Asiamoney best bank awards 2019: Malaysia
Best Domestic Bank: Maybank
As Asean’s fourth-largest bank by assets, Malaysia’s largest listed company and the most identifiable bank brand in its domestic market, Maybank continues to stand supreme in Malaysia through 2018 and 2019.
|Abdul Farid Alias, Maybank
Chief executive Abdul Farid Alias, now in his sixth year at Maybank’s helm, has again presided over a solid year, even though his term has coincided with some of the most turbulent events in the country’s recent history. Loan growth and a crunch on overheads helped give a lift to net profit for calendar 2018, up 7.9% to RM8.11 billion ($1.9 billion).
While the numbers have been softer so far in 2019 – Maybank reported a 3.3% decline in net profit to RM1.81 billion for the first quarter – Alias is taking advantage of the buoyancy last year to adopt a conservative posture for bad loan provisions as Malaysia is buffeted by regional trade wars.
Maybank’s allowances for impaired loans and advances was up 18.6% in the first quarter. But revenues remain healthy, up 12.7% to RM13 billion in the first quarter – and Alias has set up the next three years with an ambitious target to extend a further RM50 billion in mortgages, equivalent to about 60% of its current book, and RM35 billion in domestic small and medium-sized enterprise financing, or about 90% of the bank’s current SME-related loans.
Maybank’s Islamic banking business has been a sweet spot, with the division reporting a 97% increase in pre-tax profit to RM896.6 million in 2018.
Best Bank for SMEs: Hong Leong Bank
Hong Leong Bank’s digital obsession is transforming its relationship with its core franchise, Malaysia’s small and medium-sized business sector. In June 2018, and after a sustained gestation period integrating with external fintech partners, HLB rolled out its souped-up digital offering for business, an all-in-one platform that provides the usual business bookkeeping, alongside payroll, personnel services and deal-specific tax advice.
|Domenic Fuda, Hong Leong Bank
There’s even a button to launch digital advertising across national digital screens, reaching airports, shopping malls, convenience stores and hotels. All of which is enhanced by HLB’s continued branch makeover.
Chief executive Domenic Fuda says the ambition is to enable the customers to “live life uninterrupted.” Client take-up has been promising; HLB claims its new SME platform generated 25% loan growth in calendar 2018, and 44% more clients. This year the trend is even better, with HLB claiming around 10% quarterly loan growth, which is targeted to translate into 34.1% growth when measured year on year.
The bank has also made strides in peer-to-peer (P2P) lending, collaborating with Fundaztic, one of Malaysia’s leading P2P platforms, to reach creditworthy SMEs that may not ordinarily meet the bank’s conventional loan criteria. HLB says the Fundaztic tie-up ensures that all potential financing avenues are open to Malaysia’s SMEs.
Best Corporate & Investment Bank: Maybank Investment Bank
Under chief executive Fad’l Mohamed’s stewardship, Maybank Investment Bank (a unit of Maybank) has had a busy year across all of Malaysia’s capital markets, topping the national league tables in equity and with solid top two finishes in advisory and M&A.
|Fad’l Mohamed, Maybank Investment Bank
Notable among the deals in conventional banking was its role as sole principal adviser on the RM1 billion ($240 million) IPO of local poultry firm Leong Hup, the biggest IPO in Malaysia in two years.
Maybank IB got that away to 3.64 times oversubscribed. Another highlight was the sale of 50% of the exploration and production assets of oil and gas group Sapura
Energy to Austria’s OMV Aktiengesellschaft for $975 million.
But it was in sukuks where Mohamed’s team was busy. In the year to the end of May, Maybank IB was ranked first in ringgit sukuk and bonds, handling 162 transactions worth a total of RM25 billion. It was also number one in Asean sukuks, processing 158 local currency sukuk deals worth $5.2 billion. In global sukuks, Maybank handled 161 transactions worth $5.7 billion, to finish top there too. Among them was a $500 million sukuk for Qatari bank QIIB and a $2 billion sovereign sukuk for Indonesia.
Best International Bank: HSBC
As HSBC pointed out in a survey that it distributed across Malaysia in May 2019: “Malaysians spend more time swooning over property than at the gym.”
|Stuart Milne, HSBC
They apparently devoted an average 4.37 hours a week in property-related activity (so-called property porn), the bank’s researchers claimed, noting that this was the highest level in southeast Asia.
So it is perhaps unsurprising then that HSBC is telegraphing its commitment to Malaysia with bricks and mortar in a massive new branded tower taking shape in the heart of Kuala Lumpur’s emerging TRX complex.
TRX was one of the projects started by 1MDB and one of the few projects salvaged from the decade-long debacle. Slated to be finished by December 2020, the tower represents the first – and so far only –investment by a foreign bank in the TRX complex.
