- Maybank
Banking Bhd (Maybank) recently held an Investors’ Day Briefing for Maybank Singapore.
In June 2012, Maybank Singapore’s loans made up 21% of group loan, and 13% of group
pre-tax profit. Maybank Singapore
highlighted its continuing competitive edge as a niche player in Singapore with
specialised expertise in selected corporate segments. Maybank Singapore was
awarded a Qualifying Full Bank (QFB) status by the MAS in 2001 to increase its presence
in mass retail market. It has a total of 27 service locations, with 22 branches
and 5 offsite ATMs.
- Prior to
its QFB status in 2001, Maybank Singapore’s strengths were largely in the
global and wholesale banking segment, specifically in the areas of construction
and real estate property development, commerce and services, trade finance and
vessel financing. Since its QFB status in 2001, Maybank Singapore has
significantly beefed up its retail presence, gathering quite a fair share of
retail loans and deposits in Singapore. Maybank Singapore’s total market share
is currently circa 3% of total industry loans and circa 5% of domestic loans.
As for the corporate segment, Maybank Singapore believes its strengths in the
corporate loan segment is due to its historical presence and strong relationships,
while its retail presence has been boosted since its QFB status was awarded in
2001.
- Corporate
loans form the bulk of total loans, with global markets’ loans contribution at
around 12%, global wholesale banking at 48% and community (retail) financial
services at 40%. The long-term target mix is 20% for global market, 40% global
wholesale banking and 40% for retail.
- Maybank
Singapore alluded to a strong likelihood of required local incorporation,
although it is still engaging with regulatory authorities in Singapore in terms
of details of the recent QFB rulings. Maybank Singapore alluded to likely
considering local incorporation of only the retail operations, but would also
need to be mindful of restraints under Section 35 of the Banking Act, which
states that total financing exposure to property of a bank in Singapore shall
not exceed 35% of the total eligible assets of the bank unless it obtains
approval from the regulatory authority. Housing loans contributed 21% of total
loans, and car loans are at 12.7%.
- However,
if Maybank Singapore is to consider incorporating both the retail and corporate
segments, there are also restraints in terms of corporate loan book as it may
need to consider concentration risk as well as single-party limits, given that the loan book will now be benchmarked
against a smaller portfolio compared to the group portfolio currently. Overall, we get the sense Maybank Singapore
is doing well, but in the short term, there may be growth constraints given
possible new regulations. We maintain HOLD on Maybank.
Source: AmeSecurities
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