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Send to friendIn Malaysia, Community Financial Services (CFS) has expanded from Consumer Banking to encompass SME and Business Banking. We now aspire to attain the undisputed No. 1 position in Retail Financial Services by 2015 by achieving community banking leadership in all areas where we operate, and by becoming an employer of choice.
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“Despite the tough business environment, the new House of Maybank has laid a solid foundation for CFS to strengthen its capacity and capabilities so as to generate accelerated growth across-the-board in all our key business lines.”
Lim Hong Tat |
Highlights
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Over the years, our dedication to enhance our customers’ experience has won CFS ten million individual, SME and Business Banking customers. What makes our service so distinctive is that we regularly make product and service innovations that really fulfill customer needs; and we are constantly reinventing both our distribution network and alternative channels to provide customers with unparalleled access and convenience.
We aspire to be the community financial services leader in Malaysia by serving our customers from the heart and by becoming part of every community where we operate. By humanising banking, we are reigniting our legacy as a truly Malaysian bank which customers can depend on in both good times and bad.
We empower our customers with innovative financial solutions. We enrich community life by promoting wider ownership of homes, vehicles and financial assets, and by supporting local business growth. In all these ways, we help boost the local economy and contribute to a higher standard of living.
We have undertaken a strategic transformation plan, anchored on four strategic thrusts to enable us to achieve our aspiration:
Reposition Maybank as a CFS provider
Move to a customer-segment-driven model
Enhance Maybank’s operating model
Embed credit decisions-making
During the year under review, CFS reported a profit before tax of RM3.0 billion with a revenue of RM6.2 billion.
Driven by key strategic initiatives, loans growth was up 13% to RM114 billion, while consumer banking shot up 15.6% to RM88 billion despite the competitive business environment. All consumer loan portfolios registered strong double digit growth on the back of high performance in mortgage (+12%), auto finance (+14%), retail finance (+26%) and credit cards (+16%).
Mortgage, automobile, unit trust and card financing remained the key contributors to the consumer loan segment, making up 98% of the total portfolio. Mortgage financing alone accounted for 45% of our total consumer financing portfolio. Meanwhile, Current Account & Savings Account (CASA) deposits (up 14.4%) and fixed deposits (+ 8.2%) pushed retail deposits up 11.1%.
Overall, CFS recorded a gross impaired loans ratio of 3.0%. The Consumer segment, in particular, achieved a steady improvement from a high of 6.6% in 2007 to just 1.7%. This was mainly due to proactive loan management, aggressive rescheduling and restructuring, and the acquisition of quality loans at source.
With our unmatched distribution network and strong virtual banking presence, we are well placed to reach our ten million customers in Malaysia. During the year, we further consolidated our market dominance by maintaining our No. 1 market positions as the:
No.1 Commercial Bank in terms of total assets, deposits and loans
No.1 Retail Islamic Bank
No.1 Distribution network in terms of branches and ATMs/Self Service Terminals (SSTs)
No.1 Internet Banking website with the highest number of active users, payee corporations and transaction volumes
No.1 Mobile Banking provider with the largest number of users and transaction volumes
No.1 In Credit Card customer base, billings and merchant sales
No.1 In Debit Card customer base and transactions
No.1 In Unit Trust Financing
No.1 In Dealer finance with floor stocking and block discounting
No.1 In retail CASA and core deposits
Mortgage financing rose significantly in FY2011 despite both the fiercely competitive environment and the Central Bank’s measure to curb speculation and rising household debts by limiting the loan to value (LTV) ratio to 70% for the financing of the third home. Progress was underpinned by a comprehensive review of our mortgage business value chain that enabled us to streamline and simplify the process from origination to recovery. This will materially benefit our customers.
Meanwhile, the high quality of our credit assets was demonstrated by a further drop in our gross impaired loan ratio spurred by improved underwriting standards, faster approval turnaround time, more aggressive collection via our Early Care Centres (ECC) and a rebalancing of our portfolio from primary to secondary and owner-occupied properties.
