practicum (ojt) final paper

8/12/2019 Practicum (OJT) Final Paper

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I. Company Profile

A. History

Maybank was founded by Malaysian business tycoonKhoo Teck Puat,who died in 2004. Thecompany was led by President and CEOAmirsham Abdul Aziz from 2002 until March 2008 after

which he was appointed Minister in the Prime Minister's Department in-charge of the Economic

Planning Unit, a post he held until April 2009. Dato' Sri Abdul Wahid Omar was President & CEO of

Maybank Group from May 2008 to June 2013. On 2 August 2013, Datuk Abdul Farid Alias,

Maybank's Deputy President and Head of Global Banking, was appointed as President & CEO of

Maybank Group.

Timeline

1960The bank was formed and founded by Malaysian business tycoonKhoo Teck Puat with afew partners inKuala Lumpur.The bank grew rapidly to more than 150 branches within 3 years.

In 1963, the bank purchased Good wood Park Hotel, Singapore for $4.8 million.

1964The company established Mayban Trustees Bhd (MTB)

1965Khoo Teck Puat was ousted from Maybank by theGovernment of Malaysia under the

then Deputy Prime MinisterTun Abdul Razak's administration on the pretext of pumping the

bank's money into his own private firm in Singapore.

1973Forming its own investment banking subsidiary, Aseambankers Malaysia Berhad (Asian

& Euro-American Merchant Banking (Malaysia) Berhad)

1975Aseambankers establishment of a joint venture, Kota Discount Berhad, in partnership

with a group of Kuala Lumpur-based investors

1986Acquired a majority stake in Kota's which renamed to Mayban Discount Berhad in 1989

1987Maybank Securities Sdn Bhd set up to provide stockbroking and other investment

services

1990The new Malaysian Offshore Banking Act passed and the bank set up new operations in

the Federal Territory of Labuan

1990Maybank Unit Trust Berhad has been added, a subsidiary focused on the management

of unit trust funds

1992Maybank launched Maybank General Assurance Bhd

1993Acquisition of Safety Life & General insurance Sdn Bhd then re launched as Maybank

Life Assurance

1994Set up a subsidiary in Papua New Guinea, which opened 2 branch offices in Port

Moresby and Lae
http://en.wikipedia.org/wiki/Khoo_Teck_Puathttp://en.wikipedia.org/wiki/Amirsham_Abdul_Azizhttp://en.wikipedia.org/wiki/Khoo_Teck_Puathttp://en.wikipedia.org/wiki/Kuala_Lumpurhttp://en.wikipedia.org/wiki/Khoo_Teck_Puathttp://en.wikipedia.org/wiki/Government_of_Malaysiahttp://en.wikipedia.org/wiki/Tun_Abdul_Razakhttp://en.wikipedia.org/wiki/Tun_Abdul_Razakhttp://en.wikipedia.org/wiki/Government_of_Malaysiahttp://en.wikipedia.org/wiki/Khoo_Teck_Puathttp://en.wikipedia.org/wiki/Kuala_Lumpurhttp://en.wikipedia.org/wiki/Khoo_Teck_Puathttp://en.wikipedia.org/wiki/Amirsham_Abdul_Azizhttp://en.wikipedia.org/wiki/Khoo_Teck_Puat


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1995Entered a joint-venture with PT Bank Nusa Nasional (Indonesia), bringing the Maybank

name to the Indonesian market

1997Joined forces with Philippine National Bank, acquiring 60 percent stake of the

former Republic Savings Bank

1997Renamed its new subsidiary Maybank Philippines Inc. (MPI) which later gained fullcontrol of the enterprise

1997Acquired through Philmay Holding Inc. and establishment of the real estate and property

development vehicle Philmay Property Inc.

2000Maybank Philippines Inc. (MPI) network boasted nearly 60 branches across the

Philippines

2000Merger completed with the Pacific Bank and the Phileo Allied Bank after Malaysian

Government directive.

2000the corporate cracked the world top 120 banks for the first time

2001Opened a branch office in Shanghai after gaining a lisence in China

2001Applied for a license to begin operations in Bahrain

2002Launched of Maybank Takaful Bhd begin promoting Takaful insurance products.

