Annual Report 2011

Total Assets

USD135 billion
Net Profit

USD1.5 billion
Market Capitalisation

USD22 billion

SERVICES
Our Mission Humanising Financial Services Across Asia guides every decision we take as our business continues to grow
rapidly across the region. Our fundamentally held belief in the importance of always doing the right thing underpins our
dedication to building sustainable, long term relationships founded on mutual respect. We are committed to working at
the very heart of our communities, understanding that no one single decision applies to every situation, empowering our
staff to operate flexibly within an agreed framework. Delivery, not just promise, is everything and our focus on objective
and honest advice, and the continuing launch of innovative products and services clearly and thoroughly explained,
ensures we meet the developing financial needs of all our customers from across the full range of our business.
Our team of Maybankers are enthusiastic, confident and passionate, dedicated to delivering the essential humanising
ingredient that defines the very spirit of Maybank.

New York

ACROSS

Our vision

To be a Regional
Financial Services
Leader

Over

2,100 offices

Our mission

Humanising
Financial Services
Across Asia

17 countries

London

China
Uzbekistan

Pakistan
Bahrain
Saudi Arabia

India

Thailand

Malaysia
Singapore

Hong Kong
Vietnam
Cambodia
Philippines
Brunei
Labuan
Papua New Guinea
Indonesia

Our 2015 strategic objectives

1.
2.
3.
4.
5.

Undisputed No.1 Retail Financial Services provider in Malaysia

Leading ASEAN wholesale bank eventually expanding further into Middle East, China & India
Sustainable champion for Insurance and Takaful
Truly regional organisation, with ~40% of pre-tax profit derived from international operations
Leading Islamic bank in ASEAN

42,000 Maybankers

21 million customers

Scholarships

RM4.5 million

Maybank
Foundation

RM50 million

Contents
At A Glance

OUR PERFORMANCE

Highlights of FY2011

Our Home Markets

80 Five-Year Group Financial Summary

82 Simplified Group Statements of
Financial Position
83 Group Quarterly Financial
Performance
84 Key Interest Bearing Assets and
Liabilities
85 Statement of Value Added
86 Segmental Information

from our perspective

10 Chairmans Statement
12 President & CEOs Statement

Who We are

business review

OUR RESPONSIBILITY

Empathetic
170 Corporate Responsibility
178 Investor Relations

Our Leadership

Courageous
20 Vision, Mission and Core Values
21 Code of Ethics and Conduct

Collaborative
Genuine

22 Corporate Profile & Global Network

90 Group Financial Review

24 Key Business Entities

99 Economic & Banking

Industry Review

184 Board of Directors

104 Business Review: Overview

186 Board of Directors Profile

106 Community Financial Services

194 Group Executive Committee

26 History, Innovation & Leadership

33 Group Corporate Structure
34 Group Organisation Structure

Our Strategy & Achievements

116



131

Global Wholesale Banking

120 Investment Banking
124 Global Markets
124 Corporate Banking
Insurance & Takaful

137 Islamic Banking

44 Key Performance Indicators

46 Maybank Share

154 Group Human Capital

38 Our Strategy

54 Maybank in the News

56 Events Highlights
76 Awards & Recognition

Chairmans
Statement

222 Statement on Internal Control

226 Audit Committee Report
241 Anti-Money Laundering / Counter
Financing of Terrorism Policy

162 IT Transformation Programme (ITTP)

165 Service Quality

President and CEOs

Statement

p10

200 Statement on Corporate Governance

232 Risk Management

141 Shariah Committee

International Banking
146 Singapore
148 Indonesia
150 Other Markets

142

Creative

CORPORATE GOVERNANCE

p12

Corporate Profile &

Global Network

p22

Our
Strategy

p38

the FinAnciAlS
243 Statement of Directors Responsibility
244 Analysis of Financial Statements
254 Financial Statements
263 Notes to the Financial Statements
431 Details of Subsidiaries
442 Pillar 3 Disclosure

otheR inFoRMAtion
532 Awards & Recognition: 2006-2008
534 Analysis of Shareholdings
535 Classification of Shareholders
536 Changes in Share Capital
539 Properties Owned by Maybank Group
540 List of Top 10 Properties Owned
by Maybank Group
541 Corporate Information
542 Group Directory

AGM inFoRMAtion
544 Notice of the 51st Annual General
Meeting
547 Statement Accompanying Notice of the
51st Annual General Meeting

51

st

Annual General Meeting

of Malayan Banking Berhad
Grand Ballroom
Level 1,
Sime Darby Convention Centre
1A, Jalan Bukit Kiara 1
60000 Kuala Lumpur
Wednesday, 29 September 2011 at 10.00am
Refer to page 544 for Annual General Meeting Information and Financial Calendar.

548 Financial Calendar

v

Form of Proxy

This annual report is available on the web at www.maybank.com/ar2011

To contact us, please refer to page 541 for Corporate Information and
page 542 for Group Directory

our
performance

Business
Review

p80

corporate
Responsibility

p90

p170

Financial
Statements

p242

Maybank Annual Report 2011

at a Glance

Highlights
of FY2011
Profit after tax and minority interest (PATAMI) reached
another historical high. PATAMI came in at RM4.45 billion
on top line growth across all business segments and with
greater profit contribution from Community Financial
Services (CFS), Global Wholesale Banking (GWB) and
International.

Net Profit

RM4.45 billion
Up over 16%

Refer to page 90 for Group Financial Review.

Acquisition of Kim Eng accelerates the Groups objective of

being a regional investment bank, a leap towards achieving
our 2nd and 4th Strategic Objectives. Kim Eng is ASEANs
leading securities firm: ranked No. 1 in Thailand, second in
the Philippines, third in Indonesia and fourth in Singapore.
Refer to page 120 for Investment Banking Business Review.

Dividend Reinvestment Plan well received with a higher

reinvestment rate, reflecting overwhelming support by our
shareholders. This plan continues to strengthen our capital
position for future business expansion and regulatory
capital requirement.

Reinvestment Rate

91% 2nd DRP

89% 1st DRP

Refer to page 46 for Maybank Share.

Operational Highlights
v

Record profit for the second successive year

with broad based domestic growth and higher
contribution from overseas

Strongest loans growth since FY2001

The new House of Maybank accelerated the

pace of growth and regional reach

Gained market share in various market

segments: auto finance rose to 2nd place

Heightened competition and effect of FRS139

led to compression in net interest margin

Improvement in asset quality and lower losses

on loans

Capital position strengthened via issuance of

SGD and RM sub-debts

at a Glance

Maybank Annual Report 2011

At A Glance
Our Perspective

FINANCIAL HIGHLIGHTS
Earnings Per Share

Return on Equity

RM4.45 billion

61.4 sen

15.2%

0708 070809 0809

10 09
1011 10
11

11

14.5
15.2

14.5
15.2 14.5
15.2

3.1

09
11
10

10
11

07

07
08 0708
09 0809
10 0910
11 10
11

07

07
08

07

0708 070809 0809

10 09
10
11 10
11

NON-FINANCIAL HIGHLIGHTS

2,100

Maybankers worldwide

branches

Customers

17
countries

21 million
worldwide

15.2
8.94

8.94
11
11
11

as at
30 June

AGM Information

42,000

11.84 15.36
11.84 15.36
11.84 15.36

10.88 14.49
10.88
14.49
11.8410.88
15.36
14.49
11.84
11.84
15.36 15.36

10.81 14.49
14.8110.81 14.81
10.88
10.88
10.81
14.81
14.49
11.8410.88
11.84
15.36
11.84
15.36 14.49
15.36

08
09
10

+18.3%
+18.3%
+18.3%

Refer to page 80 for 5-year Financial Summary.

Global Network

15.2

3.1

3.1 3.1

10.08 12.72
10.08
12.72
10.8110.88
14.81
10.08
12.72
10.81
14.81
10.81
14.81 14.49
10.88
14.49
10.88
14.49

07
08
09

+18.3%
+18.3%
+18.3%

8.94

66.9

66.9

as
11 at
30 June

7.56
7.56
8.94
7.56
8.94 8.94

07
08

5.90 7.56 5.90

5.90
7.56
8.94
8.947.56
8.94

07

11

+18.3%
+18.3%
+18.3%

7.05
5.907.05
5.90 7.56
5.907.05
7.56
7.56

66.9

10
11

07
08 0708
09 0809
10 0910
11 1011

Human Capital

15.2

14.5
15.2

3.1
14.5 14.5
15.2 15.2

15.2
14.5
15.2
3.1
15.2
14.5 14.5

17.6
17.6
15.2 15.217.615.2
3.1

17.6

3.1 3.1

8.95 13.70 8.95 13.70

10.088.95
12.7213.70
10.08
12.72
10.8110.08
10.81
14.81
10.81
14.81 12.72
14.81

61.4

61.4

17.6
15.2 15.217.615.217.6
8.95 8.95
13.7013.70
8.95
10.0810.08
12.7212.72
10.08 13.70
12.72

147.5147.5 147.5
171.2171.2 171.2

213.3
213.3
261.2
213.3
261.2 261.2

09
10
11

07

07

8.95 8.95
8.95 13.70
13.7013.70

12.0

08
09
10

53.5
53.566.9
53.566.9 66.9

60.0
11

07
08
09

+25.0%
+25.0%
+25.0%

RM8.94

Financial & Others

0708 070809 0809

10 09
1011 10
11

11

+25.0%
+25.0%
+25.0%
34.4
34.4
41.8
34.4
41.853.541.853.5
53.5

10
11

Capital
Core
Capital
Core
Capital
Risk-weighted
Risk-weighted
Risk-weighted
07Core07
08
0708
09 08
09
10 09
10
11* 10
11*
11*
Ratio Ratio Ratio CapitalCapital
RatioCapital
Ratio Ratio
* assuming
reinvestment
of
DRP
Core Capital
Core full
Capital
Core
Capital
Risk-weighted
Risk-weighted
Risk-weighted
Ratio Ratio Ratio Capital
Capital
Ratio
Capital
Ratio Ratio

Share Price

+25.0%
+25.0%
+25.0%

46.7
46.7
34.4
46.734.4
34.4
41.8
41.8
41.8

09
10
11

60.0

07
08

8.0

07

11

17.6 17.6

61.4

53.9
53.9
61.4
53.9
61.4 61.4

12.0
12.0 53.9
53.9
61.4
61.4 53.9
61.4

53.3
53.9
12.0 12.0 53.3
12.0
53.3
53.9
53.9

58.5
58.5
58.5 53.3
53.3
12.0 12.0 53.3
12.0

58.5
147.5147.5 147.5

261.2
261.2
261.2

11

RM66.9 billion
46.7
34.4 34.446.734.446.7

55.0
60.0

55.0
60.0 55.0
60.0

+9.1%+9.1%+9.1%

07
08 0708
09 0809
10 0910
11 1011
08
09
10

60.0

55.0
60.0

8.0
8.055.0
60.0 55.0
60.0

52.50
52.50
8.0 8.0
8.0
55.052.50
55.0 55.0

80.00
80.00
52.5052.50
80.00
8.0 8.0
8.0 52.50

11

07
08 0708
09 0809
10 09
11*
10 10
11* 11*

Core Capital
Core Core
Capital
Capital
Risk-weighted
Risk-weighted
Risk-weighted
07Ratio07
08
07
08
09 Capital
08
09
10 Capital
11*
09
10 Capital
11*
10 Ratio
11*
RatioRatio
Ratio
Ratio

Governance

80.00 80.00
52.5052.5080.00
52.50

80.0080.00 80.00

0708 070809 0809

10 09
1011 10
11

+9.1%+9.1%+9.1%

07

07

10
11

Market Capitalisation
+9.1%+9.1%
+9.1%

07
08
09

09
10
11

08
09
10

07

CCR: +0.96%
CCR: +0.96%
CCR: +0.96%
RWCR: +0.87%
RWCR: +0.87%
RWCR: +0.87%
CCR: +0.96%
CCR: +0.96%
CCR: +0.96%
RWCR:RWCR:
+0.87%
RWCR:
+0.87%+0.87%

Leadership

60 sen

07
08
09

41.8
41.853.5
41.8
53.566.953.566.9
66.9

Dividend Per Share

07

07
08

11

RWCR: 15.36%

12.00
12.00
12.00
5.907.05
5.907.055.907.05

11

07

11

11

CCR:
CCR:
0708 070809 08CCR:
09
10 +0.96%
09
1011+0.96%
10
11+0.96%
11
RWCR: RWCR:
+0.87%
RWCR:
+0.87%
+0.87%

12.0012.00 12.00
7.05

0708 070809 0809

10 09
1011 10
11

11

07
08 0708
09 0809
10 0910
11 1011

07

7.05 7.05

10
11

+22.5%
+22.5%
+22.5%

07
08 0708
09 0809
10 0910
11 1011

07
07
08 Adequacy
07
08
09 08
09
10 Ratio
09
10
11 10
11
Capital

12.0012.00 12.00

09
10
11

193.4
193.4
213.3
193.4
213.3
213.3
261.2
261.2
261.2

412.0
412.0
412.0

336.7
336.7
412.0
336.7
412.0 412.0

269.1
269.1
310.7
269.1
310.7
336.7
336.7 310.7
336.7
08
09
10

46.7

07
08
09

11

+22.5%
+22.5%
+22.5%

07

11

11
10

0708 070809 0809

10 +22.5%
09
10
11 +22.5%
10
11+22.5%
11

RM261.2 billion

46.7 46.7

07

07
08

07

+22.4%
+22.4%
+22.4%

07
08 0708
09 0809
10 0910
11 1011

11
09
10

07 Gross
07
08 07
08
09 08
09
10
Total
Loans

07

+0.7%+0.7%+0.7%

Responsibility

07

256.7
256.7
269.1
256.7
269.1
310.7
310.7269.1
310.7

07

256.7256.7 256.7
269.1269.1 269.1

256.7256.7 256.7

+22.4%
+22.4%
+22.4%

58.5 58.5 58.5

53.3 53.3
53.3

4.45

4.45
11

11

+0.7%+0.7%+0.7%

Business Review

310.7
310.7
336.7
310.7
336.7
336.7
412.0
412.0
412.0

RM412.0 billion

58.5 58.5

4.45

3.82
3.824.45
3.824.45 4.45
10
11

171.2
171.2
193.4
171.2
193.4
213.3
213.3 193.4
213.3

09
10
11

0708 070809 0809

10 +22.4%
09
1011+22.4%
10
11+22.4%
11

+13.8%
+13.8%
+13.8%

07
08 0708
09 0809
10 0910
11 10
11

147.5
147.5
171.2
147.5
171.2
193.4
193.4171.2
193.4

08
09
10

0.69

07
08
09

07

11

+13.8%
+13.8%
+13.8%

+0.7%+0.7%
+0.7%

Performance

2.93
2.93
0.69 0.69
0.69
2.93
3.82
3.82 3.82

+16.6%
+16.6%
+16.6%

07
08 0708
09 0809
10 0910
11 1011

07
07
08
Total Assets
07

3.18
3.18
2.93 2.93
3.18
0.69 0.69
0.69 2.93

07

3.18 3.18 3.18

2.93 2.93
2.93

3.18 3.18

3.18

+16.6%
+16.6%
+16.6%

+13.8%
+13.8%
+13.8%

Strategy

0.69
0.69 3.824.45
3.824.453.824.45

+16.6%
+16.6%
+16.6%

Who We Are

PATAMI

Maybank Annual Report 2011

at a Glance

Our Home Markets

In FY2011, we saw the economies of
ASEAN and the region recovering from
the recessionary conditions of the prior
two years, providing a significant boost to
business activities, loans and deposits
growth across all our key customer
segments and markets. With this view, we
further strengthened our position in our
three key home markets of Malaysia,
Singapore and Indonesia, capitalising on
various opportunities to grow our
customer base and deepen our customer
relationships by focusing on developing
innovative products and enhancing our
service delivery capabilities.
Our three home markets contributed 96%
of revenue and 95% of profit before tax
in FY2011.

Branches

MALAYSIA

Maybank is the largest financial services group in

Malaysia, our home base.
Our products and services are delivered through
three distinct business pillars, namely Community
Financial Services, Global Wholesale Banking, and
Insurance & Takaful under the Etiqa brand.
We serve companies as they grow and become more
international as well as individuals as they become
wealthier and require more sophisticated financial
services, such as wealth management. We operate as
a universal bank offering a complete range of
financial services for all customer segments.

386

Total Assets

RM281.0 billion

Total Loans

RM164.5 billion

Total Deposits

RM187.4 billion

Consumer/Business loan ratio

Revenue (Net Income)
Profit before tax
Contribution to Group Pre-Tax Profit
Staff strength

52:48
RM9.1 billion
RM4.8 billion
76%
25,500

at a Glance

Maybank Annual Report 2011

9
At A Glance
Our Perspective

INDONESIA

Maybank Singapore began its operations in 1960,

and was granted Qualifying Full Bank (QFB) status in
December 2001. We operate one of the largest
banking networks amongst foreign banks in
Singapore, with 22 full service branches and five
offsite ATMs. Maybank Singapore is part of atm5,
Singapores only shared ATM network among six
QFBs with a combined reach of more than 140 ATMs.
Maybank Singapore offers both consumer and
wholesale banking businesses.

Our operations in Indonesia is through our 97% stake

in Bank Internasional Indonesia Tbk (BII). BII is one of
the top ten banks in the country by assets, deposits
and loans, and has one of the largest branch
networks of 344 branches. PT Wahana Ottomitra
Multiartha Tbk, our two wheeler motorcycle finance
company, operates through 100 branches offering
and servicing motorcycle financing to customers. In
addition, Maybank offers Islamic banking products
and services through Maybank Syariah Indonesia.
With different strengths and distinct target segments,
these complementary franchises enable us to seize
multiple growth opportunities in Indonesia.

Who We Are

SINGAPORE

Strategy

S$22.7 billion

Rp66.5 trillion

42:58

34:66

S$679.1 million
S$372.6 million

Rp6.1 trillion
Rp0.8 trillion

14%

5%

1,400

7,600

AGM Information

Rp58.1 trillion

Financial & Others

S$22.4 billion

Governance

Rp84.6 trillion

Leadership

S$29.2 billion

Responsibility

344

Business Review

22

Performance

In FY2011, we acquired Kim Eng Holdings. This will

further expand our investment banking and
stockbroking not only in Singapore but across the
region.

10

Maybank Annual Report 2011

From Our Perspective

Chairmans
Statement

FRoM ouR peRSpective

Maybank Annual Report 2011

11
At A Glance
Our Perspective
AGM Information

Chairman

Financial & Others

tAn SRi dAto MeGAt

zAhARuddin MeGAt
Mohd noR

Governance

Once again, I would like to thank all our

stakeholders for your support in our shared
quest to create value for the benefit of all.

Leadership

We continue to build our capital base to

sustain our growth in line with the new
Basel III regulations. In this connection, we
are grateful to our shareholders for the
confidence in us you displayed through your
very high participation in our two dividend
reinvestment plans (DRP), of 89% and 91%
respectively. We will continue the DRP for a

We will of course be mindful of the

economic uncertainties that have appeared
on the horizon in big markets such as
Europe, Japan and the USA. Nevertheless,
we remain in the worlds region of growth
and we expect the strong foundations we
have laid in Southeast Asia to enable us to
continue to grasp opportunities.

Responsibility

Our mission rests on the belief that the

benefits of banking should be available to
all, and that everyone deserves good advice
and a fair deal. Underlying our mission is a
pledge made by every member of staff : to
Serve From Your HEART which means
serving our customers with Humility,

A commitment to unity and community is

fundamental to the way we operate, and
appropriately, to symbolise the unity of all
Malaysians, a 1Malaysia sculpture now
stands in the grounds of our Kuala Lumpur
headquarters to commemorate our Golden
Anniversary in 2010.

Starting the second half-century of our

journey, we further demonstrated our intent
to become a regional financial services
leader and to humanise financial services by
acquiring Kim Eng Holdings in May 2011.
This will greatly enhance our regional
investment banking reach and capabilities,
as part of improving further our regional
wholesale banking franchise.

Business Review

But to create shareholder value is not just

about delivering financial returns. The new
Group organisation we put in place on
1 July 2010 picked up momentum to
strengthen capabilities for sustained
performance longer term, driven by our
mission to humanise financial services
across Asia. This is being further reinforced
by a newly-launched initiative to refresh the
Maybank brand, which unites our people
regionwide and clarifies to all our
stakeholders how we are differentiated.

We also have a vital role to play in the

community, and in 2010 we ended our first
half century of existence with a variety of
events that involved us with many diverse
communities. Looking forward, to enable us
to prosper all the communities we touch,
we have set up the Maybank Foundation.
The foundation will cover all aspects of
human well-being from social and medical
welfare and community development to
heritage preservation and environment
conservation. The goal of the foundation is
to do nothing less than transform lives, and
underlying all its activities is the principle of
sustainability.

while to further strengthen our capital base.

Given the robust results achieved in FY2011,
we are proposing a final gross dividend of
32 sen per share, which would translate to a
dividend payout ratio for the year of 75%.

Performance

We took full advantage of healthy economic

conditions in the areas where we operate to
capitalise on a range of opportunities. This
once again enabled us to post a record net
profit attributable to shareholders of RM4.45
billion, with over 90% coming from our
three home markets of Malaysia, Singapore
and Indonesia, where national GDP grew
5-8%. Assets climbed to RM412 billion,
22.4% up on the previous year; and we were
heartened by an increase in our fee income
ratio from 33.4% to 36.6%.

Efficiency, Appreciation, Respect, and Trust.

During the year, we received many
accolades from various quarters for the way
we care for our customers. Our challenge
now is to ensure the standards we have set
for ourselves get implemented more
uniformly across all our operations
throughout Asia.

Strategy

In FY2011, our commitment to enhancing

shareholder value by focusing on growth
areas and delivering strong financial results
made Maybank Malaysias largest marketcapitalised company. Our total shareholder
returns continued to sustain double digit
growth, recording 28.1% for the year.

Who We Are

Dear
shareholders,

12

Maybank Annual Report 2011

From Our Perspective

President
& CEOs
Statement

From Our Perspective

Maybank Annual Report 2011

13
At A Glance
Our Perspective
Who We Are

Dear
shareholders,

Financial & Others

AGM Information

At RM502.2 million, allowance for losses on loans was

59.0% lower than a year ago due to higher bad debt
recovery and lower collective assessment.

Governance

Net interest income rose 6.1% from RM6.77 billion to

RM7.19 billion due to strong loans growth by Malaysia
and BII, but was offset by lower margins as a result of
intense competition.

Overhead expenses rose 14.2% to RM6.65 billion,

lower than the previous years growth of 15.3%.
Growth in expenses was largely the result of higher
personnel costs on account of recruitment and
performance-based incentives, which are investments
in human capital that we are confident will translate
into higher productivity and profitability.

Leadership

Group revenue advanced 8.9% to RM13.42 billion

from RM12.32 billion with all key business segments
posting higher revenue spurred by strong loans and
non-interest income growth. Gross loans grew 21.7%
supported by strong overseas loans growth of 29.4%,
with both Singapore and Bank Internasional Indonesia
(BII) recording 25.8%. Meanwhile, domestic loans
growth of 16.8% was well above the industry average
of 13.5%.

Non-interest income was up 11.4% to RM4.12 billion

thanks to higher fee income including brokerage fees
and the profit from sales of equity and debt securities
in a buoyant market.

Responsibility

On the back of sustained economic growth in

Malaysia and the region, FY2011 was another
outstanding year. Profit after tax and minority interest
(PATAMI) rose 16.6% to RM4.45 billion from RM3.82
billion the year before.

Islamic Banking income rose 8.9% with strong

financing growth of 35.1%. Islamic Banking now
accounts for 27.4% of Group loans from 24.0% a year
ago, while net income from insurance business
recorded 31.2% growth owing to a higher transfer of
actuarial surplus to insurance business income from
both conventional insurance and takaful.

Business Review

Delivering Results

Our three home markets of Malaysia, Singapore and

Indonesia all posted strong results. In Malaysia, profit
before tax improved from RM4.12 billion to RM4.75
billion; in Singapore from SGD338.0 million to
SGD375.1 million; and in Indonesia from Rp607 billion
to Rp782 billion.

Performance

Group transformation initiatives achieved growth

across all our key business areas, with loans growing
at the fastest pace in a decade, driven by a greater
contribution from Singapore and Indonesia. Together
with our acquisition of Kim Eng Holdings, this is a
testament to our success in expanding our regional
contribution.

Strategy

We delivered another record profit in FY2011 and

exceeded our headline key performance indicators by
healthy margins. This robust performance comes just a
year after we reframed our strategic objectives in July
2010 by adopting a new organisation structure we
called the new House of Maybank.

14

Maybank Annual Report 2011

From Our Perspective

President
& CEOs
Statement

With this financial performance, we

surpassed our two headline key
performance indicators (KPIs) with
a return on equity of 15.2%
exceeding the target of 14.0%, and
a 22.6% growth in loans and debt
securities, far ahead of our 12%
target. For a detailed explanation of
all our KPIs, please refer to page 44.

Transforming the
Business
Last year I mentioned that in July
2010 we reorganised our
operations into three business
pillars called the new House of
Maybank. In line with this, we
embedded our business initiatives
which had earlier been driven by
the Transformation Office into
three sectors to enable a more
coordinated and effective business
execution. I am glad to say this
sector-driven agenda has been
embraced by the whole
organisation and the initiatives are
achieving fantastic results. Getting
the sectors to drive change has
unleashed the banks latent
energies and spurred synergies
right across the Group. It has also
enabled us to home in on
humanising financial services and
reach out to all the communities
we touch through our activities.
The new organisation structure
has accelerated the performance
of both Community Financial
Services (CFS) and Global
Wholesale Banking (GWB). CFS is
now strengthening our
competitive position to make us
the undisputed leader in retail
financial services. GWB has two
goals: to maintain its leadership of
Malaysias corporate banking
sector; and to become a regional

wholesale banking powerhouse by

2015. Meanwhile, Etiqa, our
Insurance and Takaful arm, is
achieving sustainable and
profitable growth and beefing up
its leadership of the industry.
Watching our transformation, I am
greatly encouraged by the
tremendous response to the
Presidents Innovative Idea Awards.
Many of the more than 500 ideas
contributed by staff from all
divisions are already being
implemented to enhance our
customer service, products,
processes and marketing. This is a
real tribute to the creativity and
enthusiasm of our people.
I am seeing a remarkable
collaboration between sectors,
maximising resources to deliver
exceptional customer value,
service and support. I am also
seeing Maybankers initiating and
leading change efforts and taking
team responsibility for delivering
results. This is what will keep us
ahead of our competitors and
enable us to enrich the
communities around us.
For more information on our
strategy, the House of Maybank
and what we have accomplished,
please refer to page 38.

Expanding Across
Asia
Our regional expansion is well on
track to deliver a 40% profit
contribution to the Group by 2015.
A major milestone along the road
was the acquisition of Kim Eng,
which became a subsidiary in May
2011. Kim Eng, a leading
brokerage firm with operations

across the region, is a platform for

us to build our regional
investment banking presence in
order to become a leading
wholesale bank in ASEAN.
To achieve seamless delivery of
our services internationally we
launched global initiatives to
integrate our systems and
processes. We have regionalised
various services such as internet
banking and global ATM
installation. We put in place
regional transaction banking
capabilities encompassing global
cash management, trade finance
and treasury services. And we
strengthened our regional
governance and enhanced the
calibre of our human capital.
In Singapore, we are growing our
SME segment and expanding our
structured trade business. Besides
this, we are focusing on boosting
our income from wealth
management and have just
kick-started a regional wealth
management programme.
In Indonesia, our goal is for BII to
become an innovative relationship
bank for businesses and
communities. Last year, we opened
70 new branches and we will be
expanding the network to 450 by
the end of 2012. We continue to
collaborate with BII on business
initiatives and support functions
to increase its contribution to
Group earnings.
As part of our drive to expand
across Asia, our Malaysian,
Singaporean and Indonesian
operations have been working
closely together to develop
products that can be replicated
regionwide. This teamwork has
already achieved results in the

From Our Perspective

Maybank Annual Report 2011

15
At A Glance
Governance
Financial & Others
AGM Information

With the newly set-up Maybank

Foundation, we will be able to
execute our corporate
responsibility (CR) role by
engaging with communities across
Asia to develop sustainable
solutions. In so doing, our
intention is that the foundation
will offer hope, meet needs, inspire
lives, and support aspiration.

Leadership

As an example of how this works

in practice, we have now installed
user-friendly facilities for
physically-challenged customers at
many of our branches. Then, on 20
November last year, we held a
Maybank Global CSR Day that saw
Maybankers participate in
group-wide volunteerism.

Responsibility

As part of our strategy to be

ASEANs leading Islamic bank by
2015, we introduced our Islamic
First strategy last year and I am
glad to report we have been

To achieve these ends we have the

most extensive financial network
in Malaysia, with 386 branches and
4,596 self-service terminals. In
remote rural areas we provide
mobile bus banking, and in 18
rural areas we are the only bank
there is. We also have the nations
biggest internet banking presence,
with a 55% market share.
Meanwhile, our Islamic First policy

Humanising our services also

means being at the heart of the
community. It means being a
responsible corporate citizen
committed to building a
sustainable future for the ASEAN
region through long-term social
and economic development. It
means enriching the lives of the
communities we serve and
advocating a greener earth.

Business Review

Putting Islamic
First

Humanising financial services

across Asia means that customer
welfare comes first. Our
commitment to humanising our
services is based on three key
principles: providing people with
access to funding; offering fair
terms and pricing; and advising
customers based on their needs.

Touching
Communities

Performance

In China, we will be converting our

representative office in Beijing into
a fully-fledged commercial
banking branch by the end of
2011 or early 2012.

Humanising our
Services

To ensure our customers enjoy

consistent and exemplary service
wherever we operate, we have
centralised our service units under
a new service quality department
with a remit to catalyse service
transformation and coordinate and
streamline customer service
initiatives Groupwide.

Strategy

Our overseas associates MCB Bank

(Pakistans most profitable bank)
and An Binh Bank (a fast-growing
Vietnamese commercial joint-stock
bank) again generated positive
returns despite difficult macroeconomic conditions. Our
partnership with MCB involves
strategic tie-ups in the areas of
trade financing, remittances and
Islamic banking. Meanwhile, with
ABB which further expanded its
branch network during the year
we are pursuing synergistic
growth by enhancing ABBs trade
financing capabilities.

Islamic banking is now being

developed with a global approach.
We are pursuing growth in
Indonesia, the country with the
worlds biggest Muslim population,
through our conversion of PT Bank
Maybank Indocorp into an Islamic
Bank, renamed PT Bank Maybank
Syariah Indonesia. We are also
leveraging on our relationship
with our associate company, MCB,
to develop Islamic banking
business in Pakistan.

is proving to be an appropriate
and effective driver behind our
commitment to fairness.

Who We Are

We are bullish about prospects in

the Philippines, where we are
providing increased capital to fuel
growth, especially in the
corporate, commercial and
consumer segments. In Cambodia,
we opened three new branches in
FY2011 and plan to open a further
two by the end of this year. We
also aim to achieve local
incorporation as soon as possible.
In the longer term we plan to
develop a presence in Thailand,
India and the Middle East as well.

successful in growing our Islamic

assets at double the rate of
conventional assets in Malaysia. By
cross-selling and bundling
products and services in
collaboration with CFS and GWB,
we have grown our Islamic
financing to 27% of domestic
loans, well on the way to account
for a third of the Groups domestic
financing portfolio by 2015.

Our Perspective

areas of credit card, wealth

management and remittances.

16

Maybank Annual Report 2011

From Our Perspective

President
& CEOs
Statement

Nurturing Talent
Humanising our services begins at
home. In FY2011 we continued to
focus on communicating our
vision, mission and strategies to
our staff, so as to achieve a real
cultural transformation fuelled by
our shared TIGER values of
Teamwork, Integrity, Growth,
Excellence & Efficiency and
Relationship Building.
Maybank is a great place to work.
Many initiatives have been
launched to nurture talent, to
boost efficiency, effectiveness,
productivity and innovation, and
to inculcate the spirit of service. All
these initiatives are based on the
recognition that each of our
employees is an important asset
with a part to play in our longterm sustainable future. We hire
the best people for the job and
strive to retain, motivate, empower
and reward them for their
contribution. In this way, and
through our shared, humanising
spirit, I believe our people find
meaning in their work and will
strive to serve from the heart.

Supporting the
Transformation
Our mission to humanise financial
services by transforming our
business is supported by
Enterprise Transformation Services
(ETS), which is currently
spearheading two vital initiatives
involving service quality and
information technology.
In FY2010, we embarked on a
three-year sustainable service
programme. In year one, we
focused on developing our service
culture and improving governance

and process enablement. In years

two and three, we will continue to
invigorate our processes and
systems, always moving in the
direction of more humanised
banking.
Meanwhile, in July 2010 we
launched a five-year IT
Transformation Programme (ITTP)
encompassing system, process and
control changes, and designed to
give us an edge over our
competitors. We have completed
system evaluation and
implementation is ongoing.

Key Management
Changes
Several key management changes
were made during the year to
strengthen our leadership. At the
Group Executive Committee level
we appointed Muzaffar Hisham as
Chief Executive Officer of Maybank
Islamic Berhad and Head of Group
Islamic Banking; Hans De Cuyper
as Head, Etiqa Insurance & Takaful
and Chief Executive Officer of
Mayban Ageas Holdings Berhad;
and Dr. John Lee Hin Hock as
Group Chief Risk Officer. Other
senior management positions
were filled by the appointment of
Eliza Mohamed as Head of
Corporate Affairs and Mohamed
Adam Wee Abdullah as Chief
Marketing Officer.

Refreshing the
Brand
In FY2011, we embarked on a
project to refresh the Maybank
brand. This involves reviewing our
Group corporate architecture and
identity to better align our brand

strategy with our business vision.

The project will enable us to
leverage more effectively on
Maybanks brand equity through a
more consistent interpretation and
communication of our brand
proposition to all stakeholders
across Asia. It will also allow us to
maintain and celebrate our brand
heritage and at the same time
rejuvenate the brand so as to
boost its relevance and appeal to
both existing and new customers.
We are pleased to introduce the
new Maybank logo as part of
enhancing our brand, which will
become an ever more valuable
asset and a key tool in building
enduring customer relationships.

Capital Management
Efficient capital management is a
priority in anticipation of the more
stringent capital requirements of
Basel III. As part of our ongoing
capital optimisation initiatives, we
raised capital equivalent to more
than RM6 billion through capital
raising exercises and through our
dividend reinvestment plans for
the last two dividend payments.
We maintained healthy capital
levels after the acquisition of Kim
Eng with our core capital ratio and
risk weighted capital ratio at
11.84% and 15.36% respectively as
at 30 June 2011.

Prospects
Economic prospects for Malaysia
and the ASEAN region remain
positive, supported by resilient
domestic demand, despite
uncertainties and challenges in the
US, the Eurozone and Japan.

From Our Perspective

Maybank Annual Report 2011

17
At A Glance

16%
12%

Other KPIs
Group Loans Growth
v Malaysia
v Singapore
v Bank Internasional Indonesia
Group Deposits Growth
Risk Weighted Capital Ratio

12%
12%
8%
24%
14%
>12%

Note: Loans growth for Singapore and Bank Internasional Indonesia are in local
currency

Governance
Financial & Others

Dato Sri Abdul Wahid

Omar
President & CEO

AGM Information

Everything we are today,

everything we stand for, and
everything we achieved last year is
a tribute to the commitment of
our stakeholders. We are
profoundly grateful for the
dedication of all our Group staff
and the loyalty of our customers,
the trust of our partners and
associates, and the support of
Bank Negara Malaysia, the
Securities Commission and the

Meanwhile, buoyed by the

outstanding results achieved in
FY2011 and strengthened by the
backing of our stakeholders, our
transformation will continue as we
journey to become a regional
financial services leader by
humanising financial services
across Asia.

Leadership

Giving Thanks

On a personal note, my heartfelt

thanks to our Chairman and Board
members for their support and
guidance and for entrusting me to
continue to lead the Maybank
Group. Likewise, my thanks also to
my fellow management colleagues
for their support and commitment
in steering the Group forward.

Responsibility

Overall, we are confident of

recording a still better financial
performance for the current
financial year which will be
six months ending 31 December
2011 as we change to a December
financial year end. Our headline
KPIs for the period are a return on
equity of 16% and loans and debt
securities growth of 12%. Other
KPIs are listed in the table above.

other regulatory authorities that

have guided us over the years.

Business Review

Kim Eng and the expertise of

Maybank-IB to boost the Groups
fee-based income.

Performance

We will continue to expand

non-interest income through
growth in our insurance and
investment banking business,
which will leverage on the regional
investment banking platform of

Return on Equity
Loans and Debt Securities Growth

Strategy

Competition will remain intense,

partly due to industry liberalisation
and the consolidation of the
domestic banking industry in the
light of the imminent introduction
of the second Financial Sector
Masterplan. As a result, net interest
margins could still be under
pressure as competition for loans
and deposits becomes more
challenging.

Headline KPIs

Who We Are

As a result, we anticipate loans

growth in our three home markets
to remain strong. Robust
expansion in the corporate
segment should offset the more
moderate pace of consumer
demand due to rising inflation and
regulatory measures to rein in
household debt levels. In Malaysia,
the gradual rollout of projects as
part of the Governments
Economic Transformation
Programme will support corporate
loans growth and capital market
activities. Loans growth in
Indonesia is expected to be the
strongest in the Group, while in
Singapore we anticipate further
broad-based but moderate
growth. We expect credit costs to
rise with loans growth and
stabilisation of FRS 139.

Key Performance Indicators for six months ending

31 December 2011

Our Perspective

We expect the Malaysian economy

to record GDP growth of 5.1% in
2011 and 5.5% in 2012.
Singapores GDP growth is forecast
at 5.2% in 2011 and 4.4% in 2012,
while growth in Indonesia is
expected to be 6.2% in 2011 and
6.5% in 2012.

Courageous
With the pride, courage and tenacity of the Tiger, Maybank has always been the leader in financial services in
Malaysia, and is rapidly becoming a more visible presence across Asia. Restless and determined to achieve more,
Maybankers are constantly searching for new opportunities to stay ahead in the ever changing and challenging
21st century, unwilling to accept today as reflective of the future, and bringing their unique brand of personal
relationships to the world of financial services.

20

Maybank Annual Report 2011

who we are

Vision, Mission and

Core Values
Vision
To Be A Regional Financial Services Leader
Mission
Humanising Financial Services Across Asia

CORE VALUES

Teamwork
We work together as a team based on mutual respect and dignity
Integrity
We are honest, professional and ethical in all our dealings
Growth
We are passionate about constant improvement and innovation
Excellence & Efficiency
We are committed to delivering outstanding performance and superior service
Relationship Building
We continuously build long-term and mutually beneficial partnerships

who we are

Maybank Annual Report 2011

Engage directly or indirectly in any business activity that competes or is in conflict with the Banks interest.
Misuse or abuse their positions in the Bank for their personal benefit or for the benefit of other persons.
Misuse information. Staff should not copy, remove or make use of any information obtained in the course
of business for the direct or indirect benefit of themselves or of any other persons.

Responsibility

1.
2.
3.

Business Review

The code stipulates that staff should not:

Performance

Uphold the good name of the Maybank Group and to maintain public confidence in the Maybank Group.
Maintain public confidence in the security and integrity of the banking system.
Maintain an impartial and unbiased relationship between the Maybank Group and its customers.
Uphold the high standards of personal integrity and professionalism of Maybank Group staff.

Strategy

1.
2.
3.
4.

Who We Are

The purpose of the code is to:

Our Perspective

Maybank, as a custodian of public funds, has a

responsibility to safeguard its integrity and credibility. It is
on this understanding that the organisation sets out clearly
the code of ethics and conduct for its staff. The code
stipulates the sound principles that will guide all Maybank
staff in discharging their duties. It sets out the standards of
good banking practice.

At A Glance

Code of
Ethics and Conduct

21

In addition to these, staff should:

Governance

5.
6.

Ensure the integrity and accuracy of records and/or transactions.

Ensure fair and equitable treatment in all business dealings on behalf of the Bank.
Maintain the highest standard of service in their relationship with customers.
Maintain confidentiality of all relations and dealings between the Bank and its customers. However,
confidential information concerning a customer may be given or made available to third parties only with
the prior written consent of the customer or when disclosure is authorised under the Banking and
Financial Institutions Act, 1989.
Manage their financial matters well and not subject themselves to pecuniary embarrassment.
Observe and comply with laws and regulations relating to the operations of the Bank.

Leadership

1.
2.
3.
4.

Financial & Others

AGM Information

22

Maybank Annual Report 2011

who we are

Corporate Profile &

Global Network

Kuala Lumpur main branch in Menara Maybank.

Over 2,100 offices

17 countries
42,000 employees
Serving 21 million customers
Market capitalisation of USD22 billion
Total assets of USD135 billion
Net profit of USD1.5 billion

The Maybank Group is Malaysias financial services

leader with a network of over 2,100 offices in 17
countries worldwide. The Bank was incorporated on
31 May 1960 and commenced operations on 12
September of the same year. It quickly expanded its
network and was listed on the Kuala Lumpur Stock
Exchange (now Bursa Malaysia) on 17 February 1962.
By its second anniversary on 12 September 1962,
Maybank had branches operational in numerous parts
of Malaysia as well as Singapore, Brunei, Hong Kong
and London.
Maybanks objective at the time of incorporation was
to support the development of the then newly
independent Malaya by financing economic growth
and bringing modern banking services to its people.
Over the years, it played a key role in meeting this
objective and expanded both in network as well as
products and services. Maybank was in fact one of the

who we are

Maybank Annual Report 2011

23
At A Glance
Our Perspective
Who We Are
Strategy

China
India

London

Papua New
Guinea

Indonesia

Saudi Arabia

Brunei

Philippines
Labuan

Islamic commercial bank in Asia Pacific and

ranked 17th worldwide.

AGM Information

As it journeys on to achieve its vision,

Maybank will always remain true to its
founding objectives which is to enrich the
lives of all its stakeholders and to be a
continued channel for economic progress
and the growth of communities it serves.

Financial & Others

With over half a century of experience and an

ever expanding network, Maybank now has
set its sights on becoming a regional financial
services leader by 2015. The Groups mission
is to humanise financial services across Asia
reaffirming its commitment to provide the
people access to financial services at fair
terms and pricing as well as to be at the
heart of the community.

Governance

The next few decades of Maybanks

operations were periods of aggressive
expansion and continuous innovation that
saw it evolve into a major financial services
group, offering a comprehensive range of
products to customers as well as supporting
Malaysians who ventured abroad for trade
and investment through offices in key
markets they were in. Along the way, the
Group achieved numerous firsts leading the
way for the Malaysian banking industry and
making Maybank one of the leading
Malaysian brands.

Today, Maybank has grown to become the

largest company by market capitalisation on
Bursa Malaysia and is recognised as one of
the regions leading banking groups. It offers
an array of financial services including
commercial banking, investment banking,
stock broking, insurance and takaful, trustee
services, offshore banking, asset
management and Islamic banking. Maybank
has been recognised through numerous
local and international awards for its
leadership, innovation, technology and
corporate responsibility. It is the leading
Malaysian listed company in the Forbes
Global 2000 List, as well as top Malaysian
bank and 134th amongst global banks in
The Bankers list of top 1,000 banks in the
world. Maybanks Islamic banking subsidiary
- Maybank Islamic Berhad - is the largest

Leadership

key drivers in supporting the countrys

economic transformation and setting new
benchmarks in financial services for
Malaysia.

Responsibility

v Bahrain 1 branch v Brunei 3 branches v Cambodia 10 branches v China 1 branch, 1 representative office v Hong Kong 1 branch, 1 branch via Kim Eng v Indonesia 1 branch via
Maybank Syariah Indonesia, 344 branches via 97.5% owned BII, 5 branches via Kim Eng v India 1 branch via Kim Eng v Labuan 1 branch v London 1 branch, 1 branch via Kim Eng
v New York 1 branch, 1 branch via Kim Eng v Malaysia 386 branches v Papua New Guinea 2 branches v Pakistan 1,134 branches via 20% owned MCB Bank, 4 branches via 25% owned
Pak-Kuwait Takaful Company v Philippines 50 branches, 2 branches via Kim Eng v Singapore 22 branches, 3 branches via Kim Eng v Thailand 44 branches via Kim Eng v Uzbekistan 1
office via 35% owned Uzbek Leasing International v Vietnam 2 branches, 122 branches via 20% owned An Binh Bank, 7 branches via Kim Eng v Saudi Arabia 1 office via Anfaal Capital

Business Review

Cambodia
Pakistan
Malaysia
Uzbekistan Singapore
Bahrain

New York

Thailand

Performance

Hong Kong
Vietnam

24

Maybank Annual Report 2011

who we are

Key Business
Entities

Malayan Banking Berhad is the holding company and listed

entity for the Maybank Group with branches in Malaysia,
Singapore and other international financial centres such as
London, New York, Hong Kong and Bahrain.
Maybanks key overseas units subsidiaries are PT Bank Internasional Indonesia Tbk (BII), Maybank Philippines Inc,
Maybank (PNG) Ltd in Papua New Guinea and Maybank International (L) Ltd in the offshore centre of Labuan.
The major operating subsidiaries are Maybank Investment Bank Berhad, Maybank Islamic Berhad and Etiqa
Insurance Berhad. Maybank has associate companies in Pakistan (through 20%-owned MCB Bank) and in
Vietnam (through 20%-owned An Binh Bank).

Maybank Investment Bank Berhad

A wholly-owned subsidiary and the investment
banking division of Maybank. It offers a complete
range of investment solutions from corporate finance
to debt capital markets, equity markets to research
and strategic advisory.

Maybank Islamic Berhad

Maybank Groups wholly-owned, full-fledged licensed
Islamic bank. Maybank Islamic is the largest provider
of Islamic financial services in the Asia Pacific region
and ranked 17th among the worlds Islamic financial
institutions in terms of Shariah-compliant assets.

Kim Eng Holdings Ltd

A wholly-owned subsidiary of Maybank. Kim Eng is a
regional securities powerhouse with successful
franchises across Asian financial markets. It is the
leading securities firm in Thailand and in the
Philippines.

Bank Internasional Indonesia Tbk

A 97%-owned subsidiary of Maybank. It is 8th largest
commercial bank by assets and is listed on the Jakarta
Stock Exchange (Ticker: BNII) The bank provides a full
range of financial services for SME/Commercial,
Consumer and Corporate Banking customers.

who we are

Maybank Annual Report 2011

25
At A Glance
Our Perspective
Strategy

Key Associate Companies

Business Review

An Binh Bank
A 20% owned associate company of Maybank. It
offers a full range of commercial banking products
and services and is strong in the small and medium
enterprises (SME) sector. Its consumer banking market
share is also growing with the introduction of
innovative mortgage, automobile financing and
personal loan products and services.

Performance
Responsibility

MCB Bank Ltd

A 20% owned associate company of Maybank. It is
one of the leading banks in Pakistan with total assets
of over Rs.500 billion, a customer base of over 4
million and a nationwide network of over 1,000
branches and over 450 ATMs. MCB Bank was the
recipient of The Strongest Bank award for 2010 by
Asian Banker for being Pakistans best-performing
financial institution.

Who We Are

Etiqa
Etiqa is the brand for Maybank Groups insurance business which offers all types and classes of Life and General
conventional insurance as well as Family and General Takaful plans via a robust agency force of over 21,900
agents complemented by a wide bancassurance and bancatakaful network.

Network Partnership

Leadership

Maybank is the sole issuer and merchant acquirer of

the American Express Cards in Malaysia

Maybank Firsts

First instant international money transfer service

owned by a Malaysian bank available through
Malaysia, Singapore, Indonesia, Brunei, the
Philippines, Cambodia, Vietnam and Pakistan

Overseas Mortgage
Loan Scheme

Maybank was the first to offer a local mortgage for

properties in London

AGM Information

Maybank
Money Express

Financial & Others

No. 1 internet banking website in Malaysia with 3.8

million registered users, leading the market share
by over 54%

Governance

maybank2u.com

26

Maybank Annual Report 2011

who we are

History, Innovation
& Leadership
Maybanks journey over the years has been
marked by one milestone after another. From
its incorporation in 1960 and throughout its
51 years of operations, the Group has
demonstrated its commitment to excellence
and innovation as it charted its course to
becoming Malaysias regional financial
services leader. As it moves into its sixth
decade, the Group is committed to blazing
new heights as it seeks to ensure a better
future for all.
1960
v

Maybank is incorporated on May 31 and begins

operations at Mansion House in High Street in the
heart of Kuala Lumpur on September 12.
Malayan Finance Corporation (later Mayban
Finance) is established, the first wholly bankowned finance company to be set up at a time
when the Malayan economy was dependent on
rubber and tin.

On November 28, Maybanks first overseas branch

opens in Brunei Darussalam. Two more branches
were later opened in Brunei in Seria in 1983
and Gadong in 1999.

Branches are opened in Singapore, with the first

on South Bridge Road in December.

1962
v

First to introduce a rural credit scheme in 1974.

Maybank introduces the first Rural Credit Scheme

in Malaysia with 10 project field officers. The
scheme aimed to bring the Bank and its services
to the people in rural sectors, and to play its role
in financing viable small-scale industries and
businesses as well as Bumiputeras and Bumiputera
concerns in line with the governments objectives
to correct the economic imbalance among the
populace.

1976
v

First to introduce mobile bus banking services

in 1976.

As part of the Banks continuing policy to provide

financial services to rural communities, the first
mobile bank unit is set up in Johor.

1977
v

In June, Mayban-Phoenix Assurance Bhd with

the Bank holding 70% equity is incorporated
offering underwriting general insurance risks with
an authorised capital of up to $10 million. The
remaining 30% is held by British Phoenix
Assurance. On October 10, 1986, Mayban-Phoenix
Assurance is renamed Mayban Assurance.

1978
v

Pioneer in computerisation of banking operations

in Malaysia in 1978.

In October, the Kuala Lumpur main branch is

computerised, making Maybank the first Malaysian
bank to computerise its savings and current
accounts services.

The Hong Kong branch opens on February 12,

followed by a branch in London on September 12.
On February 17, Maybank lists on the Kuala
Lumpur Stock Exchange.

1973
v

1974

In September, Maybank sets up its investment

banking arm Asian and Euro-American
Merchant Bankers Bhd (Aseambankers). The bank
is renamed Maybank Investment Bank in 2009.

who we are

Maybank Annual Report 2011

27
At A Glance

1986
Maybank introduces the nations first integrated
and largest ATM network Automated Banking
Consortium or ABC linking Kwong Yik Bank,
Mayban Finance and Maybank in Malaysia and
Singapore, a total of 296 ATMs.

Maybank launches the first joint pilot EFTPOS

service with a number of participating petrol
stations.

1981
v

First Malaysian bank to set up ATMs in Malaysia

in 1981.

In September, Maybank becomes the first

Malaysian bank to set up an ATM at its Ampang
branch in Kuala Lumpur.

1988

Maybank becomes the first financial institution to

introduce payment for new IPOs through ATMs.

Prime Minister Datuk Seri Dr Mahathir Mohamad

lays the foundation stone of Menara Maybank
Maybanks headquarters in September.

1984
v

Maybanks New York branch opens in September.

Business Review

In January, Balai Seni Maybank and the Maybank

Numismatic Museum are officially opened by Tan
Sri Dato Jaffar Hussein, Governor of Bank Negara
Malaysia. This is followed by the official opening
of Menara Maybank in June 1988 by the Prime
Minister.

Performance

1983
v

Strategy

Who We Are

In December, Maybank launches its first credit

card the Maybank Visa Classic card.

Our Perspective

1980

Responsibility
Governance
AGM Information

1980s

Financial & Others

1970s

Leadership

1960s

28

Maybank Annual Report 2011

who we are

History, Innovation
& Leadership

1990
v

Maybank sets up an offshore bank in Labuan

International Offshore Financial Centre in October.

1992
v

In January, Mayban Securities is formed.

1996
v

In March, the Hanoi branch and a representative

office in Ho Chi Minh City are officially opened. In
October 2005 Ho Chi Minh City becomes an official
branch making it the second branch in Vietnam.

Pioneer in bancassurance in South East Asia in

March 1996.

In March, Deputy Finance Minister Wong See Wah

launches Maybank Bankassurans, the first such
service in Southeast Asia offering insurance
products to customers at bank branches.

Maybank sells Kwong Yik Bank to Rashid Hussain

Berhad in December.

1992
v

In September, Maybank Autophone is launched,

making it the first local bank in the country to
offer customers the convenience of conducting
their banking transactions and payment of
selected utility bills through a computerised
telephone service.

1993
v

Mayban Ventures begins operations in February. In

September, Aseam Leasing and Credit Bhd is
incorporated, offering leasing and hire purchase
activities.

1994
v

Maybank (PNG) Ltd opens for business in Port

Moresby in October, with a second branch opened
in Lae in 1997.
In November, Prime Minister Datuk Seri Dr
Mahathir Mohamad officially launches PT
Maybank Nusa Internasional, a joint venture with
PT Bank Nusa Internasional of Indonesia.

A branch is opened in Phnom Penh, Cambodia,

and two representative offices are opened in
Beijing and Tashkent, capital of Uzbekistan in
Central Asia.

1997
v

First to offer the convenience of ticket-less travel

for domestic flights on MAS through MAS
Electronic Ticketing (MASET) in 1997.

In July, Maybank becomes the first bank to launch

the Malaysia Airlines Electronic Ticketing or
MASET, marking the birth of ticketless air travel via
payment at any Maybank Group ATM.

Maybank acquires a 60% stake in PNB-Republic

Bank of the Philippines, and renames it Maybank
Philippines Inc.

who we are

Maybank Annual Report 2011

29
At A Glance
Our Perspective

2000

First in Malaysia and South East Asia to offer

common ATM and over-the-counter services in
Malaysia, Singapore, Brunei and the Philippines in
2000.

First Malaysian bank to open a branch in

Shanghai, Peoples Republic of China in 2000.

Strategy

First to introduce View & Pay service in Malaysia

using credit card and direct debit via Internet with
Mesiniaga Bhd in 2000.

Who We Are

2002
v

Maybank launches Maybank2u.com in June,

making it the first bank in Malaysia to introduce
Internet banking services.

Maybank acquires Pacific Bank Bhd and Phileo

Allied Bank Bhd. In 2001, they were merged into
Maybanks operations.

2003
First to launch Malaysias Internet banking kiosk,
Maybank2u.com Internet Kiosk in 2003.

Maybank officially launches its Bahrain branch, the

first Malaysian bank to operate there.

First bank at a petrol station in 2004.

In February, Maybank is the first local bank to

introduce e-Dividend via Maybank2e, a
comprehensive dividend payment system that
streamlines dividend processing and payment
through the Banks enterprise cash management
system, Maybank2e.net.

In October, the entire operations and business of

Mayban Finance Bhd is vested into Maybank.

2005
v

AGM Information

The acquisition of Malaysia National Insurance Bhd,

Malaysias largest national insurer and its subsidiary,
Takaful Nasional Sdn Bhd, Malaysias premier
Takaful provider, catapults Mayban Fortis to the
position of second largest insurer in Malaysia. The
merger culminates in the rebranding of the entire
Insurance and Takaful group which takes the new
brand name of Etiqa in November 2007.

Financial & Others

In November, Deputy Prime Minister Datuk Seri

Abdullah Ahmad Badawi launches Dataran
Maybank in Kuala Lumpur. Dataran Maybank
houses the head offices of Mayban Finance,
Mayban General Assurance, Mayban Fortis
Holdings, Mayban Life Assurance, Mayban Life
International, Mayban Securities and Mayban
Futures.

Governance

In July, Maybank Tower, the new headquarters of

Maybank Singapore, is officially opened by the
republics Deputy Prime Minister Brig-Gen (Rtd)
Lee Hsien Loong.

2004

Leadership

Maybank and Fortis International NV, one of the

largest providers of integrated financial services in
Europe, collaborate to set up Mayban Fortis
Holdings Bhd. The partnership, with Maybank
holding a 70% stake and Fortis 30%, sees the
grouping of all Maybanks insurance companies
under Mayban Fortis Holdings Bhd (now Mayban
Ageas Holdings Bhd).

Responsibility

2001
v

In July, Mayban Takaful commences operations,

making it the first Takaful company owned by a
conventional bank in Malaysia. Its products are
sold via Maybank and Mayban Finance branches
under the bancassurance model.

Business Review

Pioneer in Internet Banking services in Malaysia

in 2000.

Performance

30

Maybank Annual Report 2011

who we are

History, Innovation
& Leadership

2008

2006
v

First to offer online mobile banking via SMS

followed by M2U Mobile Services using GPRS/3G
phones in 2006.

In August, Maybank signs a business transfer

agreement with American Express to be the sole
issuer and manager of the American Express
charge card and merchant acquiring businesses in
Malaysia.

Maybank becomes the first Malaysian bank to

provide its Region Link services for over-thecounter-cash withdrawal services in its offices in
Malaysia, Singapore, Brunei Darussalam and the
Philippines.

Maybank took on the title sponsorship of the

Maybank Malaysian Golf Open for a five year
period. This sponsorship was later renewed for
another five years beginning 2011.

2007
v

First to introduce the structured commodity

financing solution for business customers in 2007.

First to launch complete mobile money service in

Malaysia with Maxis in 2007.

Maybank Group launches Etiqa, the new brand

name for its conventional and takaful businesses
under Mayban Fortis Holdings.

First to launch Malaysias dual purpose Bankcard in

partnership with Visa International in 2008.

Malaysias Most Valuable Brand in 2008 & 2007.

Maybank establishes its Islamic banking

subsidiary, Maybank Islamic Berhad, in January.

Maybank expands its international network with

strategic acquisitions of stakes in Bank
Internasional Indonesia, An Binh Bank of Vietnam
and MCB Bank Ltd of Pakistan.

2009
v

First to launch online facility for making additional

investments in ASB units with PNB in 2009.

Maybank launches the countrys first wireless

(mobile) payment terminal facility to accept credit
or debit payment at the point of delivery with
Pizza Hut. Later in the year, Maybank, in
partnership with Maxis, Nokia, Touch n Go and
Visa, launches the first-in-the-world, contactless
mobile payments using near field communications
(NFC) via Nokia phones.

In April, Maybank and Permodalan Nasional

Berhad jointly launch Malaysias first-ever service
for making additional investments in ASB units via
Internet banking.

Maybank successfully completes a RM6 billion

rights issue the largest in Malaysian corporate
history.

who we are

Maybank Annual Report 2011

31
At A Glance
Our Perspective

2010
v

Maybank launches 50th anniversary celebrations

in January.

Launches TradeConnex, first local bank in Malaysia

to offer a comprehensive suite of conventional
trade finance products online.

Maybank Islamic launches Waqf, first structured

community giving programme for customers by a
financial institution in Malaysia.

PT Bank Maybank Indocorp, Maybanks subsidiary

in Indonesia, is converted to a full-fledged Islamic
bank and renamed Maybank Syariah Indonesia.

In December, the Group announced the setting up

of the Maybank Foundation with an initial RM50
million allocation, to spearhead the Groups
Corporate Responsibility initiatives in the region.

Responsibility

Launches Malaysia and Asias first co-brand credit

card with a healthcare service provider with the
launch of the Pantai American Express Credit Card.

Business Review

First to launch disabled friendly banking branches

for wheelchair bound users nationwide.

Performance

Maybank Singapore launches the first Islamic

financing package for SMEs in Singapore offering
fixed rates beyond the conventional three year
period.

Strategy

First Malaysian bank to achieve more than

USD100 billion in total asset size and USD1 billion
in profit after tax.

Who We Are

In March, Maybank becomes the first public listed

company on Bursa Malaysia to announce a
dividend reinvestment plan that allows
shareholders of Maybank to reinvest their
dividend into new ordinary shares of Maybank.

Leadership
Governance
Financial & Others
AGM Information

32

Maybank Annual Report 2011

who we are

History, Innovation
& Leadership

2011
v

First Malaysian bank to launch an Overseas

Mortgage Loan Scheme, offering Malaysians a
local mortgage loan facility in Ringgit for
purchases of property in London.

Maybank announces the acquisition of stake in

Kim Eng Holdings Ltd, a Singapore-listed
investment banking group with a strong regional
platform.

Launches a strategic partnership via Shared

Banking Services with Pos Malaysia Berhad. This
service enables customers in Malaysia, especially
in rural areas, to conduct selected Maybank
services at more than 400 Pos Malaysia outlets
nationwide.

First in Malaysia to launch Maybank 2 Cards

which offers an innovative feature providing two
credit cards together to a card member with only
one sign-up.