In our drive to humanise financial services, we launched a series of products to meet new customer needs. The Overseas Mortgage Loan helps High Net Worth and Private Banking customers purchase properties in London. This is the market’s first Ringgit-denominated loan product dedicated to the purchase of residential property overseas. Meanwhile, the Skim Rumah Pertamaku (My First Home Scheme), backed by Cagamas, caters specifically to first time buyers, in line with the Government objective to promote greater home ownership.
In addition, Maxiplan was enhanced to provide SMEs and business owners with an attractive shophouse and commercial property financing package.
We also expanded our mortgage origination channels by building alliances with mortgage direct sales forces, real estate agents and mortgage brokers during the year.
During the year, we launched new products, services and promotions for the younger affluent segment. Graduate Ezy HP Auto Product allows students, undergraduates and young graduates/professionals to step-up repayment; while Online HP finance application via M2U makes owning a car ‘Just a Click Away’.
We also implemented several strategic alliances: with Honda Malaysia Sdn Bhd for the Honda Nationwide Roadshows; with Youth Asia Sdn Bhd for Youth’10 at PWTC; and with TV3’s Jom Heboh team to promote Maybank ‘Close 2 U’. Meanwhile, our Free for a Year campaign (part of our customer loyalty and retention programme) gave winners a full year free of financing instalments.
Encouragingly, in FY2011 we achieved a rise in receivables to RM4.8 billion in the face of the dampening effect of the new RM50-per-card service tax on the industry’s growth. Inevitably, the introduction of the new tax, plus tighter credit card lending guidelines, reduced the number of cards in circulation, which dropped by 8%. But we bucked the industry trend by expanding in all areas via new campaigns and promotions designed to boost activation, spend, receivables and loyalty.
Having issued over three million Visa Debit cards in just over three years, we rolled out regional card marketing initiatives in Singapore, Indonesia and the Philippines during the year. In addition, Maybankard introduced three innovative new products: Maybankard MasterCard World Card; Amex Pantai CoBrand Card; and Maybankard 2 Cards. Of these, the second and third were market firsts, and all offer our customers major benefits and tremendous value.
FY2011 saw us promote not just Unit Trust finance (which accounts for the bulk of our total retail finance portfolio) but other high yield loans, such as salary and other consumer loans. As well as enhancing existing products (Maybank Study Loans and Salary Financing for Government employees) we launched two new ones: Salary Financing and Other Consumer Loans for Government Link Company (GLC) employees; and Amanah Hartanah Bumiputra unit trust financing.
At the same time, we initiated several marketing campaigns including the highly successful Invest & Win Campaign, and participated in major events such as the Perbadanan Nasional Bhd Minggu Saham Amanah Malaysia (PNB MSAM) in Perak and Media Prima’s Jom Heboh.
FY2011 witnessed a major growth in CASA, thanks not just to an overwhelming response to our promotions, but to the improvements in customer experience brought about by process enhancements and new product launches.
During the year, our aim was to grow our low cost CASA from the retail, SME and Business Banking segments. To this end, we launched two new products; leveraged on our one-stop branch network; introduced deposits champions at branches; and streamlined business processes to complement our touch points (i.e. our 386 branches, our 24x7 Self Service Terminals, and M2U.com). We also ran a series of aggressive and highly successful marketing campaigns.
Of our new products, m2u Savers is an online savings account riding on m2u, while the Master Foreign Currency Account is a single account supporting multiple currencies that also rewards loyal customers with special rates.
We also streamlined our account opening processes for various deposits products. For m2u.Premier, new account opening requires only a single customer visit to the branch. Meanwhile, for Foreign Currency Account and Foreign Currency Placement, our Simplified Opening of Accounts (SOA), does away with the need to fill in account opening forms which can now be done using MyKad.
