KUALA LUMPUR: Malayan Banking Bhd (Maybank) has revealed a new five-year plan that aims to make big changes towards environmental, social and governance (ESG) targets as its aims to achieve a return on equity (ROE) of as much as 15% by 2025.
Maybank chairman Tan Sri Zamzamzairani Mohd Isa said Maybank’s five-year strategy named M25 would be steered by three strategic priorities by concentrating more on digital, building new value drivers and focusing on sustainability throughout its operations.
That is being done to achieve three outcomes, which are to deliver a sustainable ROE, concentrate on customer experience and be a regional ESG leader.
“Ultimately, we are committed to making a positive impact on society and the environment through this new five-year journey that we have begun, ” stated Zamzamzairani.
Based on the M25 Plan, Maybank aims to achieve by 2025 an ROE of 13% to 15%, a cost-to-income ratio of below 45%, an earnings per share of more than 100 sen and delivering a dividend payout ratio of between 40% and 60% on a net cash basis.
The group’s aim to focus on its customers will be driven via digital and hybrid services by leveraging on data analytics, and will be measured and tracked.
Additionally, by 2025, the group intends to mobilise RM50bil in sustainable financing and improve the lives of one million households across Asean, achieve one million hours per year for sustainability activities and deliver one thousand significant United Nations Sustainable Development Goals (UN-SDG)-related outcomes.
The group has also committed to a carbon-neutral position of its emissions by 2030 and to achieving net zero carbon emissions by 2050.
“Our deliverables in the area of ESG follows through from our sustainability journey taken over the years, including our financing commitments of ‘No Deforestation, No New Peat and No Exploitation’, not providing financing to black-listed activities deemed not in line with the group’s core values and no financing of new coal activities while transitioning together with existing borrowers to achieve sustainable renewable energy mix over the medium to long term, ” stated Maybank group president and CEO Datuk Abdul Farid Alias.
He added that coal financing was only 0.2% of the group’s portfolio.
Farid also said the group will partner stakeholders to achieve sustainable growth with a focus on enabling responsible transition to a low-carbon economy, empowering communities for inclusive progress and leading by example with good governance practices.
To realise its aim as the preferred Asean bank, he said the group would deliver customer-centric solutions through data and digital-led propositions and leverage on its Asean presence, insights, capabilities and global network.
As for its goal to be a global leader in Islamic finance, the group would provide comprehensive Islamic financial solutions for a sustainable future globally by building financial resilience, global prominence and thought leadership in sustainable finance, product innovation and syariah expertise.
On becoming a leading Asean insurer, the group aims to enable insurance protection and wellness offerings to the largely under-insured Asean region, leveraging on digital platforms as well as its Asean footprint.
The latest movement control orders (MCOs) in selected areas have been factored into Maybank’s loan loss provisioning.
In the last financial year ended Dec 31,2020 (FY20), the group’s allowance for impairment losses on loans, advances, financing and other debts had jumped by RM2.3bil or 101% year-on-year to RM4.6bil.
“The loan loss provisioning – most of it was done on the basis of macroeconomic variables.
“Some banks such as in the United States had reversed these provisions in the fourth quarter but we did not make such reversals.
“To us, the macroeconomic variables have to be sustainable before we reverse the outlook that we have.
“From that perspective, the latest MCO is consistent with what we have anticipated from last year, ” said Farid at a media briefing after the group’s 61st AGM.
Regarding provisioning, the group has guided for net credit charge off to be at 70 to 80 basis points (bps) in 2021, compared with 88bps in 2020.
“That takes into consideration the uneven economic recovery through the Covid-19 pandemic which would include further MCOs such as this one, ” he added.