Kuala Lumpur – Malayan Banking Berhad (Maybank) successfully conducted the two day ABA Short Term Visiting Program in its headquarters in Kuala Lumpur on January 18-19, 2017. The program, attended by 10 bank delegates from 5 banks originating from 5 countries featured 8 different banking subjects, presented by senior managers of Maybank.

The first day

The first session on “Maybank International’s Journey, Mission and Aspirations” was presented by Ms Lim Siow Yee, Head Strategic Transformation & Business Excellence, Maybank International. Based in Singapore, she flew to Kuala Lumpur to share with the delegates on Maybank’s international expansion and operations.

Ms. Lim first introduced Maybank’s two parts future vision: (1) Advancing Asia’s Ambitions with you and (2) Humanising Financial Services. The objectives of this vision is to create a high performing bank that is customer centric and capable of providing financial services across the region.

The overall vision is targeted to materialized by 20/20. The strategy comprises of 5 clear goals: (1) Top ASEAN bank; (2) Leading ASEAN wholesale bank linking Asia; (3) Leading ASEAN insurer; (4) Global leader in Islamic Finance; and (5) Digital bank of choice.

With respect to the first goal, Ms. Lim noted that Maybank has become the only bank present in all ten ASEAN members, with three of these countries: Malaysia, Singapore and Indonesia becoming the strategic business pillars of its ASEAN strategy.

Ms. Lim noted that the ASEAN market is quite diverse in terms of economic levels. With respect to new markets such as Cambodia, developments in direct mobile banking are allowing Cambodia to catch up with banking services offered to other more advanced countries in the region as well as increasing the market size for banking customers.

Ms. Lim also reported that Myanmar, with 23 local banks, is a country where Maybank had more than 20 years partnering with local players on its journey of growth and development. Nevertheless, the market remains very protective. And though it is a cash based economy at this moment, she expects rapid growth for the Myanmar’s economy.

Maybank’s linkage to Asia is implemented with operations in Indochina, HK & China and Philippines, that will cross border with its home markets in Malaysia, Singapore and Indonesia.

Ultimately, with its 2,200 offices in 20 countries and over 47,000 employees serving 22 million customers worldwide, and international operations contributing more than 40% of the Group’s revenue, Maybank’s goal is that foreign operations achieve PBT US$1 billion by 2020.

The second presentation of the day on “Overview of AML/CFT Regime in Malaysia” under the guidance of Ms. Jans Lim Mei Lin, Chief Compliance Officer Maybank Malaysia Group Compliance focused on anti-money laundering (AML) and counter financing of terrorism (CFT).

As Ms. Jans Lim Mei Lin explained, high risk jurisdictions require more surveillance and stricter due diligence with the corresponding bank. In cases like this, it is necessary to have a strong AML and CFT. Thus, Ms. Jans Lim Mei Lin proceeded to explain the AML/CFT regime in Malaysia which is based on four objectives: (1) Strengthening national economy; (2) Reduce total crime rate; (3) Reduce leakage in revenue; (4) Strengthening Malaysia reputation. These four objectives are geared toward an ultimate and permanent goal: protect the Malaysian economy and financial system against criminal threats.

It is imperative that the banking operations implement internal transaction monitoring to detect criminal offense in smuggling, tax evasion, money laundering and corruption. For this purpose, FATF (Financial Action Task Force) compliance has been created, positioning financial institutions as the first line of defense. In the case of Malaysia, banks must be very familiar with each of its clients while Bank Negara analyses the transaction reports issued by individual banks.

For the perspective of a bank, Ms. Jans Lim Mei Lin indicated that due diligence for each account, detection of mule accounts, screening of PEP (politically exposed person) and proper cash threshold monitoring are key to filter suspicious operations. These preventive measures are difficult to enforce yet in the age of terrorism and cross border criminality, they are necessary.

The participating bankers had the opportunity to see how Maybank managed the customer experience practically and observed the customers’ flow throughout the first floor. Issues about service flow among the back offices, and design of workspace to achieve efficiency were discussed.

The fourth session on “Staying ahead of competition – Global markets” led by Lai Ngan Foong, Director, Deputy Head of Global Sales, Global Markets introduced the present position of Maybank as number one conventional and Islamic bank in Malaysia, top 5 bank in ASEAN with business presence in 5 international financial centres.

Currently, with 363 branches and 12 million customers in Malaysia, Maybank offers diversified financial products and services while remaining number one in market share for deposits and unit trust loans. That has led Maybank to have US$173.1 billion in assets and a market capitalization of US$17.8 billion.

Director Lai Ngan Foong proceeded to explain several financial instruments commercialized among its large customer based such as (1) Target Forward that allows clients to buy UAD against MYR at a guaranteed rate; (2) Cross Currency Swap to protect the client against interest rate risk; (3) Commodity Hedging for crude oil, aluminum, palm oil and other commodities; and (4) Callable Klibor Range Accrual FRNID (CRA) that invest in MYR with an enhanced yield  linked to the underlying 3-months KLIBOR, among many other available instruments.

During this session, many participants expressed interest in Maybank’s marketing and requested for a more detailed explanation of the products and procedures, as well as its advantages and disadvantages vis-à-vis the bank and the customers.

Another product explained was Dual Currency Investment (DCI) that allows short term yield enhancement structure linked to the underlying currency pair.