The first Qualifying Full Bank in Singapore to

launch a Platinum Debit Card with the NETS
FlashPay feature which allows cardholders to pay
for public transport and small ticket purchases, as
well as withdraw cash from ATMs and Singapore
Post outlets.

who we are

Maybank Annual Report 2011

33
At A Glance

Group Corporate
Structure

Our Perspective

as at 30 June 2011

Insurance
100% Etiqa International Holdings Sdn Bhd

100% Maybank Islamic Bhd

(Banking)

(Investment Holding)

69.05% Mayban Ageas Holdings Bhd
(Investment Holding)(formerly known as Mayban Fortis

Holdings Bhd)
(Banking) (formerly known as PT Bank Maybank Indocorp)
100%

99.97% Maybank Philippines Inc

(Banking)

100% Maybank PNG Ltd

(Banking)

(Offshore Banking)

20% MCB Bank Ltd

(Banking)

20%

An Binh Bank

(Banking)

Mayban Agro Fund Sdn Bhd

(Fund Specific Purpose Vehicle)

(Offshore General
Reinsurance)

32.50% Pak-Kuwait Takaful

Company Ltd

(Investment Holding)

100% Mayban Investment

Management Sdn Bhd

(Fund Management)

Other Subsidiaries
100%
Mayban IB Holdings
Sdn Bhd
(formerly known as
Aseam Credit Sdn Bhd)

96.87% Kim Eng Holdings Limited

100% Kim Eng Securities Pte Ltd

56%
Kim Eng Securities

(Thailand) Public

Company Ltd

42%
ATR KimEng Financial

Corporation

80%
PT Kim Eng Securities

Other Subsidiaries

Mayban Venture Capital

Company Sdn Bhd

(Venture Capital)

Pelaburan Hartanah Nasional Berhad

(Property Trust)

AGM Information

Note:
1. Where investment holding companies are omitted, shareholdings are shown as effective interest.
2. Companies that are not shown include those dormant, under members voluntary liquidation, have ceased operations or provide nominee services.
3. Refer to pages 431 to 440 for the complete list of Maybank subsidiaries and associate companies.

Financial & Others

33%


33%



30%

Etiqa Offshore
Insurance (L) Ltd

Governance

(Investment Advisory &

Administration Services)

100%

Etiqa Takaful Bhd

(Family & General Takaful

Insurance)

Leadership

100% Maybank Investment Bank Bhd

(Investment Banking)

100% Bina Fikir Sdn Bhd

Other Subsidiaries

100% Mayban Ventures Sdn Bhd

(Venture Capital)

50% JAIC Maybank

(Fund Management)

Mgmt Ltd

51% Mayban-JAIC Capital
Mgmt Sdn Bhd

Etiqa Insurance Bhd

(General Insurance)

Responsibility

Investment Banking

100%


100%

Investment-linked
Insurance)

Business Review

35%
UzbekLeasing International A.O. (Leasing)
97.40% PT Bank Internasional Indonesia Tbk
(Banking)

100% PT BII Finance Center


50% PT Wahana Ottomitra
Multiartha Tbk
(Multi financing)
100% Mayban Trustee Bhd

(Trustee Services)

Performance

100% Maybank International (L) Ltd

Mayban Life Assurance Bhd

(Life Insurance)

100% Etiqa Life Intl

(Labuan) Ltd

(Offshore

Strategy

96.80% PT Bank Maybank Syariah Indonesia

OTHER
SUBSIDIARIES

Who We Are

Commercial Banking

34

Maybank Annual Report 2011

who we are

Group Organisation
Structure
Board of Directors
Chief Audit Executive
Head, Compliance
General Counsel & Company Secretary

President & CEO

Deputy President & Head

Community Financial Services

Deputy President & Head

Global Wholesale Banking

Head Consumer Finance

Head Wealth & Payments
Head Virtual Banking
Head HNW & Affluent Banking
Head SME Banking
Head Business Banking
Head Community Distribution
Head Corporate Development
Head Financial & Risk Management
Head Retail Credit
Chief Marketing Officer

CEO Maybank Investment Bank Berhad

Head Global Markets
Head Corporate Banking
Head Transaction Banking
Head Client Coverage (Private Sector)
Head Client Coverage (Public Sector)
Head International Strategies & Operations
CEO Maybank Philippines
Head Finance & Business Operations

Group
Chief Risk Officer

Deputy President & Group Chief

Financial Officer

Chief Credit Officer

Chief Risk Officer
Head, Group Governance & Assurance
Head, Group Risk Innovation

Head Strategy & Corporate Finance

Head Finance & Treasury Operations
Head Management Reporting &
Business Planning

Head Central Funding

Head Enterprise Information Management
Head Corporate Remedial Management
Head Strategic Procurement
Head Property, Security & Procurement

who we are

Maybank Annual Report 2011

35
At A Glance
Our Perspective
Who We Are
Strategy

CEO
Maybank
Singapore

President
Director, Bank
Internasional
Indonesia

Head Strategic Management

Head Business Development
Head Deposit & Investment
Head Shariah Management
Head Islamic Treasury
Head Risk & Compliance

Head
Group Human Capital

Head
Enterprise TRansformation Services

PResident & CEO

OFFICE

Head Talent Management

Head Performance & Rewards Management
Head Organisational Learning
Head Organisational Development
Head Industrial Relations
Head Customer Experience
Head Business HR-Corporate Functions
Head Business HR-Global Wholesale Banking
Head Business HR-Community Financial Services
Head Business HR-Insurance & Takaful
Head Business HR-Islamic Banking
Head Shared Service Centre
Head Resourcing Centre
Executive Leadership Coaches

Chief Information Officer

Head Operations
Head Service Quality
Head Transformation Office
Head Finance & Planning

Corporate Affairs

Responsibility

Chief Sales Officer

Chief Marketing Officer
Chief Operating Officer
Chief Financial Officer
Chief Risk Officer
CEO Mayban Investment Management (MIM)
Head Corporate Planning & Strategy
Head Program Management Office
Head Corporate Secretarial
Head Communications

Business Review

Head
Group Islamic Banking

Performance

Head
Insurance & Takaful

Leadership
Governance
Financial & Others
AGM Information

Creative
We seek to develop in all our people the personality, initiative, confidence and enthusiasm to enable them to meet
our customers needs and support their aspirations. We try to anticipate what customers want even before they
ask for it, and we are willing to look for answers beyond the immediately obvious. We believe that we are in control
of our own destiny and are limited only by our own creativity.

38

Maybank Annual Report 2011

Our Strategy & Achievements

Our
Strategy

Vision

To Be A Regional
Financial Services Leader

Mission

Humanising Financial
Services across Asia

P
roviding the people with
access to financing
Fair terms and pricing
Advise customers based on
their needs
B
eing at the heart of
community

Our Strategy & Achievements

Maybank Annual Report 2011

39
At A Glance
Our Perspective
Who We Are
Governance

Leading Islamic bank in ASEAN

Leadership

Truly regional organisation, with

~40% of pre-tax profit derived from
international operations

Responsibility

Sustainable champion for

Insurance and Takaful

Business Review

Leading ASEAN wholesale bank

and eventually to expand into the
Middle East, China and India

Performance
Financial & Others

1
2
3
4
5

Undisputed No. 1 retail financial

services provider in Malaysia

Strategy

2015
STRATEGIC OBJECTIVES

AGM Information

40

Maybank Annual Report 2011

Our Strategy & Achievements

Our

Strategy

In FY2011, starting in July 2010, the Group reframed

its transformation programme so as to further
strengthen our leadership of Malaysias financial
services industry and to drive our regional expansion.
To make us a regional financial services leader by
2015, we have adopted five strategic objectives that
will make us:
1. Undisputed No. 1 Retail Financial Services
Provider in Malaysia

In Malaysia, we aim to maintain our No.1 ranking
in terms of overall market share across all our
core retail financing products, including
mortgages, automobile financing, credit cards,
unit trust financing, and individual deposits.

We intend to reinforce our leadership position in

touch points and distribution network as a key
community destination and focal point. Our
Customer Value Proposition centres around
convenience and serving the needs of the
community, including individuals, small and
medium enterprises (SME) and commercial
customers; and we are committed to the values
of a One Stop Shop, Needs Based Selling and
World Class Services.
We will leverage on a shared distribution model
across all parts of the Group network, and will
customise and differentiate our product offerings
by segment to meet the needs of our four
different types of customers: High Net Worth,
Affluent, Mass and SME. The Group will also
capitalise on technology to achieve high
performance in processing times and customer
service. Innovation will further drive the Groups
differentiation in the market.

2. Leading ASEAN Wholesale Bank and

eventually to expand into the Middle East,
China and India

We plan to become the leading ASEAN
wholesale bank by building domestic leadership
while aggressively pursuing regional expansion.
This will involve enhancing our corporate
relationship model. Strategic initiatives will
include:
v
Improving domestic and regional market
position for corporate and non-retail
deposits
v
Building a regional investment bank
v
Increasing contributions to revenue from
non-domestic markets and increasing the
fee to income ratio contribution

We also intend eventually to expand into the

Middle East, China and India.

3.

Sustainable Champion for Insurance and

Takaful
We seek to be the domestic insurance champion
and an emerging regional player by 2015
through the growth of our life, general insurance
and takaful business, carried under the Etiqa
brand. The objective is to build a sustainable and
profitable business. For general insurance and
takaful, the Group will keep pace with industry
growth while maintaining a healthy portfolio mix
and supporting a better combined ratio
compared to the market.

To achieve organic growth in life/family business,

we are aggressively growing the assets under
management (AUM) of our life/family funds
through product innovation. This will drive the
build-up of surpluses attributable to
shareholders. On the asset management front,
the strategy of our asset management subsidiary
is to build a leading asset management brand by

Our Transformation Journey

In FY2009, the Group embarked on a transformation
programme named LEAP30 (Lead, Execute, Achieve,
Progress) involving 30 initiatives designed to secure our
leading position in the Malaysian financial services
industry and to expand our regional presence by 2015. To
transform the Group, we introduced both strategic and
tactical initiatives to stimulate sales; strengthen client
relationship management; improve our processes and
internal systems; enhance our talent pool; and raise
customer service standards.

In FY2010, with the re-alignment of the organisation into

three business pillars, the 30 initiatives launched under
LEAP30 were embedded into the relevant pillars and sectors
to continue to drive these initiatives. The previous LEAP30
Transformation Office was renamed Transformation Office
and became part of Enterprise Transformation Services (ETS),
a larger unit providing support in transforming the bank.

Our Strategy & Achievements

Maybank Annual Report 2011

41
At A Glance

a
um

ice

s ac

Maybank
Group CEO + Support

ros
s

Asi
a

Who We Are

in
nis

al Serv

nci

ina
gF

Our Perspective

tHE NEW HOUSE OF MAYBANK

Group Finance Office (GFO),

Group Credit & Risk Management (GCRM),
Group Human Capital (GHC), Legal, Compliance, Communications

Insurance & Takaful

Leveraging shared
distribution, Customer
Segment driven,
Community
Bank

Regaining domestic
leadership and
aggressively
pursuing ASEAN
market expansion by
humanising client
interaction

Being the National

Insurance Champion
and Living the
ETIQA way

providing strong investment management

support for Etiqa funds, wholesale funds and
institutional mandates as well as by leveraging
on Maybanks extensive distribution network.

AGM Information

Reposition as a Community Financial Services

provider focusing on convenience and serving
the needs of individuals, SMEs and commercial
customers
Move to a segment-driven model for
customisation and differentiation in products,
services, pricing, channels and process mix

Financial & Others

Our Islamic banking operations, meanwhile, will

focus on delivering innovative and globally
accepted products and services that differentiate
us from other Islamic financial institutions.

The CFS business pillar was created to extend the

former consumer banking business to also serve SME
and Commercial/Business Banking customers from all
our branches in Malaysia. This will better enable us to
entrench our customer value proposition, which
centres around convenience and serving the needs of
the community. This sectors transformation has four
main thrusts:

Governance

Community Financial Services

(CFS)

Leadership

5. Leading Islamic Bank in ASEAN

Our target is to have one-third of our domestic
financing backed by Islamic financial assets by
2015. To achieve this, our Islamic banking
operations will take full advantage of Maybanks
huge domestic branch network as well as its
electronic banking platforms and the various
distribution outlets of our strategic partners. We
also aim to grow our Islamic business in markets
like Indonesia and Singapore as part of our focus
on the ASEAN region.

To realise the Groups vision of becoming the Regional

Financial Services Leader by 2015 and to support the
Groups five strategic objectives, in July 2010, the
Groups organisation structure was re-aligned into
three business pillars which allow for a more
coordinated and effective business execution:
Community Financial Services, Global Wholesale
Banking and Insurance and Takaful.

Responsibility

4. Truly Regional Organisation

Our aspiration is to become a truly regional
organisation with approximately 40% of loans
and pre-tax profit derived from international
operations by 2015. This will be driven by our
key markets of Indonesia and Singapore. At the
same time, we are developing a presence in the
Philippines, Cambodia, Vietnam and China by
building scale and scope in these growth
markets.

tHE NEW HOUSE OF MAYBANK

Business Review

Enterprise Transformation Services

Performance

Global Wholesale
Banking

Strategy

INTERNATIONAL
EXPANSION

Community Financial
Services

ENABLEMENT

ISLAMIC
INSPIRED

42

Maybank Annual Report 2011

Our Strategy & Achievements

Our

Strategy

v
v

Industrialise and drive innovation to further

differentiate ourselves in the market
Embed credit into the business to speed up
turnaround time and achieve customer
fulfilment without compromising on asset
quality

The year saw a transformation of all branches to

One-Stop-Shops, providing a comprehensive range of
financial services within a single touch point. The
branch transformation enables SME customers to be
served by the entire branch network in Malaysia of
386 branches, instead of only 39 business centres
previously. This allows us to engage with, retain and
deliver better service experience to our customers.
Other changes at the branch saw the beginnings of
the Hip and Cool approach to increase our urban
clientele.
During the year, we also extended our contact points
via POS Malaysia offices and made inroads into rural
areas through our mobile micro payment facility.
Refer to page 106 for Community Financial Services.

Global Wholesale Banking

(GWB)
GWB was created to streamline corporate banking,
transaction banking, global markets and investment
banking under a single business pillar. This allows us
to serve corporate customers through a Client
Coverage Model, with a client relationship manager
responsible for meeting all of the clients various
product needs regionwide.
The sector is now strengthening its regional network,
with our regional expansion supporting that of our
clients. A significant milestone was the acquisition of
Kim Eng Holdings, which enables us to extend our
investment banking operations by leveraging on Kim
Engs regional platform to provide comprehensive
services for our corporate customers across the
region.
In November 2010, we restructured Trade Finance to
improve our ability to service wholesale clients. Our
transformation means focusing on business growth
and improving customer experience by being
prepared to explore trade business beyond the norm,
and by providing competitive financing.
Refer to page 116 for Global Wholesale Banking

Insurance and Takaful

We operate Insurance and Takaful through several life
and general as well as conventional and Islamic
insurance companies under the Etiqa brand name.
Our initiatives to expand product offerings and widen
distribution through expanding the agency force aim
to make Etiqa the countrys largest insurer. Our key
focus is on:
v
v
v
v

Building a productive agency force in

Conventional and Takaful insurance
Driving Maybank business through product
innovation (Savings, Investment & Protection)
Building a profitable portfolio for Group and
Health insurance
Strengthening branches, third party business,
direct, enterprise and corporate distribution
channels
Growing third party assets under management

During the year, new initiatives were launched to

expand the agency business, including the
recruitment of new agents, generating over RM350
million in new premiums. Meanwhile, to increase
effectiveness in end-to-end processing and business
efficiency, we are upgrading our IT infrastructure.
Refer to page 131 for Insurance and Takaful

Apart from operating businesses vertically within the

pillars, we are also focusing on the growth of our
International and Islamic banking offerings across
these business pillars.

International Expansion
To support our international expansion, we launched
regionalisation initiatives for both the consumer and
corporate segments. To capture the growing market
for cross-border payments, we introduced a money
transfer service known as Maybank Money Express
(MME). Then, for trade finance and cash management
services, the Groups Transaction Banking rolled out
and expanded its web-based trade finance service,
TradeConnex, to regional offices in ASEAN countries.
Refer to page 142 for International Banking

Our Strategy & Achievements

Maybank Annual Report 2011

43
At A Glance
Strategy

We will continue to measure internal and external

customer satisfaction and benchmark our
performance against the market. To embed a quality
service culture, we will measure the service
performance of all Maybankers.

Who We Are

As the largest Islamic bank in Malaysia, Maybank

Islamic seeks to grow domestically through better
collaboration with the three business pillars and also
plans to expand into the key markets of Indonesia,
Brunei, Singapore, the Philippines and Hong Kong/
China. During the year, Maybank Islamic worked to
grow its retail and wholesale business in close
partnership with Bank Internasional Indonesia (BII)
and the newly established Maybank Syariah Indonesia
(MSI).

Efforts to improve levels of customer service at the

branches continued. Soft skills and the image of front
line staff improved, and Mystery Shopping scores
pushed from 73% in May 2010 to 87% in February
2011.

Our Perspective

Islamic Banking

Refer to page 165 for Service Quality

Refer to page 137 for Islamic Banking

Service Quality

AGM Information

Service Quality was also transformed, to improve both

internal and external customer service. FY2011 saw a
centralisation of service units, maximising the
strengths of service teams across the Bank.

Looking ahead, our transformation journey will

continue, ensuring that we keep ahead of the market,
delivering exceptional customer value and enriching
the communities around us.

Financial & Others

Refer to page 162 for IT Transformation Programme (ITTP)

This phase of the transformation has seen an active

involvement by all sectors, with Maybankers initiating
and leading change efforts and taking team
responsibility for delivering results. There was also a
remarkable collaboration between sectors,
maximising resources to deliver exceptional customer
value, service and support.

Governance

The regional capabilities of our technology

transformation will boost collaboration, data sharing
and knowledge management between countries as
we pursue ASEAN expansion.

More than 500 ideas have been submitted since

January 2011, encompassing process, product,
marketing and customer service enhancements.
Winning ideas were immediately scheduled for
implementation.

Leadership

ITTP undertook a transformation initiative to replace

the Banks legacy system. It rolled out a five-year
strategic roadmap to be deployed across the region,
aimed at improving service channels, product design
capabilities and business support. The system is
designed to be agile, leveraging on capabilities to
out-execute the competition.

Harnessing the experience and the creative talents of

Maybankers, the Presidents Innovative Idea Awards
was reframed and relaunched, inviting active
participation across sectors. The new framework
ensures Maybankers continually rethink established
processes, add value to our products and services,
find solutions to challenges, and implement the best
solutions.

Responsibility

IT Tranformation programme
(ITTP)

To remain competitive and always ready for change,

we are building a culture of innovation, which we are
nurturing as a mindset and capability in all
Maybankers.

Business Review

Operationally, our business pillars are supported by

the Groups Enterprise Transformational Services
providing overall support for transformation
initiatives, information technology and operations,
with the aim of continually improving operational
efficiencies. Two areas which underwent major
changes during the year are Information Technology
and Service Quality.

Re-igniting Innovation

Performance

Enterprise Transformational
Services

44

Maybank Annual Report 2011

Our Strategy & Achievements

Key Performance
Indicators
To assess the Groups performance and ensure that it meets
its strategic objectives, the Group has identified several key
performance indicators (KPIs). These measures are set out below.
Headline KPIs

Achievement Target Met

Return on Equity (ROE)

11

10

11

12.0%

FY11
Target

5.0%
FY11
Target

2.59%
25.8%
2.59% 2.59%

74.9%
74.9% 74.9%

33.3%
2.80% 2.80%2.80%

61.4% 61.4%61.4%
2.59%
76.5% 76.5%76.5%

NIM target
for FY11

11

Net07
Interest
08Margin
09 10 NIM
11target
for FY11
(NIM)
Payout10Ratio11
07 Dividend
08 09

Our loans growth was07above

08 industry
09 10 11
growth of 13.5% due to strong
Payout
growth in large corporate
loans.
07 Dividend
08
09
10Ratio11
ROE achieved

07

08

ROE achieved

25.8%

FY11
Target

BII loans 2.70%

growth target
for FY11
NIM target
for FY11 FY11
NIM target Target
for FY11 2.70%

Domestic loans growthDividend

due mainly
Payoutto
Ratio
corporate loans growth
25.6%
07 of 08
09 10 11
underpinned by Governments
economic programmes. Dividend Payout Ratio

FY11
Target

FY11
Target

25.8%
25.8% 25.8%

33.3% 33.3%33.3%

16.8%

5.0%

11

11

10

11

61.4%

FY11
Target

60.4% 60.4%60.4%

12.0%

5.0%

10

10

Net Interest Margin

(NIM)

12.0%

5.0%

10

Net Interest Margin

(NIM)

12.0%
FY11
Target

24.0%

15.2% 74.9%
15.2% 15.2%

10

10
Far exceeded target mainly
due to11
BII
strong domestic loans growth of
10
16.8%, and overseas loans
growth11
Net Interest Margin
of 29.4%.
(NIM)
10
11

FY11
Target
FY11
12.0%
Target

FY11
Target

FY11
Target

07

08

ROE achieved

09

09

10

10

Driven by 33% growth in business

loans, up from 25% in the previous
08 09 10
year. Consumer loans0716%.
ROE achieved

10

International
contribution
10
International
contribution

11

11

FY15
Target

18.0%
FY15
Target
18.0%
FY15
Target

18.0%

2015 target
FY15
11
Target
2015 target FY15
18.0%
Target

11
40%
FY15
2015 targetTarget
15.2%

11

12.0%

24.0%

14.5% 14.5%14.5% 76.5%

10

FY11
Target

22.6%

3.1% 3.1%

11

12.0%

BII

3.1%

10

10

14.0%
12.0%
FY11
Target

24.0%
FY11
Target

BII loans
growth target
for FY11
BII loans FY11
growth target
Target
FY11
for FY11 24.0%
Target
11
2.70%
BII loans FY11
growth target
Target
for FY11 2.70%

15.2% 15.2%15.2% 60.4%

11

FY11
Target
FY11
Target

FY11
Target

Our ROE was below the industry

10 capital 11
ROE of 18% due to equity
BII
expansion following several
10
11
Maybank acquisitions
BII since 2008.

71.5% 71.5%71.5%
2.80%

9.9%
11.0% 11.0%11.0%

10

14.0%

3.1%
24.0%
24.0%
24.0%
14.5%

Loans growth for Singapore defined as gross

loans growth reported by Maybank
Singapore in Singapore Dollar (SGD).

11

FY11
Target

15.2%

5%

10

25.8%
16.8%
25.8% 25.8%

Loans Growth
Singapore

11

8.6% 8.6%
11.0%

Loans growth for Malaysia is defined as

domestic gross loans growth i.e. in Malaysia
only.

10

11

Target

14.0%

Target exceeded due to growth in

profit and greater efficiency in
capital utilisation.

17.6% 17.6%17.6% 71.5%

11

14.0%
FY11

15.2%

17.6%

10

8.6%

12%

15.2%
22.6%
22.6% 22.6%

11
11

8.6%

Loans Growth
Malaysia

11

10
10

10

Other KPIs

15.2%
15.2% 15.2%

14.5% 14.5%14.5%

10

22.6%

Loans and debt securities (financial assets)

growth measures the total increase in gross
loans and other debt or security issuances.

11

16.8%
16.8% 16.8%

12%

10

25.8%

Loans and Debt Securities Growth

11

9.9% 9.9% 14.5%

We have a long term target of 18% to be

achieved by 2015

10

9.9%

ROE is defined as profit after tax and

minority interest (PATAMI) divided by the
average shareholders equity for the financial
year. Shareholders equity is made up of
share capital, retained earnings and other
reserves.

FY11
Target

21.0% 21.0%21.0%

14%

4 40%

11

2015 target

FY15
Target

40%

2015 target FY15

Target
2015 target 40%
FY15

Our Strategy & Achievements

11.0% 11.0%
8.6%11.0% 11.0%

11

12.0%

07

25.8% 25.8%
2.59%
25.8%25.8%

08

2.59% 2.59%
2.59%2.59%
76.5%

09

74.9%

Refer to page 48 for DRP

FY15
Target

11

10

Dividend payout ratio for FY2010 of

74.9% again surpassed the 40-60%.
To preserve capital, a Dividend
Reinvestment Plan (DRP) was
introduced last year.

Dividend Payout Ratio

07

18.0%

11

International contribution to
Group profit before tax

ROE achieved

07

08

09

09

27%

40%

11

International
10
contribution
International
10
contribution
International
10
contribution
International
contribution

10

10

11
11

2015 target

33.3%

2015 target
FY15
2015
target
11
Target
2015 target
FY15
33.3%
Target
FY15
11
Target
33.3%
2015 targetFY15
33.3%
Target

11

33.3%

2015 target
Islamic financing
10
11
to Group
2015 target
Islamic
10 financing 11
to Group
Islamic
financing
10
11 2015 target
to Group
2015 target
Islamic financing
to Group

Maybanks Islamic First aspiration is

set to focus on Islamic product
offerings to customers as the first
option. Islamic financing formed 27%
of Maybanks group loans and
advances. This is on track to achieve
our long term target of 33%.

AGM Information

24.5% 24.5%
24.5% 24.5%

Islamic financing
to Group

11

40%

FY15
Target

Maybanks international contribution

was 24% as at June 2011 with major
contributors still being Singapore
(14%) and Indonesia (5%).

Financial & Others

33%

24%

ROE of 15.2% for FY11 shows that

we are on track to achieve our long
term target of 18%.

2015 target

07 achieved
08 09 10 2015
11 target
ROE
FY15
ROE achieved
target Target
07 08 09 10201511
FY15
40%
ROE achieved
2015 target
Target
FY15
10
11
40%
Target
FY15
International
2015 target
40%
Target
contribution

10

Islamic Financing to Maybank

domestic loans

Target

11

10

10

18.0%
FY15

15.2%

Governance

40%

08

24.0% 24.0%
27.0%
24.0%24.0%

5.0%

07

27.0% 27.0%
27.0%27.0%

11
11

17.6% 17.6%
17.6% 17.6%
15.2% 15.2%
15.2% 15.2%
3.1% 3.1%
3.1% 3.1%
14.5% 14.5%
24.0%
14.5% 14.5%
15.2% 15.2%
15.2%15.2%

25.8% 25.8%
25.8%25.8%

8.6% 8.6%
8.6% 8.6%

10
10

FY15
Target
FY15
18.0%
Dividend Payout Ratio
Target
07 08 09 10 11 FY15
18.0%
Target
ROE achieved
2015 targetFY15
18.0%
Target

Leadership

11

FY11
Target
5.0%
FY11
Target
FY11
5.0%
Target
FY11
5.0%
Target

11

10

Responsibility

18%11

09

21.0%

FY11

08

Dividend Payout Ratio

08 09 10 11
Dividend Payout Ratio

07

21.0% 21.0%
24.5%21.0% 21.0%

11
11

10

10

Net Interest Margin

NIM target
11 for FY11
(NIM)10
Net10
Interest Margin11
NIM target
for target
FY11
(NIM)
Net
Interest Margin
10
11 NIM
for FY11
(NIM)
Net Interest Margin
NIM target
07 08 09 10 for11
FY11
(NIM)

Long Term Targets by 2015 On

Track
07Dividend
08 Payout
09 10
Ratio 11

10 Return on
11 Equity (ROE)
Target
5.0%

10

25.8%

33.3%

FY11
Target
12.0%
FY11
Target
FY11
12.0%
Target
FY11
12.0%
Target

74.9%

Exceeded the target of 24% due to

strong consumer and SME loan growth
and boosted by the addition of 70
branches during the year.

Business Review

10
10

16.8% 16.8%
25.8%
16.8%16.8%

11

10

10

16.8%

policy of paying
10 Maybank
11has a dividend
12.0%
10 dividends
11 equivalent to between 40-60% of
10 annual profit
11 after tax and minority interest

11

10

2.70%

61.4%

11
40-60%

25.8%

Performance

9.9% 9.9%
11.0%9.9% 9.9%

10

Achievement Target Met

Strategy

Dividend Payout

FY11
Target
12.0%
FY11
Target
FY11
Ratio
12.0%
Target
FY11
12.0%
Target
FY11
12.0%
Target

growth
BII
loans target
10
11 BII
for FY11
FY11
growth
target
BII
loansTarget
forBII
FY11
growth target
2.70%
FY11
Target
10
11 for FY11FY11
2.70%
Target
Net Interest Margin
NIM target
FY11
for FY112.70%
(NIM)
Target

60.4%

11

10

BII loans 2.70%

11 growth target
BIIFY11
loans
11 for

10
BII 10

71.5% 2.80%
2.80%
2.80% 2.80%

11
22.6% 22.6%
22.6%22.6%

9.9%

Rupiah

BII

71.5% 71.5%
17.6% 71.5% 71.5%
60.4% 60.4%
15.2% 60.4% 60.4%
61.4% 61.4%
3.1%
61.4% 61.4%
76.5% 76.5%
14.5% 76.5% 76.5%
74.9% 74.9%
15.2% 74.9%74.9%

15.2% 15.2%
22.6%
15.2%15.2%

14.5% 14.5%
14.5% 14.5%

captured by

10
11
BII, including its subsidiary
12.0% WOM Finance, in
10
11
10

11

10

14.0%

FY11
Target
FY11
24.0%
BII loansFY11
Target
growth target
24.0%
Target
for FY11 FY11
24.0%
Target
FY11
24.0%
Target

Who We Are

14.0%
Target

33.3% 33.3%
2.80%
33.3% 33.3%

15.2%

14.5%

Target
Loans Growth
FY11
14.0%
Bank Internasional Target
Indonesia
(BII)
FY11

Defined as gross

11

10
BII

24.0%
Our Perspective

FY11
14.0%

FY11
loans
growth
Target

At A Glance

FY11
Other KPIs (continued)
Target

24%
11

10

14.0%

11

45

FY11
Target

FY11
Target

10

Maybank Annual Report 2011

46

Our Strategy & Achievements

Maybank Annual Report 2011

Maybank
Share
Summary

Highlights

Maybanks Total Shareholder Return (TSR) for FY2011 was 28.1%,

outperforming the benchmark FBM KLCI TSR of 24.8% but lower than the KL
Finance Index TSR of 32.9%.

Maybank share price experienced an overall upward trend, reaching to a

high of RM9.29 in November 2010. The share rose 18.3% compared to the
previous financial year.

Total dividend of 60 sen per share was declared for the financial year, an
increase of 9.1% year-on-year.

Two Dividend Reinvestment Plans (DRP) were successfully implemented with

high reinvestment rate of 88.6% (1st DRP) and 91.1% (2nd DRP) respectively,
reflecting shareholders confidence in Maybank.

60 sen

Dividend Per Share

FY2010

55 sen
+9.1%

RM8.94

Share Price

FY2010

RM7.56
+18.3%

RM66.9b

Market Capitalisation
Total Shareholder Return (TSR)
TSR is the measure of our enhancement of value to our shareholders. It consists
of capital gains (share price increase) and dividends.

RM53.5b
+25.0%

FY2010

61.4 sen

Earnings Per Share

In terms of TSR, Maybank outperformed the FBM KLCI Index by 3.3% by

registering a return of 28.1% compared to the broader indexs 24.8% rise.
However, Maybanks TSR is lower compared to the KL Finance Index which
rose 32.9%

53.9 sen
+13.8%

FY2010

28.13%

Total Shareholder Return

31.69%
-3.6%

FY2010

FY07

Maybank

FY10
KL Finance Index

FY11

32.86

28.13
24.83

26.09

1.70

(5.26)

(3.88)

FY09
FBM KLCI Index

43.81

31.69
FY08

(19.79)

(8.20)

(21.43)

53.23

54.30

19.30

Total Shareholder Return (%)

Our Strategy & Achievements

Maybank Annual Report 2011

47
At A Glance
Our Perspective

Maybank Share Price and volume

10.00

70
60

50

6.00
5.00

40
30

3.00

20

2.00

10

1.00
Jul 08

Oct 08

Jan 09

Apr 09

Jul 09

Oct 09

Jan 10

Apr 10

Share Price (RM)

Jul 10

Oct 10

Jan 11

Apr 11

Jul 11

Volume (million share)

30 Sep 08

Completes acquisition of BII

12 Nov 10

Announces 1QFY11 results

29 April 09

Maybank completes rights issue of RM6 billion

6 Jan 11

Kim Eng acquisition announced

25 Aug 09

Announces FY09 results

21 Feb 11

Announces 2QFY11 results

21 Apr 10

BII completes rights issue of Rp1.4 trillion

12 May 11

Announces 3QFY11 results

20 Aug 10

Announces FY10 results

10

22 Aug 11

Announces FY11 results

Responsibility

Maybank Share Price vs benchmark

%
30

Maybank
+18.6%

FBMKLCI
+25.4%

Business Review

Performance

Strategy

4.00

Volume (million shares)

Share Price (RM)

7.00

Who We Are

8.00

80

9.00

KLFIN Index
+20.7%

Leadership

20

10

Jul10

Aug10

Sep10

Oct10

Nov10

Dec10

Jan11

Feb11

Mar11

Apr11

Chart: Maybank share price vs FBM KLCI Index and KL Financial Index (1 July 2010 - 30 June 2010)

At the start of the financial year, Maybanks share price staged

a sharp rise to a high of RM9.29 on November 9, 2010
following a strong financial results in the previous financial
year and the anticipation of dividend payout.

The share price then fell amid economic uncertainty brought

by the triple disaster in Japan and European debt crisis, in line
with the broader index.

However, a string of positive news flow such as the roll out of

Economic Transformation Project (ETP), stabilising European debt
crisis and improving economic condition in the US shored up the
share price to end on a positive note.

A comparison with the broader index saw Maybanks share to

be in line with FBM KLCI Index but underperformed against KL
Finance Index which increased by 20.65% and 25.38%
respectively.

AGM Information

In FY2011, Maybanks share price rose by 18.6% from RM7.54

on 30 June 2010 to RM8.94 on 30 June 2011.

Jun11

Financial & Others

-10

May11

Governance

48

Maybank Annual Report 2011

Our Strategy & Achievements

Maybank
Share

Refer to page 52 for history of dividends and page 240 for

capital management.

32*
44*

28*

We continue to reward shareholders with a high

dividend payout ratio but at the same time
being prudent with capital management. Hence,
the introduction of Dividend Reinvestment Plan
(DRP), which rewards shareholders while
preserving capital. Through our DRP, eligible
shareholders have the option of reinvesting their
electable dividend portion into Maybank shares
at a discount of up to 10%. Both the first DRP
and second DRP achieved high reinvestment rate
of 88.6 and 91.1% respectively, reflecting
shareholders confidence in Maybank. The
Dividend Reinvestment Plan (DRP) will continue
to be an integral part of Maybanks strategy to
preserve equity capital whilst providing healthy
dividend income to shareholders.

11

For FY2011, the Board of Directors proposed a

gross dividend 60 sen which is 9.1% higher
compared to the previous year as a result of a
second successive record net profit. This
translates to a dividend payout ratio of 74.9%,
exceeding our payout ratio policy.

61.4%

18

60.4%

74.9%

26

The Group adopts a high dividend policy with a

Dividend Payout Ratio based on reported
earnings attributable to shareholders for the year
of 40-60%.

76.5%

71.5%

29

Gross Dividend (sen) and Payout Ratio (%)

29

Dividend and Dividend

Reinvestment Plan

FY07**

FY08**

FY09

FY10

Final

Interim

* subject to Dividend Reinvestment Plan

** adjusted for 1:4 Bonus Issue in February 2008 and
9:20 Right Issue at RM2.74 in March 2009

FY11

Our Strategy & Achievements

Maybank Annual Report 2011

49
At A Glance
Our Perspective

Shareholder Analysis

Financial Year End

30 June (31 December starting 1 July 2011)

Ticker Code

Maybank shares are mostly held by institutional

investors at 91.36% while private investors hold
the remaining 8.64%

MYX : 1155
MAY MK EQUITY
MBBM.KL

Foreign shareholding rose to 13.49% in June 2011

from 12.66% a year ago.

Shareholding
by region
1 Asia
84.21%

1 Asia
2 84.21%
North America
2
3

Tricor Investor Services Sdn Bhd

Level 17, The Gardens
North Tower, Mid Valley City
Lingkaran Syed Putra
59200 Kuala Lumpur
Malaysia

3
4
4
5
5

43
2
3
2

5
5

1
1

Leadership

Shareholding by type
1

1
2
2

Financial & Others

Note: Private investor figure is based on assumption of the

remaining figures not analysed

Governance

Private Investor
8.64%
Private Investor
8.64%
2 Institutional
Investor
2 Institutional
91.36%
Investor
91.36%

Responsibility

Share Registrar for the 51st AGM

4.72%
North America
UK
4.72%
2.06%
UK
Euro excluding
2.06%
UK
Euro excluding
1.06%
UK
1.06%
Others
7.95%
Others
7.95%

Business Review

American Depository Receipts (ADR)

Bloomberg
MLYBY US
Reuters
MLYBY.PK

Performance

Analysis of the shareholder structure showed that

84.21% of the shareholding emanates from Asia,
followed by 4.72% from North America, 2.06%
from UK, 1.06% from Europe (excluding UK), and
7.95% from other geographical locations.

Strategy

13.49%
12.66%

30 June 2011
30 June 2010

Bursa Malaysia
Bloomberg
Reuters

With over 60,000 shareholders around the globe,

Maybank has a diversified shareholder base.

Who We Are

Foreign Shareholding

AGM Information

50

Our Strategy & Achievements

Maybank Annual Report 2011

Maybank
Share

OWNERSHIP STRUCTURE
Principal Shareholders
v

Permodalan National Berhad, the largest investment management company in Malaysia, and its funds are
major shareholders of Maybank.
No. of Shares
(million)

2011
Shareholding (%)

4,127.0

55.17

Employees Provident Fund Board

841.9

11.26

Kumpulan Wang Persaraan (Diperbadankan)

206.5

2.76

Lembaga Tabung Angkatan Tentera

199.8

2.68

Valuecap Sdn Bhd

162.9

2.18

State Street Bank & Trust Company (West Clt OD67))

74.6

1.00

Great Eastern Life Assurance (Malaysia) Berhad (Par 1))

67.6

0.90

Vanguard Emerging Markets Stock Index Fund

53.2

0.71

Prudential Fund Management Berhad

51.3

0.69

JPMorgan Chase Bank National Association (Norges BK Lend)

46.5

0.62

Permodalan Nasional Berhad and its funds*

* Funds include those held by AmanahRaya Trustees Berhad

Foreign Shareholding
%

24%

24%

22%

22%

20%

20%

18%

18%

16%

16%

14%

14%

12%

12%

10%

10%

Jan 08

Jan 08

Number of Shareholders

80,000 80,000
62,547 62,547
62,160 62,160
58,390 58,390

52,660 52,660

60,000 60,000

34,959 34,959
40,000 40,000
20,000 20,000
0
Jan 09

Jan 09

Jan 10

Jan 10

Jan 11

Jan
Jun11
11

Jun 11

FY2007 FY2007
FY2008 FY2008
FY2009 FY2009
FY2010 FY2010
FY2011 FY2011

Our Strategy & Achievements

Maybank Annual Report 2011

51
At A Glance
Our Perspective

Economic Profit

Fitch Ratings

A-

Moodys Investors Services

A3

RAM Ratings

AAA

Malaysian Rating Corporation

AAA

05

06

07

1,362

1,745

08

09
(1,481)

A-

10

11
Leadership

Standard and Poors

+28.1%

1,101

Maybank is regularly in contact with its credit

rating agencies as well as regulators to ensure
continued adoption of prudent capital
management practices and remains committed
towards maintaining its investment grade credit
ratings.

1,610

Economic Profit
(RM million)

1,023

The outlook for the long-term credit ratings for

Maybank was maintained as Stable throughout
the financial year by all five rating agencies.

Responsibility

Business Review

Maybank continued to retain its credit ratings on

par with Malaysias sovereign rating during the
financial year with strong fundamentals.

Performance

For FY2011, Maybanks Economic Profit increased

28.1% to RM1.75 billion from RM1.36 billion in the
previous year. The increase was attributable to higher
profit for the year despite the expanded equity base.

Strategy

Credit Ratings

Who We Are

To diversify and increase US ownership and improve

Maybanks profile in the US market, Maybank is also
traded in the United States through an NYSE-listed
sponsored ADR facility since 2005 with The Bank of
New York Mellon as the depositary. The ADRs are
traded on the New York Stock Exchange under the
ticker MLYBY US on Bloomberg and MLYBY.PK on
Reuters.

Khazanahs Transformation Programme for

Government-linked Companies (GLCs) is an initiative
to develop high-performing entities for the future
prosperity of the country. Being part of the
transformation programme, Maybank has tracked the
performance of its Economic Profit since 2005.
Economic Profit is a key measurement of value
creation to shareholders by showing a companys
return over and above its cost of capital.

930

American Depositary Receipts

(ADRs)

Refer to page 53 for more details on credit ratings.

Governance
Financial & Others
AGM Information

52

Maybank Annual Report 2011

Our Strategy & Achievements

Maybank
Share

Share related Key Figures

Market Capitalisation (RM billion)
Total Shareholder Return, TSR (%)
Dividend per share (sen)
Dividend yield (%)
Closing Price, 30 June (RM)
Average share price (RM)
Highest closing share price (RM)
Lowest closing share price (RM)
Basic EPS (sen)

FY2007

FY2008

FY2009

FY2010

FY2011

46.7
19.3
57.5
6.7
8.62
8.46
9.84
7.47
58.5

34.4
(21.4)
44.0
7.4
6.33
8.00
9.20
6.33
53.3

41.8
(3.9)
8.0
1.4
5.90
5.25
7.14
3.57
12.0

53.5
31.7
55.0
7.3
7.56
6.94
7.72
5.60
53.9

66.9
28.1
60.0
6.7
8.94
8.60
9.29
7.53
61.4

Note: Adjusted for 1:4 Bonus Issue in February 2008 and 9:20 Rights Issue at RM2.74 in March 2009

Dividend HISTORY
Dividend per share (sen)

Actual

Adjusted for
capital
changes
Declaration

Ex-Date

Record

Payment Date

FY2007

Interim
Final
Total

40.0
40.0
80.0

28.7
28.7
57.5

21 Feb 2007
29 Aug 2007

10 Apr 2007
30 Oct 2007

12 Apr 2007
1 Nov 2007

26 Apr 2007
15 Nov 2007

FY2008

1st Interim
1:4 Bonus
2nd Interim
Final
Total

17.5

12.6

15.0
20.0
52.5

13.5
18.0
44.0

15 Nov 2008
24 Jan 2008
20 Feb 2008
27 Aug 2008

31 Dec 2007
18 Feb 2008
24 Mar 2008
7 Oct 2008

3 Jan 2008
20 Feb 2008
26 Mar 2008
9 Oct 2008

16 Jan 2008
20 Feb 2008
7 Apr 2008
21 Oct 2008

9:20 Rights
Final
Total

8.0
8.0

8.0
8.0

1 Mar 2009
25 Aug 2009

31 Mar 2009
13 Oct 2009

2 Apr 2009
15 Oct 2009

27 Oct 2009

FY2009

FY2010

Interim
Final
Total

11.0
44.0
55.0

11.0
44.0
55.0

9 Feb 2010
11 Oct 2010

2 Mar 2010
18 Nov 2010

4 Mar 2010
22 Nov 2010

16 Mar 2010
20 Dec 2010

FY2011

Interim
Final

28.0
32.0

28.0
32.0

31 Mar 2011
22 Aug 2011

12 Apr 2011

14 Apr 2011

12 May 2011

Total

60.0

60.0

Note: Adjusted for 1:4 Bonus Issue in February 2008 and 9:20 Rights Issue at RM2.74 in March 2009

Our Strategy & Achievements

53

Maybank Annual Report 2011

At A Glance

23 Oct 2001
20 Feb 2008
27 Apr 2009

Bonus Issue 1:2

Bonus Issue 1:4
Rights Issue (9:20) at RM2.74
per share
New share issue persuant to DRP
New share issue persuant to DRP

21 Dec 2010
13 May 2011

Total no. of shares

outstanding

No. of new shares

1,179,868,307
976,057,505
2,196,516,217
244,257,623
155,965,676

Rating Agency
Standard & Poors

Long Term Counterparty

A-

Short Term Counterparty

A-2

7,322,240,391

Certificate of Deposit

Outlook
Bank Fundamental Strength Rating (Local Currency)

7,478,206,067
Moodys Investors
Service

As at 9 August 2011

BBB

Subordinated (2 issues)

BBB+

LT Foreign Currency Bank Deposit/Outlook

A3/Stable

ST Foreign Currency Bank Deposit

P-1/Stable

LT Local Currency Bank Deposit/Outlook

A1/Stable

ST Local Currency Bank Deposit

P-1/Stable

Foreign Currency Tier 1 Capital/Outlook

Baa2/Stable

No. of
Shares Held

% of Issued
Capital

A3/Stable

Bank Financial Strength Rating/Outlook

C/Stable

Foreign Long Term Issuer Default Rating

A-/Stable

Local Long Term Issuer Default Rating

A-/Stable

Individual
Support Rating

B/C
2

Support Rating Floor

BBB

Sub Debt

BBB+

Long Term Financial Institution Ratings

AAA

3.27

51,812

0.00

100 to 1,000 shares

12,114

19.68

8,562,970

0.11

1,001 to 10,000 shares

35,841

58.23

126,189,182

1.69

Short Term Financial Institution Ratings

P1

Tier-1 Capital Securities

AA2

Subordinated Bonds

AA1

Outlook (Long Term)

Stable

Long Term Financial Institution Ratings

AAA

10,001 to 100,000 shares

10,158

16.50

266,392,359

3.56

100,001 to less than 5% of

issued shares

1,424

2.31

2,485,386,472

33.24

5% and above of issued shares

TOTAL

0.01

4,591,631,972

61.40

61,553

100.00

7,478,214,767

100.00

MARC

Short Term Financial Institution Ratings

MARC-1

Outlook

Stable
Governance

Refer to page 534 for more on analysis of shareholdings.

RAM Ratings

Leadership

2,013

Responsibility

Less than 100

No. of
% of
Shareholders Shareholders

Preferred Stock (1 issues)

Foreign Currency Subordinated Debt/Outlook

Fitch Ratings

B
A- / A-2

Business Review

Size of Shareholdings

10,000,000,000
7,478,214,767
Ordinary Share of RM1 each
1 vote per Ordinary Share

Stable

Performance

ANALYSIS OF SHAREHOLDINGS
:
:
:
:

Ratings

3,539,604,721
4,880,287,526
7,077,663,368

Refer to page 536 for complete list of changes in share capital

Authorised Share Capital

Paid-Up Share Capital
Class of Shares
Voting Right

Rating Classification

Strategy

Event

Credit Ratings

Who We Are

Date

Our Perspective

MAJOR Changes in Share Capital

Financial & Others

AGM Information

54

Maybank Annual Report 2011

Our Strategy & Achievements

Maybank in the
News

55
Maybank Annual Report 2011

Our Strategy & Achievements

At A Glance

Our Perspective

Who We Are

Strategy

Performance

Business Review

Responsibility

Leadership

Governance

Financial & Others

AGM Information

56

Maybank Annual Report 2011

Our Strategy & Achievements

Events
Highlights
July 2010

07 Jul, 2010

02 Jul, 2010

Maybank unveiled its premium Maybankard World

MasterCard that provides top of the range benefits
and privileges. The card offers frequent fliers the
highest number of Treats AirMiles when used for
everyday purchases.

Maybank Islamic launched Waqf, a structured

community-giving initiative that allows customers to
place deposits as waqf contribution. The Bank was the
first financial institution in the country to offer such
an integrated waqf solution to customers. q

13 Jul, 2010
Maybank revised its Base Lending Rate (BLR) from
6.05% p.a. to 6.30% p.a.. The Base Financing Rate
(BFR) of Maybank Islamic Berhad was similarly revised
from 6.05 % p.a. to 6.30 % p.a.

14 Jul, 2010

03 JUL, 2010
Maybank holds first-ever TIGER Fun Run at the Mall of
Asia grounds. Participated in by Maybankers and key
customers, the run was able to raise php100,000.00
for Gawad Kalinga. q

6 Jul, 2010
Maybank Islamic received the Islamic Retail Bank of
the Year Award at The Asset Asian Awards 2010 event
held in Kuala Lumpur. u

Maybank achieved a rare three Asiamoney Annual

Private Banking Poll 2010 Awards for a Malaysian
private banking services provider. Maybank captured
for the second consecutive year the Best Domestic
Private Banking in Malaysia and Overall Best Domestic
Private Bank for the US$1 million - US$5 million Asset
under Management (AUM) category respectively.
Maybank was also voted as Overall Best Private Bank
in Malaysia for the AUM US$5.01 million US$25
million category.

Our Strategy & Achievements

Maybank Annual Report 2011

57
At A Glance

The World Takaful Conference under a strategic

partnership with Etiqa organised the 1st Family
Takaful Summit in Kuala Lumpur.

02 Aug, 2010

21 Jul, 2010

Strategy
Performance

Maybank launched its enhanced Mobile Banking Service

or M2U Mobile, offering joint marketing campaigns with
telecommunication operators such as Celcom, Maxis and
DiGi. The enhanced M2U Mobile enables customers to
access the banks portal Maybank2u.com using any
phone model or telco operator for their banking, bill
payment or e-commerce transactions. q

Maybank launched an innovative web-based trade

finance service, TradeConnex, the first local bank in
Malaysia to offer a comprehensive suite of
conventional trade finance products online. q

An Etiqa Green Day was held to emphasis the

importance of being environmentally friendly.

Maybank was one of the exhibitors in the first

Malaysian Solo Fair, a trade exhibition organised by
the Malaysia External Trade Development Corporation
(MATRADE), the export promotion agency of the
Government of Malaysia. The exhibition was opened
by Dato Seri Dr. Ibrahim Saad, Ambassador of
Malaysia to the Philippines and Honorable Alfredo
Lim, Mayor of Manila. The event also featured a
Briefing on Doing Business in the Philippines, with
Maybank Philippines PCEO Amos Ong as one of the
Resource Speakers and Panelists. q

Etiqa Academy with LIMRA organised the Regional

Officers School (ROS) workshop, a program designed
for company managers responsible for business
development working closely with agency managers.

30 Jul, 2010

Financial & Others

AGM Information

With the Singapore Innovation Class (I-Class)

certification, Maybank became the first Bank in
Singapore to achieve all four standards in Business
Excellence (BE) - Singapore Quality Class (SQC),
Singapore Service Class (S-Class), People Developer
(PD) and Singapore Innovation Class (I-Class) at an
enterprise level. The BE initiative was given out by the
Standards, Productivity and Innovation Board
(SPRING) Singapore to organisations which have
attained a commendable level of performance.

Governance

03-05 aug, 2010

Leadership

23 Jul, 2010

Responsibility

Etiqa won the KLIFF Award for Most Outstanding

Takaful Company for the third time.

Business Review

03 aug, 2010

26 Jul & 9 aug, 2010

Who We Are

August 2010

Our Perspective

14 JUL, 2010

58

Maybank Annual Report 2011

Our Strategy & Achievements

Events
Highlights

08 Aug, 2010

20 Aug, 2010

Maybank presented cash awards for academic and

co-curriculum excellence to 15 students at its two
schools in Penang which are under the PINTAR
programme. In addition, the bank also presented 10
computers each to the two schools to supplement
existing facilities and support computer literacy
among students.

Maybank announced record Group pre-tax profit of

RM5.37 billion compared to RM1.67 billion posted in
2009. Net profit after tax and minority interest
(PATAMI) jumped to RM3.82 billion from RM691.9
million previously. In the last financial year, the
Groups results were impacted by the RM1.97 billion
impairment charge on its investment in Bank
Internasional Indonesia (BII) and MCB Bank.

10 Aug, 2010
Maybank Islamic was honoured at the Kuala Lumpur
Islamic Finance Forum (KLIFF) Awards 2010 as the Most
Outstanding Islamic Retail Bank, the third consecutive
year received an award at it KLIFF. q

27 Aug, 2010
Maybank Islamic staff joined orphans from Rumah
Amal Belaian Kasih for an Iftar held at Dataran
Maybank. q

27 Aug, 2010

13 AUG, 2010
Maybank Investment Bank was Joint Principal Adviser,
Joint Lead Arranger and Joint Lead Manager for
Celcoms RM4.2 billion Sukuk Programme.

Maybank Singapore was conferred the Work-Life

Excellence Award by the Tripartite Committee on
Work-Life Strategy in recognition of the Banks
commitment towards a balanced work-life culture.
Maybank Singapore was the only Bank to receive this
award three times in a row in 2006, 2008 and 2010. q

Our Strategy & Achievements

Maybank Annual Report 2011

59
At A Glance

American Express and Maybank teamed up with

Pantai Holdings Berhad, the holding company of
Pantai Hospitals and Gleneagles Hospital Kuala
Lumpur to launch the Pantai American Express Credit
Card, Malaysia and Asias first co-brand credit card
with a healthcare service provider. The card was also
the first such co-brand credit card issued on the
American Express global network targeting consumers
in Malaysia and within the region.

BII launched its Superkidz Center, which is a mobile

banking service where BII teams visit selected schools
to educate students on savings.

03 Sep, 2010
Maybank Singapore officially opened its Geylang Serai
Branch offering Islamic banking products and services.
q

28 Sep, 2010

02 Oct, 2010

Responsibility

BII and IFC signed an agreement for SMEs for Womens

Business. IFC also provided advisory services for BII in
extending loans for women in business. q

Maybank Singapore organised the Maybank

NightWalk as part of its 50th Anniversary celebrations
and in support of the Maybank Family Fund launched
in July 2010. All the registration fees collected from
this event was donated to the Maybank Family Fund,
administered by Central Singapore Community
Development Council. q

Business Review

October 2010

Performance

Maybank Investment Bank signed an agreement with

Standard & Poors to offer S&Ps Global Research
Reports to Maybank IB clients.

22 Sep, 2010

Strategy

02 Sep, 2010

Who We Are

23 Sep, 2010

Our Perspective

September 2010

Leadership
Governance

Maybank Islamic contributed RM100,000 worth of

foldable bags for Hajj pilgrims in support of the
Annual Sahabat Korporat Tabung Haji.

Financial & Others

05 Oct, 2010

AGM Information

60

Maybank Annual Report 2011

Our Strategy & Achievements

Events
Highlights

8 Oct, 2010

13 OCT, 2010

BII conducted a Wheelchair Tennis Tournament 2010

to support the paraplegic community. A total of 45
wheelchair tennis athletes from different clubs in
Jakarta, Bogor, Tangerang, Bekasi, Central Java and
Yogyakarta participated in the tournament. q

Etiqa Alor Setar was one of the 14 centres involved in

a nationwide Blood Donation Drive themed Donate
Blood - Your Gift of Life to help replenish supplies for
the National Blood Bank.

18 Oct, 2010
BII conducted its annual Public Expose as required by
the stock exchange. q

08 OCT, 2010
Etiqa Oneline was awarded the prestigious Silver
Award for having the Best Contact Centre Manager
and Bronze Award for the Best Contact Center at the
Contact Centre Association of Malaysia Awards 2010.

12 OCT, 2010
Maybank Philippines and Home Guarantee
Corporation (HGC) signed a Php1.5 Billion Contract of
Guaranty agreement. Under the agreement, Maybank
extends loans to individual housing loan borrowers,
as well as provide financing facility to real estate
developers through assignment or purchase of
Contract-to-Sell accounts while HGC insures the
mortgages and contract-to-sell receivables of
Maybank against non-payment of borrowers. q

21 Oct, 2010
Maybank opened its ninth branch in Cambodia,
located in Sihanoukville, south west of the country.

22 Oct, 2010
Eighty deserving students from Universitas Gadjah
Mada received scholarships from BII, the third year
the bank offered scholarships to the universitys
students. q

Our Strategy & Achievements

Maybank Annual Report 2011

61
At A Glance

Etiqa Academy welcomed 53 agents and staff into its

off-campus Risk Management and Insurance bachelors
degree program. The program is a collaboration
between Etiqa and Universiti Utara Malaysia.

Maybank Islamic hosted a study visit by 30 students from Islamic Science University of
Malaysia who were presented with an overview of the bank as well as Islamic banking
products and services in Malaysia. q

Who We Are

29 Oct, 2010

Our Perspective

22 OCT, 2010

28 Oct, 2010
Strategy

BII held a draw for the Grand Prize of Biingkisan

Beruntun 2010 Period 1, and launched the Biingkisan
Beruntun 2010 Period 2. Biingkisan Beruntun is a
loyalty program for savings products. q

Performance

29 Oct, 2010

01 Nov, 2010
Tunku Kurshiah College, one of the top residential colleges in Malaysia as well as a
Malaysia Smart School, was the first residential college to participate in the
Maybank-MoneyTree Financial Literacy Programme. This project, a joint effort
between Maybank and MoneyTree, aimed at helping secondary school students
aged 13 17 understand the importance of financial planning and developing
them into financial savvy individuals.

Governance

PT Bank Internasional Indonesia Tbk announced net

profit of Rp415 billion for the first nine months ended
30 September 2010, a significant turnaround from the
net loss of Rp183 billion in the previous
corresponding period ended 30 September 2009.

Etiqa Insurance and Takaful launched their A Lifetime of Love in One Simple Gift
campaign to encourage members of the public to purchase an insurance or takaful
plan as a lifelong gift of protection and savings for their loved ones.

Leadership

Maybank Singapore was one of the mandated lead

arrangers for a S$750 million murabaha facilities
agreement for healthcare services provider, Parkway
Holdings. The facilities, for Parkways general working
capital and refinancing of its existing loans, was the
companys first shariah-compliant funding exercise.

01 NOV, 2010

Responsibility

29 Oct, 2010

Business Review

November 2010

Financial & Others

AGM Information

62

Maybank Annual Report 2011

Our Strategy & Achievements

Events
Highlights

03 Nov, 2010

20 Nov, 2010

BII received an award for being the first bank to

launch a savings product for Women (Woman One)
from the Record Bisnis Indonesia. q

More than 10,000 Maybank Group employees globally

joined together for the first time in a global CSR
initiative through the Group employee volunteerism
programme under the Cahaya Kasih banner. The
programme which was part of Maybanks 50th
anniversary celebration themed Close to You, created
a milestone as it was the first Malaysian financial
institution to organise such an event across its global
network.

22 Nov, 2010
American Express launched its 15% cash back
campaign, offering cardmembers 15% cash back on
purchases using its cards at 14 malls nationwide. This
campaign was aimed at rewarding cardmembers and
was part of the Banks 50th anniversary celebrations.

26 Nov, 2010
Maybank Singapore was one of the mandated lead
arrangers for a S$1,618 million 5-year term loan
facilities extended to property developer, Orchard
Turn Retail Investment Pte. Ltd. for refinancing a
construction loan used for the development of ION
Orchard shopping mall, one of Singapores newest
and most upmarket malls.

10 Nov, 2010
BII added eight Sharia Office Channels in the Greater
Jakarta area.

12 Nov, 2010
Maybank announced a 21.5% rise in Group pre-tax
profit for the first quarter ended September 2010 to
RM1.40 billion compared to RM1.16 billion in the
corresponding period ended September 2009. Profit
after tax and minority interest (PATAMI) for the quarter
rose 16.6% to RM1.03 billion from RM881.8 million
previously.

Our Strategy & Achievements

Maybank Annual Report 2011

63
At A Glance

Twenty young Malaysians aged 7-12, demonstrated

the 1Malaysia spirit at a Maybank Story Telling
Contest, with stories taken from a Maybank
publication entitled Stories for our Future. The
contest which aimed to promote the values of
1Malaysia among the young generation, and was
graced by YABhg Datin Paduka Seri Rosmah Mansor,
wife of the Prime Minster of Malaysia.

02 Dec, 2010

07 Dec, 2010
Maybank Islamic was one of the corporate partners of
TV Al-Hijrah which was launched by the Prime
Minister of Malaysia, Dato Seri Mohd Najib Tun Abdul
Razak. q

Strategy

At the event, Datin Paduka Seri Rosmah also read a

specially written Story for the Children of 1Malaysia
produced by Maybank for all children. q

BII presented the grand prize of a Jaguar car to the

winner of its Biingkisan Beruntun campaign.

Who We Are

December 2010

Our Perspective

27 Nov, 2010

Performance
Business Review
Leadership

Maybank announced a disaster relief assistance

programme offering a moratorium on monthly
installment payments and waiver of certain charges
on a case-to-case basis for customers affected by
floods in Perlis, Kedah and Kelantan.

Responsibility

09 Dec, 2010

Governance
Financial & Others
AGM Information

64

Maybank Annual Report 2011

Our Strategy & Achievements

Events
Highlights

14 Dec, 2010
Maybank hosted an art exhibition entitled
Expressions of the Malayan Tiger showcasing 50
works by Malaysian artists who participated in an art
competition held in conjunction with Maybanks 50th
anniversary celebration. The aim of the competition
was to encourage the development of art as well as
create greater awareness on tiger conservation. u

17 Dec, 2010
PT Bank Maybank Indocorp (BMI) was officially
renamed PT Maybank Syariah Indonesia (MSI),
following its conversion to a full fledged Islamic bank
in Indonesia in October 2010. This was part of the
Groups aspiration to extend its Islamic banking
operations regionally. t

22 Dec, 2010
Maybanks 50th anniversary celebrations drew to a
close on a high note with the launch of the Maybank
Foundation and the unveiling of a specially
commissioned 1Malaysia sculpture called Segerak,
One Movement 1Malaysia by Prime Minister YAB
Dato Sri Mohd Najib Bin Tun Abdul Razak, at a
Maybank Gala Dinner. About 1,000 guests attended
the glittering event. The Maybank Foundation, with a
RM50 million initial fund, will spearhead the Groups
CR activities throughout its network. u

Our Strategy & Achievements

Maybank Annual Report 2011

65
At A Glance
Our Perspective

24 Jan, 2011

06 Jan, 2011

Pos Malaysia Berhad and Maybank launched a strategic partnership to provide

Shared Banking convenience for customers to conduct selected Maybank services
at more than 400 Pos Malaysia outlets nationwide. The ceremony was held at Pos
Malaysia Benut, Pontian, Johor. q

BII opened 12 new branches in Semarang, West Java.