Standard Chartered, HSBC’s long-time rival in Malaysia, with its slogan ‘Here for good,’ is also on the move, albeit to rented floors in the re-developed Equatorial Plaza in downtown KL.
For good measure, HSBC handled a number of financing deals in the TRX precinct, notably a RM2.15 billion ($514 million) loan for the project’s overall developer.
Under chief executive Stuart Milne’s aegis, HSBC was the leading foreign bookrunner in ringgit bonds and sukuk in the year to May 2019, handling 20 issues worth a total of RM2.46 billion: that gives it a 41% market share, well ahead of its nearest foreign rival, Singapore’s OCBC, which booked RM1.9 billion across 39 deals, and almost five times more than StanChart.
Between the traditional bank and HSBC’s Amanah Islamic banking division, HSBC now boasts the widest network of any foreign bank in Malaysia, with 68 branches nationwide. Profit for HSBC’s most recently reported quarter, to March 31, 2019, was 2.1% higher at RM396 million.
Best Digital Bank: Hong Leong Bank
HLB boss Domenic Fuda’s ‘digital at the core’ ethos is paying off.
When he took over HLB in 2017, he first determined that the bank was operating in near 20th century-mode and, secondly, that his customers disliked queues.
So Fuda deployed what he calls the ‘Zero queue experience’ across HLB’s national branch network. Almost halfway through implementation, it is more Apple than Asian legacy bank. Customers wander into the branches, which have been revamped in pastel hues, and are approached by smartly uniformed staff wielding iPads.
As Fuda explains, the experience is designed to be warm and upmarket, not quite private bank but certainly hinting at that, and eradicating the need to wait in line for a teller.
The bank has increased automation of back-office functions so that more staff can be moved to the front of the branch to engage with customers. By May 2019, HLB had deployed its tablet solution in more than 40 branches: it plans to have the bulk of its 255 branches equipped through 2020.
These digital conversions, the bank says, are paying off at the bottom line: in the nine months from July 2018 to the end of March 2019, gross loans and financing expanded by an industry-leading 6.5% to RM133.6 billion ($32 billion). HLB’s bad-loan ratio was maintained at 0.8%, also best in the sector, it claims. Taxed profits came in marginally higher at RM2.028 billion.
Fuda’s hunger to digitalize HLB isn’t sated yet. This year, HLB opened the ‘CX Lab’ at its headquarters at Bukit Damansara, outside central Kuala Lumpur. The futuristic space is designed to test digital offerings before they reach the wider market, and to work with fintechs to meld their offerings into the modernizing HLB platform.
Since its launch, Fuda says the lab has collaborated with more than 30 fintechs and startups, while testing ideas with over 3,500 HLB customers to gauge their response.
Best Private Bank: Credit Suisse
Benjamin Cavalli took over as Credit Suisse’s regional private banking head in August 2018; he seems to have hit the ground running. The Swiss private bank reports that net new assets in Malaysia soared 604% in the first quarter of 2019 (but does not provide actual figures).
|Benjamin Cavalli, Credit Suisse
“We had a very strong first quarter this year compared to last year,” the bank claims. Assets under CS’s management grew at a steady 4% compound annual growth rate over the last three years.
CS attributes its success to its “integrated business model (that) lets us chaperone Asian entrepreneurs early in their business cycle.”
The private bank works closely with CS’s investment banking side, which co-handled, with Maybank, the RM1 billion ($240 million) IPO of local poultry firm Leong Hup, the biggest IPO in Malaysia in two years.
CS describes it as “one of the first IPOs… since Malaysia Regime Change.” The private bank says the IPO was well syndicated through its platform. “The client had access to senior management team from both investment bank and private bank who were closely involved in the deal.”
Best Bank for CSR: CIMB
In 2017, CIMB’s then chairman Nazir Razak declared the bank would be sending 1% of its profits to its CSR-enabling agency, the CIMB Foundation, for philanthropic and charitable initiatives, a bold gesture that would triple CIMB’s annual CSR spend over the subsequent years to between RM65 million and RM75 million ($15.6 million to $18 million).
Malaysia was different then. Nazir’s brother, Najib Razak, was Malaysia’s prime minister and few could imagine his UMNO party would ever be out of power. But six months later, Najib was toppled, and is now on trial for corruption. Nazir also stepped away from his job, after 29 years at the bank.
But CIMB’s pledge remains, the most generous of CSR initiatives among Malaysian banks. A scroll through the CIMB Foundation’s website shows 18 separate CIMB-sponsored projects on community development and 10 with sport since May 2018. Cross-cultural – important in a masala Malaysia – these initiatives range from feeding the poor, often at CIMB ‘open house’ branches, to sponsoring Malaysia’s rising stars in cycling, squash and gymnastics.
Over the last decade, the CIMB Foundation has distributed about RM100 million to more than 900 projects across its Asean markets, benefitting about 700,000 people.