Maybank taking the lead in green commitment


Clean strategy: Customers queueing at a Maybank branch in KLCC. The bank aims to become the regional ESG leader by 2025 with a net-zero carbon emission position.

PETALING JAYA: Many companies are committing to a more sustainable future. Likewise, Malayan Banking Bhd (Maybank) has earmarked long-term sustainability as one of its key strategic priorities.

Following a briefing to analysts to provide updates on its sustainability initiatives and commitments for environment, social and governance (ESG), analysts are positive on the banking group as it takes the lead in ESG adoption in the sector.

CGS-CIMB Research said it gathered that the bank’s exposure to ESG-vulnerable sectors only accounted for 5.4% of its total loans as at end-March 2021.

These included the palm oil sector (2.3% of total loans), oil and gas (2%), forestry and logging (0.7%), coal (0.2%) and mining (0.2%).

“The small exposure to ESG-vulnerable sectors further supported our choice of Maybank as our ESG pick among the Malaysian banks,” the research firm said in a report yesterday. It also noted that the banking group had the most comprehensive ESG disclosure and was also actively engaging with its customers to help the latter to improve their ESG standards.

Considering it is able to leverage on its regional network, this would also broaden the base of beneficiaries.

Under the group’s five-year strategy (M25), which was unveiled in April 2021, Maybank aims to become the regional ESG leader by 2025 with a net-zero carbon emission position.

This includes providing RM50bil in sustainable financing by 2025 versus the current RM3.5bil.

It also includes transitioning all its stakeholders to being net carbon neutral by 2050 and internally, by 2030.

It also aims to provide greater financial inclusion and welfare assistance for vulnerable communities.

ESG aside, CGS-CIMB is positive on the expected recovery in the banking group’s core earnings per share growth to a projected 9.2% in financial year 2021 (FY21), which it said was a potential re-rating catalyst.

It added that Maybank’s dividend yield was also attractive at 4.9% for forecast FY21.

UOB Kay Hian, which is also positive on Maybank’s sustainability commitment, said near-term direct impact on earnings is not expected to be material.

The research firm has maintained a “hold” call on the stock with a target price of RM8.70, while CGS-CIMB Research has kept its “add” rating with a RM9.10 target price.

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 46
Cxense type: free
User access status: 3
Join our Telegram channel to get our Evening Alerts and breaking news highlights
   

Next In Business News

HeiTech Padu wins RM36.2mil MySikap contract
Soaring gas prices ripple through heavy industry, supply chains
Glomac profit tumbles in May-July quarter due to lockdown�
High flying Opcom makes RM2.6mil net profit in Q1
KLCI steps back 1.42 points as telcos weigh
Maybank extends over RM77bil in repayment assistance to customers as at Aug 31
CIMB targets RM30bil in sustainable finance by 2024
Indonesian shares lead Asia recovery on Evergrande assurance
Oil prices rise over US$1 after report of big draw in U.S. crude stocks
Ecomate offers 49m new shares under IPO

Stories You'll Enjoy


Vouchers