PETALING JAYA: Malayan Banking Bhd (Maybank), which like many banks regionally saw net profit impacted by market volatility in the first quarter, is eyeing to grow some of its core segments as it strives to have a stronger financial footprint.

       Group president and CEO Datuk Khairussaleh Ramli told StarBiz that there would be pockets of opportunities across segments in markets where the group operates.

       With the reopening of regional economies amid higher vaccination levels and controlled Covid-19 cases this year, he said the segments which the group targets include consumer banking, wealth management, global markets, small and medium enterprise (SME), insurance, corporate and investment banking, asset management and Islamic banking.

       “For Malaysia and Singapore, loan growth for the consumer portfolio will be supported by financing in the housing, vehicle and credit card segments.

       “Meanwhile, retail SME financing is expected to be stronger year-on-year (y-o-y) as economic activity rebounds and we continue to support growth across key sectors,” Khairussaleh said in response to email queries.

       Meanwhile, he said non-interest income growth would be pursued through investment banking and capital market activities, wealth and investment management as well as trading activities.

       In the first quarter ended March 31, 2022 (1Q22), Maybank group saw lower net profit at RM2.04bil while net operating income slipped 5.4% to RM6.45bil, as geopolitical tensions and market volatility impacted the operating environment.

       On its net interest margin (NIM), he said the bank expects it to remain stable in financial year 2022 (FY22) with a minimal potential upside, given the rising interest rate environment, as it selectively grows its loan book across key markets and defends its low-cost deposit base.

       Its NIM expanded by three basis points y-o-y on lower interest expense while loans rose 5.2% in 1Q22.

       With the reopening of regional economies amid higher vaccination levels and controlled Covid-19 cases this year, he said the segments which the group targets include consumer banking, wealth management, global markets, small and medium enterprise (SME), insurance, corporate and investment banking, asset management and Islamic banking.

       He said capital and liquidity conservation remains a key priority due to external headwinds such as market volatility seen in the first half of 2022.

       “We will also continue to monitor our customers who will see their repayment assistance packages expire this year and lend further support, where needed.

       “Overall, Maybank has guided for a group return-on-equity of between 9.5% and 10% for FY22, factoring in the one-off Prosperity Tax,” he added.

       In line with Maybank’s strategic priorities under its five-year plan (M25), Khairussaleh said it would leverage digital innovation to create an unmatched customer experience.

       For instance, the bank remained focused in driving customer experience in the retail segment including digitalising banking solutions as seen in its latest offerings, Maybank Personal Digital Financing, Maybank Home2u on the MAE app and SME Digital Financing.

       On another note, he said the group’s net fund-based income, which was over 70% of its FY21 net operating income, would continue to form the bulk of the bank’s earnings in FY22, as loans make up 60% of the group’s total asset as at March 31, 2022.

       He said in view of the challenges facing the banking industry, Maybank has mobilised various initiatives to minimise the impact on the group.

       He said one of the ways is to provide customers with wealth and investment solutions that benefit from asset classes that have performed well in a risk-off environment given rising market volatility.

       “We have also shortened durations on our securities portfolio in this rising rate environment to minimise fluctuations in our portfolio and support our net fund-based income growth.

       “Meanwhile, the bank will continue to actively manage asset quality on expectations that most of the relief programmes will expire this year.

       “This includes close monitoring of repayment patterns by customers and proactively undertaking engagements with them, especially if they require extended relief support,” he noted.

       He said the bank is also curating learning and training programmes that focus on capacity building in areas of digitalisation and sustainability as part of the group’s workforce readiness to pursue the strategic priorities under M25.

       As for competition in the deposit space, Khairussaleh said on the back of an interest rate hike of 25 basis points (bps) in May and the anticipation of potentially another 25bps rate hike in the second half of 2022, he foresees a pick-up in deposit competition.

       He said it is because markets have reopened and economic activities have improved, leading to higher customer spending.

       To this end, he said Maybank would continue to focus on its existing deposit strategies to actively source low-cost funds, current accounts and savings accounts (CASA) from all its customers including individuals, SMEs and corporates and institutions.

       “We will also remain focused on attracting trade customer deposits through targeted campaigns, use data analytics for new business acquisitions and leverage our cash management capabilities.

       “We anticipate a stable deposit growth for Malaysia in FY22,” Khairussaleh said.

       Customer deposits in Malaysia grew 7.4% y-oy while CASA ratio was healthy at 48.3% in 1Q22.