Who We Are

January 2011

06 Jan, 2011
Strategy

Maybank, through its wholly-owned subsidiary, Aseam

Credit Sdn Bhd (ACSB), entered into conditional sale
and purchase agreements with Mr. Ronald Anthony Ooi
Thean Yat and Yuanta Securities Asia Financial Services
Ltd. for the acquisition of 15.4% and 29.2% stakes in Kim
Eng Holdings Limited respectively. The shares were
acquired at a price of S$3.10/share, amounting to a total
purchase consideration of S$798 million (approximately
RM1.90 billion).

Performance
Business Review

13 Jan, 2011
Maybank launched its Overseas Mortgage Loan
Scheme, the first Malaysian bank to offer Malaysians a
local mortgage loan facility in Ringgit for purchases of
property in London, United Kingdom.

PT Bank Internasional Indonesia Tbk reported a net profit of Rp461 billion for the
full year of 2010, a significant turnaround from the net loss of Rp41 billion in the
previous corresponding period.

Leadership

Maybank launched its Maybankard 2 Cards

targetting half a million new cardmembers within 12
months. The Maybankard 2 Cards offer an innovative
feature, a first in Malaysia, of providing two credits
cards together to a cardmember with only one
sign-up.

31 Jan, 2011

Responsibility

18 Jan, 2011

February 2011

Financial & Others

Maybank Islamic Berhad signed an agreement to

provide a RM100 Million Commodity Murabahah Term
Financing-i (CMTF-i) facility to Universiti Teknologi
Malaysia (UTM), Skudai. The facility was to be used to
redeem UTMs existing term loans for the construction
of hostel facilities at its Skudai campus. t

Governance

11 Feb, 2011

AGM Information

66

Maybank Annual Report 2011

Our Strategy & Achievements

Events
Highlights

17 FEB, 2011

23 Feb, 2011

Maybank Philippines handed over childrens books

contributed by Maybank staff in addition to a cash
donation to Maharlika Elementary School, for the
improvement of the public schools library. q

Maybank entered into a strategic partnership with

Xinhua News Agency, the most important information
authority in the Peoples Republic of China to enable
the Bank have greater exposure and news coverage in
the Peoples Republic of China. Xinhua will also
benefit from this tie-up by having access to
information on the Malaysian and ASEAN financial
sector from Maybank. q

March 2011
21 Feb, 2011
Maybank announced a 16% rise in Group pre-tax
profit for the six months ended December 2010 to
RM2.97 billion compared to RM2.56 billion in the
previous corresponding period ended December
2009. Profit after tax and minority interest (PATAMI) for
the period rose to RM2.15 billion compared with
RM1.88 billion previously. q

01 Mar, 2011
Maybank won Euromoneys Best Private Banking
Services Overall in Malaysia for the third consecutive
year. q

06 09 Mar, 2011
Maybank Islamic participated in the Malaysia
International Halal Showcase for the 7th consecutive
year. q

Our Strategy & Achievements

Maybank Annual Report 2011

67
At A Glance

Maybank Islamic opened its 13th branch in i-City,

Shah Alam making it the first bank to begin
operations in the area. q

Maybank Islamic hosted a study visit by 30 students of

Babson College, USA to provide them a better
understanding of Islamic banking. q

Who We Are

16 Mar, 2011

Our Perspective

07 Mar, 2011

Strategy
Performance

08 Mar, 2011
Business Review
Responsibility

Maybank joined forces with the Ministry of Women,

Family and Community Development to celebrate
International Womens Day (IWD). The Bank and its IT
outsourcing partner CSC Malaysia teamed up to
contribute 200 refreshed computers to single mothers
nationwide under the Rumah Nur programme
managed by the Ministry.

15 Mar, 2011
21 Mar, 2011
Maybank Islamic opened its 14th branch in Gunung
Rapat, Perak.

Leadership
Governance
Financial & Others

Maybank signed a USD700 million 5 year syndicated

term loan facility underwritten and arranged by
mandated lead arrangers and bookrunners
comprising Australia and New Zealand Banking Group
Limited, The Hongkong and Shanghai Banking
Corporation Limited, Labuan Branch, Mizuho
Corporate Bank Ltd., Labuan Branch and Standard
Chartered Bank Labuan Branch which saw a total of
22 banks (including the mandated lead arrangers and
bookrunners) joining the transaction. The Facility was
upsized from the original amount of USD500 million
to USD700 million to accommodate part of the
oversubscription during syndication.

AGM Information

68

Maybank Annual Report 2011

Our Strategy & Achievements

Events
Highlights

21 mar, 2011

29 Mar, 2011

Maybank further strengthened its presence in the

Philippines by making the big move to the Clark
Freeport Zone. The newly-opened Maybank Clark
branch was positioned as a one-stop financial shop
offering customers a portfolio of products and
services suited to meet a variety of needs. Located
within the BerthaPhil Clark Center Compound,
Maybank Clark is right in the heart of an emerging
community that features, at full build-out, an
information technology business park, commercial
shopping centers, entertainment complexes,
condominiums and a school campus. q

Maybank won two awards, the prestigious Country

Award for Best Retail Bank in Malaysia and the
Products and Processes Award for Best Deposit and
Liability Business in The Asian Bankers International
Excellence in Retail Financial Services Awards 2011
held in Kuala Lumpur.

26 MAR, 2011
Etiqa Takaful made a zakat contribution of RM286,781
to Madrasah Darul Atiq at Ulu Yam, which provides
assistance and shelter to single mothers and
abandoned children.

28 MAR, 2011
In a move to further boost operational capability and
service delivery, Maybank relocated its Bian Branch
to a more visible location that offer high potential for
business growth.
Maybank Bian is now located right in front of
Pavilion Mall, along National Highway, a prominent
area being primed for growth and development in
Binan City. u

30 MAR, 2011
Maybank Philippines started offering Merchant
Acquiring services, with a pilot run on 5 accredited
merchants. By June 2011, a total of 70 Maybank
Point-of-Sales (POS) terminals have been installed. q

Our Strategy & Achievements

Maybank Annual Report 2011

69
At A Glance

31 Mar, 2011

07 Apr, 2011

Our Perspective

Maybank held a prize presentation ceremony for the

final phase of its RM2 million Rewards Campaign held
in conjunction with Maybanks 50th anniversary
celebrations which included a RM500,000 grand prize.

Two hundred and forty Formula One fans were part of

the exciting 2011 Formula One PETRONAS Malaysia
Grand Prix at the Sepang International Circuit on April
9 10 April, 2011 courtesy of Maybank cards. q

Who We Are

31 Mar, 2011
Strategy

April 2011

Responsibility

Maybank Singapore collaborated with Central

Singapore Community Development Council to
launch a matched savings scheme for low-income
families called C.A.S.H.UP (Cultivate A Savings Habit).
In this nine month programme, Maybank Singapore
matched dollar-for-dollar, up to a maximum of $1,000
at the end of the savings period, any C.A.S.H.UP
Savings Account opened by a family. q

Maybank and Pos Malaysia Berhad achieved another

milestone in their strategic partnership by extending
their Shared Banking services to East Malaysia
commencing in Belaga, Sarawak. It was among the 51
locations identified in Sarawak and Sabah for the
Shared Banking services to reach a larger base of
customers, especially the under-served segment in
rural areas, by leveraging on the extensive reach of
Pos Malaysia outlets.

Business Review

Apr, 2011

09 Apr, 2011

Performance

Maybank Islamic Berhad issued its maiden Tier 2

Capital Islamic Subordinated Sukuk of RM1.0 billion,
based on the Islamic principle of Musyarakah. It was
rated AA+IS (outlook stable) by Malaysian Rating
Corporation Berhad (MARC) and carried a tenure of 10
years from the issue date on a 10 non-callable 5 basis.

11 Apr, 2011

12 Apr, 2011

AGM Information

Maybank Philippines conducted a contest-and-fundraising drive for Operation Smile Foundation, a

charitable institution dedicated to treating children
with cleft lip or palate and other facial deformities.

Financial & Others

12 apr, 2011

Governance

Maybank and Xinhua News Agency officially launched

the Xinhua08 Malaysia webpage at Invest Malaysia 2011.
The webpage, available in Mandarin at http://maybank.
xinhua08.com provides readers especially in China, the
opportunity to follow up-to-date business and financial
news covering Malaysia and the ASEAN region.

Leadership

BII held its Grand Prize Lucky Draw for its Biingkisan
Beruntun 2010 programme.

70

Maybank Annual Report 2011

Our Strategy & Achievements

Events
Highlights

14 APR, 2011

May 2011

BII conducted a Public Expose for its Subordinated

Bonds. The issuance of this subdebt raised an
additional Rp 1.5 trillion Tier 2 Capital.

05 May, 2011

14 17 Apr, 2011

Maybank won the Malaysian Institute of Directors

Innovative Leadership in Globalisation Award in the
Banking & Finance category. q

The Maybank Malaysian Open was held at the Kuala

Lumpur Golf & Country Club. This 50th edition of the
Open saw the participation of renowned golfers from
the European and Asian tours, led by World No. 1
Martin Kaymer. q

05 May, 2011

21 Apr, 2011
Maybank launched a Debit & Drive Home A
Volkswagen Polo campaign which aimed to create
greater awareness on the convenience of debit cards,
while rewarding customers with two Grand Prizes of a
Volkswagen Polo car each as well as one daily cash
prize of RM500 for the highest number of transactions
for the day. The launch of the campaign was held in
conjunction with Permodalan Nasional Berhads
Minggu Saham Amanah Malaysia 2011 (MSAM) held
in Ipoh.

21 Apr, 2011
Maybank announced that it had successfully priced a
SGD1.0 billion subordinated notes programme, the
Banks maiden issue under the US$2.0 billion
Multicurrency Medium Term Note Programme.

27 Apr, 2011
BII and Garuda Indonesia signed an agreement for
ticketing Cash Management payment via BII CoOLPAY.

Maybank announced its intention to make a

mandatory unconditional cash offer to acquire all the
ordinary shares of Kim Eng Holdings Limited, other
than those already owned by Mayban IB Holdings, its
related corporations and their respective nominees, at
a price of S$3.10 per share.

06 MAY, 2011
A groundbreaking ceremony was held on the future
site of Maybank Corporate Center, soon to become
the hub of the Banks operations in the Philippines. q

Our Strategy & Achievements

Maybank Annual Report 2011

71
At A Glance

09 MAY, 2011

10 May, 2011

Our Perspective

Maybank Malabon was relocated to Governor Pascual

Avenue, a commercial site in Malabon City developed
as a flood-free zone area. q

Maybank Islamic distributed a total of RM7.07 million

to 15 State Zakat centers as well as to charity bodies
in Malaysia, an increase of RM2.06 million compared
to the 2009 financial year. q

Who We Are
Strategy
Performance

10 May, 2011
Business Review

12 May, 2011

13 May, 2011

Maybank revised its base lending rate (BLR) upwards

from 6.30% p.a. to 6.60% p.a. The base financing rate
(BFR) of Maybank Islamic Berhad was similarly revised
to 6.60 % from 6.30%.

BII held its Annual General Meeting.

14 MAY, 2011

15 May, 2011

AGM Information

BII celebrated its 52nd anniversary with a series of

sports, writing and singing competitions as well as
CSR activities.

Financial & Others

Etiqa Takaful made a zakat contribution of RM 237,900

to Madrasah Darul Istiqamah, Muar to build new
hostels for its students.

Governance

10 May, 2011

Leadership

Maybank announced that it had completed the

acquisition of a 44.6% stake in Kim Eng. Together with
the market purchases on January 7, 2011 and January
10, 2011 for approximately 5.6% stake, Maybank now
owned a majority interest of 50.2% in Kim Eng.

Maybank announced a 13.4% rise in Group profit after

tax and minority interest (PATAMI) for the nine months
ended March 2011 to RM3.3 billion compared with
the RM2.91 billion recorded in the previous
corresponding period ended March 2010. Group
pre-tax profit rose 13.2% to RM4.54 billion compared
to RM4.01 billion previously.

10 May, 2011

Responsibility

BII strengthened its electronic network with the

launch of its 1,000th ATM. BIIs ATMs are connected
with more than 35,000 ATMs under ATM PRIMA, ATM
BERSAMA, ALTO, CIRRUS, and Malaysias MEPS
network, and to more than 2,800 Maybank ATMs in
Malaysia and Singapore.

72

Maybank Annual Report 2011

Our Strategy & Achievements

Events
Highlights

19 May, 2011

24 May, 2011

During Invest Malaysia in New York from 17-18 May

2011, Maybank President and CEO Dato Sri Abdul
Wahid Omar was interviewed by Pimm Fox on
Bloomberg Televisions Taking Stock on a wide range
of economic and banking issues. q

Maybank hosted a month long art exhibition

featuring works by Selangor-born artist Goh Ah Ang,
renowned for his Chinese paintings on diminutive
subjects, such as insects.
The exhibition entitled Art and Ants was officially
launched by Tan Sri Amirsham A Aziz, Chairman,
National Economic Advisory Council at Balai Seni
Maybank, Menara Maybank. q

23 May, 2011
Maybank Islamic clinched the Top SMI Supporter for
Islamic Bank Category award at the Credit Guarantee
Corporation (CGC) Top SMI Supporter Award 2010.

23 MAY, 2011
Maybank Makati Avenue Branch was opened for
business, located near the corner of Makati Avenue
and Kalayaan Avenue, beside St. Giles Hotel. It is the
3rd Maybank branch to be opened in Makati City. q

Our Strategy & Achievements

Maybank Annual Report 2011

73
At A Glance

Maybank Singapore launched iSAVVY on

Facebook, targetting the online-savvy youth
segment. Maybank offers an online appointment
booking service, iAppointment, to timeconscious customers to further complement
their mobile lifestyle. q

Responsibility

Maybank Singapore embarked on a series of M2U

touch-point innovations to further engage
customers. Under the eBusiness C.I.D (Convenience,
Innovation and Differentiation) initiative, new
additions to M2U include M2U Touch, a touchscreen based channel for branch-visiting
customers; M2U Roar, Maybank Singapores very
own Augmented Reality Application for smart
phones and M2U TV, a web-based platform for
sharing of investment knowledge.

Business Review
Leadership

Maybank Investment Bank was Joint Principal Adviser,

Joint Lead Arranger and Joint Lead Manager for
Westports Malaysias Sukuk Musharakah Programme
of up to RM2.0 billion. The issue was the largest
Islamic securities programme established by a port
operator in Malaysia.

Performance

Jun, 2011

02 Jun, 2011

Strategy

Maybank Singapore was one of two corporations

which clinched the Excellence Award at the Peoples
Association Community Spirit (PACS) Awards 2011 of
recognition of its community partnership efforts.
Working with the Central Singapore Community
Development Council, Maybank had launched
initiatives such as the Maybank Family Fund, which
addresses the needs of low-income families, and raised
over half a million dollars within months of the
launch. q

Maybank Singapore launched CashOut, a service that

allows customers to withdraw cash while paying bills
using their Maybank ATM card or credit card linked to
a Savings or Current Account. Customers also enjoy
greater convenience by having more access points for
withdrawing cash at all 62 Singapore Post outlets
nationwide.

Who We Are

Jun, 2011

01 Jun, 2011

Our Perspective

June 2011

01 Jun, 2011
Governance

Dato Sri Abdul Wahid Omar, President & CEO of

Maybank, was interviewed on CNBC on various issues
pertaining to the growth of Maybank. q

Financial & Others

AGM Information

74

Maybank Annual Report 2011

Our Strategy & Achievements

Events
Highlights

06 Jun, 2011

08 09 Jun, 2011

Pos Malaysia Berhad and Maybank extended their

shared banking services to Sabah with a target to
cover 26 selected post offices in Sabah.

Maybank Islamic was platinum strategic partner at the

2nd Annual World Islamic Banking Conference Asian
Summit in Singapore. The Chief Executive Officer,
Muzaffar Hisham was one of the keynote speakers at
the event. q

The launch, held in Kota Marudu was officiated by

Tandek state assembly member, Ms Anita Baranting.
The Shared Banking Service allows customers,
particularly in rural communities, to access Maybanks
banking services using Pos Malaysias extensive
branch network across the country.

07 Jun, 2011
Fifty Maybankard MasterCard Platinum Debit
customers were presented a holiday package each to
Resorts World Sentosa Singapore courtesy of Maybank
and MasterCard Worldwide. The winners were among
the first successful applications of the Maybankard
MasterCard Platinum Debit Campaign held from
December 2010 to February 2011. q

16 Jun, 2011
BII was ranked second among banks in Indonesia for
Bank Service Excellence Award for 2010 and 2011 by
Marketing Research Indonesia (MRI) and Infobank
magazine. This was the second consecutive year it
won the award.

18 JUN, 2011
Etiqa Takaful made a zakat contribution of RM157,280
to Rumah Amal Raudhatul Ikhwani, a home which
provides shelter to the poor and needy in Rompin.
.

Our Strategy & Achievements

Maybank Annual Report 2011

75
At A Glance

Maybank became the first Qualifying Full Bank in

Singapore to launch the new Maybank Platinum Debit
Card with the NETS FlashPay feature. This allows
cardholders to pay for public transport as well as
small ticket items at over 12,000 retail points. In
addition, customers can withdraw cash from ATMs
and Singapore Post outlets, and sign for their
purchases via the MasterCard network. q

21 Jun, 2011

29 Jun, 2011

Business Review

Maybank Singapore launched the Ar Rihla Regular

Savings Account-i (RSA-i) for Muslims going on the
Hajj. Savers with this Syariah-compliant account
would be rewarded with a bonus gift (hibah) at the
end of each 12-month period. q

Performance

Maybank joined six other banks in signing a USD175million six-year term loan for Energy development
Corporation (EDC), a Philippine company engaged in
exploration, development and operation of
geothermal energy.

Strategy

BII launched its Mobile Banking service, making it one

of the most connected banks in Indonesia. BII Mobile
Banking allows customers to perform banking
transactions through shortcut SMS, SIM Tools Kit, Java
at BlackBerry and UMB Banking.

Who We Are

30 Jun, 2011

Our Perspective

21 Jun, 2011

Responsibility
Leadership
Governance
Financial & Others
AGM Information

76

Maybank Annual Report 2011

Our Strategy & Achievements

Awards &
Recognition

2011

Malaysian Institute of

Directors

RAM Ratings Award (Maybank

Investment Bank)

RAM Lead Manager Award 2010

- Number of Issues 2nd Place

RAM Lead Manager Award 2010
(Islamic) Joint 1st Place
RAM Blueprint Award 2010 - New
Structured - Finance Benchmark Deal
RAM Special Merit Awards 2010
Malaysia Top Lead Manager 2010
(Corporate Sukuk Market)
Readers Digest Trusted

Brands Award

Credit Card Issuing Bank Gold

Award

Islamic Financial Services Gold

Award

Innovative Leadership in

Globalisation Award - Banking &

Finance Maybank

Malaysian Takaful

Association (Etiqa Takaful

Berhad)

Best Group Business Operator

The Asian Banker.

International Excellence
in Retail Financial Services
Awards

Best Retail Bank in Malaysia

Best Deposit and Liability Business

The Asian Banker

Achievement Awards
Technology Implementations
Awards

Best Retail Payments Implementation

Euromoney Awards
Best Private Banking Services Overall
in Malaysia
Association of Accredited

Advertising Agents Malaysia/

Malaysias Most Valuable
Brands Putra Brand
Awards 2011 The Peoples
Choice

Finance Gold Award: Maybank

The Asset Triple A Award

Best Domestic Trade Transaction
Banking
Best E-commerce Bank
Best Domestic Cash Management
Bank
Best SME Bank
Best Domestic Trade Finance Bank
NEF-Awani ICT Awards
Favourite Online Banking Service
Provider

Our Strategy & Achievements

Maybank Annual Report 2011

77
At A Glance
Our Perspective
Who We Are
Strategy
Performance
Business Review

Trailblazer Awards
Category

Asia Pacific Brands

Foundation

Societe Awards Best Brands

Corporate Responsibility

Awards

Best Brands in Banking

MPC Productivity Award

Services Category 2

Malaysia Service to Care

Champion

Credit Card
Conventional Banking (Asset >

USD20 Billion)

Largest Consumer Product

Purchase Volume Visa

Credit & Visa Debit

Most Innovative Use of Visa Asset

Largest Debit Card Issuer
Largest Debit Card Purchase Volume

Global Network Services

Marketing Award

Outstanding Merchant Marketing

Campaign (Amex)

KLIFF Islamic Finance Awards

Most Outstanding Takaful Company
(Etiqa Takaful Berhad)

Company on Re-employment
Efforts and Practices (NTUC)
(Maybank Singapore)

Asian Banking & Finance

Awards

Best Corporate Social Responsibility

Program Silver (Maybank

Singapore)

Peoples Association

Community Awards

Excellence Award (Corporate Partner)

(Maybank Singapore)

AGM Information

Philip Kotler CenteR

Recognition as Model

Program Silver (Maybank

Singapore)

Financial & Others

KLIFF Islamic Finance Awards

Most Outstanding Retail Islamic Bank
Award (Maybank Islamic Berhad)
Most Outstanding Takaful Company

Visa Malaysia Bank Award

Largest Consumer Credit Card Issuer

Awards

Best Corporate Social Responsibility

Governance

The Brand Laureate Masters

Asian Banking & Finance

Leadership

Product Excellence Award Best in

CCAM Excellence Award

Best Contact Centre Manager Silver
Award
Best InHouse Contact Centre
Bronze Award

Responsibility

Banking & Payments Asia

78

Maybank Annual Report 2011

Our Strategy & Achievements

Awards &
Recognition

2010
Malaysian Institute of Human
Resource Management

HR Excellence Category (Gold Award)

HR Innovation Category (Silver Award)

Malaysian Rating Corporation

Euromoney Awards
Best Private Banking Services Overall
Malaysia
KLIFF Islamic Finance Awards
Most Outstanding Retail Islamic Bank Award
(Maybank Islamic Berhad)

Berhad

Friend of Heritage Award (Maybank

Excellent Service Award (Maybank

Top Lead Managers Award (Jan-Jun 2010)

No. 1 by Issue Count

No. 1 by Issue Value

Asiamoney Private Banking Poll

Best Domestic Private Banking in Malaysia
Overall Best Domestic Private Bank in Malaysia
(Asset under management of US$1 million
US$5 million)
Overall Best Private Bank in Malaysia (Asset
under management of US$5.01 million
US$25 million)
Credit Guarantee Corporation

Malaysia

Singapore)

Singapore)

Work-Life Excellence Award

(Maybank Singapore)

Distinguished Defence partner

Award (DDPA) (Maybank Singapore)

Exemplary Employer Award

Tripartite Alliance for Fair

Employment Practices (TAFEP)
(Maybank Singapore)

Top SMI Supporter Award

Commercial Bank Category

Bumiputera SMI Supporter
Best Financial Partner
Best Financial Partner Award
Readers Digest Trusted Brands

Awards

Bank Category Gold Award

Credit Card Issuing Bank Gold Award

Association of Accredited

Advertising Agents Malaysia /

Malaysias Most Valuable Brands
Putra Brand Awards 2010

Finance Gold Award : Maybank

The Asset Triple A Award

Best SME Bank in Malaysia
Best e-Commerce Bank in Malaysia
Asian Banker Excellence in Retail

Financial Services Awards

Excellence in Employee Engagement for Asia

Pacific, Central Asia and Gulf Regions

(Maybank Singapore)

AsiamoneY awards
Best FX Bank in Indonesia (Bank Internasional
Indonesia)

2009
Malaysian Rating Corporation
Berhad

Top Lead Managers Award (Jan-Dec 2009)

No. 1 by Issue Count

No. 2 by Issue Value

Finance Asia Country Awards

Best Cash Management Bank
Best Trade Finance Bank

Euromoney Awards

Best Local Bank Malaysia

Best Private Banking Services Overall

Malaysia

The Asset Triple A Award

Best Cash Management Bank in Malaysia

The Asset Triple A Award Islamic

Finance Award (Maybank Investment
Bank)
Most Innovative Islamic Finance Deals WCT

Engineering Berhad RM300 million Sukuk

Musyarakah with warrants
Best Innovative Islamic finance deals
Cagamas RM2 billion Sukuk Commodity
Murabahah

Our Strategy & Achievements

Maybank Annual Report 2011

79
At A Glance

International Takaful Award

Best Bancassurance Takaful Award (Etiqa

Takaful Berhad)

Most Outstanding Islamic Bank Award

(Maybank Islamic Berhad)

Most Outstanding Takaful Company (Etiqa

Takaful Berhad)

Most Innovative Deal of the Year & Tawarruq

trillion category (Maybank Indocorp)

Ministry of Human Resources,

Malaysia
Asiamoney Private Banking Poll

Overall Best Domestic Private Bank in Malaysia

(Asset under management of USD1 million

and above)

Best Local Trade Bank in Malaysia

Best Islamic Trade Bank in Asia (Maybank

Islamic Berhad)

Bank Gold Award

Credit Card Issuing Bank Gold Award
Islamic Financial services

Service Excellence for Credit Card Customers

(BII)

Marketing Magazine and Carre

Center for Customer Satisfaction
and Loyalty Service Quality Award
Indonesian Institute for
Corporate Directorship, Centre for
International Private Enterprise
Washington, DC and Business
Review Magazine Good Corporate
Governance Award

Gold Award (BII)

The Best Individual Indicators Responsibility of

the Board (BII)

SWA Magazine and Stern Stewart &

Co. (100 Public Companies Rank in the
SWA 100 2009). Indonesia Best Wealth
Creators Award
One of the Best Public Companies Based On

WAITM (Wealth Added Index) Method (BII)

Infobank and MRI Awards (BII)

Best Banking Service Excellence Monitor

Award 2nd Placing

Best ATM 3rd Placing

Best Phone Handling, Phone Banking Machine

2nd Placing

The Best Phone Banking Officer

Infobank Magazine Golden Trophy

2009

Very Good Financial Performance 2004-2008

(BII)

Refer to page 532 for Award & Recognition for 2006-2008.

AGM Information

Gold Award (Maybank Islamic Berhad)

Carre (Center for Customer

Satisfaction & Loyalty) Call Center
Award

Financial & Others

Readers Digest Trusted Brands

Award

Best Visa Program Innovation

Maybank Mobile NFC

Governance

Trade Finance Magazine Awards for

Excellence

Best New Product for Maybankard Visa Debit

Best Debit Card for Maybankard Visa Debit

Leadership

Caring Employer Award Winner

Lafferty Cards Award

Responsibility

Best Bank for asset size Rp1 trillion Rp10

Number of Deals (2008) 3rd position

Issue Value (2008) 2nd position

Business Review

Investor Magazine

RAM Lead Managers Islamic Award

(Maybank Investment Bank)

Performance

Deal of the Year Cagamas Berhads RM915

million Medium Term Notes (Maybank
Investment Bank)
Sovereign Deal of the
Year & Indonesia Deal of the
Year Republic of Indonesia; Perusahaan
Penerbit SBSN Indonesia I USD650 million
Global Sukuk Indonesia (Maybank Investment
Bank)
Ijarah Deal of the Year & Qatar Deal of the Year
Qatar Airways Syndicated Financing Islamic
Finance Facility (Maybank Investment Bank)

Issue Value (2008) 1st position

Number of Deals (2008) 3rd position

Strategy

KLIFF Islamic Finance Awards

RAM Lead Managers Islamic Award

(Maybank Investment Bank)

Who We Are

Best Foreign Exchange Bank in Malaysia

Best Trade Finance Provider in Malaysia
Best Sub-Custodian Bank in Malaysia

Our Perspective

Global Finance

80

Maybank Annual Report 2011

Our performance

Five-Year Group
Financial Summary
Group
Year ended 30 June
OPERATING RESULT (RM Million)
Operating revenue
Operating profit
Profit before taxation
Profit after taxation and minority interest
key STATEMENTS OF FINANCIAL POSITION DATA
(RM Million) 1
Total assets
Securities portfolio
Loans, advances and financing
Total liabilities
Deposit from customers
Commitments and contingencies
Paid-up capital
Shareholders equity
SHARE INFORMATION 1
Per share (sen)
Basic earnings 3
Diluted earnings 3
Gross dividend
Net assets (sen)

2007

2008

2009

2010

2011

YoY Change

15,179
4,370
4,364
3,178

16,154
4,571
4,086
2,928

17,586
3,064
1,674
692

18,560
5,249
5,370
3,818

21,040
6,135
6,270
4,450

13.4%
16.9%
16.8%
16.6%

256,667
33,692
140,865
236,799
163,677
175,392
3,889
19,198

269,101
36,551
164,614
249,009
187,112
204,217
4,881
19,302

310,739
57,727
185,783
284,971
212,599
221,587
7,078
24,899

336,700
54,170
205,555
308,035
236,910
232,273
7,078
27,877

411,959
61,039
253,976
379,488
281,976
292,202
7,478
31,461

22.4%
12.7%
23.6%
23.2%
19.0%
25.8%
5.7%
12.9%

58.5
58.3
80.0
493.6

53.3
53.3
52.5
395.5

12.0
12.0
8.0
351.8

53.9
53.9
55.0
393.9

61.4
61.4
60.0
420.7

13.9%
13.9%
9.1%
6.8%

12.00
46,668

7.05
34,411

5.90
41,760

7.56
53,510

8.94
66,853

18.3%
24.9%

2.8
3.7
17.6
1.3
2.0
42.8

2.7
3.5
15.2
1.1
1.6
44.4

2.8
3.4
3.1
0.2
0.3
52.8

2.9
3.5
14.5
1.2
1.6
47.3

2.6
3.6
15.2
1.2
1.8
49.6

(0.3)
0.1
0.5

0.2
2.3

19.6
30.6
21.4

18.1
28.0
21.5

17.8
26.6
21.3

17.6
27.7
20.5

18.1
27.9
20.7

0.5
0.2
0.2

9.0
13.7

10.1
12.7

10.8
14.8

10.1-11.0
13.7-14.6

11.2-11.8
14.7-15.4

0.8-1.1
0.8-1.0

3.0
80.3
86.1
8.5

1.9
101.1
88.0
9.7

1.6
112.9
87.4
8.5

1.2
124.5
86.8
8.5

2.3
82.3
90.1
8.5

1.1
(42.2)
3.3

Share price as at 30 June (RM)

Market capitalisation (RM Million)
FINANCIAL RATIOS (%) 1
Profitability Ratios/Market Share
Net interest margin on average interest-earning assets
Net interest on average risk-weighted assets
Net return on average shareholders funds
Net return on average assets
Net return on average risk-weighted assets
Cost to income ratio
Domestic market share in :
Loans, advances and financing
Deposits from customers Savings Account
Deposits from customers Current Account
Capital Adequacy Ratios (%) 1
(after deducting proposed final dividend) 2
Core capital ratio 5
Risk-weighted capital ratio 5
Asset Quality Ratios 1
Net impaired loans / non-performing loans ratio (%)
Loan loss coverage (%)
Net loan to deposit ratio (%)
Deposits to shareholders fund (times)
Valuations on Share 1
Gross dividend yield (%)
Dividend payout ratio (%)
Price to earnings multiple (times) 4
Price to book multiple (times)

1
2

6.7

7.4

1.4

7.3

6.7

(0.6)

71.5
20.5
2.4

60.4
13.2
1.8

61.4
49.2
1.7

76.5
14.0
1.9

74.9
14.6
2.1

(1.6)
0.5
0.2

Comparative figures were reclassified to conform with current year presentation.

In compliances with Bank Negara Malaysia Guidelines Risk Weighted Capital
Adequacy Framework.
Adjusted for rights issue completed on 30 April 2009 and bonus issue of 1:4
completed on February 2008 and Maybank Group Employee Share Scheme relating
to the Restricted Share Unit as at 30 June 2011.

Price to earnings multiple (times); (2009) 12.8 times (before impairment of goodwill/
associate).
The capital adequacy ratios for 2011 and 2010 present the two range of extreme
possibilities, i.e.
(i) Where the full electable portion is not reinvested; and
(ii) Where the full electable portion is reinvested in new ordinary shares in
accordance with the Dividend Reinvestment Plan.

Our performance

81

Maybank Annual Report 2011

At A Glance

10

11

Shareholders' Equity

07

08

09

4,450

3,818
308,035

284,971

249,009

379,488

11

Deposit from Customers

07

08

09

281,976

236,910

212,599

187,112

RM million

10

11

Paid-up Capital

31,461

RM million

3,889

27,877

24,899

19,302

19,198

10

10

11

07

08

09

10

11

AGM Information

1.0
(37.9)
3.7
0.3

09

Financial & Others

2.3
83.0
90.1
7.2

08

7,478

09

07

7,078

08

RM million

1.3
120.9
86.4
6.9

692

3,178
236,799

RM million

07

2,928

5,370

6,270
411,959

11

7,078

(1.3) - (1.6)
(1.3) - (1.6)

10

4,881

12.5 - 13.3
12.5 - 13.3

09

163,677

13.8 - 14.9
13.8 - 14.9

08

253,976

0.5
0.2
0.2

11

RM million

Loans, Advances And Financing

140,865

18.1
27.9
20.7

10

Governance

17.6
27.7
20.5

09

Leadership

(0.2)

(2.3)
0.3
(0.1)
3.8

08

Responsibility

2.2
2.9
12.6
1.2
1.8
45.7

07

Total Liabilities

RM million

07
2.4
2.9
14.9
1.5
1.9
41.9

11

Total Assets

336,700

10

205,555

1,674

09

310,739

(7.8%)
(7.8%)
9.1%
4.9%

08

185,783

46.3
46.3
60
374.4

4,086

50.2
50.2
55
356.8

07

269,101

18.2%
8.3%
19.9%
19.1%
14.9%
24.7%
5.7%
10.9%

164,614

293,661
51,486
181,573
265,662
201,465
265,846
7,478
27,998

4,364

248,392
47,544
151,470
223,135
175,380
213,216
7,078
25,257

256,667

2.3%
(4.7%)
(4.7%)
(5.5%)

RM million

Business Review

13,588
4,561
4,561
3,359

PATAMI

RM million

Performance

13,280
4,787
4,787
3,553

Profit Before Taxation

Strategy

YoY Change

Who We Are

2011

Our Perspective

Bank
2010

82

Our performance

Maybank Annual Report 2011

Simplified Group
Statements of Financial Position
Asset
Cash and
short-term funds
8.5%
2 Deposits and
placements with
financial institutions
2.7%
3 Securities portfolio
16.1%
1

7
1

RM336.7
billion

Loans, advances
and financing
61.0%
5 Others assets
10.3%
6 Statutory deposits
with Central Banks
1.3%
7 Securities purchased
under resale
agreements
0.1%

Cash and
short-term funds
9.4%
2 Deposits and
placements with
financial institutions
2.5%
3 Securities portfolio
14.8%
1

1
2

RM412.0
billion

Loans, advances
and financing
61.7%
5 Others assets
9.7%
6 Statutory deposits
with Central Banks
1.9%

2010

2011

Liabilities & Shareholders Equity

1

Deposits for
customers
70.4%

Deposits and
placements of banks
and other financial
institutions
6.9%
Obligations on
securities sold
under repurchase
agreements, bills
and acceptances
payable and other
liabilities
10.0%
Subordinated
obligations and
Capital securities
4.2%
Share capital
2.1%
Reserves
6.2%
Non-controlling interests
0.2%

5
6
7

7
4

Deposits for
customers
68.4%

Deposits and
placements of banks
and other financial
institutions
8.1%
Obligations on
securities sold
under repurchase
agreements, bills
and acceptances
payable and other
liabilities
11.6%
Subordinated
obligations and
Capital securities
4.1%
Share capital
1.8%
Reserves
5.8%
Non-controlling interests
0.2%

3
3

RM336.7
billion

2010

5
6
7

7
4

RM412.0
billion

2011

Our performance

Maybank Annual Report 2011

83
At A Glance

Group Quarterly Financial

Performance

Our Perspective

2011
Q2

Q3

Q4

YEAR

5,002

5,189

5,128

5,721

21,040

2,113
87
1,373
1,404
1,028
14.54

2,206
41
1,524
1,562
1,125
15.72
28.00

2,159
84
1,550
1,576
1,143
15.61

2,270
345
1,688
1,728
1,154
15.54
32.00

8,748
557
6,135
6,270
4,450
61.41
60.00

RM million

Q3

Q4

YEAR

4,565

4,671

4,587

4,737

18,560

2,009
72
1,131
1,156
882
12.46

2,039
82
1,365
1,400
994
14.04
11.00

2,010
102
1,429
1,455
1,030
14.55

2,148
169
1,324
1,359
912
12.89
44.00

8,206
425
5,249
5,370
3,818
53.94
55.00

Responsibility

Q2

Business Review

Operating revenue
Net interest income (including income from
Islamic banking business)
Net income from insurance business
Operating profit
Profit before taxation and zakat
Net profit attributable to equity holders of the Bank
Earnings per share (sen)
Dividend per share (sen)

Q1

Performance

2010

Strategy

Operating revenue
Net interest income (including income from
Islamic banking business)
Net income from insurance business
Operating profit
Profit before taxation and zakat
Net profit attributable to equity holders of the Bank
Earnings per share (sen)
Dividend per share (sen)

Q1

Who We Are

RM million

Leadership
Governance
Financial & Others
AGM Information

84

Maybank Annual Report 2011

Our performance

Key Interest Bearing Assets

and Liabilities
2011

2010
As at
30 June
RMmillion

Effective
Interest Rate
%

Interest
RMmillion

As at
30 June
RMmillion

Effective
Interest Rate
%

Interest
RMmillion

Interest earning assets

Loans, advances and financing
Cash and short-term fund & deposits
and placements with financial institutions
Securities held-for-trading
Securities available-for-sale
Securities held-to-maturity

205,555

6.22

10,228

253,976

6.52

11,632

37,623
2,651
42,576
8,943

1.43
3.39
4.18
4.97

486
62
1,688
425

49,095
4,142
47,259
9,639

1.82
3.39
4.07
3.98

572
91
1,736
439

236,910

1.63

3,524

281,976

1.94

4,368

23,258
2,825
8,069
5,979

1.24
3.19
3.87
6.56

405
165
358
398

33,304
5,447
10,801
6,121

1.83
3.67
3.88
6.54

626
213
300
397

Interest bearing liabilities

Deposits from customers
Deposits and placements of
banks and other financial institutions
Borrowings
Subordinated obligations
Capital securities

Our performance

Maybank Annual Report 2011

85
At A Glance

Statement of
Value Added

Our Perspective

2011
RM000

2010
RM000

VALUE ADDED

YoY Change

Value added available for distribution

8,623,617

10,126,349

17.4%

2,918,421

3,567,754

22.2%

1,401,958

1,650,709

17.7%

DISTRIBUTION OF VALUE ADDED

1,008,613
150,283

3,873,404
169,480

284.0%
12.8%

334,788
2,809,554

288,128
576,874

(13.9%)
(79.5%)

Value added available for distribution

8,623,617

10,126,349

17.4%

Responsibility

To employees:
Personnel costs
To the Government:
Taxation
To providers of capital:
Dividends paid to shareholders
Minority interests
To reinvest to the Group:
Depreciation and amortisation
Retained profits

Business Review

6.1%
8.9%
31.2%
11.4%
8.7%
(59.0%)
464.3%
10.8%

Performance

7,185,930
1,561,873
557,306
4,114,655
(2,796,302)
(502,166)
(129,955)
135,008

Strategy

6,770,873
1,434,744
424,907
3,692,680
(2,572,325)
(1,226,067)
(23,030)
121,835

Who We Are

Net interest income

Net income from Islamic Banking business
Net income from insurance business
Other operating income
Operating expenses excluding staff costs, depreciation and amortisation
Allowance for losses on loans, advances and financing
Impairment (loss)/written back
Share of results of associated companies

Leadership

To Providers of Capital
Dividends paid to Shareholders
Minority Interest
1,158,896

To Reinvest in the Group

Depreciation and amortisation
Retained profits
3,144,342

2010

To The Government
Taxation
1,650,709

To Providers of Capital
Dividends paid to Shareholders
Minority Interest
4,042,884

To Reinvest in the Group

Depreciation and amortisation
Retained profits
865,002

4
1
3

2011

AGM Information

To Employees
Personnel costs
3,567,754

Financial & Others

To The Government
Taxation
1,401,958

Governance

To Employees
Personnel costs
2,918,421

86

Maybank Annual Report 2011

Our performance

Segmental
Information
Analysis by Geographical Location
2011

2010
RM000

Composition

RM000

Composition

YoY Change

8,574,604
1,387,340
1,890,875
470,385

70%
11%
15%
4%

9,075,257
1,618,698
2,133,125
592,684

68%
12%
16%
4%

6%
17%
13%
26%

12,323,204

100%

13,419,764

100%

9%

4,119,567
818,301
255,230
177,310

77%
15%
5%
3%

4,751,383
888,242
289,711
341,131

76%
14%
5%
5%

15%
9%
14%
92%

5,370,408

100%

6,270,467

100%

17%

NET INCOME
1.
2.
3.
4.

Malaysia
Singapore
Indonesia
Other Locations
Group

PROFIT BEFORE TAXATION

1.
2.
3.
4.

Malaysia
Singapore
Indonesia
Other Locations
Group

Profit Before Taxation

Net Income
RM million

RM million

4,120

FY10

Singapore

Indonesia

FY11

177

Malaysia

341

Others
Locations

290
255

888
818

FY11

593

Indonesia

4,70

2,133
1,891

1,619
1,387
FY10

Singapore

4,751

9,075

8,575

Malaysia

Others
Locations

Our performance

87

Maybank Annual Report 2011

At A Glance
Our Perspective

Analysis by Activity
2011

2010

YoY Change

6,129,500
2,796,100
3,748,600
755,656
(1,106,652)

6,224,830
3,329,864
4,177,800
924,788
(1,237,518)

1.6%
19.1%
11.4%
22.4%
11.8%

Total

12,323,204

13,419,764

8.9%

Community Financial Services

Global Wholesale Banking
International Banking
Insurance, Takaful and Asset Management
Head Office and Others

2,781,942
2,002,706
1,250,842
441,570
(1,106,652)

2,990,044
2,540,851
1,489,469
487,621
(1,237,518)

7.5%
26.9%
19.1%
10.4%
11.8%

Total

5,370,408

6,270,467

16.8%

Business Review

Strategy

Community Financial Services

Global Wholesale Banking
International Banking
Insurance, Takaful and Asset Management
Head Office and Others

Performance

Who We Are

NET INCOME (RM000)

PROFIT BEFORE TAXATION (RM000)

Responsibility
Leadership

Profit Before Taxation

Net Income
RM million

RM million

AGM Information

Investment International Insurance,

Banking
Banking
Takaful and
Asset
Management

Financial & Others

FY11

Global
Market

442

Corporate
Banking

488

1,489
1,251

FY10

136
144

Community
Financial
Services

1,321

492

Investment International Insurance,

Banking
Banking
Takaful and
Asset
Management

1,367

1,084

756

925

4,178
3,749

Global
Market

482
236

1,505
FY11

1,568

1,279
1,055

FY10

Corporate
Banking

Governance

2,782

6,130

6,225

Community
Financial
Services

2,990

Global Wholesale Banking

Global Wholesale Banking

Collaborative
Our approach to customers and staff alike is to build mutually beneficial long-term relationships. We seek to understand our
customers ever-evolving and frequently different needs, and we work with our customers to explore and deliver the best
possible solutions with their personal interests in mind. We work as a team with our customers, always offering them optimum
support and advice.

90

Maybank Annual Report 2011

Business Review

Group Financial
Review
FY2011 Highlights

> PATAMI grew 16.6% YoY to a record RM4.45 billion

> Strong business performance across most business

segments contributed 13.8% growth in earnings per

share to 61.4 sen

> Net Interest Margin declined 9bps (normalised) due to

Amid heightened competition both in

domestic and overseas operations, our
results were ahead of expectations and
reflect sustainability and responsible growth
and expansion in our Group business model.
The Group fundamentals remain strong
going forward.

intense competition
> Asset Quality continued to improve with net impaired
loan ratio declining to 2.25% in June 2011

> Full-year dividend rose by 9.1% to 60 sen per share

Khairussaleh Ramli
Deputy President and
Group Chief Financial Officer

PATAMI

Return on Equity

RM4.45 billion

15.2%

2010: RM3.82 billion

2010: 14.5%

PATAMI (RM billion) & EPS (sen)

Gross Loans
Growth
+16.6%

21.7%

1.7x

49.6%

3.82

Cost to Income Ratio

Risk-Weighted Capital
Ratio

2.93

Capital Raising

15.36%*

0.69

2010: 47.3%

FY08

4.45

2010: 10.3%
12.0

Oversubscription of SGD1 billion

Subordinated Notes

61.4

53.9

53.3

FY09
PATAMI (RM bil)

FY11

FY10

2010: EPS14.49%**
(sen)

* Assuming full reinvestment of DRP
**

After actual electable portion reinvested

Revenue (RM billion)

PATAMI (RM billion) & EPS (sen)

PATAMI (RM billion) & EPS (sen)

Revenue (RM billion)

3 Year CAGR : +12.0%

+8.9%

+16.6%

0.69
FY08

FY09
PATAMI (RM bil)

FY10
FY11
EPS (sen)

Revenue (RM billion)

FY08

FY09

Non Interest Income

Income from Islamic Banking

4.11
7.19

1.56

0.42

0.56

3.69
6.77

1.43

0.51

5.43

5.92

1.22

2.69
0.48

2.87

10.52

9.56
0.96

2.93

3.82

12.0

4.45

53.9

53.3

13.42

12.32

61.4

FY10

FY11

Net Income from insurance business

Net interest income

Business Review

Maybank Annual Report 2011

91
At A Glance

31.2%

4,115
3,693
13,420
12,323
FY10
FY11
(6,652)
(5,826)
EPS (sen)
6,768
6,498

11.4%
8.9%
14.2%
4.2%

0.69

557

3 Year CAGR : +12.0%

(502)

(1,226)

(130)
12.32

(23)

5,370

4.11

3.69

5,249
122

464.3%
16.9%
10.8%

7.19 1.56
0.56

6,270

6.77 1.43
0.42

5.43 0.96 2.69

0.48

5.92 1.22
2.87
0.51

6,135
135

-59.0%

13.42

16.8%

4,450

3,818

16.6%

61.4

53.9

13.8%

FY10
Customer Deposit

282.0

262.0

236.9

215.2

212.6

185.8

187.1
Gross Loans

FY09

FY11

AGM Information

FY08

Financial & Others

164.6

+19.0%
+21.7%

Governance

FY10
FY11
Net Income from
insurance business
from&Islamic
Banking Deposits
Net interest
income
GrossIncome
Loans
Customer
(RM
billion)
FY08
FY09
Non Interest Income

Asset quality continued to improve with net

impaired loan ratio declining to 2.25% in June
2011 from 2.99% in September 2010.
Earnings per share rose 13.8% to 61.4 sen from
53.9 sen in FY2010. Return on Equity (ROE)
increased to 15.2% from 14.5% the previous year,
exceeding the targeted Return on Equity of 14%.

4.45

425

3.82

6.1%
8.9%

2.93

6,771
1,435

Leadership

7,186
1,562

Growth

Responsibility

Allowance for losses on loans declined 59.0%

attributable to high bad debt recovery in
Malaysia and Bank Internasional Indonesia and
lower collective assessment for Corporate and
Business Banking.

12.0
Net interest income
Income from Islamic
Banking
Net income from
insurance business
Non-interest income
Net income
FY08
FY09
Overhead expenses
PATAMI (RM bil)
Operating Profit
before allowances
for losses on loans
Allowance for losses
on loans
Impairment losses
on securities, net
10.52
9.56
Operating
Profit
Share of profits in
associates
Profit before
taxation and zakat
Profit after Tax and
Minority Interest
EPS (sen)

FY10

Business Review

Overhead expenses increased 14.2% mainly due

to higher personnel costs which grew by 22.2%.
The Groups cost to income ratio rose to 49.6%
from 47.3% in FY2010 owing to higher costs
growth as compared to income growth. The first
time consolidation of Kim Eng added overhead
cost of RM150 million.

60.0

53.9
FY11

53.3
RM million

Performance

Net income grew 8.9% on the back of 6.1%

growth in net interest income as a result of
stronger loans and deposits growth, 8.9%
growth in Islamic Banking due to strong
financing growth and 31.2% growth in Insurance
income as a result of higher transfer of actuarial
surplus and expansion in the Takaful business.
Non-interest income grew 11.4% resulting from
higher commission fees and higher investment
and trading income.

YoY: +16.6%

Income Statement

Strategy

The Group continued to deliver a strong financial

performance in FY2011, with profit before tax
and profit after tax and minority interest
(PATAMI) rising by 16.8% and 16.6% respectively
while earnings per share was up by 13.8% to
61.4 sen. Growth in profit was contributed by
higher net income which grew by 8.9% and a
decline of 59.0% in allowance for losses on loans
despite a higher growth of 14.2% in overhead
expenses.

The Board of Directors proposed a final dividend

of 32 sen per share less 25% taxation,
comprising of an electable portion of 28 sen (21
sen net per share) and a cash portion of 4 sen (3
sen net per share). Total dividend for the year
was 9.1% higher at 60 sen per share, equivalent
to a payout ratio of 74.9%, exceeding the
Annual
and EPS
dividend payout policy
ratioPTAMI
of 4060%.

Who We Are

Our Perspective

PATAMI rose 16.6% to RM4.45 billion

92

Maybank Annual Report 2011

Business Review

Group Financial
Review

Higher growth in most business segments

v

Revenue by Business Segment

RM million
FY11
FY10 YoY Change
Community Financial Services
6,225
6,130
1.6%
Global Wholesale Banking
3,330
2,796
19.1%
International Banking
4,178
3,749
11.4%
Insurance, Takaful & Asset
925
756
22.4%
Management
Head Office & Others
(1,238)
(1,108)
11.8%
Total
13,420
12,323
8.9%

In FY2011, all segments reported topline revenue

growth. The Groups business segments recorded
a healthy growth in profit before tax (PBT) with
the exception of Global Market and Investment
Banking. Community Financial Services (CFS)
PBT, forming 47.7% the Groups PBT, rose 7.5%
year-on-year to RM2.99 billion on the back of
13% loans growth supported by double digit
growth in all consumer portfolios.
Global Wholesale Banking (GWB) PBT rose 26.9%
contributed by the following businesses:
o Corporate Banking PBT rose sharply by
120.2% to RM1.08 billion as a result of
robust growth of 66% in trade finance and
17.4% in term and working capital loans
o Investment Banking reported a decline in
PBT of 5.8% mainly due to higher overhead
expenses including acquisition expenses for
Kim Eng.
PBT for International Banking increased by
19.1%. The growth was driven by strong
overseas loans growth of 30% especially from
Singapore, Indonesia and the Philippines.
Insurance, Takaful & Asset Management saw a
growth of 10.4% in PBT due to higher surplus
transfer from the Life fund and strong
investment performance.

Profit Before Tax by Business Segment

RM million
FY11
FY10 YoY Change
Community Financial Services
2,990
2,782
7.5%
Global Wholesale Banking
2,541
2,003
26.8%
International Banking
1,489
1,251
19.1%
Insurance, Takaful & Asset
488
442
10.4%
Management
Head Office & Others
(1,238)
(1,108)
11.8%
Total
6,270
5,370
16.8%

Composition of Revenue and Profit before tax

by Business Segment
Revenue
1

Community Financial Service 46.4%

2
1

Corporate Banking
9.5%
Community
Financial
Service 46.4%

2
3

Corporate
Banking
9.5%
Global Market
11.7%

4
3

Investment
Banking
Global Market
11.7%3.6%

4
5

Investment Banking
International
Banking3.6%
31.1%

6
5

Insurance,
Takaful
& 31.1%
International
Banking
Asset Management 6.9%
Insurance, Takaful &
Asset Management 6.9%

5
4
4

1
3

Global Wholesale
Banking
Global Wholesale
Banking

Before elimination of Group

Support costs of RM1.238 billion

Profit before tax

1

Community Financial Service 47.7%

2
1

Corporate Banking
17.3%
Community
Financial
Service 47.7%

2
3

Corporate
Banking
17.3%
Global Market
21.1%

4
3

Investment
Banking
Global Market
21.1%2.2%

5
4

International
Banking2.2%
23.7%
Investment Banking

International
Banking
Insurance,
Takaful
& 23.7%
Asset Management 7.8%
6 Insurance, Takaful &
Asset Management 7.8%

5
6

Before elimination of Group

Support costs of RM1.238 billion

6
6
1
1
3
3

Global Wholesale
Banking
Global Wholesale
Banking

2
2

Business Review

Maybank Annual Report 2011

93
At A Glance

FY11
FY11
RM13.42 billion
RM13.42
FY11
FY11 billion
International

1
1
211
2
322
3
433
4
44

International
RM13.42
32%
RM13.42 billion
billion
32%
International
Malaysia
International
Malaysia
32%
32%
68%
68%
Malaysia
Singapore
Malaysia
Singapore
12%
68%
68%
12%
Indonesia
Singapore
Singapore
Indonesia
16%
12%
12%
16%
Others
Indonesia
Indonesia
Others
4%
16%
16%
4%
Others
Others
4%
4%

4
4

33

2
2

1
1

22

FY10
FY10
RM12.32 billion
RM12.32
FY10
FY10 billion
International

211
2
322
3
433
4
44

11

4
4
3
3

44

33

2
2

1
1

22

11

Responsibility

Profit Before Tax

FY11
FY11
RM6.27 billion
RM6.27
FY11
FY11 billion
International

211
2
322
3
433
4

1
1
211
2
322
3

44

22

1
1
11

3
3
2
2

33

4
4
44

22
1
1
11

AGM Information

433
4

International
RM5.37
23%
RM5.37 billion
billion
23%
International
Malaysia
International
Malaysia
23%
23%
77%
77%
Malaysia
Singapore
Malaysia
Singapore
15%
77%
77%
15%
Indonesia
Singapore
Singapore
Indonesia
5%
15%
15%
5%
Others
Indonesia
Indonesia
Others
3%
5%
5%
3%
Others
Others
3%
3%

44

Financial & Others

FY10
FY10
RM5.37 billion
RM5.37
FY10
FY10 billion
International

2 33
2

Governance

44

4
4

Leadership

1
1

International
RM6.27
24%
RM6.27 billion
billion
24%
International
Malaysia
International
Malaysia
24%
24%
76%
76%
Malaysia
Singapore
Malaysia
Singapore
14%
76%
76%
14%
Indonesia
Singapore
Singapore
Indonesia
5%
14%
14%
5%
Others
Indonesia
Indonesia
Others
5%
5%
5%
Others
Others
5%
5%

3
3

Business Review

1
1

International
RM12.32
30%
RM12.32 billion
billion
30%
International
Malaysia
International
Malaysia
30%
30%
70%
70%
Malaysia
Singapore
Malaysia
Singapore
11%
70%
70%
11%
Indonesia
Singapore
Singapore
Indonesia
15%
11%
11%
15%
Others
Indonesia
Indonesia
Others
4%
15%
15%
4%
Others
Others
4%
4%

44

3
3

Performance

Gross Revenue

Strategy

Domestic operations accounted for a sizeable

portion of the Groups revenue and PBT of 68%
and 76% respectively in FY2011.
Overseas operations made up the remaining
portion of 32% and 24% of the Groups revenue
and PBT respectively.
Overseas operations contribution in revenue and
PBT increase from 30% to 32% and from 23% to
24% respectively due to the Groups focus to
expand international operations.
Singapores operations saw contribution in
revenue increased from 11% to 12% while profit
before tax decreased from 15% to 14%.
Indonesias operations recorded higher
contribution in revenue from 15% to 16% while
PBT contribution remain at 5%.
Other markets operations contribution saw
revenue remain at 4% while PBT increased from
3% to 5%.

Revenue and PBT by Geography

Who We Are

Our Perspective

Growing contribution from overseas

94

Maybank Annual Report 2011

Business Review

Group Financial
Review

Balance sheet continued to strengthen

v

v
v
v
v

The Groups total assets expanded by RM75.3 billion or 22.4% to RM412.0 billion from RM336.7 billion as at
30 June 2010. The growth in total assets was attributed to higher growth in net loans, advances and
financing, securities portfolio and cash and short term funds.
Total gross loans grew 21.7% YoY to RM262.0 billion from RM215.2 billion on the back of higher overseas
loans growth of 29.4%.
Deposits from customers grew by 19.0% to RM282.0 billion from RM236.9 billion a year ago driven mainly
by growth in Malaysia and Indonesia.
As a result of higher loans growth, relative to customer deposits growth, the Groups loan-to-deposit ratio
rose from 86.8% to 90.1% as at 30 June 2011.
Shareholders funds posted a growth of 12.9% year-on-year to RM31.5 billion from RM27.9 billion. The
expansion was due to the contribution of net profit for the financial year and the enlarged share capital
base from RM7.08 billion to RM7.48 billion arising from the Dividend Reinvestment Plan.

Gross Loans
RM billion

Jun 2011

Jun 2010

Variance

YoY
Growth

114.3
88.3
38.6
26.0
4.8
17.1
1.8
26.0
56.2
170.5
89.4
22.1
59.5
16.3
262.0

101.3
76.4
34.6
22.8
4.1
13.7
1.3
24.9
44.7
146.0
69.1
17.5
47.3
11.8
215.2

13.0
11.9
4.0
3.2
0.6
3.4
0.5
1.2
11.5
24.5
20.3
4.5
10.8
4.5
46.3

12.9%
15.6%
11.6%
14.3%
15.6%
25.2%
42.8%
4.7%
25.6%
16.8%
29.4%
25.8%
25.8%
38.6%
21.7%

Community Financial Services

Consumer
Mortgage
Auto Finance
Credit Cards
Unit Trust
Other Retail Loans
Business Banking + SME
Global Wholesale Banking (Malaysia Ops)
Total Domestic
International
Singapore (SGD billion)
BII (Rupiah trillion)
Others
Gross Loans

Stronger loans growth in most business

segments and key home markets
v

The Groups gross loans posted a higher growth

of 21.7% compared to a 10.3% growth in
FY2010. The growth in gross loans to RM262.0
billion was driven by strong overseas loans
growth of 29.4% due to the strengthening of the
Singaporean Dollar and Indonesian Rupiah
against the Malaysia Ringgit.

Maybank Singapore saw a healthy loans growth

of 25.8% to SGD22.1 billion, outpacing the
industrys growth of 14.8%. The growth was
attributed to business loans growth of 33%.
Corporate loans made up of 58% of the total
loans while Consumer loans formed the
remaining 42%.
In Indonesia, Bank Internasional Indonesias loans
growth rose 25.8% to IDR59.5 trillion. This was
due to strong growth across all business
segments.

Business Review

Maybank Annual Report 2011

95
At A Glance

Malaysia
RM
billion

2.8
9.9%
2.5
17.6%
17.1
4.2%
0.4
13.8%
22.7
6.4%
23.2%
96.4%

Group
YOY
Growth

14.6
18.3%
12.1
34.2%
39.2
36.0%

0.0%
65.8
31.3%
40.5%
88.1%

RM
billion

YoY
Growth

44.0
13.7%
57.9
18.7%
152.5
17.1%
27.6
43.8%
282.0
19.0%
36.8%
90.1%

The Group continued to prioritise growing its

low cost funds current accounts and savings
accounts through various strategies to optimise
utilisation of low cost funds.
66.6% of the Groups deposits came from
domestic operations. The Groups domestic
operations deposit growth of 20.8% outpaced
the industry growth of 11.5% as of June 2011.
Loan-to-deposit ratio for the Group, rose to
90.1% in June 2011 from 86.8% a year ago.
The Group seeks to maintain its loan-to-deposit
ratio at 90% or below for its three home markets.

Financial & Others

AGM Information

The Groups customer deposits grew by 19.0% to

RM282.0 billion on 30 June 2011. The growth
was higher than the previous years growth of
11.5%. Deposits growth for the Group was the
result of healthy deposits growth across all
markets. Domestic operations deposit recorded
growth of 20.8%, while Singapore and
Indonesias deposits in their respective currency
terms recorded growth of 6.4% and 31.3%
respectively.
Overall, deposits growth for the Group can be
attributed to the strategy of sourcing deposits
via branch expansion in Indonesia, and
aggressive deposit drive promotions in Malaysia
and Singapore.

