Maybank upbeat on prospects
KUALA LUMPUR: Malayan Banking Bhd (Maybank) is optimistic about its outlook for 2022, as it believes the country’s transition into endemicity is set to boost the banking sector and economy.
Chairman Tan Sri Zamzamzairani Mohd Isa said the reopening of borders would bode well for the group’s M25 plan, which is now into its second year.
“Despite some challenging circumstances, we had a commendable year (in 2021), mainly owing to our resilience and robust financial strength.
“We are optimistic that 2022 will see the country’s recovery phase gathering pace and we will remain guided by our mission to humanise financial services via our M25 plan,” he said in a virtual press conference following Maybank’s AGM yesterday.
The M25 Plan is a five-year strategy that outlines Maybank’s plans and goals from 2021 to 2025. Zamzamzairani said the M25 Plan focuses on three strategic priorities, namely,
“pervasively digital, new value drivers and sustainability”.
“Having completed the first year of our M25 Plan, I’m pleased to say that Maybank is on track to achieve its M25 goals and we expect our momentum to continue as markets move towards the endemic stage.”
Maybank’s net profit for its fourth quarter ended Dec 31, 2021 rose 33.8% to RM2.06bil from RM1.54bil in the previous corresponding period, while revenue stood at RM11.26bil compared with RM12.24bil a year earlier.
For its financial year ended Dec 31, 2021, Maybank’s net profit surged to RM8.10bil from RM6.48bil in the previous corresponding period, while revenue stood at RM45.96bil against RM51.03bil a year earlier.
When the group announced its 2021 financial results in February, it did provide an outlook of its prospects for 2022.
Maybank group president and chief executive officer Datuk Seri Abdul Farid Alias said the outlook that was given earlier had already taken into account the possibility of Malaysia transitioning into an endemic phase by the second quarter of this year.
“However, one event that was not factored in was the Russian invasion of Ukraine.”
Abdul Farid however said the impact of the Russia-Ukraine war on Malaysia and the Asean economy would not be significant.
“The contribution of trade flow of those two countries into this part of the region is pretty insignificant. It’s less than 1%.
“But we still don’t know what kind of an impact it will have on Europe, which is a major trade partner for Malaysia and Asean. Therefore, we will have to wait and see how things evolve over time.”
Commenting on the digital banking landscape, Abdul Farid said Malaysia has indeed come a long way, adding that local banks such as Maybank will leverage whatever opportunities it can and make the most out of the situation.
“We’ve been looking at the digital space since way back when. Initially there were concerns and fears. But as we learnt more, looking at what customers want and the potential players coming in, we realised that we have advanced quite far.”
Abdul Farid explained that today, Maybank is able to offer its banking services digitally.
“We wouldn’t have come this far if not for the threat from other players. So we would like to thank them for forcing us to be creative, as this is the kind of environment that is needed for us to progress.”
Commenting on the likelihood of a hike in the overnight policy rate (OPR), Abdul Farid said he only expects an increase in the final quarter of this year. “We don’t think there’s pressure on the central bank to raise the OPR for at least the first three quarters of this year.
“We know the United States Federal Reserve will make several moves this year, but in the case of Malaysia, because inflation is not very acute, just like what is happening in the US, we believe that the rise in interest rates will happen in the fourth quarter of this year.”
Should that happen, Abdul Farid said the impact to Maybank’s net interest margin will probably be about one basis point.
Separately, he said Maybank has various strategies in place to maintain its total current account and savings accounts (CASA) growth.
“In the last couple of years, we have been receiving better than our fair share of CASA growth in the country. That’s because of the market environment, namely the level of interest rates and the implementation of the movement control orders.”
Abdul Farid however believes that this trend will change when interest rates “start to turn around”. “We will continue to do what we have been doing up to this point, because the CASA growth that we have been seeing, it doesn’t come to us by itself.
“It was because of the various efforts that we put in at the various branches, on the digital side and dealing with the non-returning customers. All of that combined, has resulted in seeing the growth in our CASA.”
When asked about Malaysia Building Society Bhd getting the green light from Bank Negara to potentially acquire Malaysian Industrial Development Finance Bhd from Permodalan Nasional Bhd, Abdul Farid said the local banking sector can benefit from consolidation exercises.
“I believe there are certain areas within the banking industry that will benefit from consolidation.
“It will not benefit the bigger guys for sure – it would not benefit us. But it will benefit the smaller scale players.”
Disclaimer: Perpustakaan Tun Abdul Razak,UiTM This material may be protected under Malaysia Copyright Act which governs the making of photocopies, reproductions or copyrighted materials. You may use the digitized materials for study or research.
