Maybank May Leverage, Expand Digital Offerings Across Markets, Says RHB Research

Maybank intends to leverage and expand its digital offerings across markets in Malaysia, Singapore and Indonesia, and to redefine the floor and ceiling for ticket sizes so as to expand its customer reach.

To enhance customer experience, this entails putting together an ecosystem that connects small medium enterprises with solutions and tools (for example, trade, payroll) to manage the business and facilitate growth. 

Wealth management total financial assets rose 6% in 2022 to RM420 billion, generating RM5.7 billion in income. The focus ahead is on holistic propositions while leveraging on regional footprint for cross-border referrals and onboarding, and digital to expand coverage and raise productivity. It is optimistic that its recently launched Islamic wealth management can be a game changer. 

The emphasis on ecosystems is to improve customer stickiness and cross selling opportunities. As for the higher cost for Islamic deposits (vs conventional), this is due to the lack of distinction. The use of more sophisticated deposit products or slower loan growth may help ease the pressure.

On digital banks, key for these banks is using data for targeted offerings. Maybank has a huge customer database and intends to monetise this (eg personalised offerings). Lastly, the banks are awaiting guidelines from Bank Negara Malaysia to operationalise the use of savings in EPF Account 2 as support for loans.

These were mentioned in the recent Malaysia Company Update report by RHB Research, who said the group community financial services focus on enhancing customer experience and journey with ecosystems as well as digital could well be the key differentiator proposition for the group.

Malayan Banking held an investor day on Mar 24 to showcase its group community financial services division, culminating in several key takeaways.

“In a volatile market, its attractive dividend yield should be the key driver of shareholder returns,” said RHB Research.

Note that Malayan Banking Bhd (MBB) (3813-K) is a local financial service provider catering to consumers, investors, entrepreneurs, non-profit organisations and corporations. As of November 2016, it is the only regional bank with a presence in all 10 ASEAN countries.

Group community financial services division is the group’s largest segment, with 2022 mix for revenue, loans and deposits at 59%, 66% and 60%. Mortgages (45% share) and auto (20%) are the largest loan segments while Malaysia (74%), Singapore (12%), and Indonesia (12%) are the largest contributors to revenue.

Group community financial services current account servicing accounts is strong (52% current account servicing accounts mix). In 2022, group community financial services loans and deposits rose 7% year-on-year and 3% year-on-year, while revenue was up 17% year-on-year.

Maybank highlighted the increasing importance of digital as a differentiator. Its Maybank Home2u is the country’s first-ever digital home financing solution where approval can be obtained within 10 seconds of completing an application. RM1.1 billion in mortgages have been approved thus far. 

For mortgages, Maybank targets primary and secondary markets (quicker disbursements in secondary market), while for auto and mortgages, it intends to strengthen its salesforce and further leverage on digital capabilities to drive growth.

Emphasis will also be on establishing integrated ecosystems to connect borrowers with solution providers along their journey of owning a property or vehicle. 

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