Rupiah
trillion

Governance

BII

YoY
Growth

Leadership

31.4
11.4%
46.7
16.8%
83.2
20.8%
26.6
44.3%
187.8
20.8%
41.6%
87.7%

Singapore
SGD
billion

Responsibility

Saving Deposits
Current Accounts
Fixed Deposits
Others
Total Deposits
Low cost funds (CASA)
LD Ratio

YoY
Growth

Business Review

Deposits grew faster in FY11

Performance

Credit cards also recorded a strong growth of

15.6% despite new regulations introduced by
Bank Negara Malaysia of higher minimum salary
requirements for credit card application
eligibility and annual fee of RM50. Credit cards
receivables were up by 15.6% on a yearly basis,
higher than the industrys growth of 12.4% as
strong promotion and branding of the Groups
credit cards were introduced. Market share for
credit cards receivables rose from 14.41%
to 14.93%.
Business Banking and SME segment loans saw a
smaller growth of 4.7% but was a recovery from
last years contraction due to new initiatives to
expand SME business through Maybank entire
branch network.

Strategy

Who We Are

On the domestic front, gross loans growth of

16.8% was above the industrys growth of 13.5%
which was attributable to stronger business and
corporate loans contribution by Global
Wholesale Banking (GWB) loans growth of 25.6%.
For the domestic Consumer loans segment,
which grew by 15.6%, mortgage loans formed
the largest chunk of 43.7%. Mortgage loans rose
by 11.6% amid a strong demand for property
loan.
Automobile financing grew by 14.3% largely due
to strong vehicle sales for most of the financial
year despite slowing down in the later part of
the year due to the tsunami in Japan and
Government measures. Market share for
automobile financing increased to 18.8% from
17.6%

Our Perspective

96

Business Review

Maybank Annual Report 2011

Group Financial
Review
2.88%
2.80%

Net interest 2.70%

margin continued to be
under pressure

Asset Quality continued to improve

v

2.69%

The Group adopted the more stringent criteria of

impaired loans classifications with the
implementation of FRS 139 effective 1 July 2010.
Asset quality continued to improve over the four
quarters: from 2.99% in September 2010, 2.74%
in December 2010, and 2.39% in March 2011. As
of June 2011, net impaired loan ratio was 2.25%.
This reflected the Groups practice of prudent
credit lending and active management of asset
quality.

2.59%

Net interest margin for the Group declined 21

basis points to 2.59%
2.80% in FY2010 due
2.57%from2.50%
to heightened competition despite the two
4Q10
1Q11 Policy
2Q11 Rate
3Q11
4Q11
FY10
FY11
Overnight
(OPR)
hikes in July
2010
and May 2011 during the financial year, and the
effect of FRS 139 implementation.
v
Net interest margin normalised for FRS 139 was
at 2.71%, a decline of 9 basis points YoY.

Net interest margin:

2.71% on normalised basis

Group Impaired Loans Ratio

Pre-FRS 139

2Q10

3Q10

4Q10

Gross NPL

1Q11

2Q11

82.4%

2.99%

0.84%

2.74%

3.34%
2.39%

3Q11

Loan loss
Coverage
Gross Impaired
Loan Ratio

4.20%

2.25%

8.76

1Q10

86.9%

3.66%
2.83%

FY10

84.6%

9.60

Normalised
after
Forex

4.70%

2.42%

10.12

1.00%

*Adjustment for Effective Interest Rate and Unwinding of

interest
4Q09

2.80%

4.63%
2.47%

84.1%

8.87

6.19

6.31

Forex

1.20%

87.6%

9.96

1.22%

2.79%

137.4%

Day1 Sept 10 Dec 10 Mar 11

1 Jul 10
Gross Impaired Loan

Jun 11

5.36

1.36%

2.71%

0.01%
2.89%

FRS139
Normalised
adjustments*
after
FRS 139
adjustments

6.96

6.72

As
Reported

3.07%

131.8%

5.63

1.43%

125.6%

6.02

1.60%

2.70%

3.27%

6.67

1.64%

3.50%

2.59%

3.46%

124.5%
117.8% 120.5%

0.11%

112.9% 113.2%

Post-FRS 139

Refer to page 232 for Risk Management.

Net Impaired
Loan Ratio

Business Review

Maybank Annual Report 2011

97
At A Glance

Bank
Internasional
Indonesia

19 May 2011 IDR1.5 trillion subordinated debt due in

May 2018.

15.36%

11.84%
15.36%

14.72%

11.84%

10.88%
14.49%

11.21%
14.72%
11.21%

13.32%
13.32%

12.49%
12.49%

30 Jun 11* 30 Jun 11**

* Full electable portion paid in cash

* * Full electable portion reinvested
^ After actual electable portion reinvested
30 Jun 09
v

30 Jun 10^

30 Jun 11* 30 Jun 11**

With the* subordinated

debts
during the
Full electable portion
paid inissued
cash
Fullongoing
electable portion
reinvested
year and* *the
capital
optimisation
^ After actual electable portion reinvested
initiatives, our capital position remained strong
after the acquisition of Kim Eng.

Refer to page 396 for Capital Management and 398 for Capital
Adequacy.

Financial & Others

Maybank Islamic 31 March 2011 RM1.0 billion 10 non-callable 5

Berhad
subordinated sukuk.

30 Jun 10^

Governance

30 May 2011 Established RM3.0 billion Lower Tier 2

Capital Subordinated Bonds.

10.88%

30 Jun 09

14.79%

14.06%

Bank

14.79%

Bank

Leadership

28 April 2011 Raised SGD1 billion 10 non-callable 5

Subordinated Notes due in 2021.

14.49%

14.81%

10.81%
14.81%
10.81%

* Full electable portion paid in cash

* * Full electable portion reinvested
^ After actual electable portion reinvested

Responsibility

15 April 2011 Established USD2.0 billion EMTN

Programme.

30 Jun 11**

Business Review

Maybank

30 Jun 11*

* Full electable portion paid in cash

* * Full electable portion reinvested
^ After actual electable portion reinvested
30 Jun 09
30 Jun 10^
30 Jun 11*
30 Jun 11**

Capital Raising Exercise

The Group undertook the following capital raising
exercises during the financial year ended
30 June 2011:

30 Jun 10^

Performance

30 Jun 09

Strategy

Group

14.06%

The Groups capital adequacy ratios, core capital

ratio (CCR) and risk-weighted capital ratio
(RWCR) remained strong at 11.84% and 15.36%
respectively as at 30 June 2011, based on full
electable portion reinvested.
A significant portion of the Groups capital
(approximately 60%) is held in the form of equity
(paid-up capital, share premium, retained
earnings, reserves), being the highest quality of
capital in terms of capacity to absorb losses. The
remaining, approximately 40%, was held in the
form of hybrid securities and subordinated debt.
The Group is proactive in ensuring its capital
position will remain strong by having a policy of
maintaining a core capital ratio of above 10%
which is viewed as necessary for the Group to be
well positioned to meet the stringent capital
requirements under Basel III moving forward.
The introduction of a Dividend Reinvestment
Plan since 2010, is one of the Groups long-term
strategy of strengthening its capital position
whereby dividends from distributable net profits
are reinvested into new Maybank shares at a
discounted price and therefore enlarging its
share capital base.

Who We Are

Group
Capital
Adequacy improved on proforma basis after
Kim Engs acquisition and SGD1 billion sub-debt

Our Perspective

Capital adequacy remains strong

AGM Information

98

Maybank Annual Report 2011

Business Review

Group Financial
Review

Consistently rewarding shareholders

with high dividend payout ratio
v

A final dividend of 32 sen per share subject to

the Dividend Reinvestment Plan has been
proposed by the Board of Directors to be
distributed to eligible shareholders. Continuing
to consistently reward our shareholders, the total
dividend for FY2011 of 60 sen per share was
equivalent to a payout ratio of 74.9% which
exceeds the dividend payout policy of between
4060%.
Dividend Reinvestment Plans, were well received
with a high reinvestment rate of 89% and 91% in
the first and second Dividend Reinvestment Plan
respectively.
The Dividend Reinvestment Plan will continue to
be the Groups strategy for conserving capital
through high reinvestment in new shares whilst
rewarding shareholders.

Gross Dividend (sen) and Payout Ratio (%)

76.5%

71.5%

FY2011 FY2010
2.59%a
15.2%
36.6%
49.6%
90.1%

2.80%
14.5%
33.4%
47.3%
86.8%

Asset Quality
Gross Impaired Loan Ratio/NPL Ratio 3.34%
Net Impaired Loan Ratio/NPL Ratio 2.25%
Loan Loss Coverage
82.4%
Charge off rate (bps)
23

2.90%
1.22%
124.5%
53

Net Interest Margin

Return on Equity
Fee to Income Ratio
Cost to Income#
Loan-to-Deposit Ratio

Capital Adequacy (Group)

Core Capital Ratio
Risk Weighted Capital Ratio
*
#
^
a

44*

29

v
v

18

28*
FY09

11

29

26
FY08**

After electable portion dividend reinvested

Total cost excludes amortisation of intangibles
Assuming full reinvestment of DRP
Normalised NIM for FY11 is 2.71%

Conclusion

61.4%

FY07**

11.84%^ 10.88%*
15.36%^ 14.49%*

74.9%

32*

60.4%

Key Ratios

FY10

Final

Interim

* subject to Dividend Reinvestment Plan

** adjusted for 1:4 Bonus Issue in February 2008 and
9:20 Right Issue at RM2.74 in March 2009

FY11
v

The Groups fundamentals remain strong with a

strong capital management policy in place.
The Group targets to further grow its fund based
income by growing loans and deposits with
pricing dicipline.
The Group is also targeting to grow fee-based
income, particularly from Global Wholesale
Banking businesses and the regional investment
banking platform of Maybank IB/Kim Eng.
Cost management will continue to be a major
focus but in doing so will not be at the expense
of future growth. The Group will continue to
invest in upgrading systems and human capital.
The Group continues to prepare itself for the
upcoming capital management regulations to be
introduced by the central bank, to be in
compliance with Basel III.

Business Review

Maybank Annual Report 2011

At A Glance

Economic &
Banking Industry Review

(3.4)

10.5

7.9

3.9
3.4

4.3
3.9

5.2
6.5

6.1
(7.5)
(6.5)
(10.1)
(10.6)

5.9
27.6
(18.1)
5.3
8.7

0.3
17.0
(23.3)
3.5
6.4

0.3
(5.3)
(9.9)
3.3
3.8

3.8
(2.6)
6.5
7.4
6.4

1.4
(3.8)
5.3
3.2
6.0

Real GDP
By Demand
Private Consumption Expenditure
Government Consumption
Expenditure
Gross Fixed Capital Formation
Net Exports of Goods & Services
Export of Goods & Services
Import of Goods & Services
By Sectors
Manufacturing
Construction
Utilities
Other Goods Industries
Services Producing Industries

FY10

FY11

(3.4)

10.5

7.9

(1.3)

4.5

4.6

5.8
(4.0)
(25.7)
(8.2)
(5.9)

8.9
4.1
59.2
10.5
5.4

5.5
3.3
15.7
10.2
9.3

(11.8)
23.0
0.9
(7.3)
(1.1)

22.4
11.8
3.7
2.4
6.8

11.0
2.0
4.1
1.0
7.6

Financial & Others

Source: CEIC

FY09

Governance

FY11

Leadership

FY10

Responsibility

Source: CEIC

FY09

Business Review

Real GDP
By Demand
Final Consumption Expenditure
Private Consumption Expenditure
Government Consumption
Expenditure
Gross Fixed Capital Formation
Net Exports of Goods & Services
Exports of Goods & Services
Imports of Goods & Services
By Sectors
Agriculture, Forestry & Fishing
Mining & Quarrying
Manufacturing
Construction
Services

Growth (% chg)

Singapore

Performance

Growth (% chg)

Malaysia

Strategy

The Malaysian economy grew by 4.7% (FY2010: 5.4%)

on growth in private consumption and sustained
robust expansion in gross fixed capital formation amid
the consolidation in Government outlays and
moderate external trade growth.

Who We Are

Singapores real GDP growth was 7.9% in the financial

year under review compared with 10.5% in the
preceding financial year, thanks to the sustained
growth in external trade and consumer spending,
while growth in Government spending and gross
fixed capital formation continued at slower pace.

Our Perspective

Overall, the Maybank Groups home market countries

Malaysia, Singapore and Indonesia sustained their growth
momentum in FY2011 as global economic recovery
gathered momentum.
Global economic growth accelerated to 4.1% in
FY2011 after rebounding by 1.9% in FY2010 from the
1.9% contraction in FY2009 as recovery from the
2008-2009 global financial crisis and world recession
gathered momentum.

99

AGM Information

100

Maybank Annual Report 2011

Business Review

Economic &
Banking Industry Review

Indonesia registered 6.4% economic expansion in

FY2011 after the 5.3% increase in FY2010,
spearheaded by domestic demand as growth in
consumer, business and Government spending picked
up, which in turn boosted import growth, while
exports were buoyed by firm commodity prices.
Growth (% chg)

Indonesia

Real GDP
By Demand
Final Consumption Expenditure
Private Consumption Expenditure
Government Consumption
Expenditure
Gross Fixed Capital Formation
Export of Goods & Services
Import of Goods & Services
By Sectors
Agriculture, Livestock, Forestry
and Fisheries
Mining & Quarrying
Manufacturing Industries
Electricity, Gas & Water Supply
Construction
Trade, Hotel & Restaurant
Transport & Communication
Financial, Ownership & Business
Services

FY09

FY10

FY11

5.1

5.3

6.4

6.5
5.2
16.3

4.4
4.4
4.1

4.7
4.7
5.2

6.8
(5.8)
(10.0)

5.8
6.6
5.1

8.6
13.9
15.2

4.2

3.4

3.2

2.7
2.3
11.8
6.5
3.7
16.4
6.9
6.7

4.7
3.5
10.7
7.6
5.2
13.3
4.8
5.5

3.0
5.2
4.0
6.6
8.6
13.2
6.6
6.7

Source: CEIC

Challenging outlook
for FY2012
Despite the stronger FY2011 growth performance
noted above, global real GDP growth decelerated to
3.6% in the second half from 4.7% in the first half,
reflecting the dampening impact of rising commodity
prices and inflation that prompted interest rate hikes
especially in the emerging and developing
economies, plus the diminishing effect of the earlier
fiscal stimuli, as well as the output and trade shock
from Japans earthquake and tsunami on 11 March
2011 which disrupted the global supply chain. These
were followed by several developments at endFY2011 and early-FY2012 that further elevate the risks
to global economic outlook.

Global: Quarterly Real GDP Growth (% YoY)

2010
WORLD
US
Eurozone
Japan
UK
Canada
Australia
China
India
Russia
Brazil
S. Korea
Taiwan
Hong Kong
Singapore
Indonesia
Thailand
Malaysia
Philippines
Vietnam

2011

1Q

2Q

3Q

4Q

1Q

2Q

4.9
2.2
0.9
5.7
(0.3)
3.0
2.3
11.9
9.4
3.5
9.3
8.5
13.6
8.1
16.4
5.6
12.0
10.1
7.8
5.9

5.2
3.3
2.0
3.1
1.6
4.1
3.2
10.3
9.3
5.0
9.2
7.5
12.9
6.4
19.4
6.1
9.2
8.9
8.2
6.3

5.0
3.5
2.0
5.0
2.5
3.6
2.5
9.6
8.9
3.1
6.7
4.4
10.7
6.7
10.5
5.8
6.6
5.3
6.3
7.4

4.5
3.1
2.0
2.1
1.5
3.4
2.7
9.8
8.3
4.5
5.0
4.7
7.1
6.4
12.0
6.9
3.8
4.8
7.1
7.2

3.9
2.2
2.5
(1.0)
1.6
2.8
1.0
9.7
7.8
4.1
4.2
4.2
6.2
7.5
9.3
6.5
3.0
4.9
4.9
5.4

3.3
1.6
1.8
(1.0)
0.7
2.2
NA
9.5
NA
3.4
NA
3.4
5.0
5.1
0.9
6.5
NA
4.0
NA
5.7

Sources: Bloomberg, CEIC, Maybank IB

The Eurozone sovereign debt crisis triggered by

concerns over the sustainability of budget deficits and
government debts intensified towards the end of
FY2011 and at the start of FY2012. The crisis, initially
contained in the smaller economies of Greece, Ireland
and Portugal, now threatens to engulf the larger
economies of France, Italy and Spain with potential
fallout on the banking sector on exposure and
counterparty risks. In response, the European Union
announced a slew of measures on 21 July 2011 that
included a second bailout for Greece; voluntary
restructuring and buybacks of Greek debt; and
expanding the scopes as well as improving the terms
and conditions for the utilisation of the European
Financial Stability Facility (EFSF), while the European
Central Bank (ECB) intervened in the regions bond
market in early-August 2011 to ease the stress on the
Italian and Spanish bonds.

Business Review

Maybank Annual Report 2011

101
At A Glance

Global: Annual Real GDP (% chg)

2007 2008 2009 2010 2011E 2012E

5
3
2
1
0
-1
-2

Jun 11

Sep 10

Mar 11

Jun 10

Sep 10

Sep 09

Mar 10

Jun 09

Sep 09

Sep 08

Mar 09

Jun 08

Sep 08

Sep 07

Mar 08

Jun 07

% YOY

Sep 07

Sep 06

Mar 07

Jun 06

Sep 06

-5

Mar 06

-4

%QoQ

4.3
2.2
2.5
2.0
(0.7)
1.5
2.9

4.5
2.6
2.7
1.7
2.9
2.3
2.6

8.8

6.1

2.7

7.4

6.6

6.4

6.1
8.5
9.9
14.2
5.9
5.1
6.0
6.4
8.8
6.4
6.3
5.0
6.5
8.5
7.1

5.2
5.2
6.2
9.6
1.8
2.3
0.7
2.3
1.5
4.7
6.0
2.5
4.7
6.3
3.7

(0.6)
(7.8)
6.8
9.2
(0.8)
0.2
(1.9)
(2.7)
(0.8)
1.7
4.6
(2.3)
(1.7)
5.3
1.1

7.5
4.0
10.4
10.3
8.4
6.1
10.8
6.8
14.5
6.9
6.1
7.8
7.2
6.8
7.3

4.1
4.8
8.2
9.6
5.1
4.5
5.4
5.4
5.2
5.4
6.3
4.0
5.1
6.3
5.0

3.6
4.5
7.8
9.5
4.5
4.2
5.2
4.2
4.4
5.7
6.6
4.5
5.5
6.8
5.0

Sources: IMF (World Economic Outlook Update June 2011), Maybank IB, BII
Leadership
Governance
Financial & Others

Current global real GDP growth forecasts for the

calendar year 2011 and 2012 are based on the
assumptions that the US economy stays on the
growth path, the Eurozone sovereign debt crisis will
be contained and resolved, China will achieve a
growth soft landing, and growth in the emerging
market economies will be sustained by strong
fundamentals and positive socioeconomic dynamics.

5.1
3.0
2.9
1.8
4.0
1.3
3.2

Responsibility

The downside risks facing the global economy were

also amplified going into FY2012 as the global
manufacturing purchasing managers index (PMI)
continued its downward trajectory for the fifth
consecutive month as of July 2011. The heightened
concerns about growth prospects resulted in the
global stock market plunge in early August 2011.

(0.5)
(3.4)
(2.6)
(4.1)
(6.3)
(4.9)
(2.5)

Business Review

At the same time, there is the fear of a double-dip

recession in the US on signs that the economys
recovery is losing momentum following the
deceleration in quarterly real GDP growth, and as the
Federal Reserves second quantitative easing (QE2)
enacted in November 2010 ended in June 2011. The
US is also under pressures to reduce budget deficit
and contain government debt after the downgrade in
its sovereign credit rating to AA+ from AAA by the
rating agency Standard & Poors on 5 August 2011.

2.9
0.2
0.0
0.7
(1.2)
(0.1)
0.5

Performance

Source: Bloomberg

5.4
2.7
1.9
3.2
2.4
2.7
2.2

Strategy

-3

World
Advanced Economies
US
Eurozone
Japan
UK
Canada
Developing & Emerging
Economies
BRIC
Brazil
Russia
India
China
Asian NIEs
South Korea
Taiwan
Hong Kong
Singapore
Asean-5
Indonesia
Thailand
Malaysia
Vietnam
Philippines

Who We Are

Our Perspective

US: Quarterly Real GDP Growth

AGM Information

102

Maybank Annual Report 2011

Business Review

Economic &
Banking Industry Review

Bearing in mind the above caveats, the Malaysian

economy is projected to grow by 5.5% in 2012 after
the forecast of 5.1% in 2011. Domestic demand is key
to sustaining growth amid the external uncertainties.
Infrastructure construction and business spending will
be the major drivers with the rollout of the Mass
Rapid Transit (MRT) project and the implementation
of investments in sectors and industries such as oil &
gas, electrical & electronics, agriculture (plantation
and food-based), tourism, healthcare, education and
business services, all of which have been identified
and confirmed under the Economic Transformation
Programme (ETP). At the close of FY2011, a total of 65
projects with investment values totaling RM169.8b
were committed under the ETP. Gradual reduction in
food, fuel and energy subsidies plus measures to
address the public concern over the rising cost of
living should keep the inflation rate in check and limit
the downsides to consumer spending. In addition,
monetary policy is expected to remain
accommodative to support business and consumer
spending amid fiscal consolidation. This was signaled
by Bank Negara Malaysias decision to keep the
Overnight Policy Rate (OPR) at 3% in the first
Monetary Policy Committee (MPC) meeting of FY2012
on 5 July 2011. OPR is expected to stay at this level
until the middle of 2012 at least.
Singapores real GDP is projected to slow to 4.4% in
2012 from 5.2% in 2011, reflecting the high degree of
economic openness for a global trade and finance
oriented economy, and the impact of high living
costs. To ensure the economy stays on the growth
path, the Monetary Authority of Singapores current
exchange rate policy of gradual appreciation in the
Singapore Dollar is expected to be maintained, and
the countrys strong fiscal position will be utilised to
support domestic demand.

Indonesias economic expansion is expected to be

sustained at 6.6% in 2012 (2011: 6.3%), as domestic
economic reforms and restructuring as well as its
emerging economy status draws in capital flows,
especially foreign direct investment (FDI), boosting
output, employment and income, and in turn lifting
domestic demand. Monetary policy is also expected
to remain supportive of domestic demand amid
recent indications of moderating inflationary
pressures, with Bank Indonesias reference rate likely
to remain stable into the foreseeable future, having
stayed at the current rate of 6.75% since February
2011.

Banking Sector Review

FY2011 July 2010 to June 2011
Banking system loans growth remained firm during
the period under review, expanding 13.4% in FY2011
to RM947.7 billion as at end-June 2011, versus a
growth of 12.5% in FY2010. While household loan
growth remained robust, non-household loan growth
noticeably gathered momentum towards the latter
few months and outpaced household loan growth.
For FY2011, household loans expanded 12.8% YoY to
RM519.6 billion while non-household loans increased
at a rate of 14.2% YoY to RM428.1 billion. Household
loans made up 55% of system loans as at end-June
2011.
While compliance with FRS139 resulted in a jump in
impaired loans during the year, overall industry health
remained fundamentally strong, with the net impaired
loans ratio of the banking system coming in at a
relatively low 2% as at end-June 2011. Industry loan
loss coverage dipped during the year but ended the
year at a comfortable 94.5%.
The banking system continued to be well capitalised
in FY2011. Core capital and risk weighted capital
ratios were 12.3% and 13.9% respectively as at
end-June 2011.
During the year, however, competition for both loans
and deposits remained elevated and contributed to
margin compression, which in turn muted profitability
for the banking system. Earnings growth,
nevertheless, was sustained on the back of lower
credit charge-off rates.

Business Review

Maybank Annual Report 2011

103
At A Glance

Asset Quality

14
12
10
8
6

Gross loans (LHS)

May11

Jan11

Mar11

Nov10

Jul10

Sep10

Jan10

Mar10

May10

Nov09

Jul09

Sep09

May09

Jan09

Mar09

Jul08

Sep08

Nov08

May08

Jan08

Mar08

2
0

2.6
2.4
2.2
2.0
1.8
1.6
1.4
1.2
1.0

Loan Loss Coverage

YoY Growth (RHS)

Banking Sector Outlook

Malaysia

It has been a decade since the 10-year Financial

Sector Masterplan (FSMP) was introduced in 2001 and
the journey continues with the expected unveiling of
the 2nd Financial Sector Masterplan (FSMP2) in the
coming months. Liberalisation of the domestic
financial sector was a key emphasis in the FSMP and
we expect it to be an ongoing theme in FSMP2.

Governance
Financial & Others

With Malaysia being a fairly mature market, banks are

increasingly pushing abroad for incremental earnings
growth and this is a trend that is likely to persist. In
fact, a common thread running through the ETP and
Bank Negaras Financial Stability and Payment Systems
Report 2010 is the need to facilitate the push by local
financial institutions beyond Malaysian shores for
incremental growth. To this end, the Central Bank will
proactively seek to open up opportunities abroad
through bilateral and multilateral agreements. As at
the end of 2010, six of the domestic banking groups
had operations in 19 countries, with overseas
operations contributing RM250 billion in total assets
and almost RM2 billion in profits.

Leadership

The recently completed EON Capital-Hong Leong

Bank merger has resulted in one less financial
institution in the industry but Bank Negara Malaysia
believes that there is room for further consolidation
among the domestic banks and financial institutions,
particularly as the sector continues to liberalise. To
this end, M&As are likely to be a prevalent theme into
the coming year.

Responsibility

Price competition within the industry is unlikely to

ease anytime soon and, as such, any recovery in net
interest margins is likely to be muted, in our view.
Nevertheless, asset quality is expected to remain
healthy and charge-off rates should remain relatively
benign, barring major economic disruptions.

Source: Bloomberg

Business Review

FY2012 July 2011 to June 2012

Uncertainties in the global economies cloud the
outlook for the domestic economy. Nevertheless, we
expect system loans to expand further with project
system loan growth of 10-12% in FY2012. Household
loan growth is likely to moderate, in our view, with
inflationary pressures and rising interest rates likely to
temper demand. Nevertheless, we expect business
loan growth to pick up the slack, riding on loan
demand for projects under the Economic
Transformation Programme (ETP). The kick-off of
projects under the ETP should also serve to benefit
the debt/equity capital markets, with flowthrough
benefits to investment banks.

Net Impaired Loans

Ratio (RHS)

Performance

Source: Bloomberg

Strategy

98
96
94
92
90
88
86
84
82
80
78

Who We Are

%
16

Jan 10
Feb 10
Mac 10
Apr 10
May 10
Jun 10
Jul 10
Aug 10
Sep 10
Oct 10
Nov 10
Dec 10
Jan 11
Feb 11
Mac 11
Apr 11
May 11
Jun 11

RMbillion
1,000
950
900
850
800
750
700
650
600
550
500

Our Perspective

Gross Loans Growth

AGM Information

104

Maybank Annual Report 2011

Business Review

Business Review:
Overview
v

The Maybank Groups business operations are organised into three business pillars with Islamic Banking
and International operating across the pillars. These are supported by Enterprise Tranformation Services,
Group Finance Office, Group Credit & Risk Management, Group Human Capital and other support
functions.

Refer to the pages indicated in the diagram for the business review of the respective sectors.

For further information on the new House of Maybank, refer to page 38 on strategy.

The new House of Maybank

Maybank
Group CEO + Support
Legal, Compliance, Communications
Group Finance Office (GFO), Page 90
Group Human Capital
(GHC), Page 154

Group Credit & Risk

Management (GCRM), Page 232

Islamic Banking
Page 137

International Banking
Page 142

Global Wholesale Banking

Insurance &

(GWB)

Takaful

Page 116

Page 131

Page 106

Enterprise Transformation Services

IT Transformation Programme, Page 162

Service Quality, Page 165

ENABLEMENT

Community Financial
Services
(CFS)

Business Review

Maybank Annual Report 2011

105
At A Glance
Our Perspective

Profit Contribution by Business Segment

Who We Are

GWB
GWB
34%
34%
1 1Global
Global
Markets
Markets

2 2Investment
Investment
Banking
Banking

6 6

RM136m
RM136m
2%2%

Strategy

RM1,321m
RM1,321m
18%
18%

1 1
2 2

3 3International
International
Banking
Banking

4 4Insurance
Insurance
& Takaful
& Takaful

3 3

5 5

RM488m
RM488m
6%6%

5 5Community
Community
Financial
Financial
Service
Service

4 4

6 6Corporate
Corporate
Banking
Banking

RM1,084m
RM1,084m
14%
14%

PBTPBT
: RM7.51b
: RM7.51b
Before
Before
elimination
elimination
of Group
of Group
support
support
costscosts
of RM1,238m
of RM1,238m

Business Review

RM2,990m
RM2,990m
40%
40%

Performance

RM1,489m
RM1,489m
20%
20%

Responsibility

1 1Malaysia
Malaysia

2 2Singapore
Singapore

RM0.89b
RM0.89b
14%
14%

RM0.29b
RM0.29b
5%5%

2 2

1 1

Governance

3 3Indonesia
Indonesia

3 34 4

Leadership

RM4.75b
RM4.75b
76%
76%

International
International
24%
24%

4 4Others
Others

PBTPBT
: RM6.27b
: RM6.27b

Financial & Others

RM0.34b
RM0.34b
5%5%

AGM Information

106

Maybank Annual Report 2011

Business Review

Community Financial
Services

Despite the tough business environment,

the new House of Maybank has laid a solid
foundation for CFS to strengthen its capacity
and capabilities so as to generate accelerated
growth across-the-board in all our key
business lines.
Lim Hong Tat
Deputy President and
Head, Community Financial Services

In Malaysia, Community Financial Services (CFS) has

expanded from Consumer Banking to encompass SME
and Business Banking. We now aspire to attain the
undisputed No. 1 position in Retail Financial Services by
2015 by achieving community banking leadership in all
areas where we operate, and by becoming an employer
of choice.
Highlights

> We achieved the best overall CFS performance in recent

years with the highest loans and deposits growth

> Profit before tax (PBT) hit RM3.0 billion and revenue
rose to RM6.2 billion

> Loans growth was in double digits across all key

business lines and was up 13% overall (2010: + 12.5%)

to RM114 billion. Lending to households market share
improved from 15.9% to 16.4% and to SMEs from 15.5%
to 17.0%

> Total deposits was up 17% to RM155 billion (2010: +8%)

with consumer Current Accounts & Savings Accounts
(CASA) deposits up 14.4% or RM5.1 billion to achieve a
market share of 24.5% while SME and Business Banking
deposits was up 19.5% or RM11.4 billion

> Credit asset quality improved, with gross impaired loan

ratio declining from 4.7% to 3.0%, of which consumer
dipped from 2.8% to 1.7%
Profit Before Tax

Revenue

RM million

FY10

+7.5%

FY11

2,782

6,225

6,130

+1.6%

FY10

2,990

RM million

FY11

Business Review

Maybank Annual Report 2011

107
At A Glance

Establish segment-ownership to drive business

strategies for HNW and Affluent customers

Serve customer segments via a combination of

products, services, pricing, channels and
processes

Enhance Maybanks operating model

v
Leverage on technology to enhance processing
times and customer services
v

Operate a customer-centric distribution strategy,

with only customer-facing processes carried out
at customer contact points

Implement a hub-and-spoke model with

seamless, straight-through, end-to-end
processing

Innovate to enhance market differentiation

Leadership

Embed credit decisions-making

v
Speed up credit application turnaround time
without compromising asset quality

Responsibility

We have undertaken a strategic transformation plan,

anchored on four strategic thrusts to enable us to
achieve our aspiration:

Move to a customer-segment-driven model

v
Operate a customised strategy for each of our
five segments: High Net Worth (HNW), Affluent,
Mass, SME and Business Banking

Business Review

We empower our customers with innovative financial

solutions. We enrich community life by promoting
wider ownership of homes, vehicles and financial
assets, and by supporting local business growth. In all
these ways, we help boost the local economy and
contribute to a higher standard of living.

Seamlessly connect all our operations via our

shared distribution network

Performance

We aspire to be the community financial services

leader in Malaysia by serving our customers from the
heart and by becoming part of every community
where we operate. By humanising banking, we are
reigniting our legacy as a truly Malaysian bank which
customers can depend on in both good times and
bad.

Strategy

KEY TRANSFORMATION & STRATEGIC

THRUSTS

Who We Are

Over the years, our dedication to enhance our

customers experience has won CFS ten million
individual, SME and Business Banking customers.
What makes our service so distinctive is that we
regularly make product and service innovations that
really fulfill customer needs; and we are constantly
reinventing both our distribution network and
alternative channels to provide customers with
unparalleled access and convenience.

Reposition Maybank as a CFS provider

Provide exceptional service and convenience via
our One Stop Shop, Hip and Cool Branches,
Needs Based Selling and World Class Services
initiatives

Our Perspective

Overview

Governance
Financial & Others
AGM Information

108

Maybank Annual Report 2011

Business Review

Community Financial
Services

FY2011: A Year of Transformation

RM billion

June 11

June 10

Growth

114.3

101.3

12.9%

38.6
26.0
18.9
4.8
26.0

34.6
22.8
14.9
4.1
24.9

11.6%
14.3%
25.8%
15.6%
4.7%

155.5
83.6

133.4
75.2

16.6%
11.1%

3.0%
1.7%

4.7%
2.8%

-1.7%
-1.1%

CFS Gross Loans, Advances & Financing

Core Product
v
v
v
v
v

Mortgage
Auto Loans
Retail Loans
Cards
SME & Business Banking

CFS Deposits
v

Consumer Deposits

Gross Impaired Loans Ratio

v

Consumer Loans

OVERALL PERFORMANCE
During the year under review, CFS reported a profit
before tax of RM3.0 billion with a revenue of RM6.2
billion.

CFS Loans
RM billion

CFS 12.9%

114.3

88.3

76.4

Consumer

June 11
CFS

CFS Deposits
RM billion

CFS 16.6%

155.5

Consumer 11.1%

June 10
Consumer

83.6

133.4

Overall, CFS recorded a gross impaired loans ratio of

3.0%. The Consumer segment, in particular, achieved
a steady improvement from a high of 6.6% in 2007 to
just 1.7%. This was mainly due to proactive loan
management, aggressive rescheduling and
restructuring, and the acquisition of quality loans at
source.

June 10

75.2

Mortgage, automobile, unit trust and card financing

remained the key contributors to the consumer loan
segment, making up 98% of the total portfolio.
Mortgage financing alone accounted for 45% of our
total consumer financing portfolio. Meanwhile,
Current Account & Savings Account (CASA) deposits
(up 14.4%) and fixed deposits (+ 8.2%) pushed retail
deposits up 11.1%.

101.2

Consumer 15.6%

Driven by key strategic initiatives, loans growth was

up 13% to RM114 billion, while consumer banking
shot up 15.6% to RM88 billion despite the competitive
business environment. All consumer loan portfolios
registered strong double digit growth on the back of
high performance in mortgage (+12%), auto finance
(+14%), retail finance (+26%) and credit cards (+16%).

June 11
CFS

Business Review

Maybank Annual Report 2011

109
At A Glance
Our Perspective

Market Position

Commercial Bank in terms of total assets,

deposits and loans

No.1
No.1

Retail Islamic Bank

No.1

Internet Banking website with the highest

number of active users, payee corporations
and transaction volumes

No.1

Mobile Banking provider with the largest

number of users and transaction volumes

No.1

In Credit Card customer base, billings and

merchant sales

No.1

In Debit Card customer base and

transactions

No.1
No.1

In Unit Trust Financing

No.1

In retail CASA and core deposits

Strategy

No.1

Who We Are

With our unmatched distribution network and strong

virtual banking presence, we are well placed to reach
our ten million customers in Malaysia. During the year,
we further consolidated our market dominance by
maintaining our No. 1 market positions as the:

Distribution network in terms of branches

and ATMs/Self Service Terminals (SSTs)

Market share steady at 13.0%

Housing loans up 10.6%

Shophouse loans up 19.1%

Loan origination, approval and acceptance up

44%, 48% and 43% respectively

Gross impaired loan ratio down from 5.43% to

3.25%

AGM Information

Mortgage financing rose significantly in FY2011

despite both the fiercely competitive environment
and the Central Banks measure to curb speculation
and rising household debts by limiting the loan to
value (LTV) ratio to 70% for the financing of the third
home. Progress was underpinned by a comprehensive

In our drive to humanise financial services, we

launched a series of products to meet new customer
needs. The Overseas Mortgage Loan helps High Net
Worth and Private Banking customers purchase
properties in London. This is the markets first
Ringgit-denominated loan product dedicated to the
purchase of residential property overseas. Meanwhile,
the Skim Rumah Pertamaku (My First Home Scheme),
backed by Cagamas, caters specifically to first time
buyers, in line with the Government objective to
promote greater home ownership.

Financial & Others

Meanwhile, the high quality of our credit assets was

demonstrated by a further drop in our gross impaired
loan ratio spurred by improved underwriting
standards, faster approval turnaround time, more
aggressive collection via our Early Care Centres (ECC)
and a rebalancing of our portfolio from primary to
secondary and owner-occupied properties.

Governance

Mortgage financing up 11.6% (2010: 9.8%) to

RM38.6 billion

review of our mortgage business value chain that

enabled us to streamline and simplify the process
from origination to recovery. This will materially
benefit our customers.

Leadership

Flexibility with Maxi Home loan packages.

Responsibility

Mortgage Financing

Business Review

LINES OF BUSINESS PERFORMANCE

Performance

In Dealer finance with floor stocking and

block discounting

110

Maybank Annual Report 2011

Business Review

Community Financial
Services

We also expanded our mortgage origination channels

by building alliances with mortgage direct sales
forces, real estate agents and mortgage brokers
during the year.

We also implemented several strategic alliances: with

Honda Malaysia Sdn Bhd for the Honda Nationwide
Roadshows; with Youth Asia Sdn Bhd for Youth10 at
PWTC; and with TV3s Jom Heboh team to promote
Maybank Close 2 U. Meanwhile, our Free for a Year
campaign (part of our customer loyalty and retention
programme) gave winners a full year free of financing
instalments.

Automobile Financing

Credit Card

Loans growth up 14.3% (2010: 12.2%) to RM26.0

billion, outpacing the industrys 8.4%

No.1 in customer cardbase (1.47 million

cardholders with a 17.6% market share)

Auto market share up from 17.5% to 18.8%

80% floor stocking market share

No.1 in billings (up 19.0% to RM18.2 billion with a

22.6% market share)

76% block discounting market share

No.1 in Islamic Auto Finance

No.1 in merchant sales (up 12.3% to RM25.5 billion

with a 29.2% market share)

Islamic Hire Purchase up 18% to RM16 billion with

a 32% market share

Gross impaired loans ratio down from 1.35% to

1.24% (industry average 1.70%)

Sole provider of Islamic floor stocking and Islamic

block discounting

Receivables up 15.6%

In addition, Maxiplan was enhanced to provide SMEs

and business owners with an attractive shophouse
and commercial property financing package.

During the year, we launched new products, services

and promotions for the younger affluent segment.
Graduate Ezy HP Auto Product allows students,
undergraduates and young graduates/professionals to
step-up repayment; while Online HP finance
application via M2U makes owning a car Just a Click
Away.

Encouragingly, in FY2011 we achieved a rise in

receivables to RM4.8 billion in the face of the
dampening effect of the new RM50-per-card service
tax on the industrys growth. Inevitably, the
introduction of the new tax, plus tighter credit card
lending guidelines, reduced the number of cards in
circulation, which dropped by 8%. But we bucked the
industry trend by expanding in all areas via new
campaigns and promotions designed to boost
activation, spend, receivables and loyalty.

Maybanks EzyAuto Graduate Financing plan comes with repayment plans starting from as low as RM268 per month.

Business Review

Maybank Annual Report 2011

111
At A Glance

First to launch ASB Account Online, enabling

customers to top-up investments via
Maybank2u.com

Straight through Processing for ASB Loan Online

Application launched via M2U

During the year, our aim was to grow our low cost
CASA from the retail, SME and Business Banking
segments. To this end, we launched two new products;
leveraged on our one-stop branch network; introduced
deposits champions at branches; and streamlined
business processes to complement our touch points (i.e.
our 386 branches, our 24x7 Self Service Terminals, and
M2U.com). We also ran a series of aggressive and highly
successful marketing campaigns.
Of our new products, m2u Savers is an online savings
account riding on m2u, while the Master Foreign
Currency Account is a single account supporting
multiple currencies that also rewards loyal customers
with special rates.
We also streamlined our account opening processes
for various deposits products. For m2u.Premier, new
account opening requires only a single customer visit
to the branch. Meanwhile, for Foreign Currency
Account and Foreign Currency Placement, our
Simplified Opening of Accounts (SOA), does away
with the need to fill in account opening forms which
can now be done using MyKad.

AGM Information

For our consumer segment, we rolled out two

thematic campaigns that brought in more than
RM2 billion and four tactical campaigns that attracted
over RM1 billion. This was achieved despite the
competition from rival banks offering higher rates,
other investment instruments promising greater
returns, and a general expectation of higher returns in
line with the predicted rise in inflation. Meanwhile, to
acquire and retain customers from the SME and
Business Banking segments, we launched direct
marketing initiatives including several Payroll
Campaigns.

Financial & Others

At the same time, we initiated several marketing

campaigns including the highly successful Invest &
Win Campaign, and participated in major events such
as the Perbadanan Nasional Bhd Minggu Saham
Amanah Malaysia (PNB MSAM) in Perak and Media
Primas Jom Heboh.

FY2011 witnessed a major growth in CASA, thanks not

just to an overwhelming response to our promotions,
but to the improvements in customer experience
brought about by process enhancements and new
product launches.

Governance

FY2011 saw us promote not just Unit Trust finance

(which accounts for the bulk of our total retail finance
portfolio) but other high yield loans, such as salary and
other consumer loans. As well as enhancing existing
products (Maybank Study Loans and Salary Financing
for Government employees) we launched two new
ones: Salary Financing and Other Consumer Loans for
Government Link Company (GLC) employees; and
Amanah Hartanah Bumiputra unit trust financing.

Loans to deposits ratio (LDR) healthy at 74.3%

despite the robust growth in our lending portfolio

Leadership

25% growth in Unit Trust Loan financing to top

RM17.1 billion, mainly for Amanah Saham
Bumiputera (ASB)

Responsibility

No.1 in total deposits CASA with a 23.0% market

share

Business Review

No.1 Unit Trust Financier in Malaysia with a 65.1%

market share

Performance

No.1 in retail CASA with a 24.5% market share

Strategy

Retail Financing

Who We Are

Maybank Visa debit allows direct debit purchases at Visa

merchant outlets.

Funding & Deposits

Our Perspective

Having issued over three million Visa Debit cards in just

over three years, we rolled out regional card marketing
initiatives in Singapore, Indonesia and the Philippines
during the year. In addition, Maybankard introduced
three innovative new products: Maybankard
MasterCard World Card; Amex Pantai CoBrand Card;
and Maybankard 2 Cards. Of these, the second and
third were market firsts, and all offer our customers
major benefits and tremendous value.

112

Maybank Annual Report 2011

Business Review

Community Financial
Services

Investment
v

Net asset value (NAV) of unit trust funds up 68% to

RM3.0 billion

RM572 million exposure to structured products

In line with our strategy to provide a wide range of

wealth management products, we act as distributors
for selected third party fund houses.
We introduced 15 new unit trust funds during the
year. We also became the sole distributor of the
Amanah Hartanah Bumiputera (AHB) fund, and hit our
sales target by achieving about RM 1 billion in sales.
In addition, to intensify our marketing activities, we
launched ten marketing campaigns, including the FD
Linked campaign and the DCI-i-rush Campaign.
Major process improvement projects included a
multi-currency function for MIAS and the
development of a FinIQ straight-through process for
DCI.

Bancassurance
v

No. 1 in Bancassurance business with a market

share of 27% based on full year 2010

Total new business premium of RM701.98 million

Regular Ordinary Life sales up 25% to RM112

million

National champion of NIAM Bijak Malaysia for

third consecutive year

In FY2011, we celebrated the 15th anniversary of

becoming the first bank in Malaysia to introduce
Bancassurance, providing comprehensive protection
and investment financial advisory services.
Our strategic priorities centred on sales process
improvements and marketing activities. We
streamlined documentation so as to improve sales
efficiency, and ran six sales campaigns two each for
single premium, regular life and general insurance.

Payment Systems
v

Fee-based income rose to RM433 million

Strong growth in remittances and Forex

Maybank Money Express (MME) extended to seven

countries

Foreign currency notes (FCN) business up 12.7%

We continued to focus on dominating Malaysias

Payments market and on driving regional expansion
in the areas of payment services, remittances and
FCN. Our growth strategy is based on aggressive
product innovation and on providing alternative
channels to generate new revenue streams.
Payment Services
To support unit trust management companies we
have established an integrated e-payment platform
including e-dividend. For business enterprises and
SMEs we are developing an enhanced Auto Credit
Payment System with an integrated HR e-payment
solution. We are now designing similar e-payment
solutions to support the Governments goal of a
cashless society.
Remittances
We are the first bank in Malaysia to provide a home
grown web-based remittance service for instant
international money transfer. Maybank Money Express
provides a swift, affordable and secure money transfer
service for migrant workers. It is already available in
seven countries and will be extended to another three
countries by the end of 2011.
ATM Services
We continued to strengthen our SST service offerings.
To enable customers to better manage their bankcard
fees we introduced the option of a single bankcard
annual fee. At the same time, we waived the crossborder fee for ATM regional transactions for Malaysia,
Singapore, Indonesia, the Philippines, Vietnam, Brunei
and Cambodia. Looking ahead, we will be providing
interbank payments and transfer services to derive
new revenue streams from Malaysian Electronic
Payments System (MEPS) ATMs including those at
the entrances of locally incorporated foreign banks
that join the MEPS system.
Forex Business
We have the largest number of Forex booths in
Malaysia some 61 in all. In FY2011, our FCN business
grew 12.5% with the introduction of a more
competitive and affordable pricing model which is
now being extended to all key branches.

Business Review

Maybank Annual Report 2011

113
At A Glance
Our Perspective
Who We Are
Strategy

Bureau de Change/Money Exchange outlets provide foreign exchange

services for 27 currencies.

Business Banking

We define SMEs as businesses with turnover of up to

RM25 million, while private limited businesses with a
turnover of above RM25 million are managed under
Business Banking.

Over 3,800 borrowing customers

Loans outstanding of RM19 billion

Leader for Business Enterprise loans with a market

share of 19.7%

SME Banking
Over 30,000 borrowers

Loans outstanding of RM6.8 billion

Total Banks SME market share of 17%

Over 50% virtual banking market share for more

than a decade

799 million transactions worth RM60.8 billion

Over 50% internet banking market share for 11

years running

Over 400,000 phone banking calls per month

AGM Information

The SME business focus is in the development of a

robust scorecard and a vigorous usage of template
based lending to improve our service delivery for loan
processing. Our strategy of targeting growth sectors
and improving asset quality will enable the Group to
improve further our risk management.

Virtual Banking

Financial & Others

In line with Government policy and aspirations, SME

Banking provides local SMEs with the financial
solutions, services and advice that will nurture their
growth into larger enterprises with capabilities to
compete in the global market.

Governance

We are confident of improving our leadership position

in the Business Enterprise segment with an
aspirational marketing strategy, supported by a
comprehensive asset quality strategy. Key asset
quality practices include portfolio management,
quality loan sourcing, fraud detection and continuous
upskiling of core credit staff.

Leadership

We have also invested in skilled personnel, dedicated

infrastructure and innovative products and services to
become a one-stop financial solutions provider.

In FY2011 we once again focused on deepening

relationships with our existing customers, acquiring
new customers and penerating growth sectors. Our
key achievements were in loans growth, lowering of
the cost to income and stale rating ratios and the
improving trend for asset quality.

Responsibility

For the convenience of customers, we have aligned all

SME and Businesses Banking under CFS. This enables
us to leverage on our vast domestic branch network,
business centres and our online delivery channels,
Maybank2u and Maybank2e.net.

Business Review

SME & Business Banking

Performance

Maybank self-service terminals and ATMs offer a host of

banking facilities as well as various other payment services
24/7.

114

Maybank Annual Report 2011

Business Review

Community Financial
Services

Internet Banking Maybank2u.com (M2U)

In FY2011, M2U active users grew by a hefty 20% to
1.72 million. More than 50,000 SMEs used the M2U Biz
services, while Mobile Banking users shot up by 122%
to more than 100,000.
M2U has consistently dominated the virtual banking
space for 11 years now. During that time, we have
regularly introduced innovative on-line products and
services such as M2U Savers, M2U Mobile and M2U
Secure, a real-time, risk-based authentication and
fraud detection security module.

this resulted in an improvement in our service levels,

with over 80% of calls beings answered within 30
seconds and an abandonment rate of 5%, in line with
best practice standards.
Telesales
More than 100 people have joined the telesales team
during the year, bringing the total number of its fully
trained sales personnel to over 200.

High Net Worth & Affluent Banking Segment

(HAB)
v

To maintain our virtual banking leadership in the

growing business segment, we offer an M2U Biz
service and have also expanded our virtual services
regionally with the launch of an online banking
service for our Philippines accountholders. Meanwhile,
we established strategic alliances with premium
brands, adding new payees to the Maybank2u.com
merchant programme.
Maybank Group Customer Care (MGCC)
During the year, customers made increasing use of
our state of the art call centre which received an
average of over 450,000 calls per month. The MGCC
team implemented a structural transformation
programme by setting up a Customer Operations
Performance Centre (COPC) and a Work Force
Management (WFM) system. Together with
enhancements to the cost efficiency of our processes,

Maybank currently has five disabled-friendly branches as well as

11 other branches with partial disabled-friendly facilities.

Customer growth of 11.6% for HNW and 9.9% for

Affluent
Total financial assets (TFA) growth of 16.1% for
HNW and 14.6% for Affluent

Based on the banks new customer segmentation

model, HAB now makes up about 4% of Maybanks
total customers. During the year, we shifted from a
product-centric to a customer-centric model to
provide not just best-in-class financial service but an
exceptional customer experience to the high net
worth and affluent customer segment.

Channel Management
v
v

386 branches with a 19% market share

2,828 ATM and SSTs with a 25% market share

MGCC is a world class customer care centre at Bukit Jelutong

which handles more than 450,000 calls per month.

Business Review

Maybank Annual Report 2011

115
At A Glance

Funding & Deposits

v

Asian Banker
Best Deposits & Liability Business
Banking & Payments Asia Trailblazer Awards
Product Excellence Award, Best in Category
(Maybank2u Premier)

CGC Awards 2010

v
v

Top SMI Supporter Award, Commercial Banks

category
Best Financial Partner Award
Top Bumiputera SMI Supporter Award

NEF-Awani ICT Awards Facebook Fan Page

Favorite Online Banking Service from
Provider

AWARDS
Maybank Malaysia
v

We have already achieved much during the first year

of our five-year transformation journey, as
demonstrated by higher growth in the second-half of
the financial year. We are confident that we will not
only sustain our growth momentum but accelerate
into the medium and long term as we realise our
aspiration to become the undisputed No.1 retail
financial services provider by 2015.

AGM Information

For FY2012, we will continue to roll out strategic and

business initiatives, evaluating them in terms of value
creation and capture. We will further enhance the
strength and capabilities of our systems and structure;
and we will focus on developing the skills, shared
values and management style of our people.

Financial & Others

The global economic outlook is uncertain, and locally

pre-emptive credit-tightening measures have been
introduced in response to rising household debt and
the forecast increase in inflationary pressures.
Nevertheless, we are cautiously optimistic about the
prospects for FY2012.

Governance

Brand Laureate Awards

Best Brand for Premium Card Payment in
Malaysia
Readers Digest Gold Awards
Best Credit Card Issuer
Visa Malaysia Bank Awards
Bank of the Year
Largest Consumer Products Purchase
Volume
Largest Consumer Credit Card Issuer
Largest Debit Card Issuer
Largest Debit Card Purchase Volume
Most Innovative Use of Visa Assets Sony
Card
MasterCard Hall of Fame Award
Best Activation Campaign (Maybankard
World MasterCard)

OUTLOOK

Leadership

Cards

Euromoney Private Banking Survey 2011

Best Private Banking Services Overall in
Malaysia
Asiamoney Private Banking Polls 2011
Best Domestic Private Bank in Malaysia

Responsibility

10th International Excellence in Retail Financial

Services Awards Programme (2011)
Best Retail Bank in Malaysia
Best Deposit & Liability Business
5th Asian Banker Technology Implementation
Awards (2011)
Best Retail Payments Implementation
Award

Business Review

High Networth & Affluent Banking

Performance

Strategy

M2U
Meanwhile, we opened two Service Centres at Kota
Kinabalu Airport, Sabah and i-City, Shah Alam; and we
provided access to banking for the previously un-banked
through a strategic partnership with POS Malaysia.

Who We Are

Our Perspective

During the year, under our Branch Transformation

programme, we redesigned our branch model to
reposition Maybank branches as the key community
destination for financial services and solutions.
Futuristic and inviting, the new branches aim to be
the best in Malaysia for community banking. The
design strategy encompases space planning and
zoning, interior and furniture design, and visually
appealing marketing communication and
merchandising. The design will also raise the profile of
our highly distinctive Islamic banking brand both at
fully-fledged Islamic branches and conventional
branches. We are currently pilot-testing the design at
five prototype branches.

116

Maybank Annual Report 2011

Business Review

Global Wholesale
Banking

GWB has taken the step in transforming

itself with the single objective of bringing
Maybank closer to its clients.

Global Wholesale Banking (GWB) was formed in July

2010 as a result of Maybank reframing its strategic
mission to humanise financial services across ASEAN.
Key to this new operating model is Client Coverage
which provides a single point of contact for all clients
supported by Maybanks wholesale banking businesses
(Investment Banking, Corporate Banking, Global Markets
and Transaction Banking) as the product specialists. This
holistic approach provides our clients with end to end
financial solutions from origination to execution.
Highlights

Abdul Farid Alias

Deputy President and
Head of Global Wholesale Banking

> GWB posted growth of more than 20% in loans and

25% in deposits

> The rise in business volumes and improving market

share across all the lines of businesses assisted us
to record year-on-year loans growth exceeding the
industry average of 13.5%

> Profit before tax increased by 26.9% year-on-year

Revenue

Profit Before Tax

RM million

RM million

+26.9%
+26.9%

FY10
FY10

FY11
FY11

2,541
2,541
2,003
2,003

3,329
3,329

2,796
2,796

+19.1%
+19.1%

FY10
FY10

FY11
FY11

Business Review

Maybank Annual Report 2011

117
At A Glance
Our Perspective

OVERVIEW

Total GWB loans

RM billion

43.9
37.4
12.3

Notwithstanding the continued pressure on net

interest margin, net interest income grew 8% on the
back of stronger loans and deposits growth.
We recorded stronger loans growth for corporates of
more than 20% year-on-year surpassing the industry
growth of 13.5%. Trade finance continued to reflect
increasing market share trend, reaching 24% in
April 2011.
We recorded double digit growth in deposits of 25%
which outpaced the industry growth of 11.5% as at
June 2011.
Commercial FX market share continued to rise.
Meanwhile we maintained our leadership in Islamic
bonds despite a lacklustre bond market performance
in the first half of the financial year.

Financial & Others

AGM Information

The new Client Coverage operating model has led

towards a much improved performance for GWB,
reflected in the growth of profit before tax (PBT) to
RM2.5 billion, up 26.9% from the previous financial
year. Growth in profit was contributed primarily by
higher non-interest income which grew by 35% owing
to higher commission fees, advisory, brokerage and
trading income and also due to the decline of 65% in
allowances for losses on loans.

Asset quality continued to improve, reflected by the

reduction in net impaired loan ratio. This is due to our
continuous effort to adopt prudent credit lending,
better risk management and also much improved
debt recovery.

Governance

FINANCIAL PERFORMANCE

FY11

Leadership

The new way of engagement in GWB is meant to

provide our clients a seamless offering across all our
product offerings, giving clients a complete view
encompassing all their needs. We will continue to
improve our level of service as well as our product
capabilities as we expand our scope across the region.

FY10

Term & Working

Capital Loans

Responsibility

Trade
Finance

Business Review

+68.0%

Performance

Strategy

Our Client Coverage division focuses on building

long-term relationships with our clients and
delivering customised solutions to our clients
Investment Banking offers services ranging from
financial advisory, mergers and acquisitions and
IPOs to issuance of equity or debt, derivatives,
equity trading and share margin financing
Global Markets provides market making in fixed
income securities, money market instruments
and foreign exchange as well as structuring
interest rates, currency and other structured
products for clients
Corporate Banking provides funding solutions to
all types of requirements for our clients including
working capital and capital investments as well
as complex project financing and acquisition
financing
Transaction Banking caters to all our clients
transactional needs such as cash management
and trade finance (including structured trade),
factoring, custody, trustee services as well as
linking with our correspondent banks

7.3

+17.4%

Who We Are

The new structure of GWB reflects the strategic

intention to better respond to the needs of our
corporate and institutional clients.

118

Maybank Annual Report 2011

Business Review

Global Wholesale
Banking

The FY2011 GWB Leadership Team (Back row left to right: Fairuz Radi, Tengku Dato Zafrul, Amos Ong, Lee Tien Poh, Hamzah
Bachee, Abdul Farid Alias, John Wong, Kua Kee Tui, Leslie Foo. Front row left to right: Hasli Hashim, Khalijah Ismail, John Chong).

STRATEGIC THRUST AND INITIATIVES

To achieve our goal of becoming a leading regional
wholesale bank by 2015, we have embarked on a
five-year strategy to re-invent our corporate
relationship model to humanise financial services,
pursue ASEAN expansion, and enhance productivity
by integrating and streamlining GWB businesses and
instilling a high performance culture. We have defined
strategic initiatives with clear business benefits as part
of the five-year transformation roadmap.
Our focus in the first year has been to operationalise
the GWB operating model in Malaysia. The strategic
initiatives include establishing and enabling the Client
Coverage model, transforming the business model
and enhancing product execution capabilities for
Corporate Banking and the newly-formed Transaction
Banking business particularly the Cash Management
and Trade Finance businesses. On the regional front,
the Global Markets priority was the setting up of the
regional centre of excellence for derivatives products.
The Investment Banking focus, meanwhile, was on
increasing competitiveness in the domestic market
and pursuing regional expansion through organic and
inorganic growth.
During the next financial year, our priority will be on
the integration of our regional business. This includes
operationalising the regional governance structure
and regional coverage, and enabling product
execution capabilities to drive wholesale banking

business growth in our home markets of Malaysia,

Singapore and Indonesia, as well as the growth
markets of the Philippines and Greater China.
Investment Bankings main focus will be to integrate
Kim Eng Holdings Limited (Kim Eng) and synergise
their business activities with other parts of GWB.
Global Markets will continue to focus on improving
their product capabilities across the region. We will
also be embarking on the implementation of a
regional infrastructure for Transaction Banking. On the
domestic front, we will continue to improve
turnaround time, product offering and productivity.

ACHIEVEMENTS
Several key factors have changed the market
landscape. Firstly, there have been a number of
regulatory changes concerning liquidity and capital
requirements introduced subsequent to the 2008
financial crisis. Secondly, Asia has emerged as a
significant growth market for global financial
institutions. Thirdly, the need for more regional
financial institutions has become even more
pertinent. All of this has resulted in stiff competition
in both the domestic wholesale banking market and
the regional wholesale banking arena.
A year into GWBs five-year transformation roadmap,
we successfully rolled out global wholesale banking in
Malaysia. In addition, the acquisition of Kim Eng, a
leading independent Asian securities and investment

Business Review

Maybank Annual Report 2011

119
At A Glance

We aspire to become a
great regional banking
institution with humanised
values as our core
competency

Our leaders will be

responsible stewards

We will not compromise

integrity and honesty

We have a GLOCAL
mindset

We aspire to be a leading regional

financial institution, and a top
employer, with exceptional customer
service levels, excellent return on
equity, impeccable return on assets
and outstanding growth in revenue
and profitability
Our approach to putting the soul into
banking and the values we bring to
our business is paramount
Our people will be steadfast in
upholding our values in their dealings
with our customers at all times
As we aspire to grow regionally, we
will carry beyond our borders our local
values of humility and a passion for
service

What it means to our

Stakeholders
v
Our goal is to ensure
above average returns to
shareholders
v
We will build an
outstanding brand name

Financial & Others

AGM Information

across the Maybank Group to offer the full suite of

products and solutions to our Clients. Products
marketed by Client Coverage include corporate
banking credit facilities, treasury solutions, trade
finance and cash management and other transaction
banking products, and investment banking solutions
such as debt capital markets, advisory, mergers and
acquisitions, equity fund raising and initial public
offerings (IPO). In FY2011 we implemented a segmentbased global relationship model, deployed our client
coverage teams, rebalanced our client portfolio mix,
and sharpened our focus on integrated product
offerings through a cross-product account-planning
platform. We have since received much positive
feedback as well as winning new corporate clients. We
will continue to strengthen the capabilities of our
client coverage teams and expand our coverage model
to serve our clients throughout the region.