For our consumer segment, we rolled out two thematic campaigns that brought in more than
RM2 billion and four tactical campaigns that attracted over RM1 billion. This was achieved despite the competition from rival banks offering higher rates, other investment instruments promising greater returns, and a general expectation of higher returns in line with the predicted rise in inflation. Meanwhile, to acquire and retain customers from the SME and Business Banking segments, we launched direct marketing initiatives including several Payroll Campaigns.
In line with our strategy to provide a wide range of wealth management products, we act as distributors for selected third party fund houses.
We introduced 15 new unit trust funds during the year. We also became the sole distributor of the Amanah Hartanah Bumiputera (AHB) fund, and hit our sales target by achieving about RM 1 billion in sales. In addition, to intensify our marketing activities, we launched ten marketing campaigns, including the FD Linked campaign and the DCI-‘i-rush’ Campaign.
Major process improvement projects included a multi-currency function for MIAS and the development of a FinIQ straight-through process for DCI.
In FY2011, we celebrated the 15th anniversary of becoming the first bank in Malaysia to introduce Bancassurance, providing comprehensive protection and investment financial advisory services.
Our strategic priorities centred on sales process improvements and marketing activities. We streamlined documentation so as to improve sales efficiency, and ran six sales campaigns – two each for single premium, regular life and general insurance.
We continued to focus on dominating Malaysia’s Payments market and on driving regional expansion in the areas of payment services, remittances and FCN. Our growth strategy is based on aggressive product innovation and on providing alternative channels to generate new revenue streams.
Payment Services
To support unit trust management companies we have established an integrated e-payment platform including e-dividend. For business enterprises and SMEs we are developing an enhanced Auto Credit Payment System with an integrated HR e-payment solution. We are now designing similar e-payment solutions to support the Government’s goal of a cashless society.
Remittances
We are the first bank in Malaysia to provide a home grown web-based remittance service for instant international money transfer. Maybank Money Express provides a swift, affordable and secure money transfer service for migrant workers. It is already available in seven countries and will be extended to another three countries by the end of 2011.
ATM Services
We continued to strengthen our SST service offerings. To enable customers to better manage their bankcard fees we introduced the option of a single bankcard annual fee. At the same time, we waived the cross-border fee for ATM regional transactions for Malaysia, Singapore, Indonesia, the Philippines, Vietnam, Brunei and Cambodia. Looking ahead, we will be providing interbank payments and transfer services to derive new revenue streams from Malaysian Electronic Payments System (MEPS) ATMs – including those at the entrances of locally incorporated foreign banks that join the MEPS system.
Forex Business
We have the largest number of Forex booths in Malaysia – some 61 in all. In FY2011, our FCN business grew 12.5% with the introduction of a more competitive and affordable pricing model which is now being extended to all key branches.
We define SMEs as businesses with turnover of up to RM25 million, while private limited businesses with a turnover of above RM25 million are managed under Business Banking.
For the convenience of customers, we have aligned all SME and Businesses Banking under CFS. This enables us to leverage on our vast domestic branch network, business centres and our online delivery channels, Maybank2u and Maybank2e.net.
We have also invested in skilled personnel, dedicated infrastructure and innovative products and services to become a one-stop financial solutions provider.
In line with Government policy and aspirations, SME Banking provides local SMEs with the financial solutions, services and advice that will nurture their growth into larger enterprises with capabilities to compete in the global market.
The SME business focus is in the development of a robust scorecard and a vigorous usage of template based lending to improve our service delivery for loan processing. Our strategy of targeting growth sectors and improving asset quality will enable the Group to improve further our risk management.
In FY2011 we once again focused on deepening relationships with our existing customers, acquiring new customers and penerating growth sectors. Our key achievements were in loans growth, lowering of the cost to income and stale rating ratios and the improving trend for asset quality.
