Malayan Banking Bhd’s (Maybank) key business sector, group community financial services (GCFS), will continue to be a key driver for the bank as 94.6 per cent of GCFS customers are retail customers.

This is followed by 5.1 per cent retail SME and 0.3 per cent business banking, which includes SME plus customers with sales turnover of more than RM25 million.

Recall back in financial year 2022 (FY22), GCFS contributed 59.3 per cent to the group’s revenue and 53 per cent of Maybank’s pre-provisioning operating profit (PPOP).

“We gather the revenue of GCFS’ mortgage segment in FY22 slid by 1.6 per cent year on year (y-o-y) to RM1.5 billion, contributed by the redemption of residential property loans in Singapore,” commented the team at AmInvestment Bank Bhd (AmInvestment Bank).

“Additionally, the decline was attributed to property cooling measures imposed by the authorities and higher interest rates in Singapore.

“Meanwhile, by countries, Indonesia’s revenue for GCFS fell slightly by 0.6 per cent y-o-y to RM2 billion in FY22. This was driven by the cautious stance in growing loans and rebalancing of non-retail financing portfolio in Indonesia.”

The research house noted that GCFS will continue to refine Maybank’s SME loan portfolio to accelerate its growth in Indonesia moving forward.

As at end of FY22, GCFS’ loans stood at RM386 billion. This comprised largely of retail financing which are mainly mortgages (44.7 per cent) and auto financing (20.2 per cent). Business banking financing accounted for 12.2 per cent, while SME loans make up 9.7 per cent of total GCFS loans.

GCFS’ deposits were RM383 billion as at end of FY22. GCFS has strong market shares in key portfolios such as auto (30.4 per cent), mortgage (14.8 per cent), credit cards (21.1 per cent), SMEs (17.9 per cent) and retail CASA (25 per cent).

GCFS has a large customer base (both borrowing and non-borrowing) comprising of 12.1 million retail customers. Additionally, it has 764,000 SME customers versus the industry’s 1.2 million.

This business sector has high market shares for transactions done digitally through mobile (53.1 per cent) and internet banking (50.2 per cent).

Since September 2020, RM2.93 billion of SME financing has been approved digitally. We gather that 164,554 SME digital accounts have been activated since February 2020.

“Moving forward, GCFS intends to accelerate growth across key markets with customerfocused propositions. For wealth segment, it aims to provide comprehensive wealth services and solutions to match the needs of clients.

“Besides, it plans to leverage on regional cross border referrals and onboarding, offer digital wealth solutions and grow its Islamic wealth management business.

“Management sees the opportunity to strengthen its relationship with retail customers and drive the expansion of its consumer portfolio by balancing the growth in primary and secondary markets for mortgages.”

The group alluded to the opportunities to drawdown loans for purchase of residential properties in the secondary market at a faster pace compared to those acquired by borrowers in the primary market.

Management is looking at the entire ecosystem, which involve end-to-end requirements of retail customers for the acquisition of residential properties and motor vehicles.

On non-retail business, GCFS will be redefining SME segment limits to expand its reach to more customers.