Group (Switzerland), JPMorgan Chase (US), Skandinaviska Enskilda Banken (Sweden), National Bank of Canada (Canada), while Industrial & Commercial Bank of China and Turkiye Garanti Bankasi (Turkey) were tied at 18th place and Bank of Communications (China) was in 20th place.
According to the 'Bloomberg Markets' report, Maybank scored highly in loan-loss reserves to non-performing assets and deposits to funding as well as efficiency which was based on costs to revenue.
To identify the world’s strongest banks, 'Bloomberg Markets' evaluated 78 banks with total assets of US$100 billion or more as of mid-March including interviewing its top officials.
Maybank now has 2,200 branch offices in 20 countries and owes its size and strength to the aftermath of the 1997 to 1998 Asian financial crisis, which forced the devaluation of the region’s currencies and the near collapse of a dozen Indonesian, Malaysian, South Korean and Thai banks.
In Kuala Lumpur, Bank Negara orchestrated mergers that combined the country’s 60-plus financial institutions into 10 big commercial banking groups, now reduced to eight.
Maybank emerged from that shake-up as Malaysia’s biggest lender.
It has since expanded further to become the fourth-biggest bank by assets in South-East Asia.
"The central bank has always adopted a very pragmatic supervision approach," Abdul Wahid was quoted as saying in the report.
"Whenever there are signs of problems, Bank Negara has never been hesitant to intervene," he said.
Maybank’s rapid overseas expansion began with the acquisition of a controlling stake in PT Bank Internasional Indonesia in 2008.
"The bank aims to extend its footprint to all 10 Asean countries as the region moves toward a planned economic integration by 2015," Abdul Wahid said.
Maybank earned 30 per cent of its pre-tax profit from overseas operations last year, the bulk of it from Indonesia and Singapore.
Alfred Chan, director of financial institutions at Fitch Ratings in Singapore, said Maybank had no choice but to look for growth outside its home territory.
"Malaysia and Singapore are highly saturated banking sectors.
"That means profitability tends to be on the lower end," said Chan.
Maybank’s answer has been to expand to fast-growing nations such as Indonesia. But in Indonesia, "risk is also relatively higher compared to Malaysia," Chan said.
As the Kuala Lumpur-based lender, which includes an Islamic-banking unit, has expanded, it’s also strengthened its risk management team.
Abdul Wahid said: "We needed to make sure that we have the right people with the right skills to manage our risks."
"That has been done. There’s now a risk-control team embedded in every key division of the bank," a spokesman said.
Malaysia started putting into place the so-called Basel III rules, designed to reinforce the capital of big international banks, on January 1 -- ahead of a majority of the 27 members of the Basel Committee on Banking Supervision.
In October, Maybank raised RM3.66 billion (US$1.18 billion) from a private placement of its shares to help bolster its capital.
And the bank said it has instituted several other Basel III reforms ahead of the international group’s timetable, which stretches the process to 2019.
"We always believe in being ahead of the curve. We are very much prepared to meet all the new requirements under Basel III,” Abdul Wahid said.-- Bernama
Published: 2013/05/02
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Maybank
Maybank innovates to stay ahead in Malaysia and regionally
MALAYAN Banking Bhd president and CEO Datuk Seri Wahid Omarwalks into the meeting room on the 48th floor of Menara Maybank for an interview with StarBizWeekclutching the company's 2012 annual report and its financial statements.
Lugging the voluminous reports, weighing around 2kg in total, Wahid remarks that the 900-plus pages are a consequence of modern reporting requirements.
Maybe the reports are a little too meticulous and fastidious for all shareholders but they certainly give a detailed snapshot of just what a company has been up to and what their intentions are going forward.
The covers of both the magazine-styled reports trumpet the two key themes Maybank has achieved in the past year.
The first is its record profits. With the country's largest bank and biggest company on Bursa Malaysia posting a net profit of RM5.74bil, some of it was attributed to the other theme of the two-book annual report which is the growing contribution from its overseas operations. Some 30% of Maybank's profit came from its banking business outside of Malaysia.
“The macroeconomic environment has been very conducive in all the markets we are present in. We have positioned ourselves for growth. We're also able to do more with customers using our client coverage model.
“And on the Kim Eng side we have an enhanced distribution capability, which is why we were able to win all the big mandates and execute them successfully,” says Wahid.
Menara Maybank in KL.
The performance, and success, of the group's regionalisation strategy will certainly mean fewer upset shareholders, something Wahid had to contend with shortly after helming the bank.
“Back in 2008-2009 a lot of people were sceptical. I still remember every time we were overtaken by market cap the papers would carry that headline. In March 2009 our market cap was RM19bil. We were No. 4. Fast forward to now, we are No. 1 with a market cap of RM77.2bil,” he says.
Regionalisation paying off
Although some 70% of pre-tax profit is still from Malaysia, growth from its international business was faster. Pre-tax profit from Maybank's international operations rose 39% compared with 14.8% for the group. Revenue wise, the growth rate of international operations was 15.5% compared with 10.5% for Malaysia.
Maybank believes its international banking business will be able to contribute 40% to group pre-tax profit by 2015, and to achieve that the group is continuing its aggressive expansion in key markets abroad.
“Malaysia is too small for a bank like Maybank and the country needs a global bank with a strong footing in the region,” says Danny Wong, chief executive officer of fund management company Areca Capital.
He feels Maybank's execution of its regional expansion plan has been done well and is under control.
Wahid says that after Bank Internasional Indonesia was acquired in 2008, it embarked on a strategy to grow its branch network there fast.
“We had 220 branches then and close to 400 now. Our target is 450 branches. It is about increasing our reach and penetrating the more significant economic areas in Indonesia,” he says.
It's the same story in the Philippines where Maybank has been in business for the past 17 years but it has not all been smooth sailing. The initial years saw the group lose money and hence the hesitancy to expand its business there.
Times, though, have changed. The Philippines is booming thanks to a rise in domestic demand and Maybank has seen it fit to expand its banking operations there.
“Last year we pumped US$100mil in additional capital and have set a target to grow our branch network from 55 to 100 over the next two years, and thereafter doubling it another couple of years,” says Wahid.
In Singapore, its operations has hit RM1bil in pre-tax profit. It accounts for 46% of Maybank's international pre-tax profit and Wahid says the plan is to create a niche for its operations there.
“It is not our intention to take on the big boys, the homegrown banks, but rather to create enough critical mass to give us a 5% market share, which would allow us to mobilise deposits. We find that SME and business banking are the areas in which we can make a difference, as well as auto finance, where we are the market leader in Singapore,” he says.
