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Maybank Mortgage Segment Drive to Stimulate Competition

May 30th, 2012 · No Comments

PETALING JAYA: Malayan Banking Bhd’s (Maybank) move to widen market share in the mortgage segment will undoubtedly lead to more competition among banks in the mortgage space.

Maybank anticipates the mortgage market to be a key driver of its domestic loans growth that is targeted at 13.6% this year. However, as they increase their market share, it could mean eating into the market share of its peers.

Nonetheless, Malaysia property analysts said that Maybank did not disclose how much the bank would expand in this area throughout the analyst briefing for the financial results 2011.

A banking analyst said that if Maybank extended its mortgage market share assertively, it would be at the expense of other banks, especially Public Bank Bhd, which was now the leader in that segment.

“Last year, if you asked Public Bank who their biggest competitor was, it would be Maybank,” he said, “Even with only 10% domestic loans growth, Public Bank was already feeling the heat.”

The mortgage segment was anticipated to slow down this year as it had been doing well for so many years, the analyst said. In contrast, Economic Transformation Programme-related business loans would probably take the lead in loans growth.

A different analyst said Maybank’s move to expand this segment stemmed from a assessment of the segment that was now gaining traction.

“They have relooked at the segment and are now comfortable with it, so they are looking to expand,” she said.

Maybank’s market share for mortgage loans has been growing on a quarterly basis since March last year, from 12.9% to 13.2% in December. In value terms, total mortgages grew 16.3% from RM36.2bil to RM42.1bil last December.

Adding up, the damaged loans ratio for mortgages dropped from 4.5% a year previously to 2.2% last December, further pushing the expansion plans.

Maybank’s domestic loans growth was 10% last year against the industry average of 13.5%.

Together with foreign loans, Maybank’s gross loans grew by 16.2% to RM274.4bil, supported by lively lending activities from regional operations.

Its overseas loans extended by 28.7% with a good number of contributions coming from Singapore and Indonesia.

Alliance Research banking analyst Cheah King Yoong said Maybank’s estimated loans growth of 13.6% this year would pull up the industry loans growth figure.

“My projection of 11% is already considered bullish but if they hit a figure above the average, naturally, it would set a higher figure,” he said.

Nonetheless, he thinks that loans growth this year is not as stable as compared last year.

Maybank’s six months financial results was released recently.


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