-  Malayan Banking’s (Maybank) retail division, which is now housed under its Community Financial Services (CFS) division, hosted an Investor Day yesterday.

-  The division is now more regionally-focused, with the latest regionalisation plans activated for its private banking unit. The private banking unit will be rebranded as Premier Wealth in 2014, for the three key markets of Malaysia, Singapore and Indonesia.

-  The head office for this unit will be in Singapore, with regional hubs in the other two markets. The company highlights that the main advantages of regionalisation are the ability to easily adopt best practices from other regional offices, price bundling of products to suit customer needs, and efficient distribution channel.

-  We are positive on this as it allows the company to tailor-make its products for customers across countries. Both the high-net-worth and affluent segments registered healthy total financial assets growth of 12.6% on an annualised basis.

-  It continues to dominate the domestic internet banking space, with an estimated market share of 36.6% (easily >50% ahead of the next competitor) in terms of online banking, and an annualised growth of 22.9% of online users. Total online transaction volume is now at an average of 88mil per month, representing 55% of total retail customer transactions via ATM and branches. About 10% of these online transactions are now being monetised.

-  There were some model risk adjustments to its overall retail loan portfolio, leading to the loan loss provision increasing to RM475mil in 9MFY13 from RM167mil in 9MFY12. However, the company indicated that this is reflective of a more precautionary stance, and is not an indication of worsening asset quality trend for the retail division. The adjustments led to a flattish 2.4% YoY growth in pre-tax profit to RM2,211mil in 9MFY13, from RM2,159mil in the same period last year.

-  The company indicated that - taking into account the latest income trend, purchasing power and overall economic indicators - retail portfolio’s asset quality is expected to be stable. Overall, we continue to like Maybank’s CFS division.

-  We maintain HOLD on Maybank, pending further confirmation of minimal impact from its exposure to the steel sector and Singapore stocks in its 4Q results.

Source: AmeSecurities