What it means to our People

v
We will hire the best
people for the job
v
Our team will find
meaning in their work
v
We will provide a great
work environment

Governance

Central to GWB is our Client Coverage division which

consists of relationship managers who are a team of
dedicated professionals with diverse banking and
capital markets experience responsible for crafting
tailored financial solutions and interfacing between
our clients and the bank. Its main focus is to build
long-term relationships with clients, with personalised
management based on a single point of contact
model that is product neutral. Client Coverage
collaborates with GWB product partners and
synergises amongst the different business sectors

We keep our promises to

all our stakeholders

Work excellence is second nature for

our team
We take collective credit for our
accomplishments and are accountable
for all our actions

Leadership

CLIENT COVERAGE

Responsibility

To help our people, in GWB we have established a set

of business principles which defines how we interact
with our clients, our community and internally with
each other.

What it means to our

Community
v
We will improve the lives
of the communities we
serve
v
We will give back to the
community
v
We will advocate a
greener earth

Business Review

With the new structure, it becomes very apparent that

our people are a key differentiator for service
excellence and therefore a major priority was to
provide relevant training programmes to boost staff
skills and expertise alongside clear targeted
recruitment and succession planning.

We stand united as a team

Our leaders will always look after the

interests of the bank, building its value
and reputation, keeping in mind the
need to pass on a successful franchise
to future generations
We will manage and protect our
customers funds at all costs

What it means to our Clients

v
Our clients interests come
first
v
We will provide exemplary
customer service at all our
touch points
v
Our customers will have
complete faith and trust
in our abilities to serve
them well

Performance

Regionally, we have established a sizeable ASEAN

footprint and now derive 34% of our wholesale
banking revenue from regional markets. We have also
launched the Global ATM platform overseas, thus
providing us with a more efficient way to manage our
clients transactions. This has allowed us to set up our
ATM machines at all our overseas locations globally so
that our customers can use their Maybank ATM card
at any of these locations.

Our bank will have the most

sought-after financial advisors who
treat people with respect and help
customers succeed financially, while
leaving behind a legacy for our
childrens children

Strategy

For Global Markets, we successfully launched a

treasury platform in Malaysia that allows straight
through processing and thus provides our clients with
greater ease of transaction.

Business Principles

Who We Are

On the Transaction Banking front, we have completed

the rollout of a new trade finance business model
nationwide, resulting in an increase in productivity
and speed of delivery.

Our Perspective

banking group with a 38-year track record expanded

our Investment Banking presence in eight out of ten
ASEAN countries.

120

Maybank Annual Report 2011

Business Review

Global Wholesale
Banking

INVESTMENT BANKING (MAYBANK IB)

Within Investment Banking, we provide a wide range of
services to a large and diverse client base that includes
corporations, financial institutions, governments and
high net worth individuals. Our vision is to become a
regional financial powerhouse by 2015. Our key
units are:
v

We are building a strong regional

investment banking platform with our
acquisition of Kim Eng. With the expanded
leadership team, we are excited to take the
integrated Maybank IB Kim Eng Group to
new regional heights.
Tengku Dato Zafrul Tengku Abd Aziz
Head, Investment Banking
Chief Executive Officer, Maybank Investment Bank Bhd

v
v

Corporate Finance and Investment Banking,

which facilitates the seamless execution of
transactions, and provides advice on mergers,
acquisitions, restructurings, reorganisations,
equity, equity-linked fund-raising and issuances
and structured solutions
Debt Markets, which advises on, arranges and
distributes debt market instruments
Equities / Brokerage, which facilitates trading of
local and foreign securities via its network of
dealers, remisiers, Equities Investment Centres
and Maybank2u.com, and is supported by
Research
Equity Capital Markets, which provides services
such as sales and distribution of equity, equitylinked and equity-derivative products, and
underwriting of IPOs
Strategic Advisory, which provides financial
advice and also policy and strategy advice, with
a focus on the energy, infrastructure and utilities
sectors
Venture Capital/Private Equity, which assists
institutional and high net worth individuals to
invest in private companies with high growth
potential

We are growing fast on strong foundations laid during

the year. We have revamped our infrastructure to
enable future growth, and in FY2011, we successfully
completed the phase one upgrade of our back office
system. Meanwhile, achievements by each of our key
business units were supported by a stream of
initiatives that enhanced synergies between units and
the Maybank Group to deliver an improved level of
service.
We continuously strive to explore new ways to
increase our revenue streams by enhancing our
product capabilities. Thus we initiated, a new unit to
develop equity and commodity solutions for our
Malaysian clients.
A major milestone, this year, was the acquisition of
Kim Eng. Listed on the Singapore Exchange, Kim Eng
is among the top five brokers in Singapore, Thailand,
Indonesia and the Philippines, with a growing

Business Review

Maybank Annual Report 2011

121
At A Glance

Amount (USD bil)

CIMB Investment

36.8

13.4

RHB Investment

32.2

11.7

Maybank IB

25.9

9.3

AmInvestment
Kenanga Investment

4
5

16.4
1.3

5.9
0.5

Source: Bloomberg

Looking forward, the Governments Economic

Transformation Programme (ETP) and Entry Point
Projects are expected to generate more M&A and
financing deals. In the current environment where
equity prices are still within fair valuation and given
the relatively cheaper cost of borrowing, we believe
more companies will seek the option to be privatised
and delisted, especially in the property and plantation
sectors. Nevertheless, we also believe that there are
still many corporates that wish to issue more equity
capital to strengthen their capital base which will lead
to more equity issues including IPOs and Real Estate
Investment Trusts (REITs).

AGM Information

Market Share (%)

Financial & Others

Rank

Governance

Privatisation of Tanjong Public Limited Company

via a Voluntary General Offer made by Tanjong
Capital Sdn Bhd (RM8.8 billion)
Privatisation of Titan Chemical Corporation
Berhad via a Mandatory General Offer made by
Honam Petrochemical Corporation
(RM4.1 billion)
Acquisition of a 44.6% equity interest in Kim Eng
and Mandatory General Offer (RM4.3 billion)
Sunway REITs IPO which raised approximately
RM1.5 billion, for which we were Joint
Bookrunner and Joint Underwriter
Malaysia Marine and Heavy Engineering
Holdings Berhads IPO, which raised
approximately RM2.0 billion, for which we were

Mergers & Acquisition

Leadership

In 2011, we increased the capacity of our Corporate

Finance and Investment Banking team to cater for
both large and mid market deals and major mergers
and acquisition (M&A) transactions. We also enhanced
and expanded our offerings in Singapore, Indonesia,
Thailand, the Philippines and the rest of emerging
Asia through the acquisition of Kim Eng.

Responsibility

Some of our key deals during the year were:

Corporate Finance and Investment Banking facilitates

the seamless execution of transactions right through
to documentation and regulatory approvals. We seek
to deliver holistic, bespoke and innovative solutions
based on an in-depth understanding of both client
needs and the corporate environment.

Business Review

The newly acquired Kim Eng Group also contributed

its maiden results (two months post acquisition) to
Investment Bankings performance for 30 June 2011.
The new Group posted a PBT of
RM29.9 million on the back of RM166.8 million in
revenue. The brokerage income registered
RM88.6 million or 53.1% of the total revenue.

Corporate Finance and Investment Banking

Performance

In FY2011, Investment Bankings net income

grew 104.6% to RM482.1 million, compared to
RM235.6 million the year before, while PBT stood at
RM135.5 million against RM143.8 million previously
a decline of 5.8% due to corporate internal allocation.
Performance was driven by 147.1% jump in fee-based
income. Key contributors were Equities improved by
133.9%, Debt Markets grew by 63.9%, and Equity
Capital Markets increased by 328.9%.

Strategy

The integration of Kim Eng to capture synergy

opportunities has also begun and is expected to be
completed over the next two years. This effort is led
by the new leadership team that will take the
investment banking business to new regional heights.
Some early successes have already been achieved,
including collaboration on loan syndication deals and
IPO deals as well as the rerouting of inbound and
outbound equity trades through Maybank IB and
Kim Eng.

Who We Are

Principal Advisor, Financial Advisor, Sole

Underwriter, Joint Global Co-ordinator and Joint
Bookrunner (this transaction was rated Best IPO
of the Year (2010) by The Edge)
Establishment of Amanah Hartanah Bumiputera,
Malaysias first Shariah-compliant fixed-price real
estate-backed unit trust fund, for which we were
Principal Adviser
Placement of 178.9 million shares in Telekom
Malaysia Berhad, which raised RM581.3 million
for Khazanah Nasional Berhad, for which we
were Joint Placement Agent (this was the second
largest share placement in 2010)

Our Perspective

presence in Vietnam as well as in global financial

centres such as Hong Kong, London and New York.
The Kim Eng acquisition gives Maybank a
complementary investment banking business and an
expanded reach that includes 200,000 clients across
the region. Post-acquisition, Investment Banking will
become a much bigger business driver within the
Maybank Group.

122

Business Review

Maybank Annual Report 2011

Global Wholesale
Banking

Debt Markets
We provide comprehensive debt capital raising
services including origination, structuring, execution,
sales and distribution. We have also built a solid Debt
Capital Markets franchise with in-depth experience of
the capital market instruments and financing
structures available in the bond and loan market. In
FY2011, we arranged 19 domestic transactions with a
nominal value of RM23.5 billion and three offshore
transactions with a nominal value of approximately
RM4.3 billion, plus monitoring of related bond
facilities.

In FY2011 we garnered an array of recognitions and

awards:
v

Malaysian Domestic Bonds

Underwriter Rank Market Share (%)

Amount (RM bil)

Issues

CIMB

27.4

17.0

109

Maybank IB

26.3

16.3

134

AmInvestment
RHB
HSBC

3
4
5

13.5
8.0
7.1

8.4
5.0
4.4

67
29
27

Source: Bloomberg

Malaysian Ringgit Islamic Bonds

Underwriter Rank Market Share (%)

Amount (RM bil)

Issues

Maybank IB

35.4

16.0

121

CIMB
AmInvestment
HSBC Bank
RHB

2
3
4
5

26.6
9.8
8.9
8.0

12.1
4.4
4.0
3.6

76
48
24
19

Source: Bloomberg

Underwriter Rank Market Share (%) Amount (USD bil)

Issues

Maybank IB

16.6

2.0

18

OCBC

15.7

1.9

19

RHB
CIMB
HSBC Bank

3
4
5

9.8
9.7
7.4

1.2
1.2
0.9

13
14
12

Source: Bloomberg

Top Lead Manager in Islamic Sukuk Award, and

one of the top two in Conventional Bonds
(number of issues category) at the RAM Rating
Services Lead Manager Awards 2010
RAM Award Distinction 2010 - Blueprint Award,
for our RM150.0 million New Structured Finance
Benchmark Deal for the Medium Term Notes
issued by Domayne Asset Corporation Berhad
Special Merit Award as Malaysias Top Lead
Manager, for our accomplishments in the
Malaysian Debt Capital Market, based on the
value of Corporate Sukuk deals closed
One of the top two Lead Managers in the Islamic
Sukuk issue count and issue value categories in
the Malaysian Rating Corporation league tables
Top in Bloombergs 2010 RM Islamic Bonds Lead
Managers league tables, with a market share
of 33.0%
Second in Bloombergs 2010 Global Islamic
Bonds league tables by amount raised, with a
global market share of 17.7%
Ijarah Deal of the Year Award 2010 from Islamic
Finance News for Celcom Transmission Sdn Bhds
RM4.2 billion Unrated Islamic Medium Term
Notes Programme

Equity Capital Markets

Malaysian Mandated Arranger

Bonds, with a market share of 26.3%

No. 1 by amount issued in the Malaysian
Mandated Arranger League Tables, with a market
share of 16.6%

No. 1 by amount issued in the Bloomberg

Underwriter Rankings for Malaysian Ringgit
Islamic Bonds, with a market share of 35.4%
No. 2 by amount issued in the Bloomberg
Underwriter Rankings for Malaysian Domestic

During the last financial year, we ranked second in

advising clients for IPOs in terms of amount. During
the year, we advised on transactions involving a total
value of RM2.7 billion which gives us a market share
of 9.7%.
Initial Public Offering
Rank

No. of Deals

Amount (RM bil)

CIMB

15.4

Maybank IB

2.8

RHB
AmInvestment
OSK Investment

3
4
5

2
8
8

1.7
0.6
0.2

Source: Bloomberg

Business Review

Maybank Annual Report 2011

123
At A Glance

Underwriter

Rank Market Share (%) Amount (RM bil)

Issues

1
2
3

37.4
16.2
16.2

10.2
4.4
4.4

14
1
1

Maybank IB

9.7

2.7

JP Morgan

4.9

1.3

24

Notable equity transactions we advised on and

lead-managed during the year included:

v
v

BinaFikir Sdn Bhd, the Strategic Advisory division of

Investment Banking, provides advice on policy and
strategy matters as well as more general financial
advisory services, focusing especially on the energy,
infrastructure and utilities sectors.

FY2011 witnessed both an expansion of Maybank IBs

institutional dealing franchise across the region, and
considerable growth in its share of the local funds and
government linked company (GLC) market. This was
supported by a landmark deal with Standard & Poors
to distribute exclusive, co-branded international
research reports to Maybank customers.

Financial & Others

Strategic Advisory

Performance during the year reflected the success of

the merger of our investment banking brokerage
business with Maybanks retail broking operations.

Governance

To ensure healthy after-market performance we focus

on sensibly-priced transactions. In FY2011 all of the
main board IPOs in which we participated remained
above their IPO prices a feat achieved by no other
Top 5 issuer by deal value (of at least two
transactions).

We deliver fully-fledged brokerage services

including trading, financing, research and risk
management plus access to Maybanks nationwide
branch network. In FY2011 our market share grew to
7.0% from 6.9% the year before.

Leadership

Telekom Malaysia the largest non-marketed

placement as at the point of pricing
Kencana Petroleum with the tightest pricing
discount over the trailing 12 months
SP Setia the largest single client demand and
allocation for a primary placement

Equities / Brokerage

Responsibility

Notable placements we handled in FY2011 included:

Business Review

CapitaMalls Malaysia Trust the listing of the

largest pure-play shopping mall REIT in Malaysia
with a market capitalisation of RM1.4 billion on
listing day
Malaysia Marine & Heavy Engineering the
largest Malaysian IPO and equity offering in 2010
with a market capitalisation of RM5.0 billion on
listing day, for which we were the principal
adviser, sole underwriter, joint global coordinator, and joint bookrunner

Performance

Strategy

Source: Bloomberg

BinaFikir was involved in 13 transactions during the

year including:
v
The completion of a study on amending the
Amendment of the Highway Authority Malaysia
(Incorporation) Act 1980 to reposition and
enable the Malaysian Highway Authority with
new powers and functions
v
The completion of submissions to the Unit
Kerjasama Awam Swasta, the Governmental
authority responsible for privatisations, relating
to a proposal to renegotiate and extend a
concession for a major port operator in Malaysia
v
Assistance in the structuring and formulating of
incentives for foreign direct investment for a
targeted foreign investor on behalf of Malaysian
Biotechnology Corporation Sdn Bhd, for
submission to the Economic Council of Malaysia,
culminating in a grant of a USD130 million
Syndicated Term Loan Facility to Biocon Sdn Bhd

Who We Are

CIMB
Deutsche Bank
Morgan Stanley

FY2011 was challenging for BinaFikir, but business

was buoyed by the Governments ETP initiatives.
BinaFikir anticipates a further increase in privatesector led projects and privatisation-linked advisory
work in 2012.

Our Perspective

Fund Raising-Equity & Rights Offering

AGM Information

124

Maybank Annual Report 2011

Business Review

Global Wholesale
Banking

To further enhance performance, we launched an

initiative to expand our trading services to regional
equity markets. We also set up a China Desk and are
now working closely with Chinese regulators and
building relationships with institutional funds in China
and Hong Kong. Meanwhile, we expect the
integration of Kim Eng to boost retail trading both
locally and regionally.
Brokerage
Broker

Rank

Market Share (%) Trading Value (RM bil)

CIMB IB
Hwangdbs IB

1
2

10.0
8.3

90.6
75.3

Maybank IB

7.0

63.5

AmInvestment
RHB IB
OSK IB
Credit Suisse
Kenanga IB
TA Securities
ECM Libra

4
5
6
7
8
9
10

7.0
6.8
6.7
6.1
5.4
4.5
4.0

63.1
61.9
60.5
55.4
48.9
40.6
36.3

Source: Bloomberg

GLOBAL MARKETS
Our Global Markets division caters to our customers
treasury needs. We provide products and services
involving Foreign Exchange, Money Market, Fixed
Income Markets, Derivatives and other structured
products. We also play a pivotal role in identifying
new markets, products and business opportunities to
increase market share and advance Maybanks
regional presence, whilst ensuring a holistic and
integrated trading strategy across all the Groups
treasury centres region wide.
Since the launch of our ASEAN mission last year, we
have been laying the groundwork to build our
business across the region. This included launching a
regional centre of excellence for derivatives in
Singapore to support an integrated regional sales
network, automating deals to improve efficiency and
continuing to implement a single seamless Straight
Through Processing Global Markets Risk Management
System across all trading centres. The system roll-out

will be staggered across Malaysia, Singapore,

Indonesia and China over this and next year.
At the same time, we explored cross-border product
capabilities, specifically foreign exchange and interest
rates derivatives, as a means to grow our non-interest
income.
Spearheaded by strong regional sales and our
strength in rates trading, revenue climbed to RM1,568
million, an advance of 4.2%. The composition of net
interest income to non interest income ratio improved
from a ratio of 55:45 in FY2010 to 46:54, keeping pace
with other leading regional players. Global Markets
accounted for 11.7% and 21.1% of Maybank Group
revenue and PBT respectively for FY2011.

CORPORATE BANKING
Our Corporate Banking division provides our clients
with value added advisory associated with their
required credit facilities. We structure high quality
loans based on viable business and repayment
capabilities. We specialise in loan origination, trade
finance and cross-border project financing. We
provide lending solutions for all types of corporate
clients, including GLCs, large Malaysian corporate
groups and multinational corporations as well as
subsidiaries, associate companies and key sponsors.
During the year, we focused on strengthening our
origination structure through greater collaboration
with both Etiqa and Community Financial Services
(CFS) to enable sophisticated, innovative,
comprehensive and customer-centric solutions. We
also launched various initiatives to improve asset
quality and increase productivity. To enhance
customer service, we boosted productivity to
approximately 14.7% (as at March 2011) and reduced
turnaround time by streamlining our processes.
Our team was also successful in rolling out the
opening of regional corporate offices in Sabah,
Sarawak, Johor and Penang. This has allowed us to be
closer to our clients and accelerate our response time
in addressing their needs and requirements.

Business Review

Maybank Annual Report 2011

125
At A Glance

RM billion

53.3
44.8

22.1
FY10

Deposits
FY11

TRANSACTION BANKING

Governance
Financial & Others
AGM Information

For the year ahead, we will establish a platform to

expand our Transaction Banking services across
ASEAN as well as building our strength in other areas
such as Supply Chain Financing, Factoring, Custody,
Financial Institution and Trustee services. We will
realign and promote the Transaction Banking business
in Singapore, Indonesia, Greater China (comprising
offices in Hong Kong, Shanghai and Beijing), the
Philippines, Cambodia, Vietnam and Brunei. This will
be the year when we will be developing the regional
engine and IT platform for Cash Management and
continue with the rollout of our electronic trade
finance platform (Trade Connex) at overseas branches/
subsidiaries. Transaction Banking will work towards
creating a centralised hub for processing and
operations while building the working capital sales
model for Cash Management and Trade in these
ASEAN countries.

Leadership

Launch of TradeConnex, August 2010.

Responsibility

Transaction Banking comprises six distinct and

interlinked business units which are involved in
manufacturing and provision of transaction banking
services across all client segments. This includes Cash
Management, Trade Finance, Financial Institutions,
Factoring Solutions, Custody Services and Trustee
Services under Mayban Trustees Berhad.

Asset Triple A Transaction Banking Awards 2011

Best Transaction Bank
Best Cash Management Bank
Best Trade Finance Bank
Asian Banker Transaction Banking Awards 2011
Asian Banker Achievement Award for Trade
Finance
Trade Finance Magazine 2010
Best Malaysian Trade Bank
Asia Money
Best Local Cash Management Bank
Finance Asia
Best Trade Finance Bank
Global Custodian
Top rated Cross Border Clients
Commended Domestic Clients

Business Review

Whilst improving our asset quality, we achieved a

growth of 19% in loans and more than 25% in
deposits. As at June 2011, our year-on-year loans
growth exceeded the industry average of 13.5%.

We also won multiple accolades during the year:

Performance

Loans

Strategy

32.9

+48.8%

Who We Are

+19.0%

As a newly established unit, our focus in FY2011 was

mainly on amalgamating the six operations into a
single, cohesive organisation, and strengthening
domestic capabilities in cash management and trade
finance. We scaled the capacity of our cash
management system, launched tactical programmes
to recapture corporate and commercial deposits, and
reengineered our trade finance operating model to
boost trade finance performance. This resulted in a
34.5% jump in domestic corporate and commercial
deposits and an 1.7% increase to more than 24% in
domestic Trade Finance market share.

Our Perspective

Corporate Banking Loans and Deposits

126

Maybank Annual Report 2011

Business Review

Global Wholesale
Banking

OUTLOOK
We have done relatively well in the first year of GWB
setup to realise some quick wins, and achieve our
business targets while concurrently setting up and
stabilising the new GWB structure.
Key to this success is the establishment of the GWB
leadership team and structure setup, utilising talents
identified internally or brought in externally. These
experts provide experienced views of how this model
has been successfully implemented in other local and
regional banks.
To take our performance to the next level, we will
drive regional growth, align strategies and realise
cross-border synergies throughout the wholesale
business units. To this end, we will continue to
implement the regional client coverage and
governance structure requiring the hiring and
grooming of the right talent to operate at a the
regional level. We will also continue to streamline and
centralise our front, middle and back office processes
to promote operational agility and one integrated
seamless platforms.

The GWB team together all striped as one.

On a macro level, next year, the Malaysian

Governments various fiscal stimulus packages will
continue to spur corporate lending activities and
drive the growth of non-household loans. We will
embark on further product innovation and bundling
across our various wholesale banking products to tap
these opportunities.
Regionally, increase in trade between the ASEAN
countries and Greater China is expected particularly
by Vietnam and Indonesia which are enhancing their
trading and settlement infrastructures. Another factor
is the emphasis placed by various ASEAN
governments on expanding their capital markets. This,
coupled with the gradual liberalisation of financial
markets, will positively impact the financial services
industry. The growing number of corporates that are
are capitalising on this rise in regional trade will
require the support of financial institutions strong in
cross-border and regional solutions.
Against this backdrop, we will be strengthening our
regional footprint to continue servicing our customers
expansion needs.

BuSineSS RevieW

Maybank Annual Report 2011

127
At A Glance

RMB Bond issue for Genting hong Kong limited

Role : Joint Malaysian Adviser / Joint Lead Manager / Joint Bookrunner

Size : RMB1.38 billion

Wakala Global Sukuk for Government of Malaysia

Role : Joint Lead Arranger / Joint Lead Manager / Joint Bookrunner

Size : USD2.00 billion

Sukuk issue for pengurusan Aset Air Berhad

Role : Joint Lead Manager

Size : RM5.80 billion

Sukuk iMtn programme for Senai desaru expressway Berhad

Role : Principal Adviser / Lead Arranger

Size : RM5.58 billion

Syndicated term loan Facility for tanjong capital Sdn Bhd

Role : Joint Mandated Lead Arranger

Size : RM5.00 billion

privatisation of tanjong plc via conditional take-over offer made by

tanjong capital Sdn Bhd

Size : RM4.70 billion

voted deal of the year Best M&A by the edge Malaysia

Acquisitions of a total of 44.6% equity interest in Kim eng holdings limited and a
Mandatory General offer for the remaining shares not owned by Maybank

Role : Joint Financial Adviser

Size : RM4.26 billion

Financial & Others

Role : Joint Financial Adviser

Governance

Leadership

Size : USD600.00 million

Responsibility

Business Review

Role : Joint Co-ordinator / Joint Mandated Lead Arranger

Performance

Strategy

Syndicated term loan Facility for Genting hong Kong limited

Who We Are

Our Perspective

ReGionAl deAlS in Fy2011

AGM Information

128

Maybank Annual Report 2011

Business Review

Global Wholesale
Banking

Sukuk issue for Celcom Transmission (M) Sdn Bhd

Role : Joint Principal Adviser / Joint Lead Arranger / Joint Lead Manager

Size : RM4.20 billion

Voted Ijarah Deal of the Year Award 2010 by Islamic Finance News

IPO for Malaysia Marine and Heavy Engineering Holdings Berhad

Role : Principal Adviser / Sole Underwriter / Joint Global Co-ordinator / Joint Bookrunner

Size : RM2.03 billion

Voted Best IPO of 2010 by The Edge

Sukuk Musharakah Programme for Westports Malaysia Sdn Bhd

Role : Joint Principal Adviser / Joint Lead Arranger / Joint Lead Manager / Joint Bookrunner

Size : RM2.00 billion

IPO of Sunway Real Estate Investment Trust

Role : Joint Bookrunner / Joint Underwriter

Size : RM1.53 billion

Privatisation of MTD Capital Berhad via Unconditional Take-Over Offer by Nikvest Sdn
Bhd, Alloy Consolidated Sdn Bhd, Alloy Concrete Engineering Sdn Bhd and Alloy Capital
Sdn Bhd

Role : Principal Adviser

Size : RM1.29 billion

Syndicated Term Loan Facility for The Intermark Sdn Bhd

Role : Mandated Lead Arranger / Bookrunner

Size : RM1.20 billion

Sukuk issue for National Bank of Abu Dhabi

Role : Joint Lead Manager

Size : RM1.00 billion

Establishment of Shariah-compliant Amanah Hartanah Bumiputera Investment Fund

Role : Principle Adviser

Size : RM1.00 billion

Business Review

Maybank Annual Report 2011

129
At A Glance

Role : Co-Manager

Size : RM884 million

IPO for CapitaMalls Malaysia Trust

Role : Joint Principal Adviser / Joint Bookrunner / Joint Underwriter

Size : RM785 million

Syndicated Islamic Financing Facilities for AuraBayu Sdn Bhd

Role : Mandated Lead Arranger

Size : RM740 million

Financial Guaranteed Sukuk Musyarakah for Ranhill Power Sdn Bhd

Role : Principal Adviser / Lead Arranger / Lead Manager

Size : RM800 million

Islamic Medium Term Notes Programme for Ranhill Powertron II Sdn Bhd

Role : Joint Principal Adviser / Joint Lead Arranger / Joint Lead Manager

Size : RM710 million

Secondary share placement for Telekom Malaysia Berhad by Khazanah Nasional Berhad

Role : Joint Placement Agent

Size : RM581 million

Privatisation of Measat Global Berhad via Conditional Take-Over Offer made by Measat
Global Network Systems Sdn Bhd
Role : Joint Financial Adviser

Size : RM662 million

Syndicated Term Loan Facility for Measat Global Network Systems Sdn Bhd

Role : Joint Mandated Lead Arranger

Size : RM660 million

Financial & Others

Governance

Primary share placement for SP Setia Berhad

Leadership

Responsibility

Size : RM891 million

Business Review

Performance

Role : Joint Bookrunner / Joint Managing Underwriter / Joint Underwriter

Strategy

Who We Are

IPO for MSM Malaysia Holdings Berhad

Our Perspective

AGM Information

130

Maybank Annual Report 2011

BuSineSS RevieW

Global Wholesale
Banking

privatisation of Berjaya Retail Berhad via unconditional take-over offer by premier

Merchandise Sdn Bhd

Role : Principal Adviser

Size : RM402 million

Sukuk issue for Bank Muamalat Malaysia Berhad

Role : Joint Principal Adviser / Joint Lead Manager / Joint Bookrunner

Size : RM400 million

primary share placement for Kencana petroleum Berhad

Role : Joint Adviser / Joint Placement Agent

Size : RM396 million

Syndicated term Financing for tanjung Kapal Sdn Bhd, a subsidiary of tanjung offshore
Berhad

Role : Mandated Lead Arranger

Size : RM240 million

private placement for Axis Real estate investment trust

Role : Adviser / Joint Placement Agent

Size : RM136 million

Acquisition of equity stake in Mutiara Goodyear development Berhad and unconditional

take-over offer by Atis corporation Berhad and Atis idR ventures Sdn Bhd

Role : Principal Adviser

Size : RM136 million

Business Review

131

Maybank Annual Report 2011

At A Glance

Insurance &
Takaful

Performance

> Etiqa maintained the No.1 ranking in life/family new

business, general insurance/takaful, and overall takaful

business

Leadership

* PBT reported above is before adjustments for consolidation at Group level.

RM million

FY11

AGM Information

506.0

417.7

4,612.4

FY10

Financial & Others

FY11

4,299.4

-6.8%

+21.0%

FY10

Governance

Gross Premium/Contribution

RM million

Responsibility

contribution surpassing the RM2 billion mark, equating

to 48% of Etiqas total gross premium/contribution for
the year

Business Review

> Takaful continued its positive momentum with its gross

Profit Before Tax

Strategy

> Profit before tax (PBT) rose by 21% to RM506 million

and we successfully beat our PBT merger target of
RM500 million*

Hans De Cuyper
Head, Insurance & Takaful

Who We Are

Highlights

Our Perspective

Etiqas dedication to building a sustainable

and profitable business is enhanced
further by living up to our brand promise to
humanise insurance and takaful. Leading
the industry by numbers is not enough. Our
aspiration is to lead by serving our customers
from our hearts.

Etiqa is the single master brand for all Maybanks

insurance businesses, and operates via two anchor
subsidiaries Etiqa Insurance Berhad (for conventional
insurance) and Etiqa Takaful Berhad. We are driven by
our passion for humanising insurance and takaful, and
for helping our customers protect their assets, maintain
their lifestyle and build a secure and prosperous future.

132

Maybank Annual Report 2011

Business Review

Insurance &
Takaful

Total Assets
RM billion

We are a true multi-channel distributor, providing our

customers with unmatched accessibility and
convenience. We have an agency force of over 21,000
and 28 insurance and takaful branches not to
mention other distribution channels including over
386 Maybank branches, ATMs and other third-party
banks. In addition, we service customers via both our
Etiqa Oneline call centre and online at
www.motortakaful.com.
Etiqa offers a comprehensive array of products
ranging from general takaful products to general
insurance as well as life and family takaful plans. As a
customer-centric business, we tailor our products to
match the needs of our customers, be they individuals
or corporate clients. Believing that no client is too big
or too small, the premiums/contributions we charge
range from just RM10 to millions.
In FY2011, we not only retained our pole position in
life/family new business, general insurance/takaful,
and overall takaful business, we also increased our
market share in all three areas. As the industrys No.1
player in these segments, we accounted for 18.3% of
all Malaysian life/family new business and 11.5% of
general insurance/takaful business, as well as 44.7% of
overall takaful business (family takaful: 45.0% and
general takaful: 44.1%).

+7.8%

22.6

24.4

OVERview

FY11

FY10

caused by the relatively poor performance of our

single premium product due to the unfavourable
interest environment. General insurance grew 15%,
with Marine, Aviation and Transit (MAT) achieving
strong results.
For takaful, gross contribution surpassed the
RM2.0 billion mark, equating to 48% of Etiqas total
gross premium/contribution for the year compared to
42% previously. Overall, takaful continued its positive
momentum, increasing 7% over last year with a
market share of 44.7%. Our takaful business has
expanded commendably over the years, with the
growth in family takaful and general takaful
consistently outstripping the market. General takaful
posted 30% growth, driven by the motor takaful
segment, while a dip in family takaful was due to low
contributions from Group business.

FINANCIAL PERFORMANCE

For FY2011, total regular premium life/family business

grew 2% from RM1.03 billion to RM1.05 billion year
on year. For Maybank Bancassurance, total regular
premium life/family business advanced 7% from
RM316 million to RM340 million. However, a slight
decline in life insurance from the previous year was

Takaful
2010

52%

48%

58%

Percentage of Total Gross Premium/

Contribution by Business Segments

42%

Etiqa is one of Malaysias top three insurance

companies in term of profitability. For FY2011, we
posted 21% growth in profit before tax (PBT), which
climbed to RM506.0 million on the back of an
improved surplus transfer from our Life Fund and
strong investment performance. We also beat our PBT
merger target of RM500 million. Meanwhile, total
assets rose 8% to RM24.4 billion from RM22.6 billion
in the previous year.

Conventional
2011

Business Review

Maybank Annual Report 2011

133
At A Glance

2
2
3
3
4

1
4

3
3

Process innovation creates value for Etiqa by

enhancing customer satisfaction, boosting efficiency
and creating a responsive, well-informed and
responsible workforce. We have embarked on process
innovation in three main areas: general business, life
business and branch management. We have identified
more than 170 improvement initiatives, of which we
have already completed over 60. The results include
faster issuing of policies and lower printing and
mailing costs.

Strategy

Who We Are

Group
10%
Group
10%
Single Premium
7%
Single Premium
7%
Regular Premium
44%
Regular Premium
44%
Credit
39%
Credit
39%

Business Process Innovation

Our Perspective

Premium/Contribution: Life/Family Business

Premium/Contribution: General Business

Key Products
1
2
2

3
4
4

During the year, we launched a range of new

products:
4

* Marine, Aviation & Transit

Etiqas Vision

To be a True Champion for Insurance & Takaful and

Asset Management

v
v

Humanising towards a true customer experience

Having the widest distribution footprint
Being the champion in revenues

v
v

A quarterly E-newsletter Etiqa in Touch

Monthly Customer Day at all branches
nationwide
Customer survey call

AGM Information

We have now almost finished implementing our IT

blueprint. During the year, we launched Core Group
Life, bringing us a step closer to full rollout of our
Core Life Solution. We also automated data entry,
billing and claims processing, slashing turn-around
time and speeding up data entry. The net result is a
vastly improved customer experience.

We also encourage a continuous communication with

the customers through customer-related activities
such as:

Financial & Others

OPERATIONAL EXCELLENCE

We are wholeheartedly committed to humanising

insurance so as to provide our customers with an
experience that is not only highly efficient but
genuinely personal. We have therefore embarked on a
number of initiatives to enhance customer service in
the three key areas of customer touch points, post
sales support, and customer experience.

Governance

Enhancing Customer Experience

Leadership

Looking ahead, Etiqa aspires to become a true

insurance, takaful and asset management champion.
This means being recognised by the market for the
excellence of our products and services through:

Responsibility

STRATEGIC THRUSTS

Flexi PA/Takaful Flexi PA provides 24 hour

personal accident cover and humanises
insurance and takaful by settling outstanding
hire purchase loans when a mishap befalls the
insured
Mustika is a savings plan that also provides
protection, offering participants an affordable
contribution amount for six years, and providing
a fixed annual cash payment for the first ten
years of the policy and protection for 20 years
VIP 50 combines a guaranteed savings plan (VIP
50 PCI) with a flexible investment plan (VIP 50
Invest) to meet the need for a balanced
investment portfolio

Business Review

MAT *
32%
MAT *
32%
Miscellaneous
17%
Miscellaneous
17%
Fire
13%
Fire
13%
Motor
38%
Motor
38%

Performance

134

Maybank Annual Report 2011

Business Review

Insurance &
Takaful

INTERNATIONAL PRESENCE
In line with Maybanks aspiration to be the top
regional player, we are working on expanding our
presence abroad with the main focus especially in
countries where Maybank operates. We already have a
presence in Singapore, Brunei and Pakistan.

Etiqa Insurance Berhad (EIB) Singapore

In FY2011, 56% of EIB Singapores Gross Premium
Written (GPW) came from the agency force, while the
bancassurance contribution increased to 18% from
8% the year before. Enhancing overall portfolio
balance, the motor segment contribution dropped
from 47% to 36% of GPW, while there were significant
rises in the miscellaneous segment (from 38% to
43%), the fire segment (from 12% to 17%) and the
MAT segment (from 3% to 4%). Meanwhile, to boost
our customer base and enhance our bottom line, we
continued to develop products for the retail and SME
markets.

Etiqa Insurance Berhad (EIB) Brunei

Our Brunei operation has successfully recorded slight
increases in GPW year on year. Its business is mainly
agency-driven and focuses chiefly on corporate and
project risk. Looking ahead, we aim to grow our retail
business primarily in the motor class in view of our
favourable claims experience in this market. We are
also planning to launch incentives to reward agents
for helping us achieve our aspirations.

Pak-Kuwait Takaful Company Limited (PKTCL)

Pakistan
Through our 32.5% shareholding in PKTCL, Etiqa
Oversea Insurance Private Limited (EOIPL) has
emerged as the single largest investor in Pakistans
first takaful company. In FY2011, despite many
challenges, the company grew all its business
segments by 10.4%.

Pak-Kuwait Takaful Company receives Brand of the Year

Award-2010

OUTLOOK
The Government is implementing major investment
programmes with the aim of doubling GDP per capita
and turning Malaysia into a high income country by
2020. Driven by the New Economic Model, the
Economic Transformation Programme and the Tenth
Malaysia Plan, the insurance sector is expected to
flourish. Such initiatives as the Employee Insurance
Scheme, the Private Pension Scheme and the Foreign
Workers Health Insurance Scheme will all intensify
Malaysias insurance sector development.
Moving forward, we are confident that Etiqas
operational strengths, multi-channel network and
powerful brand will ensure that we achieve our aim to
become a true champion of insurance, takaful and
asset management.

Business Review

Maybank Annual Report 2011

135
At A Glance

STRATEGIC THRUSTS

Realignment and expansion of our portfolio

management, research and funds performance
activities to enhance stability and consistency in
funds performance
Realignment and expansion of marketing teams
to improve the efficiency and effectiveness of
our client management and to extract greater
value from Maybank distribution platforms
Realignment and expansion of product
development activities to ensure greater focus
and accelerate the development of global
product offerings while expanding our Shariahcompliant and domestic product offerings
An initiative to enhance and transform our
information system framework

Leadership

In addition to our seven existing wholesale funds, the

AUM of our wholesale funds climbed 17% to
RM1.9 million from RM0.7 million.

Fund Type

Approved Fund Size (units)

MIM Money Market Fund

Q-Opportunities Fund
Q-Income Fund
Q-Target Return Fund

Income
Capital Growth
Income
Mixed Assets

1 billion
150 million
500 million
500 million

Financial & Others

1.
2.
3.
4.

Fund

Governance

New Funds launched in FY2011

No.

Responsibility

Our assets under management (AUM) advanced 16%

from RM20.5 billion to RM23.8 billion, underpinned by
continuous marketing efforts, improved fund
performance and new product launches. There was
strong growth in new accounts from corporates and
high net worth individuals generating a total injection
of over RM1.5 billion. MIM and Pelaburan Hartanah
Berhad (PHB) jointly launched Amanah Hartanah
Bumiputera unit trust fund worth RM1 billion.

Business Review

During the period under review, our operating

revenue grew by 18% to RM38.4 million from RM32.5
million whilst our PBT grew by 11% to RM18.5 million
from RM16.7 million and shareholders funds grew by
52% to RM39.7 million from RM26.2 million.

During the year, we implemented a number of

broad-based enhancement initiatives. We realigned
our organisation structure and business processes,
enhanced our systems, and built up our human
capital. Some of the major changes include:

Performance

FINANCIAL PERFORMANCE

OPERATIONAL EXCELLENCE
Strategy

MIM is the fund management arm of the Maybank

Group. With more than 30 years experience in the
asset management industry, MIM focuses on
providing investment solutions across asset classes
such as equities, fixed income and money market.
Today, our customers include corporates and
institutions, insurance companies, high net-worth
individuals, unit trust funds and wholesale funds.

Who We Are

OVERVIEW

We share Etiqas aspiration to become a true

insurance, takaful and asset management champion.
Through this aspiration, we aim to become a top
three asset management company and achieve first
quartile investment performance.

Our Perspective

MAYBAN INVESTMENT
MANAGEMENT (MIM)

AGM Information

136

Maybank Annual Report 2011

Business Review

Insurance &
Takaful

Some of our key strategic milestones for FY2011 were:

AWARDS

Reinforcing our brand platform of humanising

insurance and takaful, we once again garnered an
array of prestigious awards in recognition of our
excellent service and outstanding performance.

v
v
v

Investment and Research: initiating research on

foreign securities
Compliance and Risk Management: setting up a
compliance limit module
IT: upgrading our back office systems and
integrating them with the front office systems
Product Development: launching four new
wholesale funds with a combined approved fund
size of one billion units
Distribution: creating a new distribution channel
to improve access to market and market share

11th CCAM Annual Contact Centre Awards

Best Contact Centre Manager (below 100
seats) Silver Award

11th CCAM Annual Contact Centre Awards

Best In House Contact Centre (below 100
seats) Bronze Award

Malaysian Takaful Association Industry Awards

2011
Best Group Business Operator

Malaysian Takaful Association Industry Awards

2011
Best Bancatakaful Operator

Kuala Lumpur Islamic Finance Forum 2010

Most Outstanding Takaful Company

Service to Care Award 2011

Champion, Best of Malaysia Service to Care
(Life Insurance category)

OUTLOOK
Moving forward, by leveraging on the strengths of
both Etiqa and the Maybank Group, we aspire to
become a leading regional asset management
company. To realise this aspiration, our strategic intent
and initiatives for the year under review and over the
next two to three years are, firstly, to be recognised as
a domestic leader, secondly, to fully tap the Islamic
asset management segment and opportunities and,
thirdly, to extend our capabilities into the ASEAN
region.

Business Review

Maybank Annual Report 2011

137
At A Glance

Islamic
Banking

Performance
Business Review

before zakat and tax increased by 31% and 58% to

RM2.6 billion and RM838.5 million respectively

Strategy

> In FY2011, MIBs gross attributable income and profit

Who We Are

> Financing grew by 35% to RM46.8 billion, accounting

Responsibility

> Total deposits rose to RM48.3 billion a major

Leadership

Muzaffar Hisham
Chief Executive Officer, Maybank Islamic Berhad and
Head, Group Islamic banking

Highlights

Our Perspective

The phenomenal growth potential for

Islamic banking has enabled MIB to
consistently achieve double digit growth in
revenue. We foresee that this will continue
through income-stream diversification via
Islamic investment banking, Islamic wealth
management and our International Business
Currency Unit (ICBU). Moving forward, we
are strengthening our presence in markets
that have the potential to carry the Islamic
banking industry to the next level.

Maybank Islamic Banking Group (MIBG) is the

Islamic banking arm of the Maybank Group. In
alignment with the Groups aspirations, our
strategy is to become the leading Islamic Bank
in ASEAN by 2015. MIBG which focuses on
managing and setting strategies for the overall
Group Islamic banking business, is strongly
supported by the House of Maybank and is
driven by both the Groups Islamic First policy
and by our growth targets for Islamic business.

for 27.4% of the Groups total domestic financing

portfolio, and surpassing Bank Negara Malaysias target
of 20% as laid out in the Financial Sector Masterplan 1
increment of 40.0%

> We were the largest issuer of single Islamic junior sukuk
Operating Revenue

Governance

of RM1 billion for regulatory capital purposes

Profit Before Tax & Zakat

RM million

RM million

838
532

FY10 FY11

1,958

FY10 FY11

AGM Information

2,572

+57.6%
+57.6%

Financial & Others

+31.4%
+31.4%

138

Maybank Annual Report 2011

Business Review

Islamic
Banking

In Malaysia, Maybank Islamic Berhad (MIB) dominates the Islamic banking

industry with a leading market share in the retail financing and deposits
segments. Regionally, we are the largest Islamic bank in ASEAN with a total
asset size of RM66.0 billion (as at 30 June 2011). On the global front, the Groups
Global Wholesale Banking is recognised as the largest global sukuk manager
both for sukuk in all currencies with a market share of 31.9% and for RMdenominated sukuk with a market share of 35.4% (Bloomberg league table,
12-month period ended 30 June 2011).

MIB Contribution to Maybank Group Domestic as at 30 June 2011

Profit Before Tax
1

Customer Deposit

1 MIB (RM0.8bil)
MIB (RM0.8bil)
20.0% 20.0%

MIB
(RM0.8bil)
MBB(RM0.8bil)
Group
Domestic
21 MIB
MBB
Group Domestic
20.0%
20.0%
(excluding
MIB)
(excluding
MIB)
(RM3.4bil)(RM3.4bil)
2 80.0%
2 80.0%
MBB Group
MBB
Domestic
Group Domestic
(excluding
(excluding
MIB)
MIB)
(RM3.4bil)(RM3.4bil)
80.0% 80.0%
21

21

MIB
(RM48.3bil)
MBB(RM48.3bil)
Group
Domestic
21 MIB
MBB
Group Domestic
26.7%
26.7%
(excluding
MIB)
(excluding
MIB)
(RM132.2bil)
(RM132.2bil)
2 73.3%
2 73.3%
MBB Group
MBB
Domestic
Group Domestic
(excluding
(excluding
MIB)
MIB)
(RM132.2bil)
(RM132.2bil)
73.3% 73.3%

Financing

Total Assets

1 MIB (RM46.8bil)
MIB (RM46.8bil)
27.4% * 27.4% *

MIB
(RM46.8bil)
MBB(RM46.8bil)
Group
Domestic
21 MIB
MBB
Group Domestic
27.4%
* 27.4%
(excluding
MIB)* MIB)
(excluding
(RM123.8bil)
(RM123.8bil)
2 72.6%
2 72.6%
MBB Group
MBB
Domestic
Group Domestic
(excluding
(excluding
MIB)
MIB)
(RM123.8bil)
(RM123.8bil)
72.6% 72.6%

1 MIB (RM48.3bil)
MIB (RM48.3bil)
26.7% 26.7%

21

1*

1*

1*

1*

1 MIB (RM66.0bil)
MIB (RM66.0bil)
23.5% 23.5%

MIB
(RM66.0bil)
MBB(RM66.0bil)
Group
Domestic
21 MIB
MBB
Group Domestic
23.5%
23.5%
(excluding
MIB)
(excluding
MIB)
(RM215.4bil)
(RM215.4bil)
2 76.5%
2 76.5%
MBB Group
MBB
Domestic
Group Domestic
(excluding
(excluding
MIB)
MIB)
(RM215.4bil)
(RM215.4bil)
76.5% 76.5%
21

The chart above shows that MIB is well on the way to achieving a one-third Islamic financing contribution to
the Groups total domestic loans and advances by 2015, with the years contribution already at 27.4% as at
June 2011.

Business Review

Maybank Annual Report 2011

139
At A Glance
Who We Are

By strengthening intra-group linkages and capitalising on the strategic objective of becoming a leading
Islamic bank in ASEAN under the House of Maybank, Islamic Banking continues to build business
sustainability through stronger collaboration with Community Financial Services (CFS) Global Wholesale
Banking (GWB) and Enterprise Transformation Services (ETS). This has resulted in more innovative
cross-selling and bundling of products and services, allowing greater market penetration and network
expansion of Islamic Banking business domestically and overseas.

Our Perspective

House of Maybank Strategic Objective: Leading Islamic bank in ASEAN

Strategy

Key Accomplishments and Innovative

Products

Singapore launched its first Shariah-compliant savings

account for pilgrims going on the Hajj the Muslim
pilgrimage to Mecca and also an Islamic financing
package for small and medium enterprises (SMEs)
seeking financing for completed commercial and
industrial properties.

Indonesia:

Financial & Others

We currently have two vehicles in Indonesia, namely

PT Bank Internasional Indonesia TBK (BII) and
Maybank Syariah Indonesia (MSI). BII has its own Unit
Usaha Syariah dealing mostly in retail financing, while
MSI deals with the corporate and wholesale segments.
During the year, BII launched a Traveller Saving
Account-i based on Mudharabah principles, that
provides travellers with both an ATM card and a Debit
Card.

Governance
AGM Information

We are a market leader in Malaysias Islamic banking

industry. With over four million customers, we are the
nations largest Islamic commercial bank. Our
achievements for the year include the following:
v
We dominated the automobile sector gross
financing portfolio with a contribution of 32.0%
to the Group.
v
Our automobile sector grew 21.0% and
continued to lead the industry with a 33.6%
market share.
v
Maybank Investment Bank acted as joint
bookrunners and joint lead managers for the
USD2 billion Wakala Global Sukuk offering by the
Government of Malaysia.
v
We secured a major financing deal under our
ICBU and a cross border transaction totalling
approximately USD362.1 million.

Singapore:

Leadership

Malaysia:

Responsibility

We offer Islamic banking expertise both regionally

and globally, while Maybanks recent strategic
acquisition of Kim Eng Holdings will enable us to
further entrench our leadership in the capital markets
and investment banking services.

We launched our Islamic HOT stock broking

service which allows customers to open
accounts trading in Shariah-compliant equities.
We offered other innovative products including:
o Commodity Murabahah-based deposits
(Profit Now Account-i)
o Islamic Foreign Currency deposits and
remittances
o Promissory FX FX Spot, FX forward and FX
swaps
o Islamic Profit Rate Swap
o Islamic Cross Currency Profit Rate Swap
We opened two new branches, in iCity, Shah
Alam and Gunung Rapat, Ipoh.

Business Review

MIBGs business offers comprehensive Shariahcompliant financial solutions to cater to the needs of
its customers, cutting across the House of Maybanks
pillars, namely CFS and GWB. In Malaysia, CFS is the
core contributor to MIBs total financing, accounting
for approximately 66% as at 30 June 2011.

Performance

BUSINESS LINES

140

Maybank Annual Report 2011

Business Review

Islamic
Banking

STRATEGIC THRUST
Our expansion plans focus on key ASEAN markets, though ultimately we also aim
to expand into the opportunistic markets of London, Hong Kong/China and the
Middle East.
v

To be the
Leading
Islamic
Bank
in ASEAN

The Malaysian market will remain our core market, with our Islamic
First strategy driving growth in both retail and global wholesale
banking.
In Indonesia, the opportunities are vast, and we will continue to
pursue our growth strategy through BIIs Unit Usaha Syariah and
Maybank Syariah Indonesia.
The Singapore market has shown positive growth since its inception
and we are one of the few banks offering universal Islamic banking
products and services.

We offer consumer, wholesale and investment banking products and services not
only in Malaysia but in many locations in Asia, as well as in key financial centres
such as Indonesia, Singapore, London and the Middle East.

AWARDS
v

v
v

Kuala Lumpur Islamic Finance Forum (KLIFF)

Islamic Finance Awards
Most Outstanding Islamic Retail Bank
Asset Triple A Islamic Finance Awards
Islamic Retail Bank of the Year
Credit Guarantee Corporation (CGC):
Top SMI Supporter Award 2010
Islamic Bank Category

Business Review

Maybank Annual Report 2011

141
At A Glance

(Chairman)
Mufti of Perak State
Government

Governance
AGM Information

Encik Sarip is a lecturer at University Malaysia Sabah with expertise

in Shariah and specialising in Muamalat Islam and Islamic Finance.
Prior to that, he was a lecturer at International Islamic University
Malaysia (IIUM) for 7 years. He was appointed a Shariah Committee
member of Maybank Islamic/Maybank Group effective May 2011. He
obtained his first degree in Shariah from the University of Al-Azhar,
Egypt and Master in Fiqh and Usul Al-Fiqh from University of Jordan,
Amman, Jordan. He is pursuing his PhD in Shariah at Universiti
Kebangsaan Malaysia (UKM) and is also an advisor for the graduate
student programme. He is currently a member of Majlis Fatwa
Negeri Sabah.

Financial & Others

Lecturer at University
Malaysia Sabah

Dr. Ahcene Lahsasna is a lecturer in the Shariah and Legal Studies

Department, INCEIF and has been appointed as the new Graduate
Students Advisor, effective 1 October 2008. He was appointed a
member of the Shariah Committee of Maybank Islamic/Maybank
Group in June 2009. Dr. Ahcene Lahsasna holds a Masters and Ph.D
in Islamic Law & Islamic Jurisprudence (Fiqh and Usul Fiqh) from the
International Islamic University Malaysia. Prior to joining INCEIF, he
was with the Islamic Science University of Malaysia, lecturing Shariah
and law.

Leadership

Encik Sarip Bin

Adul

Graduate Studies Advisor,

Shariah and Legal Studies
Department, INCEIF

Responsibility

Dr Ismail bin Mohd @ Abu Hassan is an Assistant Professor at the

Department of Islamic Law of IIUM. He holds a 1st class honors first
degree in Shariah from University Malaya in 1989 and obtained a
Law Degree from SOAS, University of London in 1992. He pursued
his PhD at Manchester University, England and obtained his
doctorate in 1997. He has been lecturing at the Department of
Islamic Law for more than 10 years since 1989. Prior to his
appointment as Shariah Committee member of Maybank in 2007, he
was in the Shariah Committees of Takaful Nasional Berhad and CIMB
Group.

Dr. Ahcene
Lahsasna

Business Review

Assistant Professor, Ahmad

Ibrahim Kuliyyah Of Laws at
the International Islamic
University of Malaysia (IIUM)

Dr Mohammad Deen Mohd Napiah is currently an Assistant

Professor at Ahmad Ibrahim Kulliyah of Laws at the IIUM. He holds a
Doctorate of Philosophy from Glasgow Caledonian University,
Scotland. Prior to his appointment as a member of the Shariah
Committee of Maybank in 2007, he was the Shariah Advisor for EON
Bank Berhad from 1997 to 2003. He is also currently an Academic
Assessor for the National Accreditation Council since 2001.

Performance

Dr Ismail bin Mohd

@ Abu Hassan

(Member)
Assistant Professor, Ahmad
Ibrahim Kuliyyah Of Laws at the
International Islamic University
of Malaysia (IIUM)

Strategy

Tan Sri Dato Seri Dr. Hj. Harussani obtained a PhD in 2001 from
University of Malaya. He is a member of the Meeting Council, Islamic
Council and Malay Customs for the Government of Perak and the
Chairman for the State Shariah Committee. He also sits on the Board
of Directors of the State Islamic Economic Development Corporation.
He has served Takaful Nasional Berhad since 1993 as one of its
Shariah Advisory Council members. Concurrently, he is also a Shariah
Committee member of Bank Pembangunan & Infrastruktur Malaysia
Berhad and Amanah Raya Berhad.

Dr Mohammad Deen
Mohd Napiah

Who We Are

Tan Sri Dato Seri

(Dr) Hj. Harussani
Hj Zakaria

Our Perspective

SHARIAH COMMITTEE

142

Maybank Annual Report 2011

Business Review

International
Banking
International
Outside Malaysia, our commercial banking business operates in 13 countries, of which seven are
in ASEAN and the rest in strategic markets such as China, the Middle East, the United Kingdom
and the USA. Though our international business is largely wholesale, we are also active in
consumer business in our home markets of Singapore and Indonesia, as well as the expanding
markets of the Philippines and Cambodia.
Our intention is to grow our footprint, especially in the ASEAN region, introduce both retail and
wholesale banking, and offer consistent product delivery throughout the whole region using a
single brand that our customers can identify with.
FY2011 was a challenging year with net interest margin narrowing across the region. Despite
this, we delivered 19% growth in profit before tax, driven by better engagement with our clients
and higher fee-based income.
Highlights

> Gross Loans Growth was up 30%

> We expanded our footprint in Indonesia, Cambodia and Philippines
> We achieved service excellence awards in Singapore and Indonesia
> We achieved regional ATM link-up
> We set up a full-fledged Islamic Banking subsidiary in Indonesia

Revenue

Profit Before Tax

RM million

RM million

+19.0%

FY10 FY11

1,489

1,251

4,178

3,749

+11.4%

FY10 FY11

Business Review

Maybank Annual Report 2011

143
At A Glance
Our Perspective

Our International Presence

Who We Are

In addition to our branches and subsidiaries, we have a 20% equity interest in MCB Bank Ltd.
(MCB) in Pakistan, and 20% equity interest in An Binh Joint Stock Commercial Bank (ABB)
in Vietnam.

Strategy

1993
China

Performance

1962
Hong Kong

Business Review

Financial Centres
1962 London
1984 New York

Representative
office in Beijing
Branch in
Shanghai

2008
Pakistan

MCB Bank Ltd

(20% Stake)

Branch in HK

2003
Bahrain

Branches in Hanoi
& Ho Chi Minh

2008

An Binh Bank (20% Stake)

1993
Cambodia

1995
Indonesia

1960
Brunei

2 subsidiaries
Branches in
- 365 branches in
Bandar Seri Begawan,
PT Bank International
Seria & Gadong
Indonesia Tbk
- a branch in PT Bank
Maybank Syariah Indonesia

1994
Papua New Guinea
Branches in
Port Moresby & Lae

Financial & Others

Qualifying Full Bank

with full commercial
banking setup
of 22 branches

Governance

1960
Singapore

Locally
incorporated as
Maybank Philippines
Inc. with 50 Branches

Leadership

1997
Philippines

10 branches in
Phnom Penh,
Siem Reap
Sihanoukville
Battambang &
Kg Cham

Responsibility

1996
Vietnam

Branch in Manama

AGM Information

144

Maybank Annual Report 2011

Business Review

International
Banking

Financial Performance
FY2011 saw profit before tax (PBT) rise 19.0% to
RM1.49 billion, due to higher loans growth and noninterest income and lower loan loss provisions,
partially offset by a strengthening of the ringgit
against major currencies. This represents a
contribution of 25% to the Groups overall PBT.
Loans mainly by our Singapore, Indonesia and
Philippines operations grew by 30% to RM89.9
billion, making up some 34% of the Groups total
loans. Asset quality also improved, with the nonperforming loan ratio contained at 1.30% compared
to 1.63% in FY2010.

Strategic Thrusts
We aspire to be a leading regional financial services
provider by 2015, with 40% of pre-tax profit to be
derived from international operations. As part of
Global Wholesale Banking, we play a major role in
providing a consistent customer experience via
quality service offerings around the region, in line
with our vision to humanise financial services.

To meet the demands of increasingly inter-connected

countries around the region and in the countries
where we operate, we continue to expand our
overseas branch network and international product
offerings, and at the same time continuously enhance
our global capabilities and resources.

Achievements
FY2011 was marked by several milestones outside
Malaysia.
Regional expansion is well on track. We opened 72
new branches in Indonesia and three in Cambodia. In
addition, our Greater China operations received a
boost after the China Banking Regulatory Commission
(CBRC) provisionally approved our application to
operate a fully-fledged commercial banking branch in
the capital city of Beijing, which is slated to be up and
running in 2012.
We continued to leverage on synergies with PT Bank
Internasional Indonesia (BII) in terms of both business
initiatives and support functions. Ongoing business
initiatives include the channelling of remittances
business and trade finance services, as well as the
implementation of ATM regional link and strategic IT
collaboration.

Business Review

Maybank Annual Report 2011

145
At A Glance
Our Perspective
Who We Are
Strategy
Performance
Responsibility
Leadership
Governance

Several other key initiatives were successfully

rolled-out during the financial year. We have gone to
great lengths to enhance our regional governance
structure. At the same time, we have been boosting
our human capital capabilities via the recruitment,
development and deployment of talents with global
skills and exposure. We also continued to implement
initiatives to integrate systems and processes around
the globe.

Meanwhile, the regionalisation of various services has

been successfully completed, and will be extended to
cover all our markets in the future. We have
successfully implemented Global ATM which links
ATMs overseas to a centralised operation in Malaysia.
This initiative benefits customers, who will be able to
perform ATM transactions free of charge outside
Malaysia. It also enhances the banking experience as
well as improves operating efficiencies. In addition,
we have set up internet banking overseas and
implemented regional transaction banking capabilities
covering global cash management, trade finance and
global market services.

Business Review

One notable corporate exercise completed during the

financial year was the conversion in October 2010 of
our Indonesia-based 96.8% subsidiary, PT Bank
Maybank Indocorp, into an Islamic Bank. It has since
been renamed PT Maybank Syariah Indonesia (MSI).
Leveraging on Maybanks strength in Islamic finance,
MSI is well positioned to grow Islamic finance in the
country with the worlds biggest Muslim population.

Financial & Others

AGM Information

146

Maybank Annual Report 2011

Business Review

International
Banking

SINGAPORE

Amidst challenging and volatile market

conditions, we implemented several short
term action plans to capitalise on market
opportunities without losing sight of our
overall strategic direction. Our continual
focus on customer-centricity and employee
engagement also underpinned our success in
achieving another record-profit year.
Pollie Sim Sio Hoong
Chief Executive Officer, Maybank Singapore

With an asset size of SGD41.5 billion

and 1,400 staff, Maybank Singapore
is one of the few banks to have
Qualifying Full Bank (QFB) status and
a significant presence in retail and
wholesale banking.
Maybank Singapore
We have one of the largest networks of full-service
branches of all the foreign banks in Singapore.
Together with five offsite ATMs, we are part of atm5,
Singapores only shared ATM network among the six
QFBs with a combined total of 140 ATMs.
We provide a full range of consumer, commercial and
corporate banking products and services, with
strengths in selected niche areas.

