CEO Khairussaleh said the group has allocated about RM1.45bil for capital expenditure for FY23.
KUALA LUMPUR: Malayan Banking Bhd
(Maybank) is strategically directing its focus toward non-rate propositions as part of its efforts to enhance value offerings, particularly targeting its corporate customers.
Amid facing net interest margin (NIM) compression pressures, group president and chief executive officer Datuk Khairussaleh Ramli said that leveraging on Maybank’s substantial base of corporate clients provides the opportunity to create bundled packages that include more than its traditional banking services.
These encompass a range of offerings, from cash management facilities to comprehensive accounting solutions.
“Whilst we have a base of about 700,000 small and medium-sized enterprises (SMEs), we want to link them to beyond banking solutions,” he told a press conference in conjunction with the group’s first half of financial year 2023 (1H23) results.
On NIM, Khairussaleh said the bank foresees a 25 basis point reduction for the financial year ending Dec 31, 2023 (FY23).
He pointed out that during 1H23, the NIM underwent a compression of 22 basis points, declining from 2.39% in the previous year to 2.16%.
Nonetheless, Khairussaleh conveyed optimism about the NIM stabilising in the latter part of the year.
“We have to do what is best in terms of bringing in deposits but not overly overpaying,” he emphasised.
On capital expenditure (capex), Khairussaleh said the group has allocated about RM1.45bil for the whole of FY23.
As at end-June 2023, the bank had committed about RM373.9mil of the money with a significant portion of this allocation focused on technological enhancements tailored for its corporate clientele.
“Yes, we had a slow start, but we will ramp up investment,” he acknowledged.
He further noted that, if necessary, a portion of the RM1.45bil allocation could be carried forward for utilisation in the following year.
Additionally, Khairussaleh highlighted the group achieved a loan growth of 5.3% year-on-year (y-o-y), amounting to RM605.84bil in 1H23.
“We think that not just in Malaysia, potentially even in Singapore, loans will pick up in the latter half of the year,” he said. Thus, Khairussaleh said, the bank has set a loan growth target ranging from 5% to 6% for the entire year.
For the second quarter ended June 30 (2Q23), Maybank posted a 45.4% y-o-y jump in net profit to RM2.34bil, or an earnings per share (EPS) of 19.4 sen.
This compares to a net profit of RM1.61bil in the same quarter in 2022, and EPS of 13.44 sen.
Revenue for the quarter amounted to RM16.13bil compared to RM10.21bil in 2Q22.
The fourth-largest banking group in South-East Asia by assets, Maybank’s net operating income in 2Q23 rose 15.9% y-o-y to RM7.31bil on higher non-interest income from stronger treasury and markets income, which surged 119.3% to RM2.48bil from the year-ago quarter.
Net fund-based income, however, recorded a slight decrease to RM4.83bil from RM5.17bil as NIM compressed due to persisting funding competition.
The banking group has declared a first interim full cash dividend of 29 sen per share, which translates to a dividend payout ratio of 75.9%.
Meanwhile, for 1H23, the group’s net profit rose to RM4.6bil from RM3.66bil in 1H22, while revenue climbed to RM31.32bil from RM21.36bil in 1H22.
Net operating income in 1H23 was up 8.6% y-o-y to RM13.63bil on the back of a 61% jump in non-interest income to RM4.01bil.
This was, however, offset by a lower net fund-based income, which dropped 4.4% y-o-y to RM9.62bil as NIM was compressed due to higher funding costs led by interest rate hikes in the past year and deposit pressure.