2004Failed in a bid to take over Bank Permata of Indonesia

2005Finally received approval to launch a takeover bid, through its Aseambankers subsidiary,

of BinaFikir Sdn Bhd. However, this deal had fallen through by the end of 2005.

2005Acquired, via the Insurance Company Maybank Fortis, MNI Insurance and Takaful

National

2006Maybank acquired American Express' card business in Malaysia[5]

2007 (Nov)MNI Insurance and Takaful National were rebranded as Etiqa Insurance & Etiqa

Takaful respectively. Subsequently, Maybank Takaful transferred all its business, assets and

liabilities to Etiqa Takaful.

2008 (May)Dato' Sri Abdul Wahid Omar, is officially appointed as President & CEO of

Maybank Group.

2008Completed the acquisition 15% in An Binh Bank (Vietnam), 20% of MCB Bank Ltd

(Pakistan) and 97.5% of Bank International Indonesia (BII).

2009 (January)Renamed its subsidiary Aeambankers to Maybank Investment Bank.

2009Raised RM6 billion in equity capital through a 9-for-20 rights issue at RM2.74. 2010Introduced a Dividend Reinvestment Plan, the first Malaysian company to do so.

2011Acquired 44.6% ofKim Eng Holdings Limited.
http://en.wikipedia.org/wiki/Maybank#cite_note-GT-DEX-2006-68-5http://en.wikipedia.org/wiki/Maybank#cite_note-GT-DEX-2006-68-5http://en.wikipedia.org/wiki/Kim_Eng_Holdings_Limitedhttp://en.wikipedia.org/wiki/Kim_Eng_Holdings_Limitedhttp://en.wikipedia.org/wiki/Maybank#cite_note-GT-DEX-2006-68-5


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B. Organizational Structure

C. Industry Standing

In 2012, our three home markets in Malaysia, Singapore and Indonesia contributed 91.2% of total

Group PBT on the back of strong economic fundamentals and domestic growth drivers including

consumer spending and infrastructure investments. In Malaysia, where we have the largest

distribution network, our strategy is to lead industry growth and ensure balanced growth across all

key sectors. In Singapore, our long standing presence has enabled us to form strong relationships

with our clients, and our service levels are consistently recognized by the industry. In Indonesia, we

are encouraged by the traction that we see arising from the ongoing transformation program, and as

we expand our distribution network, we seek to grow in line with the industry. Our growth, however,

will continue to be predicated on being able to grow profitably and responsibly, and to be able to

conduct our activities in line with our mission of humanizing financial services.


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Malaysia

Malaysia remains the core domestic market for the Maybank Group, with 63.3% of Group gross

loans originating from this market and contributing 69.8% of Group PBT. The domestic loan portfolio

is well balanced between consumer and non-consumer segments. As at end 2012, 54% of thedomestic portfolio comprised consumer loans, while corporate loans made up 32% and the

remaining 14% were SME and Business Banking loans.

Our leading position in the overall loans and deposits markets is supported by a sizeable domestic

franchise made up of 26,473 employees, 401 branches and over 4,700 self service terminals and

mobile banking services.

In 2012, we achieved many milestones. We ranked first on the domestic league tables for M&As and

ranked second for domestic bonds. We also retained our lead in the Islamic banking market, with

Islamic loans contribution to total domestic loans up from 26.1% in 2010 to 30.6% in 2012. For 2013,we expect GDP to remain strong at above 5.0% on the back of sustained demand and strong

investment. Given this stable economic growth, we expect industry loans to grow 10%-11% in 2013.

Singapore

Maybank operates one of Singapore's largest foreign banking networks, with 22 full service

branches and five offsite ATMs.

Despite more challenging market conditions in 2012, our operations in Singapore continued to

deliver profitable growth on the back of a 10.5% growth in loans. The loan portfolio was made up of35% consumer loans and 65% commercial loans.

With the presence of Maybank Kim Eng, we are optimistic about the future growth potential. We are

also keen to further expand Islamic financing in Singapore and will introduce Shariah-compliant retail

financing and treasury solutions.

