Maybank group president and chief executive officer Datuk Khairussaleh Ramli
KUALA LUMPUR: Malayan Banking Bhd
(Maybank) has revised downwards its return on equity (ROE) target to 11%-12% from an earlier 13%-15% under what it calls its refined corporate strategy known as M25+, citing global geopolitical uncertainties as one of the key reasons.
Group president and CEO Datuk Khairussaleh Ramli said while Covid-19 had its consequences, geopolitical risk around the world was also something that had to be taken into account.
“That is why we believe in the next few years this new ROE target will be more realistic, also, given the investments that we are making,” he said at a media briefing here yesterday.
Under the M25+ which runs from now until financial year ending Dec 31, 2025 (FY25), the country’s largest lender has also set an average loans growth target of about 7% and a cost-to-income (CTI) ratio of 45%.
According to Khairussaleh, Maybank will invest between RM3.5bil and RM4.5bil over the next three to five years to implement strategic programmes and build new technological and people capabilities to support the group’s growth beyond 2025.
He said over the next couple of years, the lender’s CTI ratio would likely advance.
“But over time, we expect value to be created, and our CTI ratio will reduce.
“The key thing is that despite the challenges, we are here to still invest for the future,” he pointed out.
Under M25+, the bank has identified five strategic thrusts that it said “will build on the foundation laid by the previous M25 plan rolled out last year, focusing on intensifying customer centricity, accelerating digitalisation and technological modernisation, strengthening Maybank’s business presence and position beyond Malaysia, driving its leadership position in the sustainability agenda and becoming a global leader in Islamic banking.”
“The decision to further refine the group’s strategy was driven by the need for the organisation to remain agile for continued growth and delivery of sustained returns beyond 2025.
“It is critical for us to identify and accelerate the development of new capabilities now, especially in technology and people, so that the organisation remains relevant beyond 2025,” Khairussaleh said.
With the full realisation of the M25+ strategy by 2025, Maybank expects to also see an acceleration in time-to-market of solutions by around two to four times, increase in customer satisfaction by 10% to 20%, digital customer penetration rate of more than 80% from 59%, employee engagement of more than 90%, and Next-Gen employees comprising 25% to 30% of its workforce.
In a statement released yesterday, the bank said as part of its plan to strengthen its business presence and position in the region and Malaysia, there would be a greater push by Maybank in the regionalisation of its business and product solutions supported by the modernisation of the group’s technological platforms and applications across its key markets. The group also intends on driving its sustainability leadership agenda by expanding its scope to embrace ethical banking principles that focus on fairness, inclusivity, preservation of the environment and exclusion of harmful activities to mankind and by concentrating on developing transition solutions that support the rollout of decarbonisation strategies, it said.
The lender also said it aims to attain a global leadership position in Islamic banking. It will focus on its expertise in Islamic wealth management by making Singapore the hub and its presence in the Middle East as well as other Asean countries as spokes.
“The refinement of the five strategic thrusts comes on the back of the many macro trends disrupting the banking sector at a phenomenal pace.
“These trends include economic conditions such as rising inflationary and looming recessionary pressures, the increasing competition within the financial services space from non-bank players, the greater focus by customers and investors for sustainable practices and the demand for transition solutions as more organisations migrate towards net-zero carbon emission goals.”