With expansion comes the need for more capital. Maybank is keen to invest in Indonesia where prospects are mouth-watering and in order to meet an ever-increasing stringent regulatory capital requirements and to preserve the valuable capital within the group, it hatched a dividend reinvestment plan (DRP) some years back.
Reaction to that has been enthusiastic.
Previous DRP exercise has seen shareholders subscribe to, according to Maybank's annual report, 88.6%, 91.1%, 86.1%, 88.5% and 88.2% in the five DRPs so far. Maybank says the DRP will continue to be an important element in preserving equity capital and a means of giving shareholders an attractive dividend income.
Will the dividend reinvestment plan end?
“We will continue for as long as it is favoured by shareholders. We need to retain our profits to fund our growth,” says Wahid.
Domestically not sliding
While overseas expansion, faster growth rates and prospects of tapping into booming economies are certainly appealling, it's still the bread-and-butter business of the domestic market that home-grown banks need to pay equal if not more attention to.
That focus is never lost on Maybank but in previous years observers had felt that franchise was meandering along.
In 2010, Maybank restructured itself into three pillars to what Wahid calls the “New House of Maybank.”
They comprised community financial services, global banking and takaful and insurance.
The results of which, especially in the past year, was an eye-opener.
In 2012, Maybank's group loans rose by around 12% with loans in Malaysia expanding by slightly less.
In the Malaysian context, it's difficult for an aircraft carrier size of a bank to be nimble and quick. Giants are thought to move slowly but when they outpace the industry average, people wonder how that is possible.
“We're being more efficient. On the retail banking front, there were markets we were not very good at in the past, for example mortgage lending. What we did was to improve our distribution capability, work better with developers, make sure our product pricing is competitive, and serve customers better.
“In the areas we are doing well, it's a matter of making it better. This applies to auto financing, credit cards, as well as leveraging on firms likePos Malaysia, and reaching out to more customers.
“On the corporate front, we introduced our client coverage model in July 2010 and have improved on it. It has been very effective here in Malaysia and now we will expand it to Singapore, Jakarta, and the Philippines,” says Wahid.
The internal transformation has not gone unnoticed by the investment community.
“Their brand position and outlook has improved. Maybank is more competitive,” says Fortress Capital Asset Management (M) Sdn BhdCEO Thomas Yong.
He notes that there has been a big culture change within Maybank and that has made the bank better suited to survive in an increasingly competitive environment.
“It's a change for the better.”
For Wahid, the turning point was back in 2008 when Maybank was only growing by 5% per annum and its competitors by a far larger percentage.
“That's why we put the whole group on a burning platform. We realised we had to improve our financial performance very quickly. That was when we introduced Leap 30.
“We introduced new tools to make our sales more attractive. We saw the results, but had to ask ourselves whether this was sustainable on account that many people were burning the midnight oil. That's when we simplified the organisation into the New House of Maybank, made up of three pillars: community financial services, wholesale banking, and Etiqa insurance and takaful. Cutting across that were the Islamic banking operations.”
Looking ahead
Maybank has a vision of what it wants to achieve by 2015. It wants to be the undisputed largest provider of financial services in Malaysia, a leading wholesale bank in Asean and eventually expanding further into China, India and the Middle East.
It's looking at a global leadership position when it comes to Islamic finance and also the runaway leader when it comes to takaful and insurance in Malaysia.
Those are lofty ambitions. Wahid says the bank is “very clear on our longer-term aspirations”.
“We mentioned before that we believe in the future of Asean. Come December 2015, we want to make sure Maybank is one of the regional banks that is well-connected, capitalised, and managed. To be the leading regional financial services provider, that's our goal.”
There are nonetheless gaps that exists in the current business model.
Maybank needs a bank in Thailand, which is high on Wahid's agenda, and to grow its asset management business which right now lags behind some of the other larger financial institutions in the country.
The performance of Maybank in recent years, especially last year, has allowed the bank, what some may say, to shed its conservative veneer.
Wahid disagrees though, saying Maybank is not conservative per se.
“We are aggressive in pursuing business opportunities. But as much as we're expanding, we don't expand at all costs. Everything is measured and calculated. Our asset quality has continued to improve with net impaired loans of below 1%.”
Given the success the bank has reaped last year and the direction it is heading, maybe shareholders in the future will not be brandishing brickbats during a future EGM to approve a big purchase.
Maybe then, the size and details that are contained within future annual reports will be even larger.
Saturday March 23, 2013
The Star Biz
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Maybank
Maybank CEO : Regional presence growing
Malayan Banking Bhd's performance in recent times must certainly be a relief for president and CEO Datuk Seri Wahid Omar (pic). Record profits, having the right people on board and improved dynamism within the bank don't mean he is able to take it easy, but it means he will have the luxury of letting the company run on its own steam after a reorganisation to effect such changes gets well under way.Below is an extract of the interview with StarBizWeek.
How do you assess risks to your regional strategy?
We have been growing our risk management capability in order to operate in a multi-currency environment. We are realistic enough not to stretch our resources. That's why we are focused on Asean and its key trading partners as opposed to claiming to be a global bank.
What about your domestic banking franchise?
Expanding overseas doesn't mean our local business is stagnating, it's just that growth abroad will be faster. The target of 40% pre-tax include inorganic assumptions. Organically we can grow to about 33%. The rest will come from M&As, Thailand in particular.
Is the growth in Indonesia last year a one-off?
Absolutely not. The economy is growing well. As we grow, we become more efficient and our cost-to-income ratio improves.
Does Bank Internasional Indonesia's performance vindicate the price tag?
We all make decisions based on the circumstances at the time. There was a scarcity of vehicles available, hence the large premium we paid. Profit, return on investment is now improving. Is it highly profitable? Not yet.
And when do you expect that will be?
We are in Indonesia for the long haul. The sooner the better. Over time we'd like to rebrand it as Maybank-BII.
Has Singapore reached a saturation point?
It has been very successful. We have 22 physical branches and five outside ATMs. We have reached a level where pre-tax profit has reached the RM1bil level. Our target is S$1bil. The current platform can't take us there. We are undertaking a massive study to see how this can be done. We also take into account Monetary Authority of Singapore's announcement about local incorporation. The statement made was that banks that are systemically important from a deposit-taking perspective should be locally incorporated. The other part is to allow some banks that have been responsible to increase their branch network to 50 points of presence (up to 35 physical branches and 15 offsite ATMs). We are one of the most efficient banks there.
Why has it taken you so long to realise the potential of the Philippines?