Financial Performance
Maybank Singapore contributed close to 57% profit
before tax of Maybanks international PBT. PBT
climbed 11% in FY2011 to reach SGD375 million,
driven by an increase in non-interest income and a
lower impairment allowance. A sizeable rise in
consumer and business loans pushed loans to SGD22
billion, 25% up on the previous financial year. We also
successfully maintained asset quality, achieving a
gross impaired loans ratio of 0.46% as at 30 June 2011
a 0.17% improvement on the year before.

Strategy and Objectives

Maybank Singapore strives to improve portfolio
profitability and to focus on building on our core
strengths of:
v
Consumer segment auto and housing loans
v
Business segment construction, real estate,
shipping and property development
We are opening new frontiers by introducing an array
of products and services and entering strategic
alliances to generate fresh revenue streams and
higher fee-based income.

Business Review

Maybank Annual Report 2011

147
At A Glance
Our Perspective

Achievements

Who We Are

We continued to build our capabilities by developing

our human capital and leveraging new technology
and tools to enhance efficiency and innovation. We
have invested in critical technology and infrastructure
in the key areas of straight-through processing
initiatives, enterprise content management, and
branch re-engineering to raise overall efficiency and
effectiveness as well as to support innovation and
business growth.

Strategy

Financial & Others

Working with the Central Singapore Community

Development Council, we launched several initiatives,
such as the Maybank Family Fund, to extend a
helping hand to low-income families. Within months
of the launch, we raised over half a million dollars for
the Fund.

Our strategy for the coming financial year is to sustain

our business portfolio growth by enlarging our share
of the SME segment and further penetrating our
presence in consumer lending.

Governance

With economic growth predicted to moderate in

FY2012, we expect total bank lending to grow at a
slower rate of 8%. Housing loans are not likely to
repeat the exceptional growth seen in 2010, given the
cooling measures implemented this year, which will
weigh on both property transactions and prices.

Leadership

I-Class Certification (July 2010), from the

Standards, Productivity & Innovation Board
(SPRING) Singapore to organisations which have
attained a commendable level of performance
Work-Life Excellence Award (August 2010) for the
third consecutive time, awarded once every two
years by the Tripartite Committee on Work-Life
Strategy
Excellence Award for Peoples Association
Community Spirit (PACS) Awards (June 2011), a
testament to our community partnership efforts.

Outlook

Responsibility

During the year, Maybank Singapore garnered several

awards, namely:

The Maybank Tower in Singapore is a prominent landmark in Singapores skyline.

Business Review

Customer service excellence and corporate social

responsibility initiatives continue to be part of our
continuous efforts to humanise our service delivery
and at the same time raise market profile and
visibility.

Performance

Meanwhile, we have employed various acquisition

tools to build a strong customer base. Improving
eChannel functionalities enabled us to win more
internet-savvy customers. We have simultaneously
capitalised on our cross-border network and resources
to manage, monitor and better serve customers with
international portfolios, such as the high net worth
individuals segment.

AGM Information

148

Maybank Annual Report 2011

Business Review

International
Banking

INDONESIA
Our subsidiary in Indonesia, PT Bank
Internasional Indonesia tbk (BII) is
one of the top ten largest banks in
Indonesia.
The steady track of growth BII achieved
throughout the year signifies our hard work
in fixing basic fundamentals and setting
the right foundation for BII. We have now
revitalised its growth momentum, though
there is still much to accomplish in our quest
for greater growth and higher market share.
Rahardja Alimhamzah
Acting President Director, Bank Internasional Indonesia

PT BANK INTERNASIONAL
INDONESIA TBK
BII is present in 30 of Indonesias 33 provinces, with
334 domestic branches, five Syariah branches and
three international branches. Operating 1,017 ATMs
and 15 cash deposit machines (CDM) across
Indonesia, we are one of the few banks that connect
to all networks in Indonesia, namely ATM PRIMA, ATM
BERSAMA, ALTO, and CIRRUS, and Malaysias MEPS
network as well as 2,800 Maybank ATMs in Malaysia
and Singapore. We also have two overseas branches
in Mauritius and the Cayman Islands, and are in the
process of re-activating our branch in Mumbai. We are
a prominent provider of a broad range of banking
and financial services in Indonesia covering retail/
consumer, corporate, Syariah, SME and commercial
and treasury.
Our subsidiaries are PT Wahana Ottomitra Multiartha
Tbk (WOM Finance), a motorcycle financing company
and BII Finance Center, a car financing company.

Financial Performance

In FY2011, profit before tax increased by 29% to

Rp781 billion. Net interest income rose 22% to
Rp4,033 billion on the back of higher interest margin
earned through the growth of high-yielding assets
(especially loans), combined with optimal composition
of funding.
Non-interest income grew by 14% to Rp2,006 billion,
driven by income generated from bancaassurance,
remittances, treasury transactions and other retail
transactions. This was supported by loans growth of
26% which had risen to Rp59,828 billion as at 30 June
2011. Meanwhile, current account & savings account
(CASA), which provides lower cost of funding,
contributed 41% of total customer deposits.

Strategy and Objectives

Aspiring to be the best financial services provider in

the markets we serve, we are striving to become the
top bank in selected business segments.

Business Review

Maybank Annual Report 2011

149
At A Glance
Our Perspective
Who We Are

With our mission to humanise financial services from

the heart of Indonesia, we believe that providing
excellent service begins with our relationships and
partnerships. Positioning ourselves as offering
innovative, relationship banking for business and
communities, our goal is to ensure that all our
customers can access the financial services they need
in ways that deliver real and lasting benefits.

Indonesia Service to Care Award 2011 based on

service with care survey in 2010 conducted by
Marketeers magazine, (January 2011)
Call Center Service Excellence Award 2011
with Excellence predicate from the Care-Center
for Customer Satisfaction & Loyalty (CCSL),
(March 2011)
For the second consecutive year, BII was
recognised as the Second Best in the Bank Service
Excellence Award 2011 by Marketing Research
Indonesia and Infobank magazine, (June 2011)

Leadership

Notwithstanding the successes we have achieved so

far, global economic uncertainties and a highly
competitive market mean that plenty of challenges
remain. To ensure that our asset quality remains
intact, we have strengthened our risk management
and credit controls while speeding up loan
restructuring programmes and more closely
monitoring existing borrowers.

Responsibility

Outlook

AGM Information

With this positive domestic economic outlook, we are

poised for further growth, and hand-in-hand with
Maybank, will work hard to realize the Groups
regional aspirations.

Financial & Others

Despite the global economic weakness following the

banking and sub-debt crisis in the US and Europe,
which has now turned into sovereign credit
weakening, and measures to curb inflation in China,
we remain optimistic in our outlook for Indonesia.
Solid domestic demand and a relatively
accommodating economic policy are supported by a
healthy government budget. Economic activity is
manageable, inflation is less than 6%, and the
currency remains stable and is expected to strengthen
on the back of a strong capital flow.

Governance

Our relentless efforts to grow the business and

enhance customer service quality won us an array of
awards throughout the year:
v
Award from Bank Indonesia (BI) as the most
active bank in using the settlement mechanism
of USD/IDR Payment-versus-Payment (PVP) on BI
RTGS system, (June 2010)
v
The Best in Class Straight Through Processing
(STP) Rates from J.P. Morgan, Citibank, Standard
Chartered Bank and Bony Melon (June and July
2010)
v
Most Admired Bank in Mortgage Loan Facilities
from Indonesia Property & Bank Awards, (July
2010)
v
Best Percentage Growth in the Number of ATM
Transactions from ATM Prima Network, (October
2010)
v
Best Percentage Growth in the Number of
Transfer Transactions (Issuer) from ATM PRIMA
Network, (October 2010)
v
First Bank to Launch Savings Product for Women
from Rekor Bisnis Indonesia, (November 2010)
v
Best in Market Driving for Woman One savings
product from Marketing Award 2010, (November
2010)
v
First place in The Best 10 Banks in Service Quality
2010 in all categories from the Institute of
Service Management Studies (ISMS) and
Infobank magazine, (December 2010)

Business Review

In May 2011, we successfully completed the issuance

of sub debt, raising an additional Rp1.5 trillion of Tier
2 capital to support working capital needs and future
business growth.

Bank Internasional Indonesias headquarters in Central Jakarta.

Performance

In FY2011, we invested heavily in expanding and

upgrading our delivery network. In 2010 we opened
72 new offices and 165 ATMs throughout Indonesia,
as well as enhanced our IT infrastructure to improve
service delivery to customers. Meanwhile, the
successful launch of mobile banking further
deepened our engagement with our customers. We
also introduced new products to the market, and
continued to leverage on synergies with Maybank to
deliver mutual benefits, especially in the area of
remittances.

Strategy

Achievements

150

Maybank Annual Report 2011

Business Review

International
Banking

MAYBANK PHILIPPINES, INC.

As a full-service commercial bank, Maybank
Philippines Inc (MPI) provides a wide array of products
and services to meet the financial needs of our retail
and institutional customers. Our nationwide network
of 50 branches is the most extensive of any of the
countrys foreign banks, 25 branches being located in
Metro Manila and 25 in the key cities of Luzon, Visayas
and Mindanao. With 54 onsite and offsite ATMs and
13 auto lending centres, the Bank is growing its
presence in key segments of the consumer market
such as auto, housing and personal loans, as well as
selected segments of the corporate/commercial
market.
During the year under review, profit before tax rose
48% to P250.6 million from last years P168.8 million.
Net interest income advanced 31% to P1.4 billion
while non-interest income leapt 49% to P443.8
million. Loans grew by an impressive 38%, from
P14.03 billion to P19.30 billion while deposits climbed
to P26.53 billion, 20% up on the previous financial
year.
In April 2011, we restructured ourselves to reflect the
transformation that has taken place in Malaysia. This
will significantly enhance our ability to cross-sell and
bundle products. Our business units are now grouped
into three clusters: a Wholesale Banking Group, a
Retail Business Group and an Investment & Asset
Management Group.

To expand our presence in the retail customer

segment, in March 2011 we successfully rolled out a
credit card acquiring programme as part of the
Groups regional credit card initiative. We are actively
signing up new merchants and deploying point-ofsale terminals. To enhance our customers banking
experience, internet banking (retail suite) was
launched in June 2011.
Though the economic outlook is generally positive,
we expect the business environment to remain
challenging, with interest rates likely to rise in
response to higher inflationary pressures. Despite this,
we remain optimistic about economic growth in the
Philippines and will take advantage of the growing
economy to increase our presence.

MAYBANK CAMBODIA
Maybank set up its first branch in Cambodia in 1993,
with the initial objective of supporting Malaysian and
Singaporean companies with business operations in
Phnom Penh. We have since expanded our customer
base to serve local Cambodian businesses as well.
In April 2011, we expanded our branch network by
opening our tenth branch at Kampong Cham, a
trading district with a population of two million. We
aim to follow this by establishing an eleventh branch
in Phnom Penh City by the end of 2011.

Business Review

Maybank Annual Report 2011

151
At A Glance
Our Perspective
Who We Are
Strategy
Performance

GREATER CHINA

AGM Information

In 1995, Maybank established its presence in Vietnam

by setting up a branch in Hanoi, followed in 1996 by a
representative office which has since been
converted into a fully-fledged branch in Ho Chi
Minh City.

Maybank opened a representative office in Beijing in

1993, and in 2000, opened its first full-service branch
in Shanghai. Together with Maybanks treasury centre
in Hong Kong, these make up Maybanks Greater
China operations.

Financial & Others

MAYBANK VIETNAM

Governance

We are positive about the countrys long-term

economic outlook, and given Vietnams past track
record of robust economic growth, we are confident
that the current correction will be transitory.

Leadership

In FY2012, we will capitalise on our strengths in

transaction banking (especially trade finance),
remittances (Maybank Money Express) and cash
management. This will enable us to generate further
growth, while at the same time increasing our
presence in Cambodia.

During the year, Vietnam faced a certain amount of

macro-economic uncertainty. The State Bank of
Vietnam has taken steps to address the situation by
introducing measures to curb inflation, including
capping annual loans growth by banking institutions
at 20%. Despite these challenges, we managed to
boost our trade financing and cash management
capabilities in the area of business banking, thereby
achieving a slight growth in our loan portfolio.

Responsibility

During the year under review, we successfully

implemented Trade Connex (a web-based system
which facilitates the centralised processing of trade
finance transactions) and introduced Global ATMs.
Another milestone was passed when loans breached
the USD100 million mark in the second half of
FY2011, driven by our core business of consumer and
commercial lending.

Maybank Vietnam provides full commercial and

corporate banking services, with a wide range of
financing and trade finance products to suit
customers needs. Other services include remittances,
treasury and foreign exchange.

Business Review

With a wide range of banking products and services

on offer, Maybank Cambodia is focused on meeting
the needs of our SME, commercial and corporate
customers. At the same time, we are growing our
retail financing portfolio, particularly with our housing
loan offerings.

152

Maybank Annual Report 2011

Business Review

International
Banking

Our Shanghai branch provides wholesale banking

solutions with a focus on Malaysian, Singaporean and
ASEAN commercial and corporate customers with a
business presence in China. Meanwhile, our Hong
Kong branch primarily engages in wholesale banking,
concentrating on corporate lending, treasury and
capital markets.
Our Greater China aspiration received a major boost
in May 2011, when Maybank obtained provisional
approval from CBRC to operate a fully-fledged
commercial banking branch in the capital city, Beijing.
This will considerably enhance our ability to tap into
the massive opportunities on offer, and will support
the Banks long-term vision to build a significant
presence in Greater China via local incorporation.
Meanwhile, we will continue to facilitate business
development between Hong Kong and China, and will
simultaneously enhance our trade finance and cash
management capabilities.

OTHER OVERSEAS UNITS

In addition to acting as listening posts, Maybanks
treasury centres in London and New York continued
to bring the Bank business referrals and opportunities.
Meanwhile, our Bahrain operation acts as our listening
post in the Middle East and during the year focused
on driving investment banking and boosting our
treasury and Islamic banking capabilities.
With the conversion of PT Bank Maybank Indocorp
into Maybank Syariah Indonesia, we aspire to expand
Islamic banking beyond Malaysia. Our Papua New
Guinea operations also prospered in FY2011 to
register total assets growth of 24.4%, as well as a
25.9% increase in net interest income as compared to
FY2010.

Looking ahead, the medium to long-term economic

outlook for the emerging economies of the ASEAN
nations remains positive. We aim to penetrate
regional markets where we have yet to establish a
presence, and at the same time boost brand
awareness so as to improve our visibility among the
international community.

ASSOCIATES
Despite the challenging macro-economic conditions,
our overseas associates of MCB and ABB continued to
generate positive returns since the acquisition of 20%
strategic stakes in both banks in 2008. Maybank is
wholeheartedly committed to support the growth
and development of both banks. Our involvement in
local governance allows us to share our views with
the board members in charting the future strategic
directions of the banks.
With a strong command of the domestic deposit
segment, MCB, the largest bank in Pakistan by market
capitalisation, is the most profitable bank in Pakistan.
For the half year to 30 June 2011, the bank recorded,
a 32% jump in PBT to Pakisan Rupee 16.1 billion. MCB
Bank was recently voted as 2011 Best Bank in Pakistan
by Euromoney and 2010 Strongest Bank in Pakistan
by The Asian Banker. Maybanks continuous
partnership with MCB Bank has been a success with
strategic tie-ups in the areas of trade financing,
remittances and Islamic banking. Strategic
collaborations are ongoing, with both banks fully
committed to leverage on each others strengths
for growth.
Since its establishment in May 1993, ABB has now
become a leading Vietnamese commercial joint-stock
bank. For the half year to 30 June 2011, the bank
posted a PBT of Vietnamese Dong 270.6 billion.
Maybank is actively supporting ABB, pursuing growth
by collaboration coupled with an enhancement to
ABBs trade financing capabilities.

153
Maybank Annual Report 2011

Business Review

At A Glance

Our Perspective

Who We Are

Strategy

Performance

Business Review

Responsibility

Leadership

Governance

Financial & Others

AGM Information

154

Maybank Annual Report 2011

Business Review

Group
Human Capital
Our focus last year was on humanising the
management and development of our people
to ensure that the Groups transformation will be
sustainable, and to create a high performance
culture driven by our corporate values.

Our initiatives hinge on our signature

integrated talent management platform that
serves as the pulse of the organisation and
drives, motivates and enables our people to
make a difference. Our future focus will be to
ensure consistent quality of implementation
and regionalisation of this platform to
position our talents to serve the different
communities across all the markets where we
are present.
Nora Abd. Manaf
Head, Group Human Capital

Highlights

> Net income per head and profit before tax per head

improved from last year and employee engagement

levels remained high compared with the Towers
Watson Global High Performing Companies Norm

> We enhanced our group rewards and recognition

strategy, which is benchmarked against the market to

ensure competitiveness and is now complemented by
the introduction of a long term incentive plan

> A culture of performance management-enabled by the

enhanced Maybank performance management system
and disciplined, effective consequence management
contributed to greater growth across the Group

> Group talent management system was rolled out

regionally, with increased visibility of talents through

the multi-level talent review platform resulting in
greater of cross-border movements and accelerated
talent development

> We intensified our focus on strengthening leadership

capability and on deepening employee core functional

skills Groupwide

> There was improved impactful dialogue across the

Group through varied channels of communication to

drive innovation and creativity

Business Review

Maybank Annual Report 2011

155
At A Glance

Net Income per head increased from RM306,853

(FY2010) to RM320,389 (FY2011).
PBT per headcount increased from RM133,725
(FY2010) to RM149,704 (FY2011).

2%
11%
53%
34%
36.22 years old

Average tenure

8 years

The culture we are building is driven by our TIGER

values of Teamwork, Integrity, Growth, Excellence &
Efficiency and Relationship Building. By living and
breathing these values, we put customer service at
the heart of our operations. Appropriately, our
customer service commitment is encapsulated in our
mantra, Serve From Your HEART (Humility, Efficiency,
Appreciation, Respect, Trust).

Female Representation in
Senior Management

27.36%

87%
81%

82%

83%

77%

The trends of EES since 2006

(BII included for the first
time in 2011)

83%
77%

2006

74%
2007

86%

83%

2008

2009

84%
83%

2010

83%

2011

EES (incl. BII)

EES (excl. BII - for comparison against past year)
Towers Watson Global High Performance
Companies Norm
* Employee Engagement levels remain high when compared to
the Towers Watson Global High Performance Companies
Norm. 92% of Maybank Group employees participated, while
for BII, 95% responded to the survey.

AGM Information

Alignment begins with leadership. Our leaders are

charged with evolving the Groups strategy and
ensuring clarity throughout the organisation. It is they

Employee Engagement Survey Result Trend

Financial & Others

Meritocracy is applied to all performance

management and talent management processes in
sustaining a high performance culture. Our Cultural
Transformation Plan (CTP) incorporates our corporate
values and call to serve with a HEART. These initiatives
are well accepted as the DNA of our culture that
tightly synchronizes and aligns Maybanks strategy,
marketing, operations and leadership across the
regions.

86% *

Employee Engagement Index 2011

(excluding BII)

Governance

Average age of workforce

Leadership

BUILDING A COMMON CULTURE

Responsibility

41,886
Senior Management
Middle Management
Executive
Non-Executive

Business Review

Employees

Performance

Improved productivity indicators

Strategy

Our aim is to build a workforce that is globally

adaptable, as well as geographically and culturally
diverse. The focus continues to be on building
capability from a core banking perspective as well as
a talent management and leadership perspective. We
will continue to implement and execute our strategy
to build a regional talent pool that will be at the
forefront of our regional expansion.

To support Group transformation, during the year, our

Executive Committee (EXCO) initiated two-way
communication about our vision, mission, values,
strategies and expectations. We encouraged honest,
open and trusting (HOT) conversations and dialogue
to explore ideas, share feedback, clarify perceptions
and resolve doubts. In carrying out this exercise, many
different channels were employed including print,
electronic and, most importantly, face to face.

Who We Are

With the Group stepping up the regionalisation of its

business strategy, Group Human Capital initiatives
continued to focus on building capacity and
confidence to keep up the momentum and
employees resilience in pursuit of the transformation
agenda. The shared philosophy of these initiatives is
to unite all Maybankers behind our common mission
of humanising financial services across Asia. Finding
the right employees, developing them, rewarding
them and retaining them are some of our highest
priorities. Our talent management strategy is a
multi-pronged one that includes a compelling
employee value proposition with a competitive
reward package.

who set the right direction and establish the right

climate to inculcate shared beliefs, values and ways of
working.

Our Perspective

OVERVIEW

156

Maybank Annual Report 2011

BuSineSS RevieW

Group
Human Capital

Ghc 5-year Roadmap traction and plan

the pilot years 2009 2010
Maybank, the employer for people to
achieve their aspirations

2011 2013
Begin to Realize the potential
productivity and performance
improvement

2014 2015
Recognition as leading Regional
employer
v
v

v
v
v

v
v

v
v

Market Competitive Rewards

Base Pay correction & Significant
Variable Bonus
Skilling Factory, Maybank Great
Manager Programme (MGM) SEARCH
Pipeline, CTC, Workforce Reprofiling
Organisational Improvement (Span of
Control & Delayering)
Human Capital Workshop and Maybank
Group Leadership Model
People Policies, Processes, Terms of
Reference and Delegation of
Authorities

Regionalising Talent Management

Regional Employer Value Proposition
Organisational Climate Change (Culture
Transformation)
Focus on Key Staff Productivity
Indicators (revenue/staff cost, etc)
HRIS System to support Regional Talent
Management Framework
Market Competitive Rewards
including Long Term Incentive Plan

v
v

Preferred Employer
Leading in Staff Productivity
Reputation for Providing Talent
Continuous Leadership Engagement

vision
To be a Regional
Financial Services
Leader

Mission
Humanising Financial
Services across Asia

Workplace practices, behaviour, unwritten rules reect desired culture in action

Our five-year people plan is aligned to our corporate strategy to maximise shareholder value.

Business Review

Maybank Annual Report 2011

157
At A Glance
Our Perspective
Who We Are
Strategy
Performance

Breakfast Session
with the PCEO.

Business Review

A One Sector, One Innovation, One Month campaign

was introduced in February 2011 offering a monthly
reward to winners from each sector. A quarterly game
show was also held to showcase the best ideas. The
game show incorporated elements of fun, creativity
and teamwork with audience participation which
accounted for 20% of the judging scores.
Number of ideas received
FY2011

350

943

Presidents Innovative Ideas Award

AGM Information

FY2010

Financial & Others

All these forums acted as role models for leadership

behaviour, and helped eliminate barriers to promote
open communication and dialogue between senior
management and employees.

Meanwhile, the Presidents Innovative Ideas Award

(PIIA) scheme was revamped to inculcate a culture of
innovation and lateral thinking. As a result of the
revamp, the number of ideas jumped 169% from the
previous year.

Governance

The Chairman of the Board and EXCO held various

sessions to highlight opportunities for improvement
and to foster upward communication, with issues that
surfaced being addressed immediately.

SPARKING IDEAS

Leadership

Following the launch of House of Maybank, EXCO

visited all branches, service centres, regional offices
and departments in a nationwide Igniting the TIGER
Spirit roadshow. The roadshow focused on
elaborating the operations and synergy of the new
House of Maybank reorganisation, reviewing
Maybanks progress and strategic direction, and
obtaining feedback.

Responsibility

PIIA Game show.

Conversation session with the Chairman.

158

Maybank Annual Report 2011

Business Review

Group
Human Capital

ENHANCING LEADERSHIP
In FY2011, leadership teams Groupwide continued to
benefit from programmes to ensure convergence and
energise the teams to perform at peak levels. These
programmes included best in class leadership
development, team and individual coaching sessions,
and Maybank Great Manager (MGM) & Maybank Great
Leaders (MGL) modules.
During FY2011, all identified managers completed the
MGM programmes that was designed to hone
leadership skills against Maybank Group leadership
competencies SEARCH (Strategic Visioning, Engaging
& Developing Leaders, Spirit of Achievement,
Cultivating Relationship, Customer Centricity and
Innovation & cHange).
We have also implemented a culture of coaching and
have dedicated coaches to support, guide and help
our employees navigate through the transformation
journey. The dedicated coaches have conducted 306
coaching sessions and 23 team engagements to date.
Mentors have also been assigned to the various
talents across the organisation and act as sounding
boards for their mentees to help them acclimatise to
the changes in the organisation and deliver on
expectations.
Throughout the year, 82% of mission critical position
(MCP) successors (as against 65% in FY2010) took part
in experiential development activities such as
executive coaching, special projects, job
enlargements, and international assignments.
We also achieved increasing success in retaining key
employees, with the rate of regrettable losses
improving from 48% in FY2010 to 23% in FY2011.
.

DEVELOPING TALENT
We continue to aggressively deploy the multi-level
talent review platform to identify highly talented
employees who are ready for accelerated
development. We have also regionalised our talent
platforms to promote cross-sector and cross-border
mobility. With the development of a talent pool with

more transferable skills, in FY2011, inter-sectoral

employee transfers increased to 7.4% from 4.6% the
year before. Cross-border moves have also increased
by 24% year-on-year.
For leadership development acceleration, an in-house
programme, Transitioning Leaders to CEOs (TLC) was
introduced to create a pool of talents capable of
assuming CEO or CEO-like positions. The programme
includes best-in-class learning modules, top team
engagement, international exposure, experiential
development and opportunities to network with
business leaders in development programmes
overseas. So far, 58 talents have completed year one
of the three year programme, achieving an overall
60% improvement in their team engagement levels.

ENABLING LEARNING
We constantly up-skill our people to enable a culture
that thrives on innovation, high customer
engagement and fast problem resolution. Training
and development opportunities cater to the diverse
needs and aspirations of employees; and detailed
personal development plans (PDP) form a key
element of performance management.
Our total learning budget for FY2011 was RM84.94
million. Our learning facilities include the Maybank
Academy, our flagship learning centre, and are
supported by MyCampus, our 24/7 online e-learning
tool. The curriculum includes technical and functional
skills, managerial and leadership development, and
experiential development.
These facilities are complemented by management
luncheons, townhalls, leader-led sessions and
coaching as well as our quarterly guru series, which
offers insights into global best practice.

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159
At A Glance

PROMOTING EQUAL OPPORTUNITIES

FY2010

FY2011

Senior
Management
Middle
Management

15.68%

27.36%

38.23%

39.82%

Business Review

Job Level

Performance

Gender Representation: % Female

On top of this, we have platforms which provide
recognition for exemplary performance, we offer
career development opportunities, and we are
dedicated to our employees well-being. To boost
motivation, we also recognise and reward top
performers, long service employees, best managers,
executives and non-executives, core values

Strategy

Our policy is to provide equal employment

opportunities whether for recruitment, promotion,
transfer or development with meritocracy and
fairness as the underlying principles. In FY2011,
female to male ratios in senior management positions
increased to 27.36%, while the percentage of female
representation in middle management increased to
39.82%.

Who We Are

Our total rewards strategy has evolved with our

business transformation. Basic pay is benchmarked
against the market to ensure competitiveness, and
the 2010 variable bonus demonstrated our pay-forperformance approach. In June 2011, we launched an
employee share scheme (ESS) based on a portfolio
approach that combines an employee share option
scheme (ESOS) with a performance-based restricted
share unit (RSU) scheme. This ESS gives employees at
all levels the chance to benefit from the growth in
value of Maybank shares and to participate in the
Groups success. The ESS completes and complements
the total compensation component of our rewards
strategy which comprises base pay, fixed and variable
cash and the long term incentive plan.

champions, and top corporate social responsibility

volunteers. Every year, we celebrate their
achievements at the Maybank Group Awards Night,
the annual sports carnival and other events.

Our Perspective

REWARDING PERFORMANCE

Responsibility
Leadership
Governance

Maybank Group Awards Night.

Financial & Others

AGM Information

Pesta Sukan at Maybank Academy.

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Business Review

Group
Human Capital

FOSTERING HEALTH
Health and safety measures are in place to ensure that
our people have an optimum work environment.
During the year, we ran a variety of safety and
wellness activities such as safe riding and driving
training, Parenting@work workshops, Total wellness
and heath promotion programmes, trim and fit
programmes, blood donation drives, regular health
talks, and healthy lifestyle carnivals, as well as regular
OSH awareness programmes and audits at the regions
and branches. The Bank also extended the maternity
leave from 60 days to 90 days for its employees in
Malaysia.
The OSH regional secretaries meet centrally twice a
year to report progress of OSH implementations at
the respective regions.

SUPPORTING EDUCATION
We also recognise children of employees who excel in
their examinations, and we provide financial
assistance for employees in lower income brackets
whose children are entering schools and universities.
In December 2010, as a caring employer, we donated
over RM350,000 in back-to-school financial assistance
to 1,799 eligible employees.

Maybank Group Staffs Children Academic

Excellence Award
Year PMR, SPM
& STPM
FY2010
FY2011

Total
Recipients

Total Amount
(RM)

422
559

234,100
287,000

Meanwhile, the Maybank Scholarship Awards offer

scholarships to outstanding achievers and the
opportunity for employment with the Group after
graduation. For the first time, the Awards sponsored
candidates pursuing studies in private institutions of
higher learning in Malaysia apart from local
universities. In 2011, a total of RM1 million of
scholarship awards was disbursed to sponsor 125
Maybank scholars, of whom 27 were new scholars.

EMPLOYEE VOLUNTEERISM AND

CORPORATE RESPONSIBILITY
Our Cahaya Kasih programmes enables Maybankers
throughout Malaysia to contribute their time and
talents to create a positive impact on the various
Corporate Responsibility (CR) initiatives organised by
the Group. In 2011, the total number of hours
volunteered was approximately 1,497.5.
During the year, two key campaigns were organised.
In October 2010, Maybank launched a milestone
Global CSR Day where the Bank was the first local
financial institution to undertake a simultaneous one
day Global CSR programme involving more than
10,000 Maybankers across the Groups global network.
In March 2011, Maybank was also the first Malaysian
financial institution to hold a joint International
Womens Day Celebration with the Ministry of
Women, Family and Community Development.

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161
At A Glance
Our Perspective

Details of our employee volunteerism initiatives can be found in Corporate Responsibility section in this
annual report.

Who We Are
Strategy
Performance

Over 10,000 Maybankers participated in

Global CSR Day under our Cahaya Kasih
volunteerism programme.

Business Review
Responsibility

Celebrating International Womens Day

with the Minister of Women, Family &
Community Development.

Leadership
Governance

Dedicating time and energy to

national community events.

Financial & Others

AGM Information

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Business Review

IT Transformation
Programme (ITTP)
Aligning and re-prioritising
our business and information
technology initiatives is a
crucial element in Maybanks
transformation.
Our IT Transformation Programme will
provide Maybank with a key advantage in
driving business differentiation to surpass
our competitors and provide superior
customer experience.
Geoffrey Stecyk
Head, Enterprise Transformation Services

Our IT Transformation Programme (ITTP) is the

technology enabler for Maybank to achieve its
strategic aspirations by providing an IT platform for it
to achieve sustainable leading capability. The new
platform encompasses system, process and control
changes that support regional business
transformation. Spanning five years, the programme
provides tactical business solutions which align with
the longer-term strategic business system
replacements that will facilitate business
differentiation and business flexibility.

Essential Advantage
Business and IT are collaborating in developing
Maybank Essential Advantage - the ability to surpass
our competitors and provide superior customer
experience. Through a standardised regional
technology platform, Maybank will benefit from
Essential Advantage by delivering three core
capabilities that will drive business differentiation,
namely: Multi Channel Sales and Service, Integrated
Customer Analytics, and Agile Product Manufacturing.

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163
At A Glance
Our Perspective

Agile Product Manufacturing

Consistency of products and

services across all channels

Convenience of real time

analysis of customers needs

Customisation of product
development and delivery

Business Review

Maybank IT Transformation Journey

July 2012
Branch
Front End
Replacement

2015
August 2012
Regional Cash
Management
System-Singapore
rollout

Full Business
Transformation
Deployment

Financial & Others

The priorities of the Tactical Business Enabler Programme are to boost revenue, cut costs, and enhance customer
experience. One key project delivered by the programme created a system that offers customers the
convenience of a Master Foreign Currency Account (MFCA) which handles multiple currencies. In April 2011,
some 20 projects were successfully delivered on time, within budget, signifying a major milestone.

Governance

2011 is witnessing the Implementation phase of the journey, with the first half showing promising progress
marked by the completion of the Tactical Business Enabler Programme.

Leadership

December 2010
Enterprise
Architecture
Implementation
Roadmap

Responsibility

July 2010
Programme
Initiation Phase

April 2011
Tactical
Business
Enabler
Programme
Completion

Performance

Launched in July 2010, the business transformation journey moved from initiation to implementation phase
after establishing an Enterprise Architecture Implementation Roadmap in December 2010. As the target
technology state for Maybank, the Enterprise Architecture covers Infrastructure & Technology, Information &
Data, and Applications & Systems.

Strategy

Integrated Customer Analytics

Who We Are

Multi Channel Sales & Service

AGM Information

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Maybank Annual Report 2011

Business Review

IT Transformation
Programme (ITTP)

GWB Customer Relationship

Management
Another significant achievement was the new
Customer Relationship Management (CRM) system for
Global Wholesale Banking (GWB) that went live in
April 2011. Officially launched on 27 June, this tactical
initiative provides GWB with a customer relationship
management information tool to support the
consistent management of GWB customer data. The
system enables users, especially Customer
Relationship Managers, to share information from
initial customer contact right through to posttransaction customer support.

Serving the House of Maybank

To serve the House of Maybank in the coming years,
business and IT will deliver enabling technology for
new products and channels which will increase
business effectiveness and efficiency in meeting
customer expectations. This will:

v
v

Create a consistent customer banking

experience, as multi-channel sales and services
move towards a customer segment driven model
with centralised business data
Provide flexible and agile product and service
offerings through competitive pricing,
personalised product bundling, and localised
decision making
Enhance collaboration, data sharing and
knowledge management between regions as
Maybank pursues expansion across ASEAN
Industrialise Maybanks Operating Model to
optimise productivity and costs
Re-invent our corporate and commercial
relationship model around the principle of
humanising financial services

The pace of innovation and change will continue with

the business and ITTP team striving to meet the
Groups transformation aspirations and deliver
increased value. As a catalyst of change, both
business and IT will bring people, process and
technology together to support Maybanks Vision to
become a Regional Financial Services Leader and its
Mission to Humanise Financial Services from the Heart
of ASEAN.

Business Review

Maybank Annual Report 2011

At A Glance

Service
Quality

Governance
Financial & Others
AGM Information

We also conducted an internal employee survey to

gauge team effectiveness amongst internal support
groups. Results indicate that there are opportunities
to further improve the quality of our products,
processes and procedures, as well as customer service,
problem resolution and the speed with which we
respond to changes in the marketplace.

Leadership

We have developed a three-year sustainable service

strategy that will form the basis of our future success.
During our first year, we focused on developing a

Our Customer Engagement Survey is an annual

survey that measures our customer engagement
index, and is targeted at mass affluent groups. This
survey gives us insights into critical improvement
areas, telling us what our customers want and areas
where they wish to see improvements. We are
committed to our promise to listen to and act on their
feedback immediately. While we have seen
improvements in engagement levels, more still need
to be done to accelerate this process.

Responsibility

To support its customer service transformation

initiatives, Maybank has put in place a Service Quality
Department. The centralisation of service units within
this new structure streamlines all customer service
strategies and operations. The remit of our
Department is to be a centre of excellence and a
catalyst for service transformation which means that
our ultimate goal is to achieve 100% customer
satisfaction. We are committed to understanding our
customers expectations, using quality service to
differentiate our business from the competition by
enhancing our service delivery as well as setting and
achieving high service standards.

Customer Engagement Survey

Business Review

Serve From Your HEART is a bank-wide service pledge

that emphasises the importance of delivering
consistent and excellent customer service. The HEART
acronym means we promise that we will serve our
customers with Humility, Efficiency, Appreciation,
Respect, and Trust. Serve From Your HEART workshops
ensure that employees bank-wide develop the skills
and mindset to serve in a sincere and genuine
manner.

Performance

Serve From Your HEART

Strategy

In years two and three, we will continue to enhance

processes and systems so as to deliver on our vision
of humanising banking.

Who We Are

service culture that appreciates customer criticism

and takes personal accountability. It also involves
improving governance and process enablement. We
trained and empowered our staff to know what is
right and have given them the authority to do what is
right for our customers. This further helped us to
ensure our customers experience will continue to
improve.

Our Perspective

The House of Maybank transformation journey is supported by

Enterprise Transformation Services, which is specifically dedicated
to delivering effective, differentiated services and to accelerating
operational efficiency and performance.

Maybankers Customer Service Manifesto for

service excellence.

165

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Maybank Annual Report 2011

Business Review

Maybankers pledge to deliver unbeatable service to our

customers with a smile.

Maybankers are ever ready to serve our customers from

our HEARTs.

In our quest to enhance customer service, we have

raised the customer service weightage for staff KPIs
Bank-wide to at least 15%. In addition, for the
branches, the nationwide LEAP30 TransformationImproved Customer Service Level (ICSL) initiative
focuses on delivering differentiated, best-in-class
service experience. Front-liners have also been
provided with uniforms that reflect Maybanks
professionalism and create a common identity. The
new uniforms have not only enhanced the staffs
image but greatly boosted morale.

Mystery Shopping entails an independent evaluator

posing as a customer and performing live transactions
at the branches to gauge and track consistency of
service levels. This also allows benchmarking against
our main competitors in terms of the staffs soft skills,
product knowledge and work etiquette. The Mystery
Shopping results improved significantly from a
baseline of 73% in November 2010 to 88.7% in June
2011.

All these initiatives support our commitment to

transform Maybank into an organisation that delivers
an unsurpassed customer experience.

Measurement of Service Quality at Branches

The measurement of service quality at the branches
includes real time performance measures relating to
average waiting time, the effectiveness of problem
resolution, Mystery Shopping and Mystery Calls.

Other key initiatives designed to meet customers

rising expectations and fulfil employees career goals
included a Customer Service Transformation Lab and
an Improve Problem Resolution programme.

Customer Service Transformation Lab

Conducted in September to November of 2010, the
lab focused on bridging process gaps and resolving
problems highlighted by our customers via various
feedback channels.

Front-liners in Sarawak in their new uniforms.

Service Guidebook.

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Maybank Annual Report 2011

167
At A Glance
Our Perspective
Who We Are
Strategy

For a full eight weeks, 51 dedicated Maybankers took

on the challenge of a structured approach to
delivering quick and tangible results for Customer
Service Improvement. Rolling up their sleeves, the
team worked through each process to identify
opportunities for improvements that would deliver
Big Fast Results on 26 quick wins and 22 big tickets.

Other Key Initiatives

We confidently anticipate a continuous rise in service

quality standards. With our transformation journey
well underway, Service Qualitys ultimate aim is to
ensure that Maybank customers will enjoy a
consistent experience of service excellence across all
regions where we operate. The achievement of this
aim will be a key contributor to fulfilling Maybanks
aspiration to be a leading regional financial services
provider by 2015.

Leadership

Governance

70% reduction in annual cash jam incidents at

our cash deposit machines (CDMs) from 29,496
to 9,072.
82% (63,140 of 77,000) of annual CDM refunds
were made within one working day, down from
the previous average of four days.
30% reduction from 11,500 to 8,043 in
undelivered mails for current and savings
accounts with the address clean-up exercise
done by branches.

Looking Forward
Responsibility

Working in close collaboration with colleagues

outside the Lab, Lab members generated some 48
initiatives including intense syndication and buy-in
from key business leaders and stakeholders. Some key
results to-date are:

In 2011, we launched a Best Service Staff award

nationwide to promote a culture of service
recognition and to motivate and reward employees
who go the extra mile for our customers. A self audit
checklist tool called the Branch Monitoring Scorecard
was also introduced to focus not just on staff skills
and product knowledge but on branch faade and
appearance.

Business Review

Working as a team to develop lab initiatives.

Performance

Maybankers working diligently to identify areas for

improvement.

Financial & Others

AGM Information

Empathetic
Each and every Maybanker knows exactly what it is like to be a customer, and we treat our customers in the way we
would like to be treated ourselves. We do our best to go beyond merely understanding their needs and, over time, to
develop a personal relationship built on trust and mutual respect.

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OUR RESPONSIBILITY

Corporate
Responsibility

One of the Global CSR Day outreach programmes at a refugee centre in Kuala Lumpur.

As part of our mission to be a leader in responsible corporate citizenship,

Maybank seeks to collaborate with organisations that provide
opportunities for economic, environmental and social development. In
addition to creating opportunities and growth through our business, we
aim to fulfil our social responsibility by fostering unique and sustainable
values that have a positive impact on society.

OUR RESPONSIBILITY

Maybank Annual Report 2011

171
At A Glance
Our Perspective
Who We Are

We also recognise that the single most important

force in our organisation is our employees, who have
helped to transform Maybank from a domestic leader
into a strong regional corporate citizen.

Strategy

Our Corporate Responsibility (CR) initiatives and

programmes focus on the four pillars of Community,
Environment, Workplace and Marketplace. We are
committed to meeting community needs, to
conserving the environment, and to nurturing our
employees. Through our mission to humanise
financial services across Asia, we aspire to become a
regional financial services leader.

Performance

The Maybank Foundation

providing our employees with opportunities to

participate in impactful community development
work. Our volunteers engage with residents of the
adopted homes through activities aimed at
promoting social care, education, skill-building and
improving quality of life.

PINTAR Foundation

Financial & Others

AGM Information

We are also happy the schools and students have

been receptive to the various programmes to improve
their overall academic performance. Among the
academic achievements was an increase in the
number of students who obtained their SPM, from
71.9% in 2009 to 88.4% in 2010.

Governance

Under the banner Cahaya Kasih, our employee

volunteerism programme allows employees to
volunteer their time and share their knowledge with
various less fortunate community groups. In
partnership with the Ministry of Women, Family and
Community Developments Rumah Singgahan Kasih
Maybank, various CR programmes were launched,

Community

Leadership

Cahaya Kasih

Our partnership with PINTAR Foundation saw the

adoption of our two schools into its third year,
bringing a variety of incentives and encouragement in
recognition of the academic achievements and
excellence in sports to the indigent students of the
schools. This is in addition to our contribution of
computers to enhance computer literacy amongst the
students and conducting English courses for the
teachers to improve their English proficiency and
capabilities. Our adopted schools are Sekolah
Menengah Kebangsaan Sungai Ara and Sekolah
Kenbangsaan Sungai Duri both located in Pulau
Pinang.

Moving forward, the Maybank Foundation hopes to

initiate and support programmes with various
non-governmental organisations (NGOs), biodiversity
and conservation projects across the region and the
continuation of our Cahaya Kasih programme for
volunteering at childrens homes around the country.

Responsibility

Focusing on community investments and

environmental conservation with an initial pledge of
RM50 million over three years, the Maybank
Foundation aims to set a new standard in CR activities
that goes beyond philanthropy to deliver meaningful
programmes with lasting impact.

A childrens story telling competition to promote national unity.

Business Review

Maybank employees have worked tirelessly to support

Malaysia in its continuing efforts to promote social
and economic development. From 2011, these efforts
will be coordinated within the Maybank Foundation
which has been set up to implement the Groups
Corporate Responsibility (CR) initiatives and
programmes.

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OUR RESPONSIBILITY

Corporate
Responsibility

Rumah Kanak-Kanak Tengku Budriah

Rumah Kanak-Kanak Tengku Budriah (RKKTB) in
Cheras, Kuala Lumpur is just one of the seven homes
adopted by Maybank under our home adoption
programme. During the adoption period, we have
provided educational support and nurture, general
health and hygiene sessions, and academic excellence
rewards to the children of the home.
The tutorial sessions are now being conducted in
Menara Maybank, which also gives the children the
excitement of visiting the Head Office of the countrys
leading financial institution. This is in addition to our
material contributions and upgrading of the homes
premises.
Visits to RKKTB are organised on festive occasions to
deliver clothing and food to the residents, and special
educational as well as recreational outings are also on
the agenda. Some of the children of RKKTB have
found themselves mentors in our employees and have
progressed in their studies and personal
development. We intend to track the childrens
progress going forward as part of our commitment to
continue with our adoption of RKKTB beyond 2011.

Close To You
On 20 November 2010, we became the first Malaysian
financial institution to conduct a simultaneous global
CSR event involving some 10,000 Maybank employees
worldwide. This momentous occasion saw our
employees carry out CSR activities in every location
where Maybank operates, including Singapore,
Indonesia, the Philippines, Brunei, Cambodia, Vietnam,
Hong Kong, Beijing, Shanghai, Bahrain, London, New
York and Papua New Guinea. Themed Close To You,
the programme focused on five key areas: education,
welfare, sports, environment and health/medical
needs.
In preparation for the inaugural event, our employees
contributed their own funds and organised various
fund raising activities for their respective projects to
underline our mission to humanise financial services
globally. Projects ranged from hosting a Childrens
Day in a resettlement community to donations of
school supplies to the Maharlika Elementary School
and assisting in the ongoing medical mission in
Manila.

Some 100 families in San Fernando, Pamapanga were

recipients of food and grocery packs while
Maybankers in the Vis-Min region visited the Padre Pio
House of Children and brought toiletries, basic food
items and other necessities needed by the orphanage.

International Womens Day

As Malaysias leading financial institution, we believe
we have a role to play in setting the standard for
good CR practices with regard to support for women.
This is aligned to our policy that accords equal
employment opportunities with meritocracy and
fairness as the underlying principles. Over the years,
we have adopted strategies to acknowledge our
female employees contribution. 2011 saw us
collaborating with the Ministry of Women, Family and
Community Development on a number of sustainable
initiatives to empower women in society.
We celebrated this years International Womens Day,
the first by a financial institution with the Ministry.
The Bank and its IT outsourcing partner CSC in
Malaysia, teamed up and contributed 200 refreshed
computers to single mothers nationwide under the
Rumah Nur programme managed by the Department
of Womens Development, Ministry of Women, Family
and Community Development to improve their
computer literacy skills. Maybank employees
nationwide also contributed their time to educate the
women on the effective use of computers as well as
broaden their boundaries in communication and
networking.
Other activities organised at our Head Office around
the three day celebration were:
v

A forum entitled Empowering Women to

Challenges : Change and Financial
Independence where various issues relating to
womens contribution to the economy were
addressed.
A sales carnival that featured products made by
single mothers from the Rumah Nur centres in
the Federal Territory and Selangor to create
greater awareness of the single mothers efforts
and to generate income for themselves.
Talks that covered topics from womens sexuality
and financial independence to self-defence for
women.

OUR RESPONSIBILITY

Maybank Annual Report 2011

173
At A Glance
Our Perspective
Who We Are
Strategy
Performance
AGM Information

The visit was an occasion for Maybankers to

remember a segment of the society undergoing
correctional rehabilitation and provide assistance for

Financial & Others

During the year, another initiative for womens

emacipation was organised for female inmates at
Kajang Prison. Fifty five Maybank volunteers touched
the hearts of many when they volunteered to
celebrate Mothers Day with 49 female inmates and
their family members at Kajang prison.

Maybank supports and promotes programmes that

encourage the holistic development of the next
generation of future leaders and those aspiring to be
sportspersons. This year 2011 also saw us renewing
our support for the nations premier golf tournament
following our five-year sponsorship of the Maybank
Malaysian Open between 2006 and 2010. The
confirmation of our commitment for another five
years as the title sponsor of the Malaysian Open
brought about the participation of young sensations
like Louis Oosthuizen and Charl Schwartzel from
South Africa and Rory McIlroy from Ireland.

Governance

Mothers Day Celebration with Inmates of

Kajang Prison

Leadership

Sports

Responsibility

their self support upon release. The half day activity

with inmates and their chargers also gave extended
reconciliation time to inmates with their family
members outside the scheduled visits. Maybankers
raised funds to donate two shoe sewing machines to
help them acquire new marketable skills for economic
independence and empowerment when they return
to society. Three electronic Qurans were also donated
for their spiritual needs.

Business Review

Being at the heart of

the community through
various social and
educational projects.

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Maybank Annual Report 2011

OUR RESPONSIBILITY

Corporate
Responsibility

The tournament prize money was also increased to

US$2.5 million, while the number of Malaysian golfers
in the draw rose from 17 to 22. Meanwhile, we
appointed Danny Chia and Mohd Shaaban Hussin as
the ambassadors of the Maybank Malaysian Open
2011 to help them realise their potential and
hopefully become international champions in the
future.
We also brought immense joy to some 20,000 school
children from our adopted schools round the country
when we enabled them to watch the football match
between Englands Chelsea FC and our very own
Harimau Muda in July 2011 in Putra Stadium Bukit
Jalil.
This sponsorship is in line with our CR programmes
and our holistic approach to engagement with our
adopted schools, combining the development of
education with sports and activities.

Environment
Biodiversity
The Maybank-MYCAT partnership for tiger
conservation in Malaysia involves scientific and
research studies, outreach programmes and
enforcement support. Maybankers volunteered at the
tiger conservation outreach event held at Kiara Park
Taman Tun Dr Ismail, highlighting the drastic decline
of tigers worldwide. This event raised awareness of
the plight of the Malayan tiger and the need to
protect tigers to maintain the ecological balance. Our
RM1 million grant will assist in the implementation of
the National Tiger Action Plan, which aims to have
about 1,000 wild tigers in the Central Forest Spine by
2020.

Disaster Relief
With floods hitting the northern region of the country
towards the end of 2010, we felt the need to provide
relief assistance to the thousands of Malaysians who
were forced to leave their homes. Once again, we
offered a six-month moratorium on monthly
instalment payments and a waiver of certain charges
on a case-to-case basis for our fellow Malaysians
affected by the floods. The moratorium was extended
to businesses, SMEs and consumer customers and was
the fourth moratorium we have offered to customers
struck by natural disasters since 2007.

Aimed at relieving the difficulties faced by our

customers, our disaster relief programme is yet
another of our humanitarian programmes and reflects
our commitment to humanise financial services. Our
insurance arm, Etiqa, reported processing claims in
excess of RM13.10 million from flood-affected
policyholders in Kedah and Perlis. Maybankers played
their part by pooling over RM270,000 to help
colleagues who were affected by the floods.
Following the deadly earthquake and tsunami in
Japan which claimed tens of thousands of lives and
rendered millions homeless, we at Maybank wasted
no time in setting up a fund with The Malaysian Girl
Guide Association. Known as The Malaysian Girl
Guides Maybank Disaster Fund, this was an initiative
to lend a hand to the Japanese people struck by the
tragedy. The Malaysian public was extremely
enthusiastic in their response and within a short
period of time the collection rose to over RM2 million,
making it the highest collection for charity by a group
ever recorded in the Malaysian Book of Records.

Green Technology Financing

With awareness of green technology gaining
prominence in Malaysia, we at Maybank play our part
in support of the Governments Green Technology
Financing Scheme. Some of the green projects
financed locally by us include waste water treatment
plants, solid waste recycling plants, an oil palm
biomass steam powered generator, and the
construction of green buildings. We have also
financed green projects in our operations in the
Philippines, Indonesia, China and Vietnam.
In recognition of our efforts and contribution, we
received the Best Financial Planner Award from the
Credit Guarantee Corporation.

Marketplace
Maybank continues its efforts to rigorously adhere to
responsible business practices when engaging with its
stakeholders particularly its customers, suppliers
and investors so as to provide a clear understanding
of Maybanks performance and enhance their
experience with us.

OUR RESPONSIBILITY

Maybank Annual Report 2011

175
At A Glance
Our Perspective
Who We Are
Strategy
Performance

Marketing and Communications

Vendors

AGM Information

Maybank is committed to world-class procurement

practices that support the Groups business, financial
and strategic objectives. We are committed to
working with key suppliers towards the goal of
continual improvement in environmental, social and
ethical performance.

Financial & Others

We conduct an External Customer Engagement

Survey (ECES) to gather valuable customer feedback
and input on our products and services. Our ECES
rating increased from 34% to 40% in 2011 due to a
higher customer satisfaction level with our
Community Financial Services (CFS) division.

Maybank actively seeks to promote environmental

and socially responsible products and services in its
pursuit of business. Among our socially responsible
products are ATMs for the disabled, housing loans for
the poor, microfinance, a clean energy fund, a Green
Technology Financing Scheme (GTFS) and Maybank
e-statements, which reduce paper use dramatically.

Governance

Customers are core to Maybanks sustainability

strategy and we are conscious of our responsibility to
provide both our business and individual customers
with quality products and services. We offer honest
advice and treat all customers fairly in accordance
with our Code of Conduct, ensuring transparency in
our dealings and transactions with them.

Products and Services

Leadership

Customers

We manage customers feedback and complaints

through various monitoring systems and websites.
The channels by which customers may lodge
complaints include Maybanks branches, contact
centres and stores. The contact details of the
centralised complaint unit of Maybank are also
available on the Maybank and BNM websites.

Responsibility

Maybanks marketing policy complies with the

Product Transparency and Disclosure guideline set by
Bank Negara Malaysia (BNM) and other statutory
bodies such as the Public Islamic Dividend Fund
(PIDF). The guideline aims to enhance disclosure
quality, and requires disclosures to be made in a clear,
concise and timely manner. More than ten training
sessions were conducted during FY2011 to ensure
that Maybanks officers are familiar with and
understand our products and services.

Business Review

Getting closer to
communities helps us
to enrich the lives of
people around us.

176

Maybank Annual Report 2011

OUR RESPONSIBILITY

Corporate
Responsibility

We assess our suppliers on these issues and expect

the strict implementation of a management system
which indirectly influences all vendor processes. All
suppliers must comply with the Companys
declaration of conflict of interest. In addition,
employees must adhere to the Maybank Code of
Ethics. Any approach by a vendor that goes beyond
the bounds of courtesy, or involves the offer or
receipt of gifts, is reported to the employees superior.

Prevention of Corruption
Maybanks Anti-Fraud Framework provides policy,
strategy and a broad set of principles to enable the
Group to prevent fraud and to promote a high
standard of integrity. It also highlights roles and
responsibilities at every level for preventing and
responding to fraud. Additionally, the framework
educates employees about what channels of
communication should be employed when
communicating with external parties, and proposes
methods to be employed in safeguarding sensitive
and confidential information.

Investor Relations
We engage in constant dialogue with our investors
and shareholders through Annual General Meetings
(AGMs), Extraordinary General Meetings (EGMs), group
conferences and various investor relations
programmes. Our AGMs and EGMs are the primary
platform for direct two-way interaction between the
board and the management of the Group and our
shareholders. We keep investors updated on the
Groups performance, KPIs, strategies and key business
activities including quarterly financial announcements.
Information about the Groups financial performance
is available on our website.

WORKPLACE
Relationship with Employees
We believe an engaged workforce has the capability
to deliver sustainable financial performance and a
significant competitive advantage. We survey to
measure the level of employee engagement within
the Group. It enables management to identify what
needs immediate attention to address gaps and issues
as well as to act on the insights.

In 2011, we administered our first Group-wide

Employee Survey. The 2011 survey showed :
v

High employees participation in the survey

where 92% of Maybank Group employees
participated and BII for the first time participated
with 95% responding to the survey.
Employees Engagement levels remain high when
compared against Towers Watson Global High
Performance Companies Norm.

Health and Safety at Work

Maybank is committed to providing a safe, healthy,
secure and conducive workplace for all its employees,
contractors, visitors and customers. Our commitment
to the effective implementation of our Occupational
Safety and Health (OSH) policy will help us achieve a
work environment of zero harm for all people that
work within or visit our workplaces.
Our OSH programmes and campaigns focus on
strengthening our OSH management structure and
increasing OSH awareness within Maybank. Recent
campaigns have focused primarily on healthy lifestyle
and health talks to educate employees on ways to
maintain a sense of well-being.

Training and Career Development

Please refer to Group Human Capital Section.
For the second consecutive year, we are producing a standalone
Sustainability Report on our Corporate Responsibility initiatives
and programmes. Focusing on the four pillars of Community,
Environment, Workplace and Marketplace, they will be reported
on an annual basis to keep our stakeholders abreast of our
Corporate Responsibility efforts.

At A Glance

Our Perspective

Who We Are

Strategy

Performance

Business Review

Responsibility

Leadership

Governance

Financial & Others

AGM Information

Maybankers are ever ready to make a difference in the community.

177
Maybank Annual Report 2011

OUR RESPONSIBILITY

178

Maybank Annual Report 2011

OUR RESPONSIBILITY

Investor
Relations
Investor Relations (IR) continued its efforts to engage the
investment community effectively through various communication
channels.
The IR team is tasked with providing stakeholders with insights into Maybanks performance and business
operations. In FY2011, in enhancing IR effectiveness and in the light of the global economic crisis, we stepped
up communication with the investment community and financial markets, emphasising the strength of
Maybanks franchise, our business outlook and risk mitigation. We also undertook a host of activities in line with
corporate developments.

Highlights
v
v
v
v
v

We participated in more roadshows to enhance engagement with stakeholders

We improved the integration and coordination of IR within the Group
We initiated share register analysis to better understand our shareholders
We attracted greater analyst coverage
We received more buy recommendations and higher target price

Analyst Briefings
As in previous years, for the half year and full year results we ran media and analyst briefings, complemented by
conference call facilities, while for the first and third quarters we ran conference calls. For the results
announcement, presentations and other relevant documents are made available on the corporate website. In
addition, we have started to announce results during lunch time since 2nd Quarter FY2011 and conducted
media and analyst briefings immediately thereafter to allow analysts to prepare their report in time for market
trading and media printing the next day.
Key Events

Date

Results Announcement
First Quarter
Second Quarter
Third Quarter
Fourth Quarter

12 Nov 10
21 Feb 11
12 May 11
22 Aug 11

Other Events
Annual General Meeting for FY2010
Kim Eng acquisition announcement
Extraordinary General Meeting on employee share scheme and update on Kim Eng acquisition

Results Announcement: Analyst briefings

Results Announcement: Teleconferences
Number of companies met (in-house meetings and roadshows)
Number of analysts/fund managers met
(in-house meetings and roadshows)
Non-deal roadshows

29 Sep 10
6 Jan 11
13 Jun 11

FY2011

FY2010

2
2
238
325

2
2
233
281

OUR RESPONSIBILITY

Maybank Annual Report 2011

179
At A Glance
Our Perspective
Who We Are
Strategy
Performance
Business Review

Growing interest from the investment community has led to more requests for meetings with senior
management. The Group met 325 analysts and fund managers in 238 meetings, up 15.7% and 2.2% respectively
from the year before.

At these events, senior management updated participants on Group strategy and initiatives. A key update for
FY2011 was on the acquisition of Kim Eng Holdings.

Governance

To provide a better understanding of the Groups performance, development and future direction, we regularly
take part in local and international conferences and roadshows, including such high profile events as:
v
The 17th CLSA Investors Forum 2010 in Hong Kong
v
Invest Malaysia Kuala Lumpur 2011
v
Invest Malaysia New York/San Francisco 2011

Leadership

Roadshows and Conferences

Responsibility

In-House Meetings

Financial & Others

AGM Information

180

Maybank Annual Report 2011

OUR RESPONSIBILITY

Investor
Relations

Venue

Event

Date

Organiser

Hong Kong
UK
Singapore
Singapore
Tokyo
Singapore
Kuala Lumpur
Kuala Lumpur
NewYork/
San Francisco

17th CLSA Investors' Forum 2010

Non-deal roadshow
Singapore roadshow
Non-deal roadshow
Non-deal roadshow
Non-deal roadshow
BII roadshow
Invest Malaysia Kuala Lumpur 2011
Invest Malaysia NewYork/
San Francisco 2011

14 17 September 2010
6-8 October 2010
12 October 2010
10 January 2011
31 January 2011
3 4 March 2011
4 March 2011
12 13 April 2011
17 19 May 2011

CLSA
Nomura
Citigroup
UBS
Nomura
Nomura
Maybank/BII
Maybank-IB
Maybank-IB/CIMB/
JP Morgan

AGM/EGM
Our 50th Annual General Meeting was held on 29
September 2010. We also held an Extraordinary
General Meeting on 13 June 2011 to obtain
shareholder approval for the proposed Employee
Share Scheme (ESS) and to update shareholders on
the progress of the Kim Eng acquisition.

Website
The Maybank corporate website at www.maybank.com
recorded increased hits and queries from both local
and foreign visitors. One important initiative covered
by the website was the Dividend Reinvestment Plan
(DRP). A DRP micro-site was developed to provide vital

information including dividend details, key dates and

announcements, as well as a DRP calculator to enable
shareholders to compute their dividend entitlement.

Share Register Analysis

We initiated Share Register Analysis, which provides a
breakdown of shareholders by profile, amount of
shareholding, investment style and geographical
location. This helps us better understand our
shareholders and enables us to organise investor
meetings, conferences and roadshows more
effectively.

OUR RESPONSIBILITY

Maybank Annual Report 2011

181
At A Glance

Analyst Coverage
As at June 2011, Maybank was covered by 29 research
houses. Kim Eng Research Sdn Bhd ceased coverage
after it became part of the Group while Goldman Sachs
(Singapore) Pte started coverage in May 2011. During
the year, broader coverage by local and foreign
sell-side equity research houses reflected greater
interest in the Group.

