Malaysia’s Maybank is planning to double its non-lending income from the retail small and medium sized enterprise (RSME) segment. The bank’s revenue from RSMEs stood at 10 percent as of December 2018 — and will increase to 20 percent in the next three years.
This decision is part of Maybank’s efforts to diversify its revenue stream.
The RSME segment is reported to have a turnover of up to $14.4 million. The segment is very different from commercial banking business comprising companies with a turnover between $14.4 million and $86.3 million.
Marc Leong, head of SME banking at Maybank told Business Times, “We are trying to move more into fee-based income as we realised there’s always asset risk. And SMEs need these services, so why not offer it to them instead of having competitors do it?
The RMSE segment’s clientele has grown up to 70 percent and comprises a fully dedicated 85-member team. Leong has said there will be 100 percent growth in trade finance and treasury services.
Maybank Singapore is in discussion with its Malaysian head office to apply for one of the five digital banking licences in Singapore. The digital wholesale bank licence will allow Maybank to offer financial services to SMEs and other non-retail segments.
Digital banks target underserved small businesses while traditional banks focus more on well-established SMEs, Leong said. The bank’s non-performing loan ratio for its SME segment is below the industry average of 5.1 percent.
The bank’s net profit for the second quarter fell by 0.9 percent to RM1.94 billion owing to lower effective tax rate in the previous corresponding year.