We have to look at the readiness of the market and our capacity as well. At the end of the day we have our priorities. In the early years it was to make sure we could operate profitably and grow steadily. We also had to focus on other markets such as Indonesia and Singapore. But we believe the time has come to expand our focus to countries like the Philippines. I can't speak for the other banks, but our strategy is to be relevant to each of our markets. If you see it from a retail banking perspective, each market is different. You rely a lot on your branch network, distribution and so on. With wholesale banking, however, it is run on a regional basis.
With your ongoing expansion, what are the demands on Maybank's capital?
We have been very clear on this. We have said we want to grow by 12% per annum in terms of our weighted assets, which means we have to have additional capital of 12% per annum as well. Our return on equity (ROE) currently is 15%-16%. With the dividend reinvestment plan (DRP) we are then able to retain a lot more of our profit to fuel future growth. Net-net, if we can retain 80% of our profit on an ROE of 15%, we will have enough for the 12%. We allocate our capital based on the needs of each market.
But what about Thailand? Is that a sore point for you?
We have a strong presence there by virtue of Maybank Kim Eng, which is the No. 1 broker with 12% market share. They provide a linkage into our wholesale banking, but we would love to have a retail and commercial banking presence in Thailand as well. I suppose it is just a matter of time. You bit the bullet in Indonesia.
Why not do the same in Thailand?
You can't be chewing too many at the same time. We need to prioritise. Having acquired three entities in 2008 that cost us more than RM11bil, we allowed ourselves some time to attend to the growth opportunities in our current markets. Now that they are progressing well, we can look at other opportunities. Thailand is a big piece of Asean. That said, we must be mindful. Any opportunity must be based on the right vehicle, valuation and timing. But banks in Thailand are for sale. Why haven't you taken the plunge?
Picking the right vehicle is very important. We don't want to take a stake in a company without appreciating the valuation, potential, and how we can add value. That's why we're taking our time.
How many times have you had to evaluate an acquisition in Thailand?
Every week there is a proposal from an investment banker. But we are pragmatic. We only consider real deals.
Timeframe?
If it is allowed, we want to open a firm bank branch towards the end of 2014. This is based on earlier discussions with the regulators there. I think this needs to be revisited. We are open to inorganic opportunities, but we will not get there at all costs.
How do your periphery markets fit into your overall strategy?
We are by far the bank with the widest presence across Asean. We have a physical presence in all the 10 countries in Asean. But it's not perfect. In Thailand we're confined to investment banking and stock broking, and in Myanmar we only have a representative office.
In Cambodia we have 12 branches and plan to expand it to 20. People say Cambodia is a small country, but we think it is sizeable and part of Asean. We should be there. Vietnam, likewise, is sizeable. We have two branches there.
Barring any barriers, we would like to be fully present in all of Asean. Outside of Asean, we believe in having some presence in Asean's major trading partners like India, Middle East, China, and so on. This is not to compete for domestic business but to facilitate trade and investment flows between Asean and its partners.
And what are you doing towards this end?
We have increased our operations in China and are hoping to do a lot more. Has Maybank Kim Eng matched your expectations? It has turned out very well. Were making great progress, both in terms of internal integration and driving a wholesome investment banking franchise whilst at the same time being able to secure the mandates. We did the placement of Maybank shares ourselves in October and I must say our people did better than the other party. And we've upgraded our people. They are not just Malaysians, but also Asean nationals.
Will there be more dynamism in investment banking?
Yes. We've seen a Thai company taking over a Singaporean company (Fraser & Neave) and a Philippine multinational acquiring Esso's distribution here (Petron). There will be a lot more of this. You've set ambitious targets for 2013.
Are they realistic?
I think we've delivered in 2012. In the past, Maybank was not known for its strength in investment banking. Now we're in the top two league table and No. 1 by M&A last year.
How much stress is this kind of growth putting in your balance sheet?
We're very disciplined. The loan-to-deposit ratio of 90% is an internal target. For markets like Malaysia we manage it within 90%. But for Indonesia it was a deliberate move for us to allow loans to grow faster than deposits, because it takes time to mobilise deposits. But once we have the 450 branches fully operational, our deposits mobilisation will be enhanced. But if you do that your credit costs will rise and put pressure on your margins. The margin is a function of the price of your loans and the cost of your deposits. Naturally, the competitive environment has resulted in yields on loans coming down. For last year we kept our net interest margin compression to 16 basis points. The aim for this year is to keep it within 10 basis points. What you do is minimise your margin compression and enhance your volume, which creates greater efficiency, so your cost-to-income ratio is manageable.
Are capital requirements a hindrance?
There are high capital requirements as we move towards Basel III. The capital that is required will dilute your ROE slightly. But if it makes you stronger I don't think you should complain. Your outlook for the year?
We are optimistic about 2013. Just looking at Malaysia, where two-thirds of our operations is in, we had a great 2012 in terms of GDP. Internally, our analysts, who are conservative, are looking at 5.3% growth.
What will the operating environment be like for this year in Malaysia?
The macroeconomic environment will present growth opportunities. Loans typically grow two times faster than GDP. This year we reckon loans growth will be around last years' 10.4%. In our target markets we aim to grow faster than the industry. We also want our loan base to be balanced between retail and corporate.
Are Bank Negara's cooling measures for household debt a concern for you?
The responsible financing guidelines are a pre-emptive move on the part of Bank Negara and fully supported by banking institutions. What we need to do is ensure that the non-bank institutions adhere to the guidelines as well. That would help tremendously.
What we did to maintain loans growth was to improve our distribution channels. My simple analogy is that if we have an 18% or 19% share of distribution, why can't we have an 18% or 19% share of the loans? In areas where, for instance, our market share of the loans is 13%, clearly there is room to grow. In the past our mortgage segment was weak, particularly commercial property. But we've improved on these counts and hence our growth has outpaced the industry.
One of our three strategies for 2013 involves changing the cost structure. It is as simple as looking at our distribution channel. We have 400 branches and service centres currently. On top of that we have business and auto finance centres. We have asked our people if we can reorganise and rationalise the network.
We are also looking at our IT and cash deposit machines. Some places may have too many and others not enough. We opened seven branches in 2012 and are planning the same number in 2013. The demand for physical branches is much reduced with the rise of electronic banking. The collaboration with Pos Malaysia has been very useful. We have been able to penetrate the rural areas without opening our own branches. And there's the scaled-down version of our branches with the Maybank One model.
What's driving your domestic loan growth? Is it the ETP?