Updates to Shareholders

16
17
18
19
20
21
22
23
24
25
26
27
28
29

Research House
JP Morgan
KAF Seagroatt & Campbell
Kenanga Investment Bank
Macquarie
MIDF Research
MIMB
Nomura Securities
OSK Research
RHB Research Institute
Standard and Poors
Standard Chartered
TA Securities
UBS Securities
UOB Kay Hian

Business Review

Analyst Recommendations

Responsibility

We received 20 Buy calls compared to 16 last year with

only 2 Sell calls from 5 last year. Analysts also increased
their target price. On average, Maybanks target price
was raised from RM9.98 from RM8.16, an increase
of 22%.

Leadership

Affin Securities
Alliance Research
AmResearch Sdn Bhd
BNP Paribas
BOA Merrill Lynch
CIMB
Citigroup
CLSA Asia Pacific
Credit Suisse
Deutsche Bank
ECM Libra Avenue
Goldman Sachs
Hong Leong Investment Bank
HwangDBS Vickers
Inter-Pacific Research

No.

Performance

Refer to page 216 for Investor Relations and Shareholders

Communication, and page 46 for Maybank Share.

Governance

Key events we reported in FY2011 included:

v
A second consecutive year of record profit after
tax and minority interest (PATAMI), which rose to
RM4.45 billion despite the competitive banking
landscape and a weaker outlook for economic
growth.
v
The acquisition of Kim Eng announced on

6 January 2011. We expect Kim Eng to drive the
Groups investment banking business and
increase profit contribution from overseas.
v
The progress of the Groups transformation
programme and strategic objectives which will
carry the business to a higher level.
v
The House of Maybank structure providing
greater alignment of business units and
increased efficiency.
v
The success of our capital-raising exercise, with
our subordinated notes of SGD1 billion
oversubscribed 1.7 times. This was the largest
ever single tranche transaction for a Malaysian
borrower in Singapore.
v
A 74.9% dividend payout ratio, well above our
payout ratio policy of 40-60%.
v
The success of our DRP, which achieved a
reinvestment rate of 91%, reflecting shareholder
confidence in the Group.
v
A final dividend of 32 sen, bringing the total
dividend for FY2011 to 60 sen per share, as
against 55 sen in FY2010.

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15

Research House

Strategy

No.

Who We Are

As part of our policy of providing both stakeholders

and the public with independent information, we
maintain credit ratings with five rating agencies: RAM
Ratings, Malaysian Rating Corporation (MARC),
Standard and Poors (S&P), Fitch Ratings and Moodys
Investors Services.

Our Perspective

Credit Rating

Financial & Others

AGM Information

Genuine
We are honest, candid and sincere in all our dealings with our customers, speaking from our heart as well as our
head. We always strive genuinely to do the right thing and make sure we explain the reasons why. Our products
and services are clear and easy to understand with no hidden surprises.

184

Our Leadership

Maybank Annual Report 2011

Board of
Directors

8
5

7
3

11

10
1

12

13
6

Our Leadership

Maybank Annual Report 2011

185
At A Glance
Our Perspective
Who We Are
Strategy
Performance
Business Review
Responsibility
Leadership
Governance

Dato Mohd Salleh Haji Harun

Dato Sri Abdul Wahid Omar

Tan Sri Datuk Dr. Hadenan A. Jalil

Dato Seri Ismail Shahudin

10 Dato Johan Ariffin

Dato Dr. Tan Tat Wai

11 Sreesanthan Eliathamby

Zainal Abidin Jamal

12 Datuk Mohaiyani Shamsudin

Alister Maitland

13 Mohd Nazlan Mohd Ghazali

(General Counsel & Company Secretary)

Cheah Teik Seng

AGM Information

Tan Sri Dato Megat Zaharuddin Megat

Mohd Nor

Financial & Others

186

Maybank Annual Report 2011

Our Leadership

Board of
Directors Profile

Tan Sri Dato Megat Zaharuddin Megat Mohd Nor

(62 years of age - Malaysian)
B.Sc (Hons) in Mining Engineering, Imperial College of Science & Technology, University of London; Associate of the Royal School of Mines, UK
Non-Independent Non-Executive Director (Chairman)
Tan Sri Dato Megat Zaharuddin Megat Mohd Nor was appointed as a Director and Chairman of Maybank on 1 October 2009. He was an
Independent Non-Executive Director of Maybank from July 2004 to February 2009.
He built an outstanding career in the oil and gas industry for 31 years with the Royal Dutch Shell Group of Companies and was the Regional
Business Chief Executive Officer and Managing Director, Shell Exploration and Production B.V. prior to his retirement in early 2004. He was
also the Chairman of Maxis Communications Berhad from January 2004 to November 2007, Etiqa Insurance & Takaful from January 2006 until
February 2009, Malaysian Rubber Board from February 2009 to May 2010, Director of Capital Market Development Fund from January 2004 to
January 2010 and Director of Woodside Petroleum Ltd, a company listed on the Australian Securities Exchange, from December 2007 to April
2011.
His current directorships in companies within the Maybank Group include being Chairman of Maybank Investment Bank Berhad and
President Commissioner of PT Bank Internasional Indonesia Tbk. He is also a Director of the ICLIF Leadership and Governance Centre.
He attended all 22 Board Meetings held in the financial year ended 30 June 2011.
Tan Sri Dato Megat Zaharuddin has no family relationship with any director and is a nominee of Permodalan Nasional Berhad, a major
shareholder of Maybank. He has no conflict of interest with Maybank and has never been charged for any offence.

Our Leadership

Maybank Annual Report 2011

187
At A Glance
Our Perspective
Who We Are
Strategy
Performance
Business Review

He attended all 22 Board Meetings held in the financial year ended 30 June 2011.

AGM Information

Dato Salleh has no family relationship with any director and/or major shareholder of Maybank. He has no conflict of interest with Maybank
and has never been charged for any offence.

Financial & Others

His current directorships in companies within the Maybank Group include being Chairman of Mayban Ageas Holdings Berhad (formerly
known as Mayban Fortis Holdings Berhad), Etiqa Insurance Berhad, Etiqa Takaful Berhad, Mayban Investment Management Sdn Bhd and
Maybank Philippines Inc. He is also a Director of Scicom (MSC) Berhad and Asia Capital Reinsurance Malaysia Sdn Bhd.

Governance

He started his career as a Senior Accountant with the Treasury between 1971 and 1974 prior to joining the Maybank Group in 1974 as
Investment Manager in Aseambankers Malaysia Berhad (now known as Maybank Investment Bank Berhad), before moving to Bank Rakyat for
a short stint in 1978. Thereafter, Dato Salleh returned to the Maybank Group where he served in various senior capacities culminating as
Executive Director of Maybank from 1994 to 2000. He was then appointed as a Deputy Governor of Bank Negara Malaysia, a post he held up
to 2004. Since then, he had held directorships in the RHB Group including as Chairman of RHB Insurance Berhad until November 2009.

Leadership

Dato Salleh was appointed as a Director and Vice Chairman of Maybank on 18 November 2009. He serves as Chairman of the Nomination
and Remuneration and Employee Share Scheme Committees of the Board. Prior to that he was Chairman of the Credit Review Committee of
the Board.

Responsibility

Dato Mohd Salleh HAJI Harun

(67 years of age - Malaysian)
Member of the Malaysian Institute of Certified Public Accountants; Fellow of the Institute of Bankers Malaysia
Independent Non-Executive Director (Vice Chairman)

188

Maybank Annual Report 2011

Our Leadership

Board of
Directors Profile

Dato Sri Abdul Wahid Omar

(47 years of age Malaysian)
Fellow of the Association of Chartered Certified Accountants (UK);
Member of the Malaysian Institute of Accountants
Non-Independent Executive Director
Dato Sri Abdul Wahid Omar was appointed as the President & CEO and Executive Director of Maybank on 1 May 2008. He serves as Chairman
of the Group Executive Committee and as a member of the Credit Review Committee of the Board.
Prior to joining Maybank, he was the Group CEO of Telekom Malaysia Berhad from July 2004 to April 2008. He was also formerly the
Managing Director/Chief Executive Officer of the UEM Group Berhad and UEM World Berhad as well as the Executive Vice Chairman of PLUS
Expressways Berhad. This was preceded by serving at Telekom Malaysia Berhad as the Chief Financial Officer in 2001. He was previously a
Director of Group Corporate Services cum Divisional Director, Capital Market & Securities of Amanah Capital Partners Berhad, Chairman of
Amanah Short Deposits Berhad as well as a Director of Amanah Merchant Bank Berhad and several other financial services companies.
His current directorships in companies within the Maybank Group include as Director of Mayban Ageas Holdings Berhad (formerly known as
Mayban Fortis Holdings Berhad), Maybank Investment Bank Berhad and PT Bank Internasional Indonesia Tbk. His directorships in other
companies include as Chairman of Malaysia Electronic Payment System Sdn Bhd and as Director of Cagamas Holdings Berhad and ASEAN
Finance Corporation Limited.
Dato Sri Abdul Wahid Omar is also currently the Chairman of the Association of Banks in Malaysia, Vice Chairman of the Institute of Banks
Malaysia, and a member of Investment Panel of Lembaga Tabung Haji and Kumpulan Wang Persaraan (KWAP).
He attended all 22 Board Meetings held during the financial year ended 30 June 2011.
Dato Sri Abdul Wahid Omar has no family relationship with any director and/or major shareholder of Maybank. He has no conflict of interest
with Maybank and has never been charged for any offence.

Our Leadership

Maybank Annual Report 2011

189
At A Glance
Our Perspective
Who We Are
Strategy

Dato Seri Ismail Shahudin

(60 years of age Malaysian)
Bachelor of Economics, University of Malaya
Independent Non-Executive Director

Dato Seri Ismail Shahudin has no family relationship with any

director and/or major shareholder of Maybank. He has no conflict of
interest with Maybank and has never been charged for any offence.

Financial & Others

Tan Sri Datuk Dr Hadenan A. Jalil has no family relationship with any
director and/or major shareholder of Maybank. He has no conflict of
interest with Maybank and has never been charged for any offence.

He attended 20 of the 22 Board Meetings held in the financial year

ended 30 June 2011.

Governance

He attended 20 of the 22 Board Meetings held in the financial year

ended 30 June 2011.

His current directorships in companies within the Maybank Group

include as Chairman of Maybank Islamic Berhad and as director of
MCB Bank Limited, Pakistan. He is also a director of several public
listed companies which include PLUS Expressways Berhad, Mutiara
Goodyear Development Berhad, SMPC Corporation Berhad, EP
Manufacturing Berhad, Opus International Consultants Ltd and
Aseana Properties Limited, a company listed on the London Stock
Exchange.

Leadership

His current directorships in companies within the Maybank Group

include as Director of Maybank Islamic Berhad. He is also Chairman
of ICB Islamic Bank Ltd (Bangladesh), Protasco Berhad and its
subsidiary, and PNB Commercial Sdn Bhd and its subsidiaries. In
addition, he sits on the boards of THP-Sinar Sdn Bhd, Unilever
(Malaysia) Holdings Sdn Bhd and University Tun Abdul Razak Sdn
Bhd as well as being a member of the Audit Committee, Johor
Corporation.

Responsibility

Tan Sri Datuk Dr Hadenan A. Jalil was Auditor General from 2000 to
2006. He served with the Government for 36 years in various
capacities in the Treasury, the Ministry of International Trade and
Industry and the Ministry of Works prior to his appointment as
Auditor General.

He was Chairman of Bank Muamalat Malaysia Berhad from 2004

until his retirement in July 2008. He has held senior positions in
Citibank, serving both in Malaysia and New York, United Asian Bank
and Maybank where he was appointed Executive Director in 1997.
He left Maybank in 2002 to assume the position of Group Chief
Executive Officer of MMC Corporation Berhad prior to his
appointment to the Board of Bank Muamalat Malaysia Berhad.

Business Review

Tan Sri Datuk Dr Hadenan A. Jalil was appointed as a Director of

Maybank on 15 July 2009. He serves as Chairman of the Audit
Committee and as a member of the Nomination and Remuneration,
and Employee Share Scheme Committees of the Board.

Dato Seri Ismail Shahudin was appointed as a Director of Maybank

on 15 July 2009. He serves as Chairman of the Credit Review
Committee of the Board.

Performance

Tan Sri Datuk Dr Hadenan A. Jalil

(65 years of age Malaysian)
PhD, Henley Management College, UK;
Master of Business Management, Asian Institute of Management,
Philippines; Bachelor of Economics, University of Malaya
Independent Non-Executive Director

AGM Information

190

Maybank Annual Report 2011

Our Leadership

Board of
Directors Profile

Dato Dr Tan Tat Wai

Zainal Abidin Jamal

(64 years of age Malaysian)

PhD DMPN
PhD in Economics, Harvard University, USA;
Master of Economics, University of Wisconsin (Madison), USA;
Bachelor of Science in Electrical Engineering & Economics,
Massachusetts Institute of Technology, USA
Independent Non-Executive Director

(57 years of age Malaysian)

LL.B (Honours), University of Singapore
Non-Independent Non-Executive Director

Dato Dr Tan Tat Wai was appointed as a Director of Maybank on

15 July 2009. He serves as Chairman of the Risk Management
Committee and as a member of the Nomination and Remuneration,
and Employee Share Scheme Committees of the Board.
He started his career with Bank Negara Malaysia in 1978,
undertaking research in economic policies. Subsequently, he
assumed the role of a consultant to Bank Negara Malaysia, World
Bank and the United Nations University for several years. He served
as the Secretary and a member on the Council of Malaysian Invisible
Trade, set up to formulate policies to reduce Malaysias deficit in
service trade. He was a member of the Government appointed
Malaysian Business Council, the Corporate Malaysia Roundtable, the
Penang Industrial Council, the Industrial Co-ordination Council (ICC)
and the National Committee on Business Competitiveness (NCBC)
set up by the Ministry of International Trade and Industry. He
represented Malaysia as a member of the APEC Business Advisory
Council (ABAC) and sat on the Council of Wawasan Open University.
Within the Maybank Group, he is a Director of Maybank Investment
Bank Berhad and Mayban Trustees Berhad. He is the Group
Managing Director of Southern Steel Berhad, a post he has held
since December 1993. He also sits on the Boards of Shangri-La
Hotels (M) Bhd, Titan Chemicals Corp Sdn Bhd, Natsteel Ltd, a plc in
Singapore and Starglow Investments Ltd, and among several other
private limited companies. He is also the President of the not-forprofit Lam Wah Ee Hospital.
He attended all 22 Board Meetings held during the financial year
ended 30 June 2011.
Dato Dr Tan has no family relationship with any director and/or
major shareholder of Maybank. He has no conflict of interest with
Maybank and has never been charged for any offence.

Zainal Abidin Jamal was appointed as a Director of Maybank on

22 July 2009. He serves as a member of the Credit Review,
Nomination and Remuneration, and Employee Share Scheme
Committees of the Board.
He is a practising corporate and commercial lawyer and established
his firm, Zainal Abidin & Co in 1987, where he is the Founder and
Senior Partner. He was enrolled as an Advocate & Solicitor of the
High Court of Malaya in 1986. Between 1983 and 1986, he served as
the Company Secretary of Harrisons Malaysian Plantations Berhad.
Prior to that, he had practised in Singapore where he was enrolled in
1980 as an Advocate and Solicitor of the Supreme Court of
Singapore and had also served as a First Class Magistrate in Brunei
Darussalam.
His current directorships in companies within the Maybank Group
include as Chairman of Mayban Trustees Berhad and Director of
Etiqa Insurance Berhad, Etiqa Takaful Berhad, Maybank Islamic
Berhad, Maybank International (L) Limited, and Mayban International
Trust (L) Ltd. He also serves on the Boards of Lam Soon (M) Berhad,
Kesas Holdings Berhad, PNB Asset Management (Japan) Co Ltd, PNB
International Limited, PNB-SBI ASEAN Gateway Investment
Management Limited and several other private limited companies.
He attended all 22 Board Meetings held in the financial year ended
30 June 2011.
Zainal Abidin Jamal has no family relationship with any director and
is a nominee of Permodalan Nasional Berhad, a major shareholder of
Maybank. He has no conflict of interest with Maybank and has never
been charged for any offence.

Our Leadership

Maybank Annual Report 2011

191
At A Glance
Our Perspective
Who We Are
Strategy

Cheah Teik Seng

(57 years of age Malaysian)
Bachelor of Science, University of Manchester, UK;
Fellow of the Institute of Chartered Accountants in England
and Wales
Independent Non-Executive Director

He attended all 22 Board Meetings held in the financial year ended

30 June 2011.

He attended all 22 Board Meetings held in the financial year ended

30 June 2011.

AGM Information

Cheah Teik Seng has no family relationship with any director and/or
major shareholder of Maybank. He has no conflict of interest with
Maybank and has never been charged for any offence.

Financial & Others

Mr Cheah sits on the boards of Kumpulan Wang Persaraan (KWAP)

and of various private equity companies in Hong Kong, China and
Malaysia. He is also an Independent Non-Executive Director of two
hedge funds.

Governance

Alister Maitland has no family relationship with any director and/or

major shareholder of Maybank. He has no conflict of interest with
Maybank and has never been charged for any offence.

His current directorships in companies within the Maybank Group

include as Chairman of Mayban Ventures Sdn Bhd, Mayban-JAIC
Capital Management Sdn Bhd, Mayban Ventures Capital Company
Sdn Bhd, Mayban Agro Fund Sdn Bhd, Mayban-JAIC Management
Ltd as well as Director of Maybank Investment Bank Berhad.

Leadership

His current directorship within the Maybank Group includes as

Chairman of Maybank (PNG) Ltd.

As a federal government Public Services Department scholarship

holder, he served in the civil service in the early 80s. After leaving
government service, he took on various roles in the banking and
financial services industry both locally as well as in London, Hong
Kong and Singapore. He held positions in Public Bank, Chase
Manhattan Bank, Merrill Lynch, Goldman Sachs, UBS and in BNP
Paribas holding the position of Managing Director for a tenure of
nine years. He was appointed as CEO-designate of ECM Libra Avenue
Group in 2006. He is currently a Director and partner of Aktis Capital
Singapore Pte Ltd.

Responsibility

In his career spanning 35 years in Australia, New Zealand and the

UK, he has held many key roles within the ANZ Banking Group Ltd
including that of Chief Economist and Managing Director of ANZ
New Zealand. In his last six years with the ANZ Group, he served on
the main board of ANZ Bank as Executive Director International,
directly responsible for ANZ Groups operations in 42 countries.

Cheah Teik Seng was appointed as a Director of Maybank on

26 August 2009. He serves as a member of the Audit and Risk
Management Committees of the Board.

Business Review

Alister Maitland was appointed as a Director of Maybank on 26

August 2009. He serves as a member of the Nomination and
Remuneration, Risk Management and Employee Share Scheme
Committees of the Board.

Performance

Alister Maitland
(70 years of age Australian)
Degree in commerce from Victoria University, NZ;
AMP Graduate, Harvard Business School, USA
Independent Non-Executive Director

192

Maybank Annual Report 2011

Our Leadership

Board of
Directors Profile

Dato Johan Ariffin

Sreesanthan Eliathamby

(52 years of age Malaysian)

B.A. Economics, Indiana University, USA;
MBA, University of Miami, USA
Independent Non-Executive Director

(50 years of age Malaysian)

LLB (Hons), University of Malaya;
BCL (Postgrad degree in Law), University of Oxford, UK
Non-Independent Non-Executive Director

Dato Johan Ariffin was appointed as Director of Maybank on

26 August 2009. He serves as a member of the Audit and Credit
Review Committees of the Board.

Sreesanthan Eliathamby was appointed as a Director of Maybank on

26 August 2009. He serves as a member of the Risk Management
and Audit Committees of the Board.

He started his career in the real estate division of Citibank.

Thereafter, he held various senior positions in several subsidiaries of
public listed companies while venturing into his own successful
marketing and advertising consultancy and property development
business. He then headed Danahartas Property Division as Senior
General Manager before moving on to head TTDI Development
Sdn Bhd up to January 2009.

He is an Advocate & Solicitor and a Partner with the legal firm of

Messrs Kadir, Andri & Partners. He was formerly a Legal Assistant and
later a Partner with the legal firm of Messrs Zain & Co.

His current directorships in companies within the Maybank Group

include as Chairman of Maybank International (L) Limited and
Mayban International Trust (L) Ltd as well as Director of Mayban
Ageas Holdings Berhad (formerly known as Mayban Fortis Holdings
Berhad), Etiqa Insurance Berhad and Etiqa Takaful Berhad.
He is currently also Chairman of Mitraland Properties Sdn Bhd and
Director of Sime Darby Property Berhad, and a National Council
member of the Real Estate Housing Developers Association Malaysia
(REHDA).
He attended 21 of the 22 Board Meetings held in the financial year
ended 30 June 2011.
Dato Johan Ariffin has no family relationship with any director and/
or major shareholder of Maybank. He has no conflict of interest with
Maybank and has never been charged for any offence.

Within the Maybank Group, his sits on the boards of Maybank (PNG)
Ltd, Mayban Ventures Sdn Bhd, Mayban-JAIC Capital Management
Sdn Bhd, Mayban Ventures Capital Company Sdn Bhd, Mayban Agro
Fund Sdn Bhd and Mayban-JAIC Management Ltd as well as a
member of the Supervisory Committee of An Binh Bank in Vietnam,
an associate company of Maybank.
He is also a member of the Investment Committee of Amanah
Saham Wawasan 2020 Fund, Bursa Malaysia Listing Committee and
the Investigating Tribunal Panel of the Advocates and Solicitors
Disciplinary Board. He currently sits on the boards of the Scomi
Group Berhad, Guinness Anchor Berhad and Sime Darby Berhad.
He attended 21 of the 22 Board Meetings held in the financial year
ended 30 June 2011.
Sreesanthan Eliathamby has no family relationship with any director
and is a nominee of Permodalan Nasional Berhad, a major
shareholder of Maybank. He has no conflict of interest with Maybank
and has never been charged for any offence.

Our Leadership

Maybank Annual Report 2011

193
At A Glance
Our Perspective
Who We Are
Strategy

DATUK MOHAIYANI SHAMSUDIN

Governance
Financial & Others

Datuk Mohaiyani has no family relationship with any director and/or

major shareholder of Maybank. She has no conflict of interest with
Maybank and has never been charged for any offence.

Leadership

At present, she sits on the board of Aberdeen Asset Management

Sdn Bhd and serves as a Director of Capital Market Development
Fund. She is also a member of the National Advisory Council for
Women, Ministry of Women, Family and Community Development
and Panel Usahawan Wanita, SME Corp Malaysia as well being a
member and trustee of the National Heart Institute Foundation.

He was a Partner and Head of Equity Capital Markets at Zaid Ibrahim

& Co, specialising mainly on corporate, financial services and
securities law matters, particularly in respect of corporate
transactions such as capital raisings and M&As before joining
Maybank in 2005. Prior to that, he was with the Securities
Commission of Malaysia (SC) for about 7 years until 2000 and his last
position was the General Manager of the Enforcement Division, with
overall responsibility over the investigation, prosecution and
complaints departments. He had also earlier served the Executive
Chairmans Office and the Issues & Investment Division whilst at the
SC. Mohd Nazlan started his working career in 1991 at Messrs Shook
Lin & Bok, handling corporate, conveyancing and banking law
matters.

Responsibility

She was with Amanah Chase Merchant Bank Berhad before starting
her own stockbroking company, Mohaiyani Securities Sdn Bhd, in
1985. During her active involvement in the stockbroking industry,
she was appointed as Deputy Chairman of Kuala Lumpur Stock
Exchange (now known as Bursa Malaysia Berhad) and Chairman of
Association of Stockbroking Companies Malaysia. In addition, she
had been appointed as a member of several high level national
working groups such as National Economic Action Council (NEAC),
National Economic Consultative Council II (MAPEN II), National
Information Technology Council (NITC) and Ministry of Finance High
Level Finance Committee for Corporate Governance.

Mohd Nazlan is the General Counsel & Company Secretary of

Maybank, and is also its Head of Corporate & Legal Services. He
graduated with a Bachelor of Arts in Jurisprudence as well as Master
of Arts, both from the University of Oxford. He is also a Barrister at
Law (Lincolns Inn) and an Advocate & Solicitor of the High Court of
Malaya.

Business Review

Datuk Mohaiyani was appointed as a Director of Maybank on

22 August 2011.

Mohd Nazlan Mohd Ghazali

Performance

(63 years of age Malaysian)

MBA (Finance) Cornell University, Ithaca, New York, USA
BA (Economics) Knox College, Galesburg, Illinois, USA
Independent Non-Executive Director

AGM Information

194

Maybank Annual Report 2011

Our Leadership

Group Executive
Committee

Dato Sri Abdul Wahid Omar Age 47

President & CEO
Dato Sri Abdul Wahid Omar has helmed Maybank
Group as its President & CEO since May 2008.

Experience
Dato Sri Abdul Wahid has extensive track record in
corporate and financial management beginning with
Bumiputra Merchant Bankers Berhad from January
1988 to April 1991, Kumpulan FIMA Berhad from April
1991 to August 1994 and Amanah Capital Group from
August 1994 to February 2001. He also served as Chief
Financial Officer of Telekom Malaysia Berhad from
March to September 2001 before his appointment as
Managing Director/CEO of UEM Group (and
subsequently as Executive Vice Chairman of PLUS
Expressways Berhad) from October 2001 to June 2004.
Dato Sri Wahid returned to Telekom Malaysia as its
Group CEO in July 2004 and helmed the Group until
its demerger excercise in April 2008.

Responsibility
Dato Sri Abdul Wahid is responsible for driving the
overall management and growth of the Group.

Qualification
Fellow of the Association of Chartered Certified
Accountants, United Kingdom. Chartered Member of
the Malaysian Institute of Accountants.

Committee Membership/Appointments
Dato Sri Abdul Wahid is a Board member of Mayban
Ageas Holdings Berhad, Maybank Investment Bank
Berhad and PT Bank Internasional Indonesia Tbk. He is
also the Chairman of the Association of Banks in
Malaysia and Malaysian Electronic Payment System
Sdn Bhd, as well as a Director of Cagamas Holdings
Berhad. In addition to that, he is also the Vice
Chairman of Institute of Banks in Malaysia and
member of the Investment Panels of Kumpulan Wang
Persaraan and Lembaga Tabung Haji.

Khairussaleh Ramli Age 43

Deputy President &

Group Chief Financial Officer

Khairussaleh Ramli became Group Chief Financial

Officer of Maybank Group in November 2008.

Experience

Prior to joining Maybank, Khairussaleh served Telekom

Malaysia Berhad (TM) for about two years. His last
position there was as Group Chief Strategy Officer
where he was responsible for the overall group
strategy, business development and corporate
finance, and the strategic management of a portfolio
of subsidiaries. He sat on the Boards of VADS Berhad
and Measat Global Berhad. He was also the Project
Director for the demerger exercise of the TM Group.
Khairussaleh spent eight years with Bursa Malaysia
Berhad from 1998 to 2006, holding various positions
before rising to the position of Chief Financial Officer
in 2004. He was a key team member in the
consolidation of exchanges and clearing houses, the
Joint Project Director for the exchange
demutualisation exercise and led the IPO and listing
of Bursa Malaysia on the exchange. Khairussaleh
served the Public Bank Group for seven years from
1990 to 1997, gaining experience in corporate
banking, stock broking and research and futures
broking. His last position in the group was Executive
Director of PB Futures Sdn Bhd.
Khairussaleh was voted Malaysias CFO of the Year for
the second consecutive time in a poll conducted by
Finance Asia in 2011.

Responsibility

Khairussaleh is responsible for the Groups financial,

capital and funding management. He oversees
Finance & Treasury Operations, Management
Reporting & Business Planning, Strategy & Corporate
Finance, Central Funding, Enterprise Information
Management, Corporate Remedial Management,
Strategic Procurement and Property and Security.

Qualification

Bachelor of Science in Business Administration,

Washington University, USA.

Committee Membership/Appointments
Nil.

Our Leadership

Maybank Annual Report 2011

195
At A Glance
Our Perspective
Who We Are

Lim Hong Tat is the Deputy President and Head of

Community Financial Services.

Abdul Farid Alias was appointed as Deputy President

& Head, Global Wholesale Banking of Maybank Group
on 1 July 2010.

Experience

Experience

His areas of responsibility comprise of corporate

banking, investment banking, transaction banking,
client coverage, and global markets, which form the
businesses under Global Wholesale Banking. In
addition to that he is also responsible for international
business.

Bachelor of Economics (Business Administration)

(Hons), University of Malaya. Diploma in Marketing &
Selling Bank Services, International Management
Centre.

Qualification

Governance

Committee Membership/Appointments

Committee Membership/Appointments

Financial & Others

Qualification

Responsibility

Leadership

As Head of Community Financial Services, he is

responsible for the overall management and
performance of the Banks SME, Business Banking and
Consumer segments as well as sales and distribution.
This covers community banking, product innovation
and industrialisation, customer segmentation, virtual
banking, wealth management and payment services,
sales and distribution and business strategy, planning
and development.

Responsibility

Responsibility

Farid has over 20 years of experience in investment

banking and capital markets, having served with
various merchant and investment banks such
Aseambankers Malaysia Berhad from 1992 to 1994,
Schroders from 1994 to 1995, Malaysia International
Merchant Bankers Berhad from 1996 to 1997, and
JPMorgan from 1997 to 2005. He was attached to
Khazanah Nasional Berhad from 2005 to 2008 as
Director of Investments. In Khazanah, he sat on the
Board of Commissioners/Directors of several publicly
listed companies. These include PT Bank Lippo Tbk, PT
Excelcomindo Pratama Tbk, UEM World Berhad, PLUS
Expressways Berhad and UEM Builders Berhad. He also
sat on the Boards of MCB Bank Limited and An Bin
Bank as a nominee of Maybank until 2010.

Business Review

Being a Maybank scholar, he joined the bank upon

graduation in 1981. He has 30 years of experience
covering all aspects of banking, having managed
branches, regional banking, credit cards and
international banking operations including holding
senior management positions as Director/President
and CEO of Maybank Philippines Inc, Head of
International Banking and Head of Consumer Banking
in Maybank Group.

Performance

Abdul Farid Alias Age 43

Deputy President &
Head, Global Wholesale Banking

Strategy

Lim Hong Tat Age 52

Deputy President
Head, Community Financial Services

He is the Chairman of FPX Gateway Sdn Bhd, a

subsidiary of MEPS and a Director of Credit Bureau
Malaysia Sdn Bhd.

Bachelor of Science in Accounting, Pennsylvania State

University, University Park, USA. Masters in Business
Administration, Finance, Denver University, USA.

AGM Information

He is currently a member of the Boards of Directors of

Maybank Investment Bank Berhad, Maybank
Philippines Incorporated, Maybank International
Labuan Limited and Kim Eng Holdings Ltd. He is the
Chairperson for the Permanent Committee on ASEAN
Inter-Regional Relations, ASEAN Banking Council
(ABC) and is a member of the ABA Policy Advocacy
Committee of the Asian Bankers Association. Recently,
he was appointed as a member of the Malaysia
Pakistan Business Council.

196

Maybank Annual Report 2011

Our Leadership

Group Executive
Committee

Group Chief Risk Officer

Dr. John Lee Hin Hock Age 45

Geoffrey Stecyk Age 41

Head, Enterprise Transformation Services

Dr. Lee is appointed as Group Chief Risk Officer since

January 2011.

Geoff Stecyk is the Head of Enterprise Transformation

Services (ETS) since 1 July 2010.

Experience

Experience

Dr. Lee was previously with Amanah Merchant Bank

and the Kuala Lumpur Options and Financial Futures
Exchange (KLOFFE). Prior to his appointment in
Maybank, he served in financial services consulting
and advisory, where he was a partner with KPMG
Business Advisory for the past 13 years, assisting
numerous financial institutions across the Asia Pacific
markets. He has in-depth financial industry and risk
management expertise with a specialisation in Islamic
finance, business strategy, risk management and
performance management, which will be an asset to
the Maybank Group, in particular embedding
international standard risk practices across the
Maybank Group.

He joined Maybank in November 2008 as Chief

Transformation Officer leading the LEAP30
Performance Improvement Programme. Prior to
joining Maybank, he was National Head of
Bancassurance with American International Assurance
(AIA) China from 2006 to 2008. Prior to that, he was
Executive Vice President, Business Integration with
Southern Bank Berhad from 2001 to 2004. He was
involved in the transformation of the bank which
covered all major areas of the retail and SME banking
with an emphasis on driving immediate earnings
growth to fund the structural transformation over the
medium term.

Responsibility

He strategises, directs and drives the enterprise

operations of the new House of Maybank having
created a platform comprising Information
Technology, Operations and Service Quality that
supports the Groups Transformation and long-term
strategic objectives.

Dr. Lee is responsible for credit and risk management

across the Group.

Qualification
Bachelor of Economics, Monash University, Australia.
Doctorate of Philosophy in Economics, Monash
University, Australia. Fellow Certified Practicing
Accountant of the Australian Society of CPAs. Member
of the American Finance Association, Econometrics
Society and Society of Financial Studies.

Committee Membership/Appointments
Dr. Lee was the Malaysian representative on the Risk
Management Working Group and is currently a
member of the Liquidity Risk Management Working
Group of the Islamic Financial Services Board (IFSB).

Responsibility

Qualification
Bachelor of Commerce (Marketing/Finance), University
of Alberta, Canada.

Committee Membership/Appointments
Nil.

Our Leadership

Maybank Annual Report 2011

197
At A Glance
Our Perspective
Who We Are

Nora Abd Manaf Age 46

Head, Group Human Capital

Experience

Committee Membership/Appointments

Tengku Dato Zafrul is responsible for driving Maybank

Investment Bank to new heights.

Qualification
BSc (Hons) in Economics and Accounting Bristol
University, United Kingdom. Master of Finance &
Economics, Exeter University, United Kingdom.

Committee Membership/Appointments

AGM Information

Tengku Dato Zafrul is the Chairman of Leaders for

Tomorrow, and Deputy President of the Kuala Lumpur
Business Club. He is also a council member of the
Malaysian Investment Banks Association (MIBA).

Financial & Others

Nora is currently the Chairman of the Malayan

Commercial Banks Association (MCBA) and Chairman
of the Human Resource Management and
Development Group (HRMDG). She is also a Council
Member of the Malaysian Employers Federation (MEF).
In 2010, Nora was appointed as Pakar Rujuk Projek
Blueprint (Academic High End Industrial Relations),
Ministry of Higher Education. In May 2011, Nora was
also appointed into the Mesyuarat Peringkat Tertinggi
Malaysias National Policy on Women (Ministry of
Women, Family and Community Development).

Responsibility

Governance

Chartered Accountant, registered with Malaysian

Institute of Accountants. Bachelor of Accounting,
University Institute Technology MARA. Postgraduate
Certificate in Human Resource Development from
Cornell University, USA. Certified Trainer Gallup
Strengths Level II Coach.

Leadership

Qualification

He has wide investment banking and corporate

experience, having served in leadership positions in
key institutions over the last 14 years. Prior to joining
Maybank Investment Bank Bhd, Tengku Dato Zafrul
was the Group Director of K & N Kenanga Holdings
Berhad from January 2009 to June 2010, a board
member of Kenanga Investment Bank Berhad from
October 2009 to June 2010, Kenanga Capital Sdn Bhd
from January 2009 to June 2010, and Capital
Investment Bank (Labuan) Limited from (April 2009
June 2010. He was appointed a Director of Credit
Agricole in the early years of his career. He has also
previously served as CEO of Tune Money Sdn Bhd,
Head of Investment Banking in Citigroup Malaysia,
Group Managing Director of ECM Avenue Berhad and
CEO of Avenue Securities.

Responsibility

Noras responsibilities encompass direction setting for

Group Human Capital and guiding Maybanks People
and Culture Transformation initiatives.

Experience

Business Review

Responsibility

Tengku Dato Zafrul Tengku Abdul Aziz was appointed

Chief Executive Officer of Maybank Investment Bank
in June 2010.

Performance

Prior to joining Maybank, she was with the Standard

Chartered Group for over nine years, where her last
held position was Head of Human Resources, Scope
International, a subsidiary of Standard Chartered
Group UK Plc. Her other roles in Standard Chartered
Group included as EVP, Head Strategic Initiatives, PT
Bank Permata in Indonesia prior to returning to
Malaysia in 2008, a leadership development head role
in London as well as roles in Standard Chartered Bank
Malaysia and integration work in Hong Kong post
Standard Chartered Banks acquisition of Chase Retail
bank. Prior to Standard Chartered, Nora worked in
diverse disciplines and industries ranging from
semiconductor and telecommunications through to
education and consulting as well as finance.

Head, Investment Banking

Chief Executive Officer, Maybank Investment Bank Bhd

Strategy

Nora Abd Manaf has been the Head, Group Human

Capital of Maybank Group since September 2008.

Tengku Dato Zafrul Tengku Abd

Aziz Age 38

198

Maybank Annual Report 2011

Our Leadership

Group Executive
Committee

Muzaffar Hisham Age 39

Head Islamic Banking
Chief Executive Officer, Maybank Islamic Berhad
Muzaffar Hisham is currently the Chief Executive
Officer of Maybank Islamic Berhad effective 30 March
2011 and Head of the Group Islamic Banking Division.

Experience
Muzaffar, has collectively 16 years of experience in the
banking and financial services. He started his career in
Asian International Merchant Bankers Berhad in the
Corporate Banking Division. He later joined Amanah
Merchant Bank Berhad and Amanah Short Deposits
Berhad where he was involved extensively in
Corporate Debt and Financing businesses from debt
syndication to advising on private debt securities. He
was also involved in various debt and corporate
restructuring exercises during the 1997 / 1998
financial crisis. During his tenure in CIMB Investment
Bank and HSBC Amanah, he was involved in the
investment banking business.

Hans De Cuyper Age 42

Head, Insurance & Takaful
Chief Executive Officer of Mayban Ageas Holdings
Berhad
Hans De Cuyper was appointed as the Head,
Insurance & Takaful and Chief Executive Officer of
Mayban Ageas Holdings Berhad (MAHB) on 7 April
2011.

Experience
Hans was previously the Chief Financial Officer of
MAHB. With an experience spanning across 20 years
in the insurance industry with 7 years in Asia, he has
in-depth industry expertise and regional knowledge.
Prior to assuming the position at Mayban Ageas
Holdings Berhad, he was attached with Fortis
Insurance International in Hong Kong as the
Managing Director of Risk & Finance for Asia. He was
also with ING Group for more than a decade holding
various positions.

Responsibility

Prior to joining Maybank, he was the Deputy Chief

Executive Officer of CIMB Islamic Bank Berhad. He was
previously a member of the Board of Directors of
CIMB Insurance Brokers Sdn Bhd.

He is responsible for the growth of Insurance &

Takaful and Asset Management pillar in the House of
Maybank.

Responsibility

Masters in Mathematics, Catholic University Louvain,

Belgium. Masters in Actuarial Science, Catholic
University Louvain, Belgium. Executive MBA in
Financial Services Industry, Vlerick Management
School.

He is responsible in managing and setting the various

key strategies for the overall Group Islamic Banking
business.

Qualification
Bachelor of Science (Hons) in Economics and
Accounting, University of Bristol, United Kingdom.

Committee Membership/Appointments
Muzaffar is the Chairman, Standards Committee,
Association of Islamic Banking Institutions Malaysia
(AIBIM).

Qualification

Committee Membership/Appointments
He is a member of the Board of Directors of Mayban
Ageas Holdings Bhd. and its subsidiaries which
include Mayban Investment Management Sdn Bhd,
Etiqa Insurance Berhad, Etiqa Overseas Investment
Pte Ltd, Etiqa Life International (L) Ltd, Sri MLAB
Berhad, Peram Ranum Berhad and Etiqa Takaful
Berhad.

Our Leadership

Maybank Annual Report 2011

199
At A Glance
Our Perspective
Who We Are

Pollie Sim took the helm of Maybank Singapore in

July 2006.

Experience

Qualification
Master of Accounting and Finance, University of
Indonesia, Indonesia. Bachelor of Industrial
Engineering, University of New South Wales, Australia.

Committee Membership/Appointments
Nil.

Financial & Others

Pak Frans is responsible to oversee the banking

operations and drive the overall growth of BII.

Qualification

Governance

Responsibility

Her current key appointments include that of Director

of Mayban Nominees (S) Pte Ltd, a subsidiary of
Maybank, Director of Singapore Unit Trusts Ltd,
Bosbury Pte Ltd, Sorak Financial Holdings Pte Ltd and
Heartware Network. She is also a Council Member of
the Association of Banks in Singapore and Chairman
of the Singapore Unit Trust Investment Committee.
Pollie also sits on the Executive Council of Employer
Alliance (EA), a network of corporations committed to
create an enabling work environment to enhance
work life integration and best practices as a business
strategy to manage talent and boost productivity.

Pollie is responsible for driving the overall profitability

and growth of Maybank Singapore.

Leadership

Committee Membership/Appointments

Responsibility

Responsibility

Diploma in Management Studies, Singapore Institute

of Management. Master of Business Administration,
Brunel University of West London, United Kingdom.

Pak Frans is also BIIs Director of Corporate Banking.

Prior to joining BII, Frans was the Director, Head of
Corporate Banking and Investment Banking of PT
Bank Rabobank International Indonesia since 2003
where he managed the Corporate Banking business,
which includes Corporate Relationship Management,
Structured Trade & Commodity Finance, Corporate
Finance, Financial Institutions and Food & Agri
Strategic Advisory. He was also actively involved in
Rabobank Indonesias acquisition of two local banks in
Indonesia as part of Rabobank Indonesias business
growth strategy into Retail and Consumer segments.
He was also with Bank Summa, Standard Chartered
Bank, American Express Bank as well as Citibank
where his last held position was Vice President in
Corporate Banking and Remedial Management.

Business Review

Pollie has more than 20 years of experience in the

banking and financial industry and has held many
senior positions within Maybank Group in Consumer
Banking & Business Banking, Corporate Planning,
Human Resources, Accounts & Finance and IT. She was
instrumental in leading and developing Maybanks
consumer banking business in Singapore, which today
accounts for about 50% of Maybank Singapores
earnings. Prior to Maybank Singapore, Pollie was Chief
Executive Officer of Mayban Finance (S) Ltd.

Bapak Rahardja Alimhamzah, also known as Pak Frans,

has been Acting CEO of PT Bank Internasional
Indonesia Tbk (BII), a Maybank subsidiary in Indonesia,
since early July 2011.

Performance

Experience

Rahardja Alimhamzah Age 45

Acting President Director PT Bank Internasional
Indonesia Tbk

Strategy

Pollie Sim Sio Hoong Age 49

Chief Executive Officer, Maybank Singapore

AGM Information

200

Maybank Annual Report 2011

Corporate Governance

Statement on
Corporate Governance

INTRODUCTION
The purpose of this Corporate Governance
Statement is to provide investors with an
important insight into the corporate
governance practices of the Group.

Corporate Governance

Maybank Annual Report 2011

201
At A Glance
Responsibility

Board
Delegation
Audit
Committee

Accountability
Credit
Review
Committee

Risk
Management
Committee
PCEO

Independent
Assurance

Governance

Risk

External
Auditors
Internal
Auditors

Nomination &
Remuneration
Committee

Leadership

Compliance

Business Review

Shareholders

Performance

The Board continuously reviews its governance model

to ensure its relevance and ability to meet the
challenges of the future.

Strategy

Maybank also examines developments in corporate

governance standards of leading and reputable
organisations and institutions in the region and
around the world to ensure its approach in Malaysia
and in countries the Group has presence is in line
with the latest international best practices.

Who We Are

The Board is committed to maintaining high

standards of corporate governance with a view to
enhancing stakeholder value, increasing investor

confidence, establishing customer trust and building a

competitive organisation to pursue the Groups
corporate vision to be a regional financial services
leader by 2015. The Boards fundamental approach in
this regard is to ensure that the right executive
leadership, strategy and internal controls for risk
management are well in place. Additionally, the Board
is committed to achieving the highest standards of
business integrity, ethics and professionalism across
all of the Groups activities.

Our Perspective

Maybank Groups corporate governance model adopts

the following requirements and guidelines:
(i) Revised Malaysian Code on Corporate
Governance (the Code);
(ii) Bank Negara Malaysia (BNM)s Revised
Guidelines on Corporate Governance for
Licensed Institutions (BNM/GP1);
(iii) Bursa Malaysia Securities Berhad (Bursa
Securities)s Main Market Listing Requirements
(Listing Requirements);
(iv) Green Book on Enhancing Board Effectiveness
(Green Book) by the Putrajaya Committee on
Government Linked Companies (GLCs) High
Performance;
(v) Corporate Governance Guide (CG Guide) by
Bursa Malaysia; and
(vi) Minority Shareholders Watchdog Group
(MSWG) Corporate Governance guidelines.

Management Framework

Management
Standards
Operating Standards

Management
Committees

AGM Information

Level of
Authorities

Vision
Mission
Values

Financial & Others

Policies

202

Maybank Annual Report 2011

Corporate Governance

Statement on
Corporate Governance

The Board informs the shareholders on the

application of its corporate governance model for the
financial year ended 30 June 2011, as set out
hereunder.

THE BOARD OF DIRECTORS

Board Charter
In discharging its duties, the Board of Directors of
Maybank is constantly mindful of the need to
safeguard the interests of the Groups shareholders,
customers, and all other stakeholders. In order to
facilitate the effective discharge of its duties, the
Board is guided by the Board Manual (Manual),
which provides reference for directors in relation to
the Boards role, powers, duties and functions.
The Manual reflects not only current best practices
and the applicable rules and regulations, but also
outlines processes and procedures to ensure the
Groups boards and their committees effectiveness
and efficiency. It is a dynamic document to be
updated from time to time to reflect changes to the
Banks policies, procedures and processes as well as
amended relevant rules and regulations, or to be
reviewed at least once in two years, whichever is
earlier.
The Board encourages the Groups subsidiaries and
associates boards to adopt similar manuals for their
respective corporate entities.
The Manual comprises, amongst others, well defined
terms of reference as well as authority limits for the
Board and its committees, and the various relevant
internal policies.
The chapters covered under the Manual are as
follows:
(i) Groups standard of business conduct
(ii) Directors duties and obligations
(iii) Appointment and resignation of Directors
(iv) Governance structure
(v) Board and board committee proceedings
(vi) Remuneration and benefits for Directors
(vii) Supply of information to the Board
(viii) Training and induction programmes
(ix) Annual Board assessment

(x) Conflict of interest and related party transactions

(xi) Other key policies of the Bank and the Group

Roles and responsibilities of the Board

The Board has the responsibility to periodically review
and approve the overall strategies, business,
organisation, and significant policies of the Bank and
the Group. The Board also sets the Groups core values
and adopts proper standards to ensure that the Bank
operates with integrity and complies with the relevant
rules and regulations.
The Board has a formal schedule of matters reserved
for its decision which include, amongst others, the
following:
v
v
v
v
v
v
v
v

Reviewing and approving the strategic business

plans for the Bank and Group;
Identifying and managing principal risks
affecting the Group;
Reviewing the adequacy and integrity of the
Groups internal control systems;
Overseeing the conduct and the performance of
the Groups businesses;
Approving the appointment and compensation
of senior management staff;
Approving new policies pertaining to staff salary
and benefits;
Approving changes to the corporate
organisation structure;
Approving the appointment of Directors and
Directors emoluments and benefits in
accordance with relevant statutes; and
Approving policies relating to corporate
branding, public relations, investor relations and
shareholder communication programmes.

Other than as specifically reserved to the Board in the

Boards Terms of Reference, the responsibility of
managing Maybanks business activities is delegated
to the President & Chief Executive Officer (PCEO) of
the Bank, who is accountable to the Board.

Board composition and balance

The Board of Maybank currently comprises 12
Directors. Eight Directors are Independent NonExecutive Directors, three are Non-Independent
Non-Executive Directors (nominees of Permodalan
Nasional Berhad (PNB)) and one who is a NonIndependent Executive Director (the PCEO).

Corporate Governance

Maybank Annual Report 2011

203
At A Glance

Senior Independent Non-Executive Director

AGM Information

In line with best practices on corporate governance,

Tan Sri Datuk Dr Hadenan bin A. Jalil continues to
play his role as the Senior Independent Director
(SID) of the Board to whom concerns of
shareholders and stakeholders may be conveyed. He
is responsible for addressing concerns that may be
raised by the shareholders.

Financial & Others

The Board considers that the eight Independent

Non-Executive Directors (NEDs), namely Dato Mohd
Salleh bin Hj Harun, Tan Sri Datuk Dr Hadenan bin A.
Jalil, Dato Seri Ismail bin Shahudin, Dato Dr Tan Tat
Wai, Dato Johan bin Ariffin, Mr Cheah Teik Seng, Mr
Alister Maitland and Datuk Mohaiyani binti
Shamsudin; meet the said requirements.

Governance

The Non-Executive Directors of Maybank continue to

proactively engage with senior management and
other relevant parties such as the external/internal
auditors as well as the Banks Compliance and Risk

Leadership

The current composition of the Board, with a high

proportion of Independent Non-Executive Directors,
ensures and provides strong and meaningful
oversight over management. The composition also
reflects the interest of the Banks majority shareholder
which is adequately represented by the appointment
of its nominee directors, balancing the interest of the
minority shareholders. The Non-Executive Directors do
not participate in the day-to-day management of the
Bank and do not engage in any business dealing or
other relationships with the Bank (other than in
situations permitted by the applicable regulations) in
order to ensure that they remain truly capable of
exercising independent judgement and act in the
best interests of the Group and its shareholders.
Further, the Board is satisfied and assured that no
individual or group of Directors has unfettered powers
of decision that could create a potential conflict of
interest.

Responsibility

Director independence and Independent

Non-Executive Directors

Ability to challenge the assumptions, beliefs or

viewpoints of others with intelligent questioning,
constructive and rigorous debating, and
dispassionate decision making in the interest of
the Bank;
Willingness to stand up and defend his own
views, beliefs and opinions for the ultimate good
of the Bank; and
A good understanding of the Banks business
activities in order to appropriately provide
responses on the various strategic and technical
issues confronted by the Board.

Business Review

In addition to the aforesaid requirements, the Board

ensures that all Independent Non-Executive Directors
possess the following qualities:

Performance

The Board affirms that the selection of Directors is

based on merit, and guided by the criteria outlined in
the Groups Policy on Fit and Proper Criteria for
Appointment as Chairman, Directors and Chief
Executive Officers of Licensed Institutions in Maybank
Group (Fit and Proper Policy) as duly assessed by
the Nomination and Remuneration Committee
(NRC).

BNM/GP1 further outlines that an Independent

Non-Executive Director, amongst others, shall not
have more than 5% equity interest in the licensed
institution or in its related companies, or be
connected to a substantial shareholder of the licensed
institution. Currently, all of the Banks Independent
Non-Executive Directors comply with this
requirement.

Strategy

The Directors bring to the Board a wealth of

knowledge, experience and skills in the key areas of
accountancy, law, international business operations
and development, finance and risk management,
amongst others. A brief profile of each member of the
Board is presented on pages 186 to 193 of this Annual
Report.

Who We Are

The Board is committed to ensure diversity and

inclusiveness in its deliberations.

units, to ensure that the various concerns and issues

relevant to the management and oversight of the
business and operations of the Bank and the Group
are properly addressed. The Boards commitment to
ensure good governance in its deliberation of key
issues is evident with the introduction of Board Time
Without Management as a permanent item in the
monthly Board meeting agenda (at the end of each
meeting).

Our Perspective

The current composition of the Board is in compliance

with Chapter 15.02 of the Listing Requirements as
more than half of its members are Independent
Directors.

204

Corporate Governance

Maybank Annual Report 2011

Statement on
Corporate Governance

He can be contacted at his email address:

[email protected].

Board appointment process

There is a formal and transparent procedure for the
appointment of new Directors to the Board, the
primary responsibility of which has been delegated to
the Nomination and Remuneration Committee
(NRC), formerly two separate Board Committees,
namely the Nomination Committee and the
Remuneration & Establishment Committee. The NRC
comprises exclusively Non-Executive Directors, with its
Chairman and the majority of whom are independent.
This composition ensures that any decisions made are
impartial and are in the best interest of the Bank.
Guided by the Groups Fit and Proper Policy (which
has been implemented since August 2006) and in line
with BNM/GP1, the NRC recommends to the Board
suitable candidates for directorships and appointment
of key senior management of the Bank and relevant
subsidiaries. The NRC also ensures candidates satisfy
the requisite skills and core competencies to be
deemed fit and proper, and to be appointed as
Director in accordance with the Fit and Proper Policy.
The Fit and Proper Policy outlines the attributes and
qualifications required of a candidate to determine
his/her suitability, amongst others, in respect of his/
her management and leadership experience, which
has to be at the most senior level in a reputable local
or international financial services group, public
corporation or professional firm/body. In respect of
the candidates skills, expertise and background, the
candidate should ideally and to the extent available,
possess a diverse range of skills, including in
particular, business, legal and financial expertise,
professional knowledge and financial industry
experience, as well as experience in regional and
international markets.
In making the selection, the Board as assisted by the
NRC also considers the following aspects:
(i)

Probity, personal integrity and reputation the

person must have the personal qualities such as
honesty, integrity, diligence, independence of
mind and fairness.

(ii) Competence and capability the person must

have the necessary skills, ability and
commitment to carry out the role.
(iii) Financial integrity the person must manage
his/her debts or financial affairs prudently.
The Fit and Proper Policy is also critical as a guiding
mechanism to identify the gaps in skills of the
composition of the Board. The Fit and Proper Policy
outlines the requirement for Non-Executive Directors
of Maybank who have reached the age of 70 and
above, and those who have served the Board for 12
years or more to submit their resignation letters
annually to the NRC six months before the Annual
General Meeting (AGM), for appropriate
recommendations to be made to the Board. The
Board acknowledges the view of the Minority
Shareholders Watchdog Group among others that an
appropriate term for Independent Non-Executive
Directors should not be more than nine years and
may consider this in the next review of the Fit and
Proper Policy. One director, Mr Alister Maitland, who
turned 70 this year, has been recommended by the
NRC and the Board to be re-appointed based on the
need for his continued invaluable contribution to the
Board and the Group, in light of his wide international
experience as a former banker.
The Policy on the Nomination Process for the
Appointment of Chairman, Director and CEO of
Licensed Institutions in the Group (Policy on
Nomination Process) sets out a clear and transparent
nomination process on the same. The nomination
process involves the following five stages:-

Corporate Governance

Maybank Annual Report 2011

205
At A Glance
Our Perspective

Evaluation of
suitability of
candidates

Meeting up
with
candidates

Final
deliberation
by NRC

Who We Are

Identification
of candidates

Recommendation
to Board
Strategy
Financial & Others
AGM Information

The Board and Peer Annual Assessment exercise is

primarily based on answers to a detailed
questionnaire prepared internally by Corporate &
Legal Services of Maybank. The assessment
questionnaire is distributed to all the respective Board
members and covers topics which include, amongst
others, the responsibilities of the Board in relation to
strategic planning, risk management, performance
management, financial reporting, audit and internal
process, human capital management, corporate social
responsibility, communication, corporate governance,
and shareholders interest and value. Other areas
being assessed include Board composition and size,
the contribution of each and every member of the
Board at meetings, the Boards decision-making and
output, information and support rendered to the
Board as well as meeting arrangements.

Governance

Directors who are due for re-election at the AGM will

be first assessed by the NRC, which will then submit
its recommendation to the Board for deliberation and
approval. Upon obtaining the Boards endorsement,
the relevant submission including the justifications for
such re-appointment is thereafter made to BNM for

Annually, the NRC provides a formal and transparent

procedure for the assessment of the effectiveness of
individual Directors, the Board as a whole and its
committees, as well as the performance of the PCEO
in respect of their respective skills and experience.

Leadership

All directors of the Bank, including the PCEO, are

subject to re-election by the shareholders at their first
opportunity after their appointment, and are subject
to re-election at least once every three years in
accordance with the Banks Articles of Association.
Board support for a Directors re-election is not
automatic and is subject to satisfactory assessment of
performance.

Board and Individual Directors effectiveness

Responsibility

Directors retirement and re-election

The Board has determined that the five Directors who

are due for re-election and re-appointment at the
forthcoming AGM have continued to perform in an
exemplary manner as demonstrated by inter alia their
contribution to the Boards deliberations and have
met the Boards expectations.

Business Review

The appointment process for Executive Directors

would in essence include the identification process of
potential candidates by a special committee of the
Board based on the expectation of the roles and
capabilities described and required by the Board. This
is subsequently followed by a submission to the NRC
for deliberation to be followed by the final
recommendation to the Board for approval, and
ultimately submission to BNM for approval.

approval if the relevant directors BNMs term of

appointment is expiring.

Performance

Upon the approval by the relevant boards in the

Group, the application for the appointment of such
candidates would thereafter be submitted to BNM for
the requisite approval under the Banking and
Financial Institutions Act, 1989 (BAFIA), Insurance Act
1996 and Takaful Act 1984, as the case may be.

206

Maybank Annual Report 2011

Corporate Governance

Statement on
Corporate Governance

The results of the Board and committee assessment

are reviewed at the NRC and Board and actionable
improvement programmes identified, which may
include training needs of individual Directors, to be
reviewed quarterly thereafter. The Chairman would
discuss with individual members on the peer
assessment whilst the Chairman of the NRC would
discuss with the Chairman of the Board on the latters
assessment results.
The Board has considered its composition and is
satisfied with it to ensure an efficient and effective
conduct of board deliberation pursuant to BNM/GP1.
The current Board size enables the Board to discharge
its function in a professional manner in consideration
of the size, breadth and complexity of the Groups
business activities, domestically as well as
internationally. Future changes to the Board may be
made to enhance complementarity of skills or enable
proper succession planning.
The Chairman always tries to ensure that the Boards
decisions are based on consensus (failing which,
reflect the will of the majority), and any concern or
dissenting view expressed by any Director on any
matter deliberated at meetings of the Board or any of
its Committees as well as the meetings decision, will
accordingly be addressed and duly recorded in the
relevant minutes of meetings.

Role and responsibilities of the Chairman and

the President & Chief Executive Officer
In line with the best practices and to ensure
appropriate supervision of the Management, the roles
and responsibilities of the Chairman and the PCEO are
separated with clear division of responsibilities,
defined and documented as approved by the Board.
This distinction allows for a better understanding and
distribution of jurisdictional responsibilities and
accountabilities. The clear hierarchical structure with
its focused approach and attendant authority limits
also facilitates efficiency and expedites informed
decision-making.

Chairman
Tan Sri Dato Megat Zaharuddin Megat Mohd Nor is
the Chairman of Maybank. Prior to his appointment as
the Chairman of Maybank on 1 October 2009, he was
an Independent Non-Executive Director of Maybank
from July 2004 until February 2009. He has never
assumed an executive position in Maybank.

Previously, he has also chaired two other public listed

companies, namely Shell Refining Company Berhad
and Maxis Communications Berhad.
The Chairman leads the Board and is also responsible
for the effective performance of the Board. The
Chairman continuously works together with the rest
of the Board in setting the policy framework and
strategies to align the business activities driven by the
senior management with the Groups objectives and
aspirations, and monitors its implementation.
The Chairman ensures orderly conduct and
proceedings of the Board, where healthy debate on
issues being deliberated is encouraged to reflect an
appropriate level of scepticism and independence.
The Chairman takes the lead to ensure the
appropriateness and effectiveness of the successionplanning programme for the Board and senior
management levels. He also promotes a healthy
working relationship with the PCEO and provides the
necessary support and advice as appropriate. He
continues to demonstrate the highest standards of
corporate governance practices and ensures that
these practices are regularly communicated to the
stakeholders.

The President & CEO

Dato Sri Abdul Wahid bin Omar has been the PCEO
and Executive Director of Maybank since May 2008.
As PCEO, he has been delegated certain
responsibilities by the Board and is primarily
accountable for overseeing the day-to-day operations
to ensure the smooth and effective running of the
Group. Furthermore, he is responsible for mapping
the medium to longer term plans for Board approval,
and is accountable for implementing the policies and
decisions of the Board, as well as coordinating the
development and implementation of business and
corporate strategies, specifically by making sure that
they are carried through to their desired outcomes,
especially in the institution of remedial measures to
address identified shortcomings. He is also
responsible for developing and translating the
strategies into a set of manageable goals and
priorities, and setting the overall strategic policy and
direction of the business operations, investment and
other activities based on effective risk management
controls.

Corporate Governance

Maybank Annual Report 2011

207
At A Glance
Performance
Business Review
Responsibility
Leadership

All Directors have complied with the requirement that

Directors must attend at least 75% of Board meetings
held in the financial year in accordance with BNM/
GP1, and attended at least 50% of Board meetings
held in the financial year pursuant to the Listing
Requirements.

During the financial year, a Board Offsite session was

held on 25 November 2010 in Singapore, whereby the
Board took the opportunity to discuss key matters in
relation to its role in promoting organisational
innovation and monitoring strategy execution, and
initiatives to further enhance Board effectiveness and
processes, as well as how the Board could work better
with senior management to achieve shared goals.

