As the landscape of Asean’s financial sector changes, Malayan Banking Bhd (Maybank), Malaysia’s largest commercial bank, hopes to have a greater presence in the region in the years ahead.
Asean’s third largest commercial bank (tied with UOB) in terms of asset size, Maybank is now gearing its resources toward having a pan-Asean footprint when the Asean Economic Community (AEC) is formed in late 2015.
"When we talk about Asean, we think of a group of 600 million people, a region with nearly $2 trillion in GDP, and a region that is growing at about 5-6% annually," CEO Abdul Wahid bin Omar said in an interview with Asia Focus in Bangkok last week.
"Within these markets Thailand is likely to be an important market in the group. As it’s a strong industry-based country with hard-working people, it is our ambition to expand our presence in Thailand."
Mr Omar said the bank truly believed in the future and potential of Asean and saw the region as its home market. To further reinforce that role, Maybank also wants to be present in Asean’s major trading partners such as China, India and the Middle East, promoting more trade and investment, he said.
Omar: Looking for "right fit" in Thailand
Intra-Asean trade has recorded tremendous growth, reaching $520 billion as of 2010 (the latest full year for which figures are available) thanks to the Asean Free Trade Area agreement (Afta) against just $90 billion in 1993.
Apart from intra-Asean trade, investment has also seen a marked increase, with 16% of net foreign direct investment in Asean or about $10 billion coming from within the region. Global FDI also rose to $79 billion in 2010 from $38 billion in 2009.
As well, a marked increase in infrastructure development in Asean is expected to produce demand for $60 billion annually in financing for the next decade, he said.
All this is music to the ears of financial institutions that can enjoy the benefit of high savings rates in Asia to fund infrastructure and business needs.
Maybank, he said, wants to increase its revenue and loan contributions from Asean while increasing profit before taxes from 36% currently to about 40% by 2015.
Outlining the three top priorities for achieving regional bank status, Mr Omar said the first was capital as banking is a highly capital-intensive business. Next comes talent, because it’s crucial to employ the right people. Third are the right licences in the right countries, since the rules related to operating scope vary.
"I think that if these are all in place, if our people continue to serve the customers well and keep on innovating, we will continue to grow," he said.
With the opening of its first branch in Laos in November 2012, the Maybank Group now has a physical presence in all 10 Asean countries, he added.
The bank is reported to be in talks to acquire assets in Thailand as well, although Mr Omar declined to comment on market talk.
Maybank has a presence in Thailand through its brokerage business, when it acquired Kim Eng Securities and renamed it Maybank Kim Eng.
Mr Omar said there were no active discussions in Thailand at the moment. The default position is to look at opening a branch in the country by 2014 and to work together with the other 46 branches of Maybank Kim Eng. However the bank remains open to looking at other interesting opportunities, and hopes to expand to retail banking and commercial banking.
"We will always be looking for the right fit in Thailand. We are fortunate that we already have the Number 1 position in terms of brokerage market share, which is Kim Eng Securities. And certainly, any inorganic opportunities to acquire local banks in Thailand could be a fast track and a good accelerator for growth," said Mr Omar.
"However we’re not in a hurry. There will come a time when we see the right opportunity."
About the author
- Writer: Nithi Kaveevivitchai
Position: Asia Focus Reporter