Absolutely. The ETP is one of the major drivers for the economy, and not just for infrastructure. For example, when the MRT is ready and commercial property developed and businesses set up, there is a multiplier effect. Because of our capabilities, we're there if anyone wants to raise funding. It's not just the size of our balance sheet, but distribution. We have a fair share of the market on any new funding requirements. It is not about being large, but being capable.
What about M&A in Malaysia? Are you up to gobbling up another bank?
Not on the cards (laughs). We remain focused on growing our business organically. There was a time when we looked at another bank but it wasn't meant to be. There are whispers about you wanting to move to PNB. I'm enjoying myself now. Never listen to rumours. I will continue for as long as I can.
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Maybank
Maybank offers one of the highest dividend yields
PETALING JAYA: Malayan Bank Bhd and RHB Capital Bhd, which are Credit Suisse's top picks, have piqued the interest of foreign investors.
Maybank climbed 13 sen to RM9.26 with close to 20 million shares traded while RHB Capital rose 18 sen to RM8.38 with a trading volume of 3.2 million shares.
Another of its top pick was Alliance Financial Group Bhd, which, however, went down 2 sen to RM4.28. In a recent report, the foreign research house said it favoured banks that had sufficient capital or a plan in place to address capital deficit that did not imply any near-term cash call risk and were perceived by investors to be politically neutral.
“We believe that these three stocks have defensive qualities that would enable them to better withstand any potential selling pressure in the run-up to the general elections,” it added.
It said RHB traded at a price-to-earnings (P/E) discount of more than 30% to industry peers (2013: P/E of 9.7 times) and had one of the lowest foreign ownership of 8%.
Meanwhile, Maybank had the lowest foreign ownership among the large banks and offered one of the highest net dividend yields in the market of 6% to 7%, it noted.
Alliance, which was deemed as a takeover target for Singapore-based DBS Group Holdings Ltd, traded at attractive valuations (2013: P/E of 11 times) and offered a 4% net dividend yield. It also pointed out that only Maybank and Alliance had sufficient capital to comply with new regulatory limits.
“Malaysia is the worst performing market over the past six months despite street earnings estimate momentum being positive (2013 estimates increases 3% over the past six months), due mainly to concerns over political risk in the run-up to upcoming general elections,” it said.
It also noted that Malaysian banks' P/E premium to regional peers had diminished to 24% compared with a 39% premium six months earlier and 34% premium three months ago. Besides political risks, another concern that could cap share price performance was the ability of banks to meet the stricter capital requirements to be imposed by Bank Negara, it added - The Star Biz
Maybank climbed 13 sen to RM9.26 with close to 20 million shares traded while RHB Capital rose 18 sen to RM8.38 with a trading volume of 3.2 million shares.
Another of its top pick was Alliance Financial Group Bhd, which, however, went down 2 sen to RM4.28. In a recent report, the foreign research house said it favoured banks that had sufficient capital or a plan in place to address capital deficit that did not imply any near-term cash call risk and were perceived by investors to be politically neutral.
“We believe that these three stocks have defensive qualities that would enable them to better withstand any potential selling pressure in the run-up to the general elections,” it added.
It said RHB traded at a price-to-earnings (P/E) discount of more than 30% to industry peers (2013: P/E of 9.7 times) and had one of the lowest foreign ownership of 8%.
Meanwhile, Maybank had the lowest foreign ownership among the large banks and offered one of the highest net dividend yields in the market of 6% to 7%, it noted.
Alliance, which was deemed as a takeover target for Singapore-based DBS Group Holdings Ltd, traded at attractive valuations (2013: P/E of 11 times) and offered a 4% net dividend yield. It also pointed out that only Maybank and Alliance had sufficient capital to comply with new regulatory limits.
“Malaysia is the worst performing market over the past six months despite street earnings estimate momentum being positive (2013 estimates increases 3% over the past six months), due mainly to concerns over political risk in the run-up to upcoming general elections,” it said.
It also noted that Malaysian banks' P/E premium to regional peers had diminished to 24% compared with a 39% premium six months earlier and 34% premium three months ago. Besides political risks, another concern that could cap share price performance was the ability of banks to meet the stricter capital requirements to be imposed by Bank Negara, it added - The Star Biz
2012 Maybank Full Year Financial Results Investor Presentation
Maybank today reported a record profit after tax and minority interest (PATAMI) of RM5.74 billion for the year ended 31 December 2012, surpassing its ROE target of 15.6% with an achievement of 16%. PATAMI was up 17.6% from the RM4.88 billion in the corresponding period to December 2011. Profit before tax (PBT) for the Group also touched a new high of RM7.89 billion from the RM6.88 billion a year earlier.
Highlights
- FY12 PATAMI jumps 17.6% to another record RM5.74 billion
- Revenue higher by 12.0% to RM16.6 billion
- Commendable shareholder value creation with ROE of 16.0% exceeding headline KPI of 15.6% Strengthened domestic leadership with loans growing faster than industry at 11.8% YoY
- Continued international expansion with overseas profit contribution growing to 30% (up 45.4% YoY) of Group profit.
- Maybank Islamic maintains leadership with PBT up 25% to RM1.19 billion
- Strong balance sheet with total assets of RM495 billion and RWCAR of 17.2%
- Asset quality continues to improve with Net Impaired Loans Ratio of 1.09% and Loan Loss Coverage of 105.6%
- Final net dividend of 28.5 sen per share amounting to RM2.4 billion.
- This brings total FY2012 net dividend to RM4.29 billion representing a net dividend payout ratio of 74.7%.
Kuala Lumpur - Maybank, South East Asia’s fourth largest bank by assets, today reported a record profit after tax and minority interest (PATAMI) of RM5.74 billion for the year ended 31 December 2012, surpassing its ROE target of 15.6% with an achievement of 16%. PATAMI was up 17.6% from the RM4.88 billion in the corresponding period to December 2011*. Profit before tax (PBT) for the Group also touched a new high of RM7.89 billion from the RM6.88 billion a year* earlier.
The Group’s results were boosted by sustained growth across most business sectors complemented by strong contributions from its global operations spanning 20 countries. Significant achievements were recorded in key international home markets of Singapore (where PBT surpassed RM1 billion) and Indonesia (where PBT surged some 60% to reach a new high of RM0.55 billion). The Group’s Islamic banking business (including Maybank Islamic) meanwhile recorded a robust 26.9% rise in PBT to RM1.32 billion.
Key financials of the Group recorded double-digit growth for the year. Total operating income rose 12.0% in spite of the challenging global economy as the Group leveraged on its strong domestic positioning, diverse capabilities and regional network to grow its franchise and explore new market segments. Revenue growth was led by a 14.0% increase in net fee-based income and 10.8% increase in net fund-based income.