For 2013 we expect GDP to strengthen to an estimated 3.0% as external demand improves. Interest

rates are expected to remain low, and inflation to ease. On the back of this outlook, the industry loan

growth forecast is 9%-11%.

Indonesia

Since the acquisition of Bank International Indonesia (BII) in 2008, our operations in Indonesia have

progressed on the back of various transformation initiatives. In 2012, Indonesia's PBT increased to

Rp1.68 trillion. Indonesia's contribution now makes up 7.0% of total Group PBT and asset quality

continues to improve. Despite intense market competition, loans in Indonesia grew 21% from the


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previous year, while deposits grew 22%. Loans and deposits growth was supported by an improving

franchise which includes 415 branches and 1,317 ATMs and CDMs.

Going forward, the Group remains focused on developing its business capabilities in Indonesia,

including consumer and wholesale banking financial services. Islamic financing will also be a focus

area. For 2013, Indonesia's GDP growth is expected to be above 6.0% supported by improving

macroeconomics, social developments and infrastructure investments. System loans growth is

expected to come in at 18%-20%.

D. Financial Statements


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II. Cite one major marketing problem of the company (comprehensive caseanalysis) using this format:A. Introduction to the Case

Maybank tops the number one bank in Malaysia. It humanizes financial services across Asia.Maybank is also one of the most growing banks here at our country specifically at my area (Imus

branch). Maybank has a good customer touch point or service but lack of human resource. As agrowing company it needs to improve their strengths and maximize its opportunities for them toreach their goal. The case study is to identify the strategic issues faced by Maybank as well as todiscover the current strategies used by the Group. Analyzing the present performance and furtherimprove the performance of the Group need to be done accordingly through application of varioustechniques, evaluation and action plan. Based on the result, recommendation will be made to furtherenhance the credibility and ability of the Group. Profit is the major focus of why everybody strugglesto make sure their business going well as profit is the important sources of funds. This paper willmeasure financial performance of Maybank Bhd and determinant of data by identifying theprofitability performance of Maybank Bhd. It is important to understand the profitability of commercialbank after considering certain factors that may contribute to the profitability. The research is basedon the performance of Maybank from 2001 to 2010.

B. Time Context (What is the time period of your analysis? Eg. last threeyears, next five years?)

After three years, Maybank has learned many lessons about executing a successful CRMproject. One of the most important success factors is executive sponsorship and consistentgovernance, which was realized through the CRM Steering Committee. Company leadersmust have the foresight to commit to this kind of CRM journey, says Fadzil. When theorganization has leadership that is prepared to go the distance, the company can fulfill itsCRM vision, as Maybank has.

C. Viewpoint (You are viewing the problem from a role of a marketingexecutive, the chief marketing officer, the CEO?)

In my opinion one of the main problems here is the inconsistency of the company which affects theirperformance as putting and building relationship to their potential customers. Sometimes it lessensthe number of their clients who open for new accounts aside from that I think the company has aslow service and lack of human resource specifically in our branch. There are only one teller in ourbranch and another one in new accounts.

D. Problem Statement

Maybank is struggling to position their mobile banking service in the continuously changing industry.

The bank already has a mobile application but is evaluating if they should add more features to thisapp and how this will affect their clients. Also there are many factors that contribute to bankprofitability. According to Bankers Journal Malaysia, for Malaysian Banks, more than 80% of theirtotal income is attributed to interest income. Previous studies have also found that interest incomeand non-interest income have a positive effect on bank profitability. However besides those bankingcharacteristics of internal variables, there are some external variable that may affect the banksprofitability performance that cannot be overemphasized like inflation and GDP.


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E. Objectives

The main objective of this study is to study the factors attributes to the profitability performance ofMaybank Bhd. comprises of interest income, non-interest income Gross Domestic Product (GDP),and inflation rate. The study also will determine the profitability performance of bank for 10 years

period. Apart from that, there are few supporting objectives to support the main purpose were listedbelow :

To study the relationship between internal variables and bank profitability.

To identify whether bank cost and bank revenues will contribute toprofitability performance of Maybank Bhd.

To determine which factors contribute the most to profitability of MaybankBhd.

