Maybank expects its net interest magin to fall by between five and eight basis points this year

KUALA LUMPUR, Feb 27 — Malayan Banking Bhd (Maybank) expects its net interest margin (NIM) to deteriorate by between five and eight basis points this year as interest rate hikes stabilise and the competition intensifies across loans and deposits.

Group president and chief executive officer Datuk Khairussaleh Ramli said in the financial year 2022 (FY2022), Maybank’s NIM expanded by seven basis points year-on-year (y-o-y) on the back of an 8.4 per cent increase in total net fund-based income to RM20.69 billion due to stronger loan growth in its Malaysia and Indonesia markets.

“We have to project based on what we know now, and (from what we know) in the United States, the rate hikes have stabilise a bit, hence other regulators may go slow on the interest rate.

“We cannot anticipate what will happen in the future but this is our forecast based on what we know at the moment and the announcements that we read from other regulators as well,” he told a media briefing on the bank’s FY2022 performance today.

On the loan growth for FY2023, Khairussaleh said Maybank expects it to moderate, tracking the slower growth of Malaysia’s gross domestic product (GDP).

“We do expect the GDP to moderate this year to about 4 per cent from 8.7 per cent last year, hence the loan growth also is expected to moderate as well, so that’s how we look at the forecast but we do believe within that range we still have the opportunity to grow from the mortgage front and small and medium enterprises (SMEs).

“We also believe that the group is about to see growth from SMEs not just in Malaysia but Singapore and Indonesia,” he added.

On the sustainability front, Khairussaleh said Maybank will raise the target of its sustainable financing to RM80 billion and commit to improving the lives of two million households in Asean.

He said this was due to the strong progress in meeting its initial targets of providing sustainable financing of RM50 billion and aiding one million households.

“In line with the group’s aspiration to become the leader in sustainability in the region, Maybank continued to record strong progress in its sustainable finance target, clocking RM34 billion in the last two years, well ahead of the target to achieve RM50 billion by 2025.

“Similarly, under its commitment, Maybank has also benefitted almost 900,000 households across Asean through its community programmes, compared to the target of one million households by 2025,” he said. — Bernama