Revenue grew ahead of overhead expenses, a result of continuous efforts in improving efficiency and the implementation of a vigorous cost management exercise. These helped offset the pressure on net interest margins during the year.
Group loans growth remained in double-digit territory with a healthy 12.2% rise. Loans & Debt Securities registered a higher growth of 12.9%. Malaysia and Singapore operations saw loans growing ahead of industry rate of 10.4% in both locations, reaching 11.8% and 10.5% respectively. Indonesia saw loans growing at a more robust pace of 20.8% while other international markets registered a rise of 12.9%.
Deposits expanded strongly across the three home markets, reinforcing the Group’s regional franchise, with higher growth momentum recorded in Indonesia. Gross Group deposits rose 10.3% to RM347.2 billion, led by a 22.3% rise in Indonesia. Singapore registered a 12.7% rise and Malaysia, 8.5%.
Operations Review
MALAYSIA
Maybank’s Malaysian operations, which contributed 70% of Group PBT, registered a 5.2% rise in FY12 PBT compared to last year.* Growth was sustained on the back of a 12.2% rise in gross loans for Community Financial Services and 11.5% in Global Wholesale Banking. Community Financial Services which remains the largest component of the Malaysian operations, saw revenue rise 3.7% to RM6.87 billion. Mortgages rose 15.2% from a year* earlier despite intense competition, with a stable market share of 13.4%. Growth in automobile financing rose 12.9%, pushing its market share to 20.5% from 19.4% a year* earlier.In the Cards Business, Maybank boosted market share in key segments namely card base, billings and merchant sales, clearly outperforming industry in these categories. The Business Banking and SME segment also continued its upward trend, with loans expanding 5.0%, and SME loans market share improving to 22.1% from 19.2% year* earlier. Global Wholesale Banking operations were boosted mainly by strong loans growth in Corporate Banking and a robust Investment Banking performance. Corporate Banking operations continued to benefit primarily from the country’s Economic Transformation Programme, registering a 25.4% rise in term loans while revenue from Global Markets operations rose 5.4%.
The Investment Banking business saw growth accelerating this year, with revenue climbing 44.0% to RM1.28 billion and operating profit growing over 2 times to RM349 million. Maybank IB had an excellent year, clinching a majority of notable deals and benefiting from the regional network of the Maybank Kim Eng group. Maybank IB topped the Malaysia League tables in Mergers & Acquisitions, coming in second in all other categories. Its Equities Brokerage business particularly had a strong year, jumping 3 positions in industry ranking to 2nd place.
Maybank Kim Eng is now well positioned to tap on increasing opportunities in the region, having strengthened its visibility as a leading regional investment bank and broking house over the last year. Plans are in place to build on capabilities and capture niche markets through new products in debt offerings, futures broking and regional online trading this year.
Etiqa registered an 11% growth year-on-year in PBT which reached RM660.5 million, as a result of improved surplus transfer from the Life Insurance / Family Takaful fund, favorable investment performance of all funds and higher wakalah fee income. Both the Life Insurance / Family Takaful and General Insurance / Takaful businesses also recorded solid growth of 14.7% from last financial year with combined gross premium and contribution of RM5.4 billion. Etiqa also saw its total assets rising 9.4% to RM27.5 billion from RM25.2 billion in the previous year.
The Group’s Islamic Banking business had another record breaking year with PBT rising 26.9%, on the back of a 19.4% rise in total income. Maybank Islamic registered robust financing growth of 18.3% with Consumer financing rising 20% and Business financing, 14%. Its asset quality also improved with net impaired loans ratio reduced to 0.71% compared to 1.03% last year. Total gross financing stood at RM62.0 billion, making up 30.6% of Maybank Group's total domestic financing.
INTERNATIONAL
Maybank’s International Operations gained further traction in the year, with PBT contribution to the Group rising to 30% from 24% in 2011*. Singapore operations saw a pickup in momentum in the second half, closing the year with a 10.6% rise in total loans and advances, boosting its PBT by 8.8% to S$430.5 million. Business loans increased 5.4% helping to offset a 2.5% fall in Consumer loans, which was expected given the increasingly competitive environment as well as curbs on vehicle population growth.
Bank Internasional Indonesia (BII) turned in a sterling performance with an 80.6% jump in PATAMI to Rp 1.21 trillion on the back of a 17.8% rise in net income and a 3.4% drop in provision expenses. Fundamentals continued to improve, making the Bank well positioned to tap on the significant growth opportunities in the country. Loan to deposit ratio was at a healthy 87.3%, while net interest margin widened from 5.22% to 5.73%. BII also maintained sound asset quality with net impaired loans ratio remaining fairly stable at 1.3%. Meanwhile, WOM Finance benefited from the continued focus on underwriting and cost efficiencies, resulting in PBT improving to Rp 28 billion from Rp 16 billion a year earlier.
Plans remain on track to expand BII’s touch points throughout Indonesia to entrench its growing franchise. The Bank added 64 branches and 165 ATMs in 2012 bringing its network to 415 branches and over 1,300 ATMs. Other operational improvements through the use of technology are also helping accelerate customer acquisition. These include being the first to introduce electronic scanning of identity cards for account opening, implementing a new trade finance system as well as enhancing its mobile banking and internet banking platforms for individuals, supply chain and corporates. In other markets, both Greater China and Philippines saw PBT almost tripling this year compared to the previous corresponding period.* Greater China operations, which comprise Hong Kong, Shanghai and Beijing recorded a PBT of RM243.5 million from RM84.6 previously, while the Philippines saw PBT grow to RM60.9 million from RM23.7 million a year earlier*.
The Group’s 20% owned AnBinh Bank (ABBank) of Vietnam also had a strong year with a 24.1% rise in PBT to VND497.1 billion, owing mainly to a decline in allowance for losses on loans. Gross loans rose 15.6%, but this was tempered by lower net interest margin and higher overhead costs. Customer deposits, however, surged 31.2% and asset quality improved further to 2.29% from 2.79% a year earlier. In Pakistan, MCB Bank, where the Group has a 20% stake, registered a 3.7% rise in PBT to PKR32.5billion, on the back of higher revenues and better efficiency. Gross loans grew 5.1% and customer deposits, mainly from corporates, rose 11%.