To analyze the trend of Maybank profitability over 10years and

identify Maybanks strength and weaknesses using certain profitability ratios.

Maybanks mission is to humanizefinancial services across Asia, by providing access to financialservices to the people at fair terms and pricing, and to be always at the heart of the community.

Undisputed No.1 Retail Financial Services provider in Malaysia by 2015 Leading ASEAN wholesale bank eventually expanding to Middle East, China & India

Undisputed Insurance & Takaful leader in Malaysia & emerging regional player Truly regional organization with ~40% of pre-tax profit derived from international operations by

2015

Global leader in Islamic Finance

F. Areas of consideration (SWOT)

Strength:

1. Largest bank in Malaysia in terms of number of branches

2. Has a customer base of more than 21 million

3. Has presence in 17 countries across the globe

4. Dividend yield is high when compared to industry and sector averages

5. Return on Assets (ROA) and Return on Equity (ROE) are substantially higher than the industry

and sector averages

6. Has a great customer friendly relationship compare to other banks


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7. The highest grossing and number one ranked bank in Malaysia

Weakness:

1. Much of the banking operations are focused in and around Malaysia and Singapore, hence limitedglobal penetration2.Much of the revenue comes from retail banking and Islamic banking, less revenue comes fromother offerings

3. Lack of human resource

4. Slow operating service

Opportunities:

1. High opportunity to expand into countries like Laos, once the bank gets the license to operate2.High opportunity to grow in investment banking in Hong Kong3.Growth in internet banking will increase the customer base

Threats:

1. Changes in economic policies in South East Asian countries will affect the bank significantly2.Current macroeconomic scenario across the globe affecting the bank

G. Assumptions

There are 5 hypotheses in this study which are:

Hypothesis 1H0: There is no significant relationship between inflation rate and bank profitability.Hypothesis 2H0: There is no significant relationship between GDP and bank profitability.Hypothesis 3H0: There is no significant relationship between Interest Income and bank profitability.Hypothesis 4H0: There is significant relationship between Non-Interest Income and bank profitability.

H. Alternative courses of actions (ACA)

Build much innovative techniques in relation to internet banking

Implement a quality management

Send a monthly report to analyze and to determine the banks profitability performance

I. Analysis of each ACA

Conducting strategical ways on how they can access digital banking more easier


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Setting up a new structure which will include management and sales responsibilities

Generating financial statements that will identify banking revenues

J. Recommendation

1. New technology is needed in order to stay close with customers to make the transition from aproduct-centric bank to a customer-focused organization. Maybank needed a new technologysolution that could strategically leverage the right customer information at the right time. A new CRMsystem should provide the following function: Analyze and promote understanding of customerbehavior

Use data to predictand influence customer behavior

Conduct effective communications to improve customer acquisition, cultivation, retention, loyaltyand profitability

Creatively use multiple customer touch points as part of the business strategy, optimizing the

multi-channel, multi-step approach to reach customers

2. Eventbased marketing can improves the customer experience Maybanks analytical CRMsystem includes an event-based engine, scanning significant customer transactions based on pre-defined business rules and priority. With this structure, the marketing team can contact customerswhen they are likely to be ready to make a decision that impacts their financial picture. Thisapproach also optimizes the time spent on customer contact by branch and call centre personnel.

3. Full campaign automation with channel reduce the waiting time Maybanks can implemented anew CRM environment includes a full campaign automation process with channel integration,providing an avenue to create business opportunities using cost-effective database marketingpractices. It also enables a closed-loop marketing process that supports campaign refinement.Channel integration provides a concrete base to support single-step campaigns, as well as multi-

step, event-triggered, multi-channel communications, offering the fastest, smartest ways tounderstand and create meaningful conversations with individual customers.

K. Action Plan

I think to be more effective Maybank must focus more on global penetration as well as maximizingrevenues. They have to be more aggressive in terms of customer behavior and create strategy thatwill increase customer relationship and influence potential customers.


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III. Appendices: Certification of Completion (Number of hours); Time card orlogbook (original or photocopy) for the whole OJT period.


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practicum (ojt) final paper

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