We are confident of improving our leadership position in the Business Enterprise segment with an aspirational marketing strategy, supported by a comprehensive asset quality strategy. Key asset quality practices include portfolio management, quality loan sourcing, fraud detection and continuous upskiling of core credit staff.
Internet Banking – Maybank2u.com (M2U)
In FY2011, M2U active users grew by a hefty 20% to 1.72 million. More than 50,000 SMEs used the M2U Biz services, while Mobile Banking users shot up by 122% to more than 100,000.
M2U has consistently dominated the virtual banking space for 11 years now. During that time, we have regularly introduced innovative on-line products and services such as M2U Savers, M2U Mobile and M2U Secure, a real-time, risk-based authentication and fraud detection security module.
To maintain our virtual banking leadership in the growing business segment, we offer an M2U Biz service and have also expanded our virtual services regionally with the launch of an online banking service for our Philippines accountholders. Meanwhile, we established strategic alliances with premium brands, adding new payees to the Maybank2u.com merchant programme.
Maybank Group Customer Care (MGCC)
During the year, customers made increasing use of our state of the art call centre which received an average of over 450,000 calls per month. The MGCC team implemented a structural transformation programme by setting up a Customer Operations Performance Centre (COPC) and a Work Force Management (WFM) system. Together with enhancements to the cost efficiency of our processes, this resulted in an improvement in our service levels, with over 80% of calls beings answered within 30 seconds and an abandonment rate of 5%, in line with best practice standards.
Telesales
More than 100 people have joined the telesales team during the year, bringing the total number of its fully trained sales personnel to over 200.
Based on the bank’s new customer segmentation model, HAB now makes up about 4% of Maybank’s total customers. During the year, we shifted from a product-centric to a customer-centric model to provide not just best-in-class financial service but an exceptional customer experience to the high net worth and affluent customer segment.
During the year, under our Branch Transformation programme, we redesigned our branch model to reposition Maybank branches as the key community destination for financial services and solutions. Futuristic and inviting, the new branches aim to be the best in Malaysia for community banking. The design strategy encompases space planning and zoning, interior and furniture design, and visually appealing marketing communication and merchandising. The design will also raise the profile of our highly distinctive Islamic banking brand both at fully-fledged Islamic branches and conventional branches. We are currently pilot-testing the design at five prototype branches.
Meanwhile, we opened two Service Centres at Kota Kinabalu Airport, Sabah and i-City, Shah Alam; and we provided access to banking for the previously un-banked through a strategic partnership with POS Malaysia.
– Best Retail Bank in Malaysia
– Best Deposit & Liability Business
– Best Retail Payments Implementation Award
– Best Brand for Premium Card Payment in Malaysia
– Best Credit Card Issuer
– Bank of the Year
– Largest Consumer Products Purchase Volume
– Largest Consumer Credit Card Issuer
– Largest Debit Card Issuer
– Largest Debit Card Purchase Volume
– Most Innovative Use of Visa Assets – Sony Card
– Best Activation Campaign (Maybankard World MasterCard)
– Best Deposits & Liability Business
– Product Excellence Award, Best in Category (Maybank2u Premier)
– Favorite Online Banking Service from Provider
– Best Private Banking Services Overall in Malaysia
– Best Domestic Private Bank in Malaysia
The global economic outlook is uncertain, and locally pre-emptive credit-tightening measures have been introduced in response to rising household debt and the forecast increase in inflationary pressures. Nevertheless, we are cautiously optimistic about the prospects for FY2012.
We have already achieved much during the first year of our five-year transformation journey, as demonstrated by higher growth in the second-half of the financial year. We are confident that we will not only sustain our growth momentum but accelerate into the medium and long term as we realise our aspiration to become the undisputed No.1 retail financial services provider by 2015.
For FY2012, we will continue to roll out strategic and business initiatives, evaluating them in terms of value creation and capture. We will further enhance the strength and capabilities of our systems and structure; and we will focus on developing the skills, shared values and management style of our people.