Prospects
Global macro economic growth is expected to stabilise in 2013 with real GDP forecast at 3.4% from an expected 3.3% in 2012 due to continued US recovery, stabilising of the crisis in Eurozone, a moderate but more sustainable growth in China and sustained expansion in Asia ex-Japan. The ASEAN 5 economies of Indonesia, Malaysia, Philippines, Thailand and Vietnam, is expected to outperform on continued resilience in domestic demand and relative improvement in net external demand, with GDP growth sustained at 5.5% in 2013 from 5.7% in 2012.Maybank’s three home markets consisting of Malaysia, Singapore and Indonesia, which contribute more than 90% of the Group’s income and profit, are expected to record positive revenue growth on the back of improved economic expansion. In Malaysia, real GDP growth is expected to remain resilient above 5.0% (2012: 5.6%) due to sustained domestic demand and strong investment from implementation of projects under the Economic Transformation Programme, supported by an accommodative monetary policy. However, consumer spending may turn cautious in the second half on the prospects of higher inflation on gradual withdrawal of energy-related subsidies and a possible hike in the Overnight Policy Rate. In Indonesia, strong domestic demand and inflow of foreign investments should enable it record higher GDP growth of 6.7% (2012: 6.2%) while Singapore’s economic growth is expected to improve to 3.0% (2012: 1.5%) on the back of stable growth across the advanced economies.
Maybank’s business momentum is expected to continue in 2013 on the back of improved loans growth in its three home markets and other markets in the region, higher non-interest income as a result of healthy deal pipeline for the investment banking business, while deriving higher revenue from regional initiatives. Having established its presence in all ten countries in ASEAN in 2012, the Group is focused on building a truly regional organisation. Global Wholesale Banking’s global relationship coverage model is being extended to realise merger synergies with Maybank Kim Eng and will see closer collaboration with overseas units especially in Singapore, Indonesia and Philippines.
Adoption of good corporate governance and upgrading of IT infrastructure will further improve business capability in the Group’s global wholesale banking, investment banking, credit cards, treasury and payment operations. The Group will continue to raise the quality of customer services, embed a robust risk culture to sustain its strong asset quality, and improve effectiveness and efficiency through an optimal cost structure.
The Group is poised to remain well capitalised for 2013 in accordance with Bank Negara Malaysia’s Capital Adequacy Framework on Basel III which was issued on 28 November 2012. Supported by the recent private equity placement of RM3.66 billion undertaken in October 2012 and with continued conservation of capital from the Dividend Reinvestment Plan, the Group is expected to maintain a Common Equity Tier 1 Capital ("CET1") ratio of above 7% well ahead of the minimum level of CET1 ratio (inclusive of capital conservation buffer) as required by 2019.
Barring any unforeseen circumstances, the Group expects its financial performance for the financial year ending 31 December 2013 to be better than the previous financial year. The Group has set two Headline Key Performance Indicators ("KPI") of Return on Equity ("ROE") of 15.0% (based on enlarged equity capital from private placement and dividend reinvestment plan) and Loans growth of 12.0% for the year ending 31 December 2013.
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整体增长 派息33仙 马银行末季净赚14亿
（吉隆坡21日讯）整体业务表现稳健增长，马银行（Maybank，1155，主板金融股）截至2012年12月31日止第四季净赚14亿5958万5000令吉，全年净利也再创新高，跃升17.62%至57亿4469万6000令吉。
马银行2012财年第四季营业额末季营业额，也按年微增4.30%至70亿2728万1000令吉，全年则按年增加15.97%至275亿3246万1000令吉。
相比之下，该公司于上财年第四季分别录得12亿5900万5000令吉净利及67亿3741万8000令吉营业额，全年净利和营业额则分别达48亿8396万8000令吉及237亿4128万2000令吉。
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Maybank IB looking for regional reach
CEO Tengku Zafrul has managed to make MIB's presence felt in the region despite the presence of strong rival groups.
IT has been two years since Tengku Datuk Zafrul Tengku Abdul Aziz accepted the post of CEO of Maybank Investment Bank Bhd (MIB). The brief before him was simple. Malayan Banking Bhd (Maybank) was the domestic leader when it comes to commercial banking, and was expanding its reach across the region. The one thing that was missing from complementing its commercial banking business was a vibrant investment bank.
It was an long pursued mission of the bank. For years, Maybank wanted its investment banking business to mimic the influence of its commercial bank but it was not able to see any satisfactory movement in that direction.
“When (Maybank president and chief executive officer Datuk Seri Abdul Wahid Omar) came in, things started to change. I noticed that he was trying to improve the investment bank (IB),” Zafrul tells StarBizWeek.
That meant having to compete head on in a space that is dominated by its rival CIMB Group Holdings Bhd. It was no easy task given the tools Zafrul and his growing team had then.
“When I first started this job, there was no Kim Eng. It allowed me to get used to Malaysia and the Maybank group. I was not as confident because of where we were. We did not have a CFO and corporate finance was less than 20 people. My focus was building the infrastructure and we got lucky that while the infrastructure was being built, deals were coming in because of the market and the support from the group,” he says.
Zafrul then got a clear sense of the seriousness of Maybank's ambition for its investment bank (IB).
“The commitment that I got when I proposed the Kim Eng deal showed that I have the buy-in from the board and the exco. To spend that kind of money after BII (Bank Internasional Indonesia) was not easy.
“That's when I realised they are committed. The support from the board and the exco is good provided we continue to deliver. MIB has done better than before and they have faith in the team. As long as we support the commercial bank, the support will be there. We have to work together.”
“The battle is out there.”
Building the franchise
Maybank flexed its intent in the IB space when it went out and acquired Singapore's Kim Eng early last year. It paid good money for the broker that had a reach throughout the main markets in Southeast Asia and Hong Kong.
The RM4.3bil deal accelerated MIB's presence into the important markets where its parent was expanding. And the results are showing.
“In Malaysia, we are one of the major players in investment banking. We also slowly becoming stronger in terms of broking where our market share has gone up from number nine and now we are top three or four depending on the volume,” says Zafrul.
Rival investment bankers too have noticed the change that has taken place within MIB, which is now among the leaders in many of the league standings that investment bankers aim for.
“They are more coordinated. Maybank's commercial bank is talking with its investment bank and they are leveraging off their balance sheet,” says a banker.
The acquisition of Kim Eng, which makes most of its money from broking, allows the Maybank group to utilise its balance sheet for the investment banking licences Kim Eng has but never utilised because of the capital demands that comes with the IB business.
“Because they don't have a strong investment banking franchise, they counted on retail players. What we are doing now is leveraging on the strength of Maybank in terms of expertise in investment banking by recruiting people and getting the supporting infrastructure,” says Zafrul.
That has allowed MIB through Maybank Kim Eng, which it is branded outside of Malaysia, to make its presence felt in a number of countries, namely Singapore and Indonesia.