 

The second day

The second day, January 19^th, comprised 4 different sessions, starting with the fifth presentation on “Maybank Group Wealth Management Business” presented by Amily Mak Lai Mun, Head, Premier Wealth Business HNW (High Net Worth) & Affluent Banking.

As Asian millionaires now control more wealth than their peers in North America, Europe and other regions, it is critical to serve effectively this key sector of the population. Maybank sees that Asian wealth is driven mainly by the financial services, high tech and health care industries accumulating some US$17.4 trillion by 2015.

Though there are discrepancies in the Asia Pacific HNW’s asset diversification in general, their distribution (excluding Japan) as of 2016 stood at Equities (23.3%), Cash and Equivalents (20.6%), Real State (20.5%), Fixed Income (19%) and Alternative Investment (16.6%).

In its business strategy, Maybank found that todays HNW investors are young millionaires exposed to new technologies, in terms of personal use and investment.

Given the particularities of the new millionaires, Maybank devised a HNW customer strategy in four stages (1) Get them early; (2) Income enhancement; (3) Wealth enhancement; and (4) Preservation with an emphasis in at least maintaining the customer’s wealth level and enhancing his lifestyle overtime.

This strategy uses regional wealth management suites and offices in Malaysia, Singapore, Hong Kong and London to render private services and customized financial products for this exclusive customer base.

The sixth session on “Risk Culture”, hosted by Khushwant Singh, Head, Operational Risk, Group Global Banking, centered on managing risk for the corporation because, as he allegorically expressed, “the tiger needs to be protected at all times”; the tiger being Maybank as it is featured in its corporate logo.

In fact, Mr. Kushwant Singh strongly emphasized that managing risk is a task that every member of the bank from the bottom up needs to be engaged and educated about. However, the spirit and importance of risk management is led by top management. He clearly said that risk management has to be embedded in the corporate culture by values of integrity exemplified by the top management’s behavior.

For instance, while serving as guidelines for good risk management, the Basel Rules’ effectiveness ultimately rest on the level of awareness emanating from the Board of Director all the way down to the employees attending customers daily.

Moreover, risk management executives need to be also close to the business operation to understand its impact on profit and loss trends since risk and business opportunities are negatively correlated. Thus a successful risk manager should speak business and vice versa.

In conclusion, managing risk has to become everybody’s responsibility throughout the whole bank organization.

\The seventh session on “Malaysia Capital Market Outlook” led by Mia Idora Ismail, Head Mergers & Acquisitions Maybank Investment, explained that Maybank Investment Banking is ranked #1 in Malaysia and ASEAN equity capital market because of its strong execution capabilities and best results. Maybank has been able to leverage its finance team into investment banking opportunities in Remimbi, infrastructure projects and Islamic banking Sukuk in Indonesia, among other achievements.

Indeed, Maybank is very familiar with IPO’s expedite listing and offers seamless transaction execution. Presently, Maybank is raising capital by Initial Public Offering, Rights Offering, Placement and Convertible Securities Offering. Since 2013, Maybank had launched 13 IPO, Placements valued at R$8.2 billion and Rights issues valued at R$1.9 billion

Currently, the Malaysian Equity market is considered the worst performing in the region, and the currency has not been being doing better, but liquidity continues to be supported by domestic funds. Nevertheless, Mia Idora Ismail’s forecast for 2017 was positive with some significant IPO news in the near future for the Malaysian market.

The eight and last presenter was Joe M. K. Ng, Director, Head of Renmimbi Business Solutions Global Banking who spoke about the “Renminbi international market”. In his unscheduled presentation, Joe was generous in sharing Maybank experience in marketing the Renminbi opportunities.

In the first part of his presentation Mr. Joe Ng spoke of the present Renminbi’s international situation. With only 2% of all international trade volume, and 70% of the offshore transactions occurring in HK, 6% in London, 5% in China and so on, the Renminbi trade faces market confidence issues that hinders its goal of becoming a treasury currency.

In fact, Mr. Joe Ng detected three factors impeding Renminbi’s internationalization. They are (1) No consistency in payment process; (2) Difference Chinese characters are used; (3) Lack of access because it is limited by excessive regulations.

Despite these present conditions, China’s expansion in world trade presents opportunities that cannot be dismissed because for investors, fear and depreciation risk also offer profitable opportunities and hedging strategies vis-à-vis other currencies.

 

List of participants

1. Steve Lum Pui Poh, BEA, Hong Kong, Head of Settlement Department
2. Wong Yip Kan, BEA, Hong Kong, Business Manager
3. James Peng, ExIm Bank, Taiwan, Manager, Finance Department
4. Whitney Pan, ExIm Bank, Taiwan, Manager, Department of Risk Management
5. Erica Erkhembayar, Trade and Development Bank of Mongolia, Mongolia, Director of International and Corporate Relations Department
6. Nguyen Ngan Ha, Vietcombank, Vietnam, Financial Institutions Group
7. Nguyen Khanh Linh, Vietcombank, Vietnam, Foreign Direct Investment Department
8. Nguyen Thi Thu Huong, Vietcombank, Vietnam, Credit Approval Department
9. Vu Ha Tram, Vietcombank,Vietnam, Business Planning Department
10. Geraldyn Chew, SMBC, Singapore, Relationship Manager, Institutional Client department
11. Mig Moreno, Asian Bankers Association, Deputy Secretary