KUALA LUMPUR: The country’s largest bank, Malayan Banking Bhd (Maybank) will continue to protect margins via selective asset growth, while at the same time expand its base of cheaper funding sources in 2019, its group president and chief executive officer, Datuk Abdul Farid Alias said.

He said in an environment where revenue growth has become harder, Maybank should grow responsibly and look for longer-term sustainability.

“What this means is that we will not necessarily grow our balance sheet for scale and volume, but instead, look at protecting our margins, as well as pricing credits and liabilities correctly for the benefit of both our customers and investors,” he said in its 2018 Annual Report released recently.

Abdul Farid said Maybank would also look for sustainable income streams that preserve the longevity of the organisation, as opposed to overly focusing on generating short-term profits.

“Given our reach in Asean, it is our responsibility to grow with our partners, customers, communities and investors in a sustainable manner, while incorporating emerging environmental, social and governance considerations into our longer-term strategic aspirations,” he said.

On other developments, he said the upcoming regulatory implementation of the Net Stable Funding Ratio  (NSFR) in 2020 for Malaysia could lead to deposit competition in the market, resulting in higher funding cost, he said.

The NSFR requirements incentivise banking institutions to fund their activities with sufficient stable funding on an ongoing basis. As at end-2018, the average NSFR for the banking industry stood at 109.3 per cent, with 83 per cent of banking institutions reporting NSFR levels of at least 100 per cent.

Abdul Farid also said that Maybank’s franchise growth engine would continue to be the catalyst for the group in both the consumer and corporate lending space, while it looks to leverage better on the bank’s regional presence to have a greater impact in markets where it has more propensity to grow, relative to the home markets.

“Apart from our growth drivers, we will remain focused on cost and asset quality management group-wide. Through the above mentioned areas, the group has set a return-on-equity key performance index of 11 per cent in 2019 financial year,” he said.

On the digital front, Maybank would look to enhance its suite of innovative solutions to benefit both current customers, as well as tap into a large non-customer base who have not established any banking relationship with Maybank.

“One such innovation is our newly launched lifestyle-themed ‘e-wallet’ named “MAE”, which is available in Malaysia starting March 2019. Anyone above the age of 12 can apply to create a “MAE” account, without the need to have a pre-existing Maybank account.”

Creating an account can also be done at the comfort of one’s home, without having to visit any Maybank branches. “Solutions such as these will widen our customer reach and encourage migration to a cashless economy,” he said.

In preparing for the digital economy, he said, “Maybank must remain relevant by being obsessively customer focused by offering products based on their evolving needs and having the right infrastructure and talent to support the development of these products.”

Being the Digital Bank of Choice goes beyond launching new apps or services online. “It encompasses analysing customers’ behaviours and needs and then delivering a solution to address that demand. We believe this ensures our continued relevance to our customers,” he added.

Maybank Group is the fourth largest bank in Asean by asset size and the largest-listed company in Malaysia. Its asset base has grown to RM806.99 billion at the end of 2018 from RM560.32 billion in 2013, while market capitalisation has risen to RM104.97 billion from RM88.09 billion.

Maybank Group achieved a new high in net profit of RM8.11 billion for the 2018 financial year, exceeding the RM8 billion mark for the first time. On the back of our strong earnings, the board recommended a final dividend of 32 sen per share, which bring the full-year dividend payout to 57 sen per share, or a total dividend payout of RM6.27 billion.

Arising from our strong dividend payout, Maybank’s dividend yield was 6.0 per cent in 2018, making it one of the highest dividend yield banking stocks in Southeast Asia. – Bernama