Its investment banking presence is also being rolled out to Vietnam and Cambomdia where the commercial bank is present.
Having investment banking in those countries allows Maybank to be a lot more savvy in the banking business in those countries, and importantly make more money.
Zafrul says that for countries such as Indonesia, which is a hot market given its growth and potential, Maybank Kim Eng is now able to offer clients of BII an avenue to get listed.
He says the one benefit of doing that is for BII to retain their customers who might otherwise have gone with the firm that brought them to the Indonesian stock market.
“We also have a relatively strong presence in the Philippines. We have 52 commercial bank branches there and we are leveraging on that. When we completed the acquisition (of Kim Eng) in May last year, we launched the project merger integration, which is a 1-year project that should be completed by the end of this year. That's where we identified the areas we need to work on. We are now in the implementation stage.
“It's a lot of work and this year, while making sure we still earn money, is when we will build the foundation for growth because our target is to be a regional financial powerhouse by 2015,” says Zafrul.
Having a regional platform permits MIB to expand its presence in ways never done before.
“For Malaysia, we managed to become a joint global coordinator for Bumi Armada. That was the first time we played the GCC role. Before that we were unable to.
“We are seeing more cross-border deals and we will lose out if we did not have the reach,” says Zafrul.
MIB is now looking at linking all of its markets and that will be done through what Zafrul says are four business pillars.
The first is investment banking, which covers the equity markets, debt markets, corporate finance, project finance, advisory and fixed income advisory.
It then has the equity business for institutions and retail broking.
“Broking is important to us, Kim Eng traditionally has been a retail house and they are very strong in this,” he says.
The last pillar is the derivatives business.
“Kim Eng was successful as a retail broker and to support the commercial bank, we need to ensure that all the product suites are available to our all clients across the region.
Winning deals will pad up the pitchbook MIB and Maybank Kim Eng can show to potential clients. Coupled with a licence to operate in, it's a combination that is getting results.
“Even in Singapore, Maybank Kim Eng has won two deals because of the licence. IB gives the group a presence in the deals.”
Zafrul says MIB is competitive in Malaysia. In Indonesia he says Maybank Kim Eng is competitive in broking and investment banking is slowly building up.
“In Thailand and especially the Philippines, we are No. 1, even in investment banking. We are relatively small in the other countries like Vietnam and India. In terms of revenue and business it is not so big but we will continue to concentrate on broking in certain countries,” he says.
In Thailand, Maybank Kim Eng is looking at more advisory work and Zafrul says the strength of the broking business there is helping in the advisory work it does.
Because of its distribution network in Thailand, courtesy of being the biggest stockbroker there for the past 10 years where its market share is 14% compared with 7% by its next closest competitor, Maybank Kim Eng is able to use that influence to win over clients.
“Clients naturally come to us and get us involved. We have the traction and our research is strong there. That's why if there is an opportunity in commercial banking there it will really benefit us,” he says.
Since the acquisition of Kim Eng, the revenue mix for MIB has been 60:40, with Malaysia, being a strong anchor for the group, accounting for 40% of revenue generated.
In a good year, that ratio shifts to 70:30. Recently with the markets shaky and confidence rattled, that ratio dropped to 50:50 with Singapore and Hong Kong being the most affected.
With the bulk of revenue coming from offshore, keeping Maybank Kim Eng at or near the top of the regional ranking is Zafrul's priority.
“Its on my scorecard and KPI. We are targeting to be the number broker and top 5 in the league rankings in Asean by 2015. That's what the board wants by 2015,” he says.
In IB now, MIB and Maybank Kim Eng are in the top 5 in Thailand, Malaysia and the Philippines. In broking, Maybank Kim Eng ranks first in Thailand and the Philippines and Zafrul says Maybank Kim Eng is in the top two in Indonesia and ranks second or third in Singapore.
“We have to compete with CIMB and now RHB & OSK. Being No. 1 in three years is not easy,” he says.
“It is a very challenging target but it is not impossible. We have been successful in Malaysia where we have beaten targets the past 2 years. The board feels we should be aiming for the sky and think out of the box in terms of how to achieve that.”
One of the key ingredients in IB is talent. People who make and execute deals and generate products and ideas are essential.
While the problems of the world has got a lot of people worried, its a bit of a silver lining for domestic IBs such as MIB.
The big European banks are pulling back their capital and cutting down on headcount.
That means a bit more elbow room for getting deals done and the other benefit is the availability of experienced people looking for a job.
“Our main problem now is to ramp up talent and the foreign banks are supplying us with that. We have to compete for talent and cost-wise, remuneration has become more “realistic” compared to the boom times,” he says.
There are pros and cons to that.
Zafrul is seeing foreign banks not as hungry and focused as they were before.
The second benefit of the current global problems is that it's their problem - for now.
Most of the developing countries in the region Maybank Kim Eng operates in are sheltered from the problems as they are domestic oriented.
“They are insulated and we are able to continue with our Thailand, Indonesia and Philippine ventures. The ones that we need to be careful of are Singapore and Hong Kong. These are the 2 markets that are open and sensitive to what is happening.
“We might not push certain transactions and IPOs in those markets,” he says.
With Malaysian IBs having a good run throughout the region, it might prompt the other banking giants to ponder if it's worthwhile to do the same.
Zafrul expects that to happen eventually but there will not be a rush in that direction.
Indonesia has such a high ceiling in terms of the potential of the domestic industry that it may take some time before they start drawing up a regional IB strategy.
“In Singapore, they are not as aggressive. We don't see them as much as we see the foreign banks. They are very much Singapore centric,” he says, but that might not be the case for long too.
“The louder we shout and the more deals we win, I just can't imagine the other banks not coming in,” he says.
With the market capitalisation of the 7 stock exchanges in Asean worth around US$2 trillion, the market is certainly big enough.
With Malaysia seemingly having the most outward looking investment banks in the region, competition will crank up, and that will soon start once RHB Capital and OSK Holdings pool their investment banking operations together.
In growing the business, Zafrul says the one area the IB business will avoid is proprietary trading.
“We don't have the appetite for that and we are closing that down. Kim Eng made and lost money on that and as a group, we have taken a position that we don't want to take a position in proprietary trading,” he says.
But the one area MIB is keen to grow is its asset management.
“Yes, that is a big missing link which our competitors have that supports the broking business and sometimes the institutional business.
“It is something the group has thought of and are finally making a move,” he says.
“We have investment management which was parked under Etiqa. Etiqa manages the insurance and some wholesale institution money but notunit trust and a mutual funds. What we did was moved it out and moved it to the Maybank group and now we are coming out with a strong business for that.”
The Star Biz
Saturday June 2, 2012
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Maybank
Maybank to lead in Asean (Analyst Report By Kenanga Research)
SINCE the launch of Malayan Banking Bhd's Global Wholesale Banking (GWB) operations, which included corporate banking and investment banking in July 2010, the group has made significant progress in building up the GWB's business. We are convinced that it's Maybank's wholesale banking would eventually become a leading player in the Asean region.
We continue to maintain our “outperform” rating with an unchanged target price of RM10.40.
Under Maybank's Enterprise Transformation Services programme, GWB is one of the three pillars under the new Maybank group. It aims to regain domestic leadership and aggressively pursue an Asean market expansion through better client interaction. Since the start of this transformation programme, the group has been gaining market shares in both the corporate and investment banking businesses locally.
In the first quarter ended March 31 (1Q12), Maybank IB was ranked either first or second place in a few IB businesses such as merger and acquisitions, equity capital market, debt capital market and equity brokerage. This has contributed positively to the group's strong 1Q12 performance.
Maybank's 1Q12 profit after tax (PAT) of RM1.347bil made up 27% of the consensus' forecast and 26% of ours. Its non-interest incomes were RM1.654bil, a 54.5% increase year-on-year, on the back of stronger local IB business and Kim Eng's contribution in the quarter.
Corporate banking and Investment banking contributed RM800mil to RM5.020bil total revenues, which accounted for 39% of total revenues in 1Q12.
The group remains optimistic on its 2Q12 profit guidance as it still has a strong pipeline of investment banking deals. Although, the economic situation remains volatile with the eurozone crisis, we believe that positive growths in the local ETP's related sectors are expected to stimulate private investments and in turn, spur domestic loans growth as well as fuel local capital market activities.
The next journey would see the group aiming to be a leading wholesale bank in Asean by 2015. Areas of opportunities in the region include driving more cross border deals, growing its Islamic banking business and seeking more treasury products businesses, which should result in a non-interest income growth over the medium term. Maybank is likely to be one of the key beneficiaries from ETP projects rollout this year with its corporate loans growth likely to see an impressive rise for the second half (2H) of the year.
We do not discount the possibility of the group delivering or even outperforming its FY12 total loans growth target of 16.2%. Adding to that, earnings upside could also come from a lower credit charged-off rate going forward as well as a stronger than expected fee-based incomes after the acquisition of Kim Eng. The group offers a good dividend yield of 6.3%.
Monday June 18, 2012
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Maybank
Maybank is upbeat based on benefits derived from the ETP
Despite the expected slowdown, Malayan Banking Bhd is seeing opportunities in segments of its financial services.
By 2015, it aspires to double its banking business from RM21bil to RM41bil.
“Boosted by opportunities from the Economic Transformation Programme (ETP), the compounded average growth rate (CAGR) is expected to hit 16% from 8% to 10% in the last few years,” says Lim Hong Tat, deputy president and head, community financial services.
Other types of loans expected to notch double digit growth are:
Lim: ‘ We have seen good results especially in the form of deposits from business banking clients; that has grown significantly by 15% to 20%.’
Construction loans, for which RM4bil in outstanding loans has been extended as of Dec 31, 2011.
Trade finance, in which Maybank has a 27% market share as at Dec 31, 2011.
Among all these loans, a new strategy and focus has been drawn up for business banking to double its growth in a few years.
The transformation includes the creation of the “hunter farmer” sales and distribution model, and “go to market” strategy, emphasis on supplier distributor financing while enhancing the existing asset quality framework, which includes sharpening fraud detection techniques.
Essentially, the hunter's job is to look for new business while the farmer will maintain and strengthen existing businesses.
After a year, the hunter passes back the business to the farmer who will spend more time on building relationships and servicing the client.
Going to market essentially involves, among others, more cross sell activities. Maybank has 60% to 70% of consumer-based customers; those in the private banking division where the high net worth individuals are, have been asked to refer more cases to business banking.
In the last few months, the bank has closed RM400mil in this area.
“We are emphasising more on supplier distributor financing and trying to build an ecosystem,” says Lim. Maybank is strong in corporate loans. This sector comprises listed companies, multinationals and government-linked companies - a conducive base for the financing of distributors.
A pilot project is being conducted to provide services to non-borrowing customers, an area which has yielded good results especially in cash management.
Improving asset quality in case of a slowdown in the economy involves strengthening of the know-your-customer concept, fraud detection and risk scoring.
The bank has also fine-tuned on which areas to focus, in line with theETP initiatives especially in oil and gas, oil palm and construction sectors.
The potential for business banking is great. As at December last year, overall business loans which comprise corporate, business banking and retail SMEs, peaked at RM85bil, with a strong market share of 19%.
Since the early 1990s, a commercial banking department had been formed to develop the bank's middle market and SME businesses.
“From RM3bil, we managed to grow this middle market and SME segment by eight times to RM25bil. During those years, we invested in infrastructure and formed 39 business centres,” recalls Lim.
In this respect, Maybank had some innovative products to offer. A customer limit enhancement programme was offered, giving a certain percentage increase in loan facility, on meeting certain criteria, without seeking for more collateral.
Other facilities included account and cash management as well as desktop banking.
“Our business banking position is very strong with a market share of 19% to 20%,” says Lim.
In July 2010, the new house of Maybank was formed. The consumer financial services division, which contributes 50% to group earnings, had included the consumer, business banking (comprising middle market SMEs) and retail SMEs (those with loan size of RM5mil and less) distribution and call centre.
The team reports to one regional director, thereby achieving more synergies and a higher level of teamwork. The bank provides a strong consumer franchise with a network of over 366 branches, 39 business centres and 17 trade finance centres.
Branches that used to focus on just consumers are now positioned to serve and solicit business from all customers. “We have seen good results especially in the form of deposits from business and SME banking clients; that has grown significantly to 20% per annum over the past two years compared with 10% previously.
“Our aspiration is to grow business banking to RM41bil by 2015, with a CAGR of 16% from 8% to 10%.
“There are opportunities from the ETP. If we are disciplined, we can grow aggressively,” says Lim.
Maybank's lending criteria emphasises business viability, and the bank is willing to lend on unsecured basis to eleigible clients for viable and profitable business propositions.
“That is the stand we took on humanising financial services, providing easy access to financing at fair terms and pricing, selling based on need and not providing excess financing,” he says.
From: The Star Biz
Saturday July 7, 2012
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Maybank