Strategy

The Board meets every month with additional

meetings convened as and when urgent issues and/or
important decisions are required to be taken between
the scheduled meetings. During the financial year
ended 30 June 2011, the Board met 22 times to
deliberate and consider a variety of significant matters
that required its guidance and approval.

The current practice of appointing Board members to

sit on subsidiary boards, in particular the key overseas
subsidiaries, is continued in order to maintain
oversight and ensure the operations of the respective
subsidiaries are aligned with the Groups strategies
and objectives.

Who We Are

Board meetings

Additionally, three of the 22 Board meetings were

held at regional offices located outside of Kuala
Lumpur, to enable the members to visit the numerous
operations centres not only to provide more effective
oversight but also to better understand the Groups
operations and customer needs and issues as well as
meet with the management and staff at Group and
regional level at sessions and events organised in
conjunction with the Board meetings.

Our Perspective

The PCEO ensures that the financial management

practice is performed at the highest level of integrity
and transparency for the benefit of the shareholders
and that the business and affairs of the Bank are
carried out in an ethical manner and in full
compliance with the relevant laws and regulations.
His other responsibilities include ensuring that whilst
the ultimate objective is maximising total
shareholders return, social and environmental factors
are not neglected, and also developing and
maintaining strong communication programmes and
dialogues with the shareholders, investors, analysts as
well as employees, and providing the effective
leadership to the Group organisation. He is also
responsible for ensuring high management
competency as well as the emplacement of an
effective management succession plan to sustain
continuity of operations. The PCEO, by virtue of his
position as a Board member, also functions as the
intermediary between the Board and senior
management.

Governance
Financial & Others
AGM Information

208

Maybank Annual Report 2011

Corporate Governance

Statement on
Corporate Governance

Details of attendance of each Director on the Board and respective Board Committees during the financial year
ended 30 June 2011 are as follows:

Name of Directors
Tan Sri Dato Megat Zaharuddin
bin Megat Mohd Nor
Dato Mohd Salleh bin Hj Harun
Dato Sri Abdul Wahid bin Omar
Tan Sri Dr Hadenan bin A. Jalil
Dato Seri Ismail bin Shahudin 1
Dato Dr Tan Tat Wai
Encik Zainal Abidin bin Jamal 2
Mr Alister Maitland
Mr Cheah Tek Seng
Dato Johan bin Ariffin
Mr. E. Sreesanthan 3

Name of Directors
Tan Sri Dr Hadenan bin A. Jalil
Dato Seri Ismail bin Shahudin
Dato Dr Tan Tat Wai
Encik Zainal Abidin bin Jamal
Mr Alister Maitland 4
Mr Cheah Tek Seng
Mr. E. Sreesanthan

Board
Number of Meetings
Held
Attended
%

CRC
Number of Meetings
Held
Attended
%

ACB
Number of Meetings
Held
Attended
%

22

22

100

22
22
22
22
22
22
22
22
22
22

22
22
20
20
22
22
22
22
21
21

100
100
91
91
100
100
100
100
95
95

50
50

50

50

50

44
31

32

37

35

88
62

64

74

70

16
1

16
11
11

15
1

15
10
10

94
100

80

94
91
91

RMC
Number of Meetings
Held
Attended
%

4
12

3
12
12

4
12

2
11
10

100
100

66
92
83

NRC
Number of Meetings
Held
Attended
%
12
12
12
12
12

10
12
12
10
10

83
100
100
83
83

ESS Committee
Number of Meetings
Held
Attended
%
1
1
1
1
1

1
1
1
1
0

100
100
100
100
0

Note:1
Appointed as a member of the CRC with effect from 6 July 2010. Subsequently, he resigned as a member of the ACB and
RMC with effect from 16 July 2010 and 22 October 2010.
2
Resigned as a member of the ACB with effect from 27 October 2010.
3
Appointed as a member of the ACB with effect from 27 October 2010.
4
Appointed as a member of the RMC with effect from 31 March 2011.
5
Datuk Mohaiyani Shamsudin, who is not included in the above summary of attendance, was appointed as Director on
22 August 2011.

Corporate Governance

Maybank Annual Report 2011

209
At A Glance

The Banks previous Employees Share Option

Scheme (ESOS) which was also applicable to
certain eligible NEDs had lapsed in August 2009,
following a decision made in May 2006 to
discontinue it for fiscal reasons. The NEDs are not
eligible to participate in the current ESS.

The current remuneration policy of the Directors

comprises the following:(a) Basic salary

Basic salary of the Executive Director is based on
the recommendation of the NRC.
(b) Directors fees and meeting allowances (effective
1 July 2010)

For the Board of Directors, RM300,000 per
annum for the Chairman, RM285,000 per annum
for the Vice Chairman and RM190,000 per annum
for each NED. The meeting allowance for the
Board is RM1,500 per meeting.

For the Board Committees, RM45,000 per annum

for the Board Committee Chairman and
RM30,000 per annum for each Committee
member. The meeting allowance for Board
Committees is RM1,000 per meeting.

Financial & Others

At the Extraordinary General Meeting of

Maybank held on 13 June 2011, its shareholders
had approved the Employees Share Scheme
(ESS) which provides for the offer and grant of
options to eligible employees. The EGM also
approved the allocation of options and/or grant
of shares to the PCEO, to subscribe up to a
maximum of 5,000,000 Maybank Shares. The
number of shares to be offered to the PCEO,
being an eligible employee, under the ESS will
be based on the Group as well as his
performance achievement at the end of financial
year, as specified in the Group/PCEO Balance
Score Card.

Governance

Leadership

The Board in 2007 had approved certain benefits

for retired NEDs which would be enjoyed by
Directors who have served on the Board for five
years or more, amongst others banking products
at privileged rates and use of the Maybank
holiday apartments/ bungalows.

Responsibility

Business Review

The Chairman is also paid monthly other

emoluments which commensurate with
responsibilities befitting his position, for example
in representing the Group and facilitating
organisation capability building.

Performance

For Non-Executive Directors (NEDs), the level of

remuneration generally reflects the experience and
level of responsibilities undertaken. The
determination of remuneration packages for NEDs
including the non-executive Chairman, is a matter for
the Board as a whole following the relevant
recommendation made by the NRC.

Strategy

For the Executive Director, the component parts of

remuneration are structured so as to link short and
long-term rewards to corporate and individual
performance. A significant portion of the Executive
Directors compensation package has been made
variable in nature to be determined by the Groups
performance during the year against the individual
Key Performance Indicators in a scorecard aligned
with the corporate objectives, and approved by the
Board.

(c) Benefits-in-kind and emoluments

Benefits for NEDs include medical coverage,
insurance coverage (Group Personal Accident,
Group Term Life and Directors & Officers
Liability), travel benefits, mobile electronic
devices and use of Maybank holiday apartments/
bungalows.

Who We Are

Directors remuneration is generally determined at

levels which would continue to attract and retain
Directors of such calibre to provide the necessary
skills and experience as required and commensurate
with the responsibilities for the effective management
and operations of the Group.

Our Perspective

Directors Remuneration

AGM Information

210

Maybank Annual Report 2011

Corporate Governance

Statement on
Corporate Governance

A summary of the total remuneration of the Directors, distinguishing between Executive and Non-Executive
Directors, in aggregate with categorisation into appropriate components for the financial year ended 30 June
2011 are as follows:-

Executive Directors
Dato Sri Abdul Wahid bin Omar
TOTAL

Salary
(RM)

Bonus
(RM)

1,156,000
1,156,000

1,920,000
1,920,000

Non-Executive Directors
Tan Sri Dato Megat Zaharuddin bin
Megat Mohd Nor
Dato Mohd Salleh bin Hj Harun
Tan Sri Dr Hadenan bin A. Jalil
Dato Seri Ismail bin Shahudin
Dato Dr Tan Tat Wai
Zainal Abidin bin Jamal
Alister Maitland
Cheah Teik Seng
Dato Johan bin Ariffin
Sreesanthan Eliathamby
TOTAL
GRAND TOTAL

1,156,000

1,920,000

Directors
Fees
(RM)

Other
Emoluments
(RM)

Benefits
in kind
(RM)

ESS
323,000
323,000

Total
(RM)
4,081,184
4,081,184

637,160
637,160

45,024
45,024

315,781

583,250

39,360

938,391

330,000
295,000
330,795
295,000
287,562
257,479
260,521
250,000
240,384
2,862,522

71,250
49,750
72,250
52,000
79,250
40,750
58,000
74,750
47,250
1,128,500

34,970

74,330

436,220
344,750
403,045
347,000
366,812
298,229
318,521
324,750
287,634
4,065,352

2,862,522

1,765,660

119,354

323,000

8,146,536

Notes:
Executive Directors Other Emoluments include allowance, EPF, SOCSO and EPF on bonus.

Quality and supply of information to the

Board
The Board has full and unrestricted access to all
information pertaining to the Groups businesses and
affairs to enable it to discharge its duties effectively.
Directors also have full and unrestricted access to the
advice and services of the senior management of the
Group. In addition to formal Board meetings, the
Chairman maintains regular contact with the PCEO to
discuss specific matters, and the latter assisted by the
Company Secretary ensures that frequent and timely
communication between the senior management and
the Board is maintained at all times as appropriate.
Directors are also regularly updated and apprised of
any new regulations and guidelines, as well as any
amendments thereto issued by Bank Negara Malaysia,
Bursa Malaysia Securities Berhad, Securities
Commission, the Companies Commission of Malaysia

and other relevant regulatory authorities including

recommendations on corporate law reform in respect
of Malaysian as well as relevant foreign jurisdictions,
particularly the effects of such new or amended
regulations and guidelines on directors specifically,
and the Bank and the Group generally.
Board meetings for the ensuing financial year are
scheduled in advance before the end of the financial
year, specifically before the end of the calendar year,
so as to allow members of the Board to plan ahead
and fit the coming years Board and Board
Committees meetings into their respective schedules.
The mechanism of the Annual Board Outline Agenda
(developed in the last financial year) aims to highlight
to the Board and relevant Board Committees as well
as the senior management subject matters other than
routine for the year to facilitate better planning and
for greater time effectiveness of various parties. It also

Corporate Governance

Maybank Annual Report 2011

211
At A Glance

The duties of the Company Secretary also include,

amongst others, the following:

AGM Information

Individual Directors may seek independent

professional advice at the Banks expense where
necessary, in the furtherance of their duties in
accordance with the Banks Policy and Procedure on
Access to Independent Professional Advice, Senior
Management and Company Secretary by Directors of
Maybank Group. Copies of any reports, advice and
recommendations provided by the independent
professional adviser to the relevant Director, would be
forwarded by the said Director to the Company
Secretary, who will, where appropriate, circulate them
to other Directors to ensure that they are kept
informed of pertinent issues, which may have an
impact on the Groups interest growth and
performance.

Financial & Others

Independent professional advice

The General Counsel & Company Secretary, in his

function as the Company Secretary, is responsible for
advising the Board on issues relating to corporate
compliance with the relevant laws, rules, procedures
and regulations affecting the Board and the Group, as
well as best practices of governance. He is also
responsible for advising the Directors of their
obligations and duties to disclose their interest in
securities, disclosure of any conflict of interest in a
transaction involving the Bank, prohibition on dealing
in securities and restrictions on disclosure of pricesensitive information.

Governance

Company Secretary

Leadership

All Directors have access to the advice and services of

the Company Secretary.

Responsibility

Senior management members are invited to attend

Board meetings to report on matters relating to their
areas of responsibility, and also to brief and present
details to the Directors on recommendations
submitted for the Boards consideration. Additional
information or clarification may be required to be
furnished, particularly in respect of complex and
technical issues tabled to the Board.

Business Review

Further, the Banks minutes of meetings of the Board

and various Board Committees incorporate the
discussions of the members at the meetings in
arriving at decisions and are concise and accurate in
accordance with the recommendations of the Code.
The draft minutes of the meeting are circulated within
one week of the meetings to the Board for early
feedback and suggestions prior to tabling at the
subsequent meetings for formal confirmation.

Performance

Strategy

Prior to each Board meeting, an agenda together with

appropriate papers for each agenda item to be
discussed is forwarded to each Director at least five
clear days before the scheduled meeting to enable
the Directors to obtain further clarification or
explanation, where necessary, in order to be
adequately apprised before the meeting.

Attending Board and Board Committee meetings

and ensuring that the proceedings of Board and
Board Committee meetings and decisions made
thereof, are accurately and sufficiently recorded;
Ensuring that minutes of meetings are properly
kept for the purposes of meeting statutory
obligations, as well as obligations arising from
the Listing Requirements, Bank Negara Malaysia
and other regulatory requirements;
Communicating the decisions of the Board for
senior managements attention and further
action;
Ensuring all appointments and re-appointments
of Directors are in accordance with the relevant
legislations;
Handling company share transactions, such as
issuance of new shares and arranging for the
payment of dividends;
Advising Directors on regulatory compliance
issues relevant to Directors duties, including on
the closed period for trading in Maybank shares,
pursuant to Chapter 14 on Dealings in Securities
of the Listing Requirements; and
Managing the necessary preparation and
arrangements for general meetings of the Bank
to ensure smooth proceedings and compliance
with the relevant regulations.

Who We Are

Our Perspective

gives a greater sense of discipline on the part of

senior management to commit to the said outline. At
the same time, such focus allows the Board to
deliberate on and contribute towards achieving a
higher level of value-added discussions on such
identified issues and other relevant matters.

212

Maybank Annual Report 2011

Corporate Governance

Statement on
Corporate Governance

In the financial year, none of the Directors had

invoked this process for independent professional
advice.

Board Satisfaction Index (BSI)

The BSI demonstrates an important initiative to
ensure continuing adequate support is provided to
the Board, to assist Directors in discharging their
duties effectively. The BSI exercise was conducted in
July 2011 for the financial year ended 30 June 2011.
The areas of assessment cover transactional and
operational efficiency, which includes the quality of
the minutes of the Board and Board Committees, of
papers and meeting arrangements, and of training
and knowledge management, as well as advisory
services on matters concerning Directors duties, such
as disclosure of interests and prohibition against
trading.
Based on feedback received from Board members, the
Board was generally satisfied with the support
provided for the period under review and several
areas had been identified for further improvement.

Structured Training Programme for Directors

The Board is responsible for further enhancing the
skills and knowledge of its members on relevant new
laws and regulations and changing commercial risks,
as well as to keep abreast with developments in the
financial services industry through a Structured
Training Programme for Directors (STPD). The STPD
requires that each Director attend at least one
training programme, which is to be specifically
developed by the organisation for its Directors during
the financial year.
For the period under review, all Board members have
complied with the aforesaid internal policy by
attending various training programmes and
workshops on issues relevant to the Group, which
were organised internally, as well as in collaboration
with external training providers. The main training
programme for the year was organised by Bank
Negara Malaysia namely the Financial Institutions
Directors Education (FIDE) programmes. Besides
attending the core training modules organised by
FIDE, directors are also encouraged to attend elective
training programmes which are being offered by FIDE
throughout its training calendar year.

A comprehensive induction programme coordinated

by Corporate & Legal Services for new Directors is
usually conducted to provide new Directors with the
necessary information and overview to assist them in
understanding the Groups operations and
appreciating the challenges and issues the Group
faces in achieving its objectives. The programme
covers subject matters, amongst others, the Groups
business and strategy, work processes and Board
Committees, and the duties and responsibilities of
Directors of financial institutions.
The key areas of focus for training programmes
attended by the Directors for the period ended 30
June 2011 are as follows:Board Effectiveness: BNM FIDE Programme (Module 1 on effective
boardroom deliberations)
BNM FIDE (Module 4 on building effective
Board team)
Corporate Governance: 2nd Annual Corporate Governance Summit 2010
Corporate Directors Conference 2011
Risk Management: BNM FIDE programme (Module 2 on enterprise
risk management)
BNM FIDE programme (Module 3 on internal
controls and audit oversight)
As at the end of the financial year, all Directors have
attended and successfully completed the Mandatory
Accreditation Programme in compliance with the
Listing Requirements.
Apart from attending the various training
programmes, some of the Directors have also been
invited to speak at conferences and seminars
organised by regulatory bodies and professional
associations.

Corporate Governance

Maybank Annual Report 2011

213
At A Glance
Financial & Others
AGM Information

The Board delegates certain of its governance

responsibilities to the following Board Committees,
which operate within clearly defined terms of
references, primarily to assist the Board in the
execution of its duties and responsibilities. Although
the Board has granted such discretionary authority to
these Board Committees to deliberate and decide on
certain operational matters, the ultimate responsibility
for final decision on all matters lies with the entire
Board.

Governance

BOARD COMMITTEES

Leadership

In line with various statutory requirements on the

disclosure of directors interest, it has been the
practice of Maybank that members of the Board make
a declaration to that effect at the Board meeting in
the event they have interest in proposals being
considered by the Board, including where such
interest arises through close family members. Any
interested Directors would then abstain from

Directors and officers of the Maybank Group are

covered against liabilities arising from holding office
as Directors by virtue of the Directors and Officers
Insurance coverage which is put in place by the Bank.
The policy covers personal liability of Directors in the
form of professional indemnity insurance, which
includes any breach of trust, breach of duty, neglect,
error, omission, misstatement, misleading statements,
breach of warranty or authority committed in their
capacity as Directors. Even though the Directors
contribute a part of the premium paid for the
insurance policy annually, such policy does not
provide coverage in the event the Directors are
proven to have acted fraudulently, dishonestly or
maliciously.

Responsibility

Conflict of Interest

Directors and Officers Insurance

Business Review

Further, although the Independent Non-Executive

Directors hold directorships in several companies in
the Maybank Group, the NRC assesses the
independence of the said Directors pursuant to a
declaration made that they are not taking instructions
from any person including Maybank. In this respect,
all the Independent Non-Executive Directors of
Maybank complied with the relevant requirements of
BNM/GP1. In addition, the respective key subsidiaries
within the Group also appoint Independent NonExecutive Directors who are not members of the
Maybank Board to ensure an optimal balance
between board members in terms of independent
internal and external directors.

In accordance with the Listing Requirements and the

relevant provisions of the Capital Markets & Services
Act 2007, Directors, key management personnel and
principal officers of the Maybank Group are prohibited
from trading in securities or any kind of property
based on price sensitive information and knowledge
which have not been publicly announced. Notices on
the closed period for trading in Maybanks securities
are circulated to Directors, key management
personnel and principal officers who are deemed to
be privy to any price sensitive information and
knowledge, in advance of whenever the closed period
is applicable.

Performance

The Board values the experience and perspective

gained by the Non-Executive Directors from their
services on the boards of other companies,
organisations and associations. However, prior to the
acceptance of any relevant external appointments
such as directorship of other listed companies, the
Board Manual stipulates that Non-Executive Directors
should first consult the Chairman to ensure that such
appointments would not unduly affect their time
commitments and responsibilities to the Maybank
Board and the Groups schedules and activities.

Insider trading

Strategy

Pursuant to the Listing Requirements, each member

of the Board holds less than 10 directorships in public
listed companies and less than 15 directorships in
non-public listed companies. Furthermore, the
Directors also comply with the best practices
recommendation of the Green Book which states that
directors should not sit on the boards of more than
five listed companies to ensure that their
commitment, resources and time are more focused to
enable them to discharge their duties effectively.

Who We Are

Directorships in other Companies

deliberations and decisions of the Board on the

subject proposal and, where appropriate, excuse
themselves from being present in the deliberations.

Our Perspective

BOARD PROFESSIONALISM

214

Corporate Governance

Maybank Annual Report 2011

Statement on
Corporate Governance

Audit Committee
The Audit Committee is authorised by the Board to
investigate any activities within its Terms of Reference
and has unrestricted access to both the internal and
external auditors and members of the senior
management of the Group. The activities carried out
by the Audit Committee, which met 16 times during
the year under review, are summarised in the Audit
Committee Report and its Terms of Reference as
stated on page 226 of this Annual Report. Members of
the Audit Committee are as indicated on page 226 of
this Annual Report.

Credit Review Committee

The responsibilities of the Credit Review Committee
include, amongst others, the following:
(i)

To review/veto all loans approved by the Group

Management Credit Committee (GMCC) in
respect of applications for fresh or additional
facilities exceeding GMCCs discretionary power;
(ii) To review/veto, with powers to object or to
support proposals recommended by the GMCC
to the Board for approval or affirmation,
including statute and policy loans eg. any
Director and Staff-related loans.
The Committee meets weekly and during the financial
year under review, the Committee had met 50 times.
Members of the Credit Review Committee and details
of attendance of meetings by members are stated on
page 208 of this Annual Report.

Nomination and Remuneration Committee

(NRC)
The NRC comprises exclusively Non-Executive
Directors.
The broad responsibilities of the NRC as outlined in its
Terms of Reference are as follows:
1.

To provide a formal and transparent procedure

for the appointment of Directors and CEO as well
as assessment of effectiveness of individual
Directors, Board as a whole and the performance
of the CEO and key senior management officers;
and

2. To provide a formal and transparent procedure

for developing a remuneration policy for
Directors, CEO and key senior management

officers and ensuring that compensation is

competitive and consistent with the licensed
institutions culture, objectives and strategy.
The specific responsibilities of the NRC include,
amongst others, the following:
(i)

To recommend to the Maybank Board, the

appointment, promotion and remuneration as
well as compensation policies for executives in
key management positions;
(ii) To recommend to the Maybank Board, a
Leadership Development framework for the
Group;
(iii) To oversee the general composition of the
Maybank Board (size, skill and balance between
Executive Directors and Non-Executive Directors);
(iv) To recommend to the Maybank Board, a
framework of remuneration for Directors,
covering fees, allowances and benefits-in-kind in
their work as Directors of all boards and
committees;
(v) To recommend to the Maybank Board a policy
regarding the period of service for the Executive
and Non-Executive Directors;
(vi) To assess the performance and effectiveness of
individuals and collective members of the Boards
and Board Committees of the Group and its
subsidiaries, as well as the procedure for the
assessment.
(vii) To recommend measures to upgrade the
effectiveness of the Boards and Board
Committees;
(viii) To recommend to the Maybank Board, a
Performance Management framework/model,
including setting of the appropriate performance
target parameters and benchmark for the Group
Balanced Scorecard at the start of each financial
year;
(ix) To oversee the succession planning,
management and performance evaluation of
executives in key management positions;
(x) To consider and recommend solutions on issues
of conflict of interest affecting Directors; and
(xi) To assess annually that Directors and key senior
management executives are not disqualified
under section 56 of the BAFIA.

Corporate Governance

Maybank Annual Report 2011

215
At A Glance

Risk Management Committee

(i)

Business Review

The ESS Committee is also tasked to review the rules

and regulations relating to ESS and to ensure the
Scheme is implemented in accordance with the
Bye-Laws, amongst others, in respect of the terms on
eligibility, the offer and date of offer, basis of
allotment, termination and appeals.

Responsibility

All members of the ESS Committee are Non-Executive

Directors. Meetings are held as and when the ESS
Committee is required to deliberate on urgent
matters.

Leadership

One meeting of the ESS Committee was held during

the financial year under review.
The members of the Employees Share Scheme
Committee are as follows:

Financial & Others

Dato Mohd Salleh Hj Harun (Chairman)

Tan Sri Dr Hadenan A. Jalil
Dato Dr Tan Tat Wai
Encik Zainal Abidin Jamal
Mr Alister Maitland

Governance
AGM Information

The RMC meets monthly with additional meetings

convened to attend to urgent matters that require its
deliberation. During the financial year under review,
12 meetings were held. The Chairman and a majority

The Board had delegated to the ESS Committee,

which had been established on 28 April 2011, the
responsibility of determining all questions of policy
and expediency arising from the administration of ESS
and to generally undertake the necessary to promote
the Banks best interest.

Performance

To develop and foster a risk aware culture within

the Bank;
(ii) To review and approve risk management
strategies, risk frameworks, policies, risk
tolerance and risk appetite limits;
(iii) To review and assess adequacy of risk
management policies and framework in
identifying, measuring, monitoring and
controlling risks and the extent to which they
operate effectively;
(iv) To ensure infrastructure, resources and systems
are in place for risk management, i.e. that the
staff responsible for implementing risk
management systems perform those duties
independently of the financial institutions risk
taking activities;
(v) To review and assess the appropriate levels of
capital for the Bank, vis--vis its risk profile;
(vi) To review and recommend strategic actions to
be taken by the Bank arising from Basel II
implementation for Boards approval;
(vii) To review and approve new products and ensure
compliance with the prevailing guidelines issued
by BNM or other relevant regulatory body;
(viii) To oversee the resolution of BNM Composite Risk
Rating findings for Maybank Group;
(ix) To oversee the specific risk management
concerns in the business units that leverage on
the Embedded Risk Units in the business units;
and
(x) To review and approve model risk management
and validation framework.

At an Extraordinary General Meeting held on 13 June

2011, shareholders had approved the establishment
of an Employees Share Scheme (ESS) which shall be
valid for seven years from 23 June 2011 to 22 June
2018. The introduction of the ESS is intended to serve
as a long-term incentive plan as well as to align the
interests of employees with the objectives of
Maybank Group to create sustainable value
enhancement for the organisation and the
shareholders.

Strategy

The responsibilities of the Risk Management

Committee for risk oversight include, amongst others,
the following:

Employees Share Scheme Committee

Who We Are

Members of the NRC and details of attendance of

meetings by members are stated on page 208 of this
Annual Report.

of the Committees members are Independent

Non-Executive Directors. Members of the RMC and
details of attendance of meetings by members are
stated on page 208 of this Annual Report.

Our Perspective

The NRC held twelve meetings during the financial

year under review.

216

Corporate Governance

Maybank Annual Report 2011

Statement on
Corporate Governance

Board IT Steering Committee

The Board IT Steering Committee was formalised on
26 August 2010 and was responsible for overseeing
activities and the outcomes of the strategic planning
within the IT Transformation Programme. The
Committee was formed on an interim basis to provide
a platform for Management to deliberate and receive
guidance and advice on strategic IT initiatives.
The members of the Board IT Steering Committee
were as follows:Tan Sri Dato Megat Zaharuddin Megat Mohd Nor
Dato Sri Abdul Wahid Omar
Dato Seri Ismail Shahudin
Mr Cheah Teik Seng
The Committee was disbanded on 16 December 2010
and the oversight function over the Groups IT
initiatives was thereafter continued by the executive
level Group IT Steering Committee. From time to time,
updates on the progress of the Groups IT
Transformation Programme are tabled to the Board
for deliberation.

EXECUTIVE LEVEL MANAGEMENT

COMMITTEES (ELC)
The PCEO, with Board support, has established various
ELCs and delegated some of his authority to assist
and support the relevant Board Committees in the
operations of the Bank. The key ELCs, which are
mostly chaired by the PCEO or the Group Chief
Financial Officer, are as follows:v
v
v
v
v
v
v
v

Group Executive Committee

Group Management Credit Committee
Internal Audit Committee
Executive Risk Committee
Asset and Liability Management Committee
Group Staff Committee
Group Procurement Committee
Group IT Steering Committee

INVESTOR RELATIONS AND

SHAREHOLDERS COMMUNICATION
Investor Relations (IR) is an important part of
Maybanks corporate governance framework to ensure
that shareholders, stakeholders, investors and the
investment community, both local and international,
are provided with relevant, timely and comprehensive
information about the Group. Maybanks dedicated IR
unit is committed to providing effective and open
communication in order to improve disclosure and
transparency.
Maybank is guided by its Investor Relations Policy
which provides a framework of procedures and
processes upon which Maybank can successfully
implement its Investor Relations programme while
providing guidance for communication through its
designated spokespersons. An Investor Relations
programme is carried during the year to ensure a
planned sequence of activities are conducted
throughout the year in communicating its financial
results and material developments to Bursa Malaysia
Securities Berhad, analysts, investors, shareholders
and other stakeholders in a timely, open and
comprehensive manner. The IR unit also engages with
its counterparts in other countries, eg. in Indonesia, to
coordinate IR activities for analysts and investors
seeking meetings with the management of Maybanks
subsidiary, Bank Internasional Indonesia.

Quarterly Results
For its quarterly financial results, the Group convenes
media and analyst briefings and/or conference calls.
Media and analyst briefings are conducted with
concurrent conference calls facilities during the
half-year and full year financial results while
conference calls are conducted for the first and third
quarter. Presentation slides are publicly available and
can be downloaded via the corporate website at
www.maybank.com to provide stakeholders with a
better understanding of Maybanks performance.

Conferences and Roadshow

Stakeholders engagement are also done through
conferences and roadshow conducted locally or
overseas whereby senior management will
communicate the Groups strategy, progress of its
various initiatives and updates for stakeholders to
understand Maybanks operations better.

Corporate Governance

Maybank Annual Report 2011

217
At A Glance

Contact Details of IR Spokesperson

AGM Information

Khairussaleh Ramli
Group Chief Financial Officer
Contact: (6)03 2074 4288
Email: [email protected]

The shares of Maybank are widely held with

institutional shareholders dominating the ownership
structure of Maybank. As at 30 June 2011, the top
three shareholders are Skim Amanah Saham
Bumiputra (ASB) with 45.13%, Employees Provident
Fund Board with 10.68% and Permodalan Nasional
Berhad (PNB) with 5.73%, accounting in aggregate for
a combined 61.54%.

Financial & Others

For more information on the investor relations

activities conducted during the year, please refer to
page 178.

OWNERSHIP STRUCTURE

Governance

Maybank maintains its credit ratings by rating

agencies Standard and Poors, Fitch Ratings and
Moodys Investors Services, RAM Ratings and MARC as
part of providing an independent flow of information
to stakeholders as well as to the general public.

In addition to the AGMs and EGMs, shareholders and

market observers are also welcomed to raise queries
at any time through the Corporate Affairs and
Strategy and Corporate Finance Divisions.

Leadership

Credit Rating

The attendance of shareholders at the Groups general

meetings has always been high as evidenced by the
presence of about 2,000 shareholders at the AGM for
the FY2011 and the EGM in June 2011 despite the
institutional bias in the investor base.

Responsibility

Media coverage on the Group and senior

management, either through print media or TV
coverage is also initiated proactively at regular
intervals to provide wider publicity and improve
general understanding of the Groups business among
investors and the public.

The Groups EGMs and AGMs represent the primary

platforms for direct two-way interaction between the
shareholders, Board and Management of the Group.
In deference to shareholder democracy and the
transparency policy adopted by the Group,
shareholders approval is required on all material
issues including, but not limited to, the election and
appointment of Directors, material mergers,
acquisitions and divestments exercises, as well as the
appointment of auditors and dividend payments.

Business Review

Media coverage

GENERAL MEETINGS

Performance

Maybanks annual report provides a comprehensive

report on the Groups direction and financial
performance. The annual report provides full
disclosure and is in compliance with the relevant
regulation to ensure greater transparency. The annual
reports are also printed in summary form together
with a CD-ROM. An online version of the Annual
Report is also available at Maybanks corporate
website.

Raja Indra Putra Raja Ismail

Head, Investor Relations
Contact: (6)03 2074 8582
Email: [email protected]

Strategy

Annual Report

Hazimi Kassim
Head, Strategy and Corporate Finance
Contact: (6)03 2074 8101
Email: [email protected]

Who We Are

Maybanks corporate website is also another channel

of communication to better engage with the
stakeholders. The website houses information of the
Group at www.maybank.com which includes
corporate profile, senior management, investor
information, financial results, corporate news and
Maybanks subsidiaries. Visitors can also get the latest
updates on Maybank by email and RSS. Bursa Link is
another source of information to the stakeholders
which is available on Bursa Malaysia website at
www.bursamalaysia.com.

Our Perspective

Website

218

Maybank Annual Report 2011

Corporate Governance

Statement on
Corporate Governance

Although the three top shareholders of Maybank

accounted for more than half of the total paid up
share capital of Maybank, Maybank is not subject to
any biased influence from these shareholders and
they do not hold management positions within the
organisation. This arrangement ensures a high level of
corporate governance and permits the Group to focus
on continuously building value for all its shareholders.

The Board also ensures that the financial treatment of

the consolidated accounts under the Group is based
on the more stringent requirements and that the
financial statements of Maybank are in compliance
with the Malaysian Accounting Standards Board
(MASB)s requirements, which in turn are in
accordance with the International Accounting
Standards (IAS).

Maybanks shareholding structure is transparent and

is disclosed on pages 49, 50 and 534 of this Annual
Report. Any updates on the shareholding structure
can be obtained on request from the designated
management personnel on Investors Relations
matters. The existing share structure consists entirely
of Ordinary Shares and there are no different classes
of Ordinary Shares. There is no foreign shareholding
limit and the Banks Memorandum and Articles of
Association does not have any explicit provision(s)
that may discourage any acquisition. However, the
Bank is subject to BAFIA, which contains certain
restrictions on share ownership.

The scope of the disclosure includes a review of the

main sources of revenue by business activity and
geography, past year performance analysis and
financial adequacy, together with detailed explanation
of the changes in the Balance Sheet and Profit and
Loss Statement, to facilitate better understanding of
the Groups operations. In addition to the Audited
Report, the Group also releases its unaudited
quarterly financial results on a timely basis. These are
accessible on Maybank and Bursa Malaysias websites.

As part of Maybanks effort to expand its liquidity and

shareholder base, it has established a Sponsored Level
1 American Depository Receipt Programme (ADR)
which is traded Over-the-Counter in United States of
America since May 2005 on the basis of 1 ADR
equivalent to 2 Maybank shares. Maybank Custody
Services holds the securities for Maybank and the
total number of ADRs outstanding is 6,759,683 as at
30 June 2011. The percentage of the securities for
which the ADRs are issued against Maybanks issued
and paid-up share capital is 0.09%.

ACCOUNTABILITY AND AUDIT

Financial Reporting and Disclosure
The Board has a fiduciary responsibility and takes it
upon itself to present to the shareholders and the
public at large, a clear, balanced and meaningful
evaluation of the Groups financial position,
performance and prospects. In order to meet the
fiduciary responsibility expected of the Board, the
Board with the assistance of the Audit Committee
oversees the financial reporting process and the
quality of the Groups financial statements to ensure
that the reports present a true and fair view of the
Groups performance.

Directors Responsibility Statement in respect

of the preparation of the Annual Financial
Statements
The Board is responsible for ensuring that the
financial statements of the Group give a true and fair
view of the state of affairs of the Group and of the
Bank as at the end of the accounting period and of
the profit and loss and cashflow for the period then
ended.
In preparing the financial statements, the Directors
have applied suitable accounting policies and applied
them consistently and made judgements and
estimates that are reasonable and prudent. The
Directors have also ensured that all applicable
accounting standards have been followed and
prepared financial statements on a going concern
basis as the Directors have a reasonable expectation,
having made enquiries, that the Group has adequate
resources to continue in operational existence for the
foreseeable future.
The Directors also have responsibility for ensuring
that the Bank keeps accounting records which
disclose with reasonable accuracy the financial
position of the Group and of the Bank and which
enable them to ensure that the financial statements
comply with the provisions of the Companies Act,
1965. The Directors generally have the duty to take

Corporate Governance

Maybank Annual Report 2011

219
At A Glance

A full report of the AC outlining its role in relation to

the internal and external auditors is set out on pages
226-231 of this Annual Report.

Financial & Others

Toll Free Message Recording Line

1-800-38-8833
Protected email address
[email protected]
Secured P. O. Box Mail Address
P. O. Box 11635, 50752 Kuala Lumpur

Governance

(i)

(ii)

(iii)

External Auditors
The AC and the Board place great emphasis on the
objectivity and independence of the Banks Auditors,
namely Messrs. Ernst & Young, in providing the
relevant and transparent reports to the shareholders.
As a measure of ensuring full disclosure of matters,
the Banks Auditors are regularly invited to attend the
AC meetings (as well as the Annual General Meetings),
apart from the twice yearly discussions with the AC
without the presence of the senior management.

Leadership

The Board is satisfied that an adequate framework on

whistleblowing, specifically the Fraud Reporting Policy
is in place, which had been implemented in 2004. All
employees can raise their concerns regarding fraud,
criminal activities, dishonesty and malpractice
committed by another employee or any person who
has dealings with the Group via the following Fraud
Reporting Hotline established by the Bank:-

Responsibility

Whistleblowing Policy

Business Review

The Statement on Internal Control is furnished on

page 222 of this Annual Report, and this provides an
overview of the state of internal controls within the
Group.

Performance

The systems of internal controls are continuously

reviewed to ensure that they are working via the
ongoing review through internal audit process. The
Audit Committee (AC) regularly evaluates the
effectiveness and adequacy of the Groups internal
control systems by reviewing the actions taken on
internal control issues identified in reports prepared
by Group Internal Audit during its monthly meetings.
The AC also reviews audit recommendations and
managements responses to these recommendations.

Relationship with the Auditors

Internal Auditors
The Group Internal Audit function is independent of
the activities or operations of other operating units
and reports functionally to the Audit Committee (AC)
of the Bank and has unrestricted access to the AC. The
Group Internal Audit regularly audits the risk
management, operating effectiveness of internal
controls, compliance with internal and regulatory
requirements across the Bank and the Group. The
audit reports which provide the results of the audit
conducted along with audit recommendations and
managements responses to these recommendations
are tabled to the AC on monthly basis. The Chief
Audit Executive is invited to attend the AC meetings
to facilitate the deliberation of the audit reports. The
minutes of the AC meetings are subsequently tabled
to the Board for information and serve as useful
references especially if there are pertinent issues that
the AC members wish to highlight to the full Board.

Strategy

The Board has overall responsibility for maintaining

sound internal control systems that cover financial
controls, operational and compliance controls and risk
management to ensure shareholders investments,
customers interests and the Groups assets are
safeguarded.

Who We Are

Internal Controls

The above mechanism protects employees who

contemplate to blow the whistle against
victimisation or harassment. The confidentiality of all
matters raised and the identity of the whistleblower
are protected under the Policy. Concerns raised
anonymously may also be considered provided they
are clear and specific. Further details of the Fraud
Reporting Policy are set out on page 223 of this
Annual Report.

Our Perspective

such steps as are reasonably open to them to

safeguard the assets of the Group to prevent and
detect fraud and other irregularities.

AGM Information

220

Maybank Annual Report 2011

Corporate Governance

Statement on
Corporate Governance

Maybank Groups Code of Ethics and Conduct

Apart from the Directors Code of Ethics as set out in
the BNM/GP7-Part 1 Code of Ethics: Guidelines on the
Code of Conduct for Directors, Officers and Employees
in the Banking Industry, and the Company Directors
Code of Ethics established by the Companies
Commission of Malaysia, the Group also has a Code of
Ethics and Conduct that sets out the sound principles
and standards of good practice in the financial
services industry, which are observed by the Directors
and employees. Both Directors and employees are
required to uphold the highest integrity in
discharging their duties and in dealings with
stakeholders, customers, fellow employees and
regulators. This is in line with the Groups Core Values
which give emphasis on behavioural ethics when
dealing with third parties and fellow employees.
The Group communicates the Code to all employees
upon commencement of their employment and is
deemed to be part of the Terms and Conditions of
Service. Further details of the Code of Ethics and
Conduct can be found on page 21 of this Annual
Report.
During the year, the Bank organised various activities
and workshops conducted by the relevant
departments/units to reinforce and renew the
commitment of the Directors and employees to
uphold the Code as a reflection of professionalism
and a lasting impression when dealing with
customers, colleagues, shareholders, suppliers,
communities and the environment.

Corporate Responsibility
The Board is satisfied that a good balance has been
achieved between value creation and corporate
responsibility. Details of the Groups corporate
responsibility initiatives are set out on pages 170-176
of this Annual Report.

ADDITIONAL COMPLIANCE
INFORMATION AS AT 30 JUNE 2011
1. Utilisation of Proceeds
(a) Maybank Islamic Berhad (MIB)s Issuance
of Tier 2 Capital Islamic Subordinated Sukuk
of RM1.0 billion in Nominal Value
(Subordinated Sukuk) issued on
31 March 2011.

The proceeds from the issuance of the

Subordinated Sukuk will be used for MIBs
working capital, general banking, business
banking, business expansion programme,
and other corporate purposes.

(b) SGD1.0 billion Tier 2 Capital Subordinated

Notes issued on 28 April 2011.

The proceeds raised from the SGD

Subordinated Notes will be utilised to fund
Maybanks working capital, general
banking, and other corporate purposes.

(c) Dividend Reinvestment Plan (DRP)

Ongoing

The net proceeds from the DRP (after

deducting estimated expenses for the DRP)
will be utilised to fund the continuing
growth and expansion of the Maybank
Group.

(d) Bank International Indonesia (BII)s

issuance of IDR1.5 trillion subordinated
debt due in May 2018 issued on
19 May 2011.

The proceeds from the issuance of the

subordinated debt will be used for BIIs
working capital and general banking
requirements.

coRpoRAte GoveRnAnce

Maybank Annual Report 2011

221
At A Glance

Share Buy-back

8.

3.

imposition of sanctions and/or penalties

non-audit fees
Non-audit fees payable to the external auditors,
Ernst & Young, for the year amounted to
RM3,863,000 for the Group and RM3,161,000 for
the Bank.

variation in results
There was no profit forecast issued by Maybank
and its subsidiary companies during the year.

7.

10. Recurrent Related party transactions of a

Revenue or trading nature (RRpt)
The Company did not seek any mandate from its
shareholders nor enter into RRPT, which are
necessary for its day-to-day operation on terms
not more favourable to the related party than
those generally available to the public and are
not to the detriment of the minority
shareholders for the financial year under review.
This statement is made in accordance with a
resolution of the Board dated 22 August 2011.

profit guarantee
tan Sri dato Megat zaharuddin
Megat Mohd nor
Chairman of the Board

Leadership

There was no profit guarantee issued by

Maybank and its subsidiary companies during
the year.

Responsibility

6.

The Company does not value its landed

properties classified as Property and Equipment.
The revaluation policy on landed properties
classified as Investment Properties are disclosed
in Note 3 (xii) of the financial statements.

Business Review

5.

valuation policy

Performance

There were no sanctions and/or penalties

imposed on Maybank and its subsidiaries,
directors or management by the relevant
regulatory bodies, which were made public
during the financial year under review.

9.

Strategy

4.

There were no material contracts entered into by

the Company and its subsidiaries involving
Directors and substantial shareholders, either still
subsisting at the end of the financial year under
review or entered into since the end of the
previous financial year.

options, warrants or convertible

securities
Maybank did not issue any options, warrants or
convertible securities during the financial year
ended 30 June 2011, save and except for the
options issued pursuant to the Employees Share
Scheme.

Material contracts

Who We Are

Maybank did not make any proposal for share

buy-back during the financial year under review.

Our Perspective

2.

Governance
Financial & Others
AGM Information

222

Maybank Annual Report 2011

Corporate Governance

Statement on
Internal Control
Introduction
This Statement on Internal Control is made
pursuant to Bursa Malaysia Securities Berhad
Listing Requirements requires the Board to
include in its Company Annual Report a
statement about the state of its internal
control. The revised Malaysian Code on
Corporate Governance (2007) requires all
listed companies to maintain a sound system
of internal control to safeguard shareholders
investment and the companys assets.

Accordingly, the Board is pleased to provide the

Statement on Internal Control (Statement) that was
prepared in accordance with the Guidance for
Directors of Public Listed Company issued by Bursa
Malaysia Securities Berhad which outlines the
processes to be adopted by the Board in reviewing
the adequacy and integrity of the system of internal
control of the Group.

Responsibility
The Board acknowledges its overall responsibility for
maintaining sound internal control systems to
safeguard the shareholders interest and the Groups
assets. The Board is of the view that the internal
control framework is designed to manage the Groups
risks within an acceptable risk profile, rather than
eliminate the risk of failure to achieve the policies,
goals and objectives of the Group. It can therefore
only provide reasonable, rather than absolute
assurance of effectiveness against material
misstatement of management and financial
information or against financial losses and fraud.

The Board has established appropriate control

structure and process for identifying, evaluating,
monitoring and managing significant risks that may
affect the achievement of business objectives. The
control structure and process which has been
instituted throughout the Group is updated and
reviewed from time to time to suit the changes in the
business environment and this on-going process has
been in place for the whole financial year under
review.
The role of Management includes:
identifying and evaluating the risks faced;
formulating related policies and procedures to
manage these risks;
v
designing, operating and monitoring a suitable
system of internal controls; and
v
implementing the policies approved by the
Board
v

Corporate Governance

Maybank Annual Report 2011

223
At A Glance

The Board has also delegated the responsibility

of reviewing the effectiveness of risk
management to the Risk Management
Committee (RMC). The effectiveness of the risk
management system is monitored and evaluated
by the Group Risk Management function, on an
ongoing basis. The RMC assists the Board to
review and oversee the effectiveness of the risk
management of the Bank, wherein the Group
Risk Management function would facilitate to
institutionalise the continuous monitoring and
evaluating of the banks risk management
system. Any approved policy and framework
formulated to identify, measure and monitor
various risk components would be reviewed and
recommended by the RMC to the Board.
Additionally, the RMC reviews and assesses the
adequacy of these risks management policies
and ensures infrastructure, resources and
systems are emplaced for risk management.

Establishment of the three (3) lines of Defence

concept risk taking units, risk control units and
internal audit. The risk taking units manage the
day-to-day management of risks inherent in their
business activities while the risk control units are
responsible for setting the risk management
framework and developing tools and
methodologies. Complementing this is internal
audit, which provides independent assurance of
the effectiveness of the risk management
approach.

During the year, the Risk Management function

was strengthened with the recruitment of a
Group Chief Risk Officer (GCRO). The GCRO has
an oversight of credit and risk management
across the Group, as the Group expands its
business regionally. The GCROs role is also to

Financial & Others

There is an Anti-Fraud Framework implemented

which provides broad principles, strategy and
policy for the Group to adopt in relation to fraud
in order to promote high standard of integrity.
The Framework establishes robust and
comprehensive programmes and controls for the
Group as well as highlights the roles and
responsibilities at every level for preventing and
responding to fraud.

Governance

Leadership

A written Management Control Policy (MCP) and

Internal Control Policy (ICP) from Management
are in place. The MCP outlines the specific
responsibilities of the various parties i.e. the
Management, the Internal Audit Committee and
the Audit Committee of the Board pertaining to
internal control for Maybank Group. The ICP is to
create awareness among all the employees with
regards to the internal control components and
the basic control policy of Maybank Group.

Responsibility

The Board has established an organisation

structure with clearly defined lines of
responsibility, authority limits and accountability
aligned to business and operations requirements
which support the maintenance of a strong
control environment. It has extended the
responsibilities of the Audit Committee (AC) to
include the assessment of internal controls,
through the Internal Audit (IA) function.

Business Review

Risk Management Framework

Performance

Risk management principles, policies, procedures

and practices are updated regularly to ensure
relevance and compliance with current/
applicable laws and regulations, and are made
available to all employees. The Group also
adopted a whistle blowing policy, providing an
avenue for employees to report actual or
suspected malpractice, misconduct or violations
of the Groups policies and regulations in a safe
and confidential manner.

Strategy

Who We Are

The key processes that the Board have established in

reviewing the adequacy and integrity of the system of
internal controls include the following:-

better align risk management to the business to

make risk management more strategic within
the Group.

Our Perspective

Control Structure

AGM Information

224

Maybank Annual Report 2011

Corporate Governance

Statement on
Internal Control

Internal Audit Function

v

The Internal Audit function includes undertaking

regular reviews of the Groups operations, the
systems of internal control by performing regular
reviews of the business processes to examine
and evaluate the adequacy and efficiency of
financial and operating controls and highlights
significant risks and non compliance impacting
the Group. Where applicable, they provide
recommendations to improve on the
effectiveness of risk management, control and
governance process. Management will follow up
and review the status of actions on
recommendations made by the internal and
external auditors. Audits are carried out on units
that are identified premised on a risk based
approach, in cognisance with the Groups
objectives and policies in the context of its
evolving business and regulatory environment,
taking into consideration input of the senior
management and the Board.
The Internal Audit Committee (IAC) is a
management committee chaired by the GCFO
and comprises senior level representatives from
a broad range of business and support units of
the Bank. The IAC meets every fortnight to
deliberate on the findings of all signed audit and
investigation reports and decide on the
appropriate action required to resolve audit
issues covering all aspects of the Banks business
and operations. Where required, representatives
from the parties being audited are requested to
attend the IAC meeting to enable more detailed
deliberation and speedy resolution of the matter
at hand. Minutes of the IAC meeting are then
tabled to the ACB together with the audit
reports. The IAC also follows up on the actions
required by the ACB.
The Audit Committee of the Board (ACB) meets
on a monthly basis to review the internal control
issues identified in reports prepared by Internal
Audit, the external auditors, regulatory
authorities and further evaluates the
effectiveness and adequacy of the Groups
internal control system. The ACB has active
oversight on the internal audits independence,
scope of work and resources. It also reviews the

Internal Audit function, particularly the scope of

the annual audit plan and frequency of the
internal audit activities. The minutes of the Audit
Committee meetings are tabled to the Board on
a monthly basis. The details of the activities
undertaken by the ACB are highlighted in the
Audit Committee Report.

Other key elements of internal control

The other key elements of the procedures established
by the Board that provides effective internal control
include:v

An annual business plan and budget is

submitted to the Board for approval. Actual
performances are reviewed against the targeted
results on a monthly basis allowing timely
responses and corrective actions to be taken to
mitigate risks. The Board reviews regular reports
from the management on the key operating
statistics, as well as legal and regulatory matters.
The Board also approves any changes or
amendments to the Groups policies.

Several Board Committees are set up to assist

the Board to perform its oversight function
namely Credit Review Committee, Nomination
and Remuneration Committee and Employee
Share Scheme Committee. Specific
responsibilities have been delegated to these
Board Committees, all of which have formalised
terms of reference. These Committees have the
authority to examine all matters within their
scope and report to the Board with their
recommendations. For more details on the
various Board Committees, please refer to pages
213 to 216.

Various Executive Level Management

Committees (ELC) are also established by
Management to assist and support the various
Board Committees to oversee the core areas of
business operations. These ELCs include the
Group Executive Committee, Group Management
Credit Committee, Executive Risk Committee,
Asset & Liability Management Committee, Group
Procurement Committee, Group IT Steering
Committee, Group Staff Committee and Human
Resource Disciplinary Committee.

Corporate Governance

Maybank Annual Report 2011

225
At A Glance

There are policies and procedures in place to

ensure compliance with internal control and the
prescribed laws and regulations. These policies
and procedures are set out in the Groups
Standard Practice Instruction and are updated
from time to time in tandem with changes to
the business environment or regulatory
guidelines.

Review of the Statement by

External Auditors

Governance
Financial & Others

The external auditors conducted the review in

accordance with the Recommended Practice Guide 5:
Guidance for Auditors on the Review of Directors
Statement on Internal Control (RPG 5) issued by the
Malaysian Institute of Accountants. The review has
been conducted to assess whether the Statement on
Internal Control is both supported by the
documentation prepared by or for the Directors and
appropriately reflects the processes the Directors had
adopted in reviewing the adequacy and integrity of
the system of internal controls of the Group.

Leadership

The external auditors have reviewed this Statement

on Internal Control for inclusion in the annual report
for the financial year ended 30 June 2011.

Responsibility

Based on their review, the external auditors have

reported to the Board that nothing had come to their
attention that causes them to believe that the
Statement on Internal Control is inconsistent with
their understanding of the processes the Board have
adopted in the review of the adequacy and integrity
of the internal control of the Group.

Business Review

A clearly defined framework with appropriate

empowerment and authority limits has been
approved by the Board for acquisitions and
disposals of assets, awarding tenders, writing off
operational and credit items, donations, as well
as approving general and operational expenses.

Performance

Strategy

RPG 5 does not require the external auditors to

consider whether the Directors Statement on Internal
Control covers all risks and controls, or to form an
opinion on the effectiveness of the Groups risk and
control procedures. RPG 5 also does not require the
external auditors to consider whether the processes
described to deal with material internal control
aspects of any significant matters disclosed in the
annual report will, in fact, mitigate the risks identified
or remedy the potential problems.

Who We Are

Recruitment and promotion policies/guidelines

within the Group are established to ensure
appropriate persons of calibre are selected to fill
available positions. Formal training programmes
either face-to-face or through e-learning, semi
and annual performance appraisals and other
relevant procedures are in place to ensure that
staff are competent and adequately trained to
enable them to discharge their duties and
responsibilities effectively. Proper guidelines are
also drawn up for termination of staff.

Our Perspective

AGM Information

226

Maybank Annual Report 2011

Corporate Governance

Audit
Committee Report

The Audit Committee Members of Maybank from left to right:

Tan Sri Datuk Hadenan A. Jalil (Chairman), Cheah Teik Seng (Member), Dato Johan Ariffin (Member) and
Sreesanthan Eliathamby (Member)

A. COMPOSITION AND TERMS OF

REFERENCE
Composition
1.

The Committee shall be appointed by the Board

of Directors from amongst its non-executive
directors and shall consist of at least (3) three
members. The Chairman and the majority of the
Audit Committee members must be
independent directors and at least one (1)
member of the committee must be:v
a member of the Malaysian Institute of
Accountants (MIA); or
v
if he is not a member of the MIA, he must
have at least three (3) years working
experience; and
i.
he must have passed the
examinations specified in Part I of the
First Schedule of the Accountants Act,
1967; or
ii he must be a member of one (1) of
the associations of accountants
specified in Part II of the First
Schedule of the Accountants Act,
1967.

2.

Where the Chairman is unable to attend the

meeting, the members shall elect a person
among themselves as Chairman.

3.

Review of membership is undertaken once every

three (3) years. This review pertains to the terms
of office and performance of the members.

Meetings
1.

Meetings shall be held at least once a month or

at a frequency to be decided by the Committee
and the Committee may invite any person to be
in attendance to assist in its deliberations. At
least once a year, the Committee shall meet with
the external auditor without the presence of
Management.

2.

The Committee will regulate its own procedure

particularly with regard to the calling of
meetings, the notice to be given of such
meetings, the voting and proceedings of such
meetings, the keeping of minutes, and, the
custody, production and inspection of such
minutes.

3.

Upon the request of the external auditor, a

meeting is to be convened to consider any
matter that the auditor believes should be
brought to the attention of the directors and
shareholders.

Corporate Governance

Maybank Annual Report 2011

227
At A Glance

1. Internal Audit

Review the internal audit reports and to

ensure that appropriate and prompt
remedial action is taken by Management
on lapses in controls or procedures that are
identified by internal audit.

Approve the appointment or termination of

the Chief Audit Executive and Heads of
Department of Internal Audit.

Assess the performance of the internal

auditor; determine/approve the
remuneration and annual increment of the
internal auditor.

Take cognisance of resignation of internal

audit staff and the reason for resigning.

The General Counsel & Company Secretary, En. Mohd

Nazlan bin Mohd Ghazali is the Secretary to the ACB.

Authority
The Committee is authorised by the Board to:
1

Investigate any activity or matter within its terms

of reference.

2.

Promptly report to Bursa Malaysia Securities

Berhad (Bursa Securities) matters which have
not been resolved satisfactorily, thus, resulting in
a breach of the Bursa Securities Listing
Requirements.
Obtain external independent professional advice,
legal or otherwise deemed necessary.

4.

Maintain direct communication channels with

external auditors, person(s) carrying out the
internal audit function or activity, and with
senior management of the Bank and its
subsidiaries.

5.

Assess the qualification, expertise, resources

and effectiveness of the external auditors.

Monitor the effectiveness of the external

auditors performance and their
independence and objectivity.

Review the external auditors audit scope

and plan, including any changes to the
planned scope of the audit plan.

Review major audit findings raised by the

external auditors and Managements
responses, including the status of previous
audit recommendations.

B. DUTIES & RESPONSIBILITIES

AGM Information

The primary duties and responsibilities of the ACB

with regards to the Maybank Groups Internal Audit
function, external auditors, financial reporting, related
party transactions, annual reporting and investigation
are as follows:-

Financial & Others

Review the appointment and performance

of external auditors, the audit fee and any
question of resignation or dismissal and to
make recommendations to the Board.

Governance

In discharging the above functions, the ACB has also

been empowered by the Board to have:v
Necessary resources which are required to
perform its duties.
v
Full and unrestricted access to any information
and documents relevant to its activities.

Leadership

Convene meetings with internal and external

auditors, without the attendance of the
management, whenever deemed necessary.

2. External Audit

Responsibility

3.

Business Review

Secretary

Performance

Review the adequacy of the internal audit

scope and plan, functions and resources of
the internal audit function, Internal Audit
Charter and that it has the necessary
authority to carry out its work.

Strategy

Who We Are

The quorum shall be two (2), both of whom are to be

independent directors.

Our Perspective

Quorum

228

Corporate Governance

Maybank Annual Report 2011

Audit
Committee Report

Review the assistance given by the Groups

officers to the external auditors and any
difficulties encountered in the course of the
audit work, including any restrictions on
the scope of activities or access to required
information.

Attendance of meetings
A total of sixteen (16) meetings were held during the
Financial Year. The details of attendance of each of the
member at the Committee meetings held during the
year are as follows:-

Approve non audit services provided by the

external auditors.

Composition and
name of
committee member

3. Financial Reporting

Review the quarterly and year-end financial

statements focusing on:v
any changes in accounting policy and
practices.
v
significant and unusual events and
v
compliance with applicable Financial
Reporting Standards and other legal and
regulatory requirements.

1.

2.

4. Related Party Transactions

Review any related party transactions and

conflict of interest situations that may arise
within the Bank or Maybank Group including
transactions, procedures or courses of conducts
that may raise questions of Managements
integrity.

3.

4.

5. Annual Report

Report the Audit Committees activities for the

financial year.

5.

6. Investigation

Instruct the conduct of investigation into any

activity or matter within its terms of reference.

7. Other Matters

Other matters as the Committee considers

appropriate or as authorised by the Board of
Directors.

C. ACTIVITIES OF THE AUDIT

COMMITTEE DURING THE YEAR
During the year under review, the Audit Committee in
the discharge of its duties and functions carried out
the following activities:

6.

Tan Sri Datuk Dr Hadenan A. Jalil

(Chairman)
Appointed on 15/7/2009
Independent Non-Executive
Director
En Cheah Teik Seng (member)
Appointed on 26/8/2009
Independent Non-Executive
Director
Dato Johan Ariffin (member)
Appointed on 26/8/2009
Independent Non-Executive
Director
En Sreesanthan Eliathamby
(member)
Appointed on 27/10/2010
Non-Independent Non-Executive
Director
En Zainal Abidin Jamal (member)
Appointed on 22/7/2009 and
ceased to be a member w.e.f.
27/10/2010
Non-Independent Non-Executive
Director
Dato Seri Ismail Shahudin (member)
Appointed on 15/7/2009 and
ceased to be a member w.e.f.
16/7/2010
Independent Non-Executive
Director

No. of
meetings
attended
whilst
in office
15/16

15/16

14/16

10/11

4/5

1/1

The Audit Committee consists of three (3)

Independent Non-Executive Directors and one (1)
Non-Independent Non-Executive Director. One of the
members (En Cheah Teik Seng) is a Fellow of the
Institute of Chartered Accountants in England and
Wales. This meets the requirement of the Bursa

Corporate Governance

Maybank Annual Report 2011

229
At A Glance

2.

Reviewed the internal audit reports, audit

recommendations and managements responses
to these recommendations.

4.

Reviewed the monthly audit performance

reports to ensure the adequacy, performance,
progress, achievement, coverage of the internal
audit functions and noted the reasons for the
resignation of audit staff.

5.

Financial Reporting
11. Reviewed the quarterly unaudited financial
results and the annual audited financial
statements of the Bank and the Maybank Group
to ensure that the financial reporting and
disclosure requirements are in compliance with
accounting standards, with special focus placed
on changes in accounting policy, as well as
significant and unusual events/transactions.

External Audit
12. Reviewed with the external auditors:v
The Audit Planning Memorandum and
scope of work for the year.
v
The results of the audit, the relevant audit
reports and Management Letters together
with Managements responses/comments
to the findings.
13. Approved the non-audit services provided by
the external auditors.
14. Evaluated the performance of the external
auditors and made recommendations to the
Board on their nomination or re-appointment,
scope of work and audit fees, as well as change
of external auditor(s) where appropriate.

AGM Information

Reviewed the audit reports issued by regulatory

authorities, Managements responses to the
Regulators recommendations and the remedial
actions taken to rectify the weaknesses detected.

10. Reviewed the minutes of meetings of the

Internal Audit Committee for an overview of the
deliberation and remedial actions taken by
Management on the control lapses raised by
internal auditors.

Financial & Others

Reviewed the status report on Managements

efforts to rectify the outstanding audit issues to
ensure control lapses are addressed.

Reviewed the Audit Committee Report and

Statement on Internal Control.

Governance

3.

9.

Leadership

Reviewed the annual internal audit plan for

FY2011 to ensure adequate scope, coverage over
the activities of the Bank and the Group and the
resource requirements of internal audit to carry
out its functions.

Instructed the conduct of investigation into any

activity or matter within its terms of reference.

Responsibility

1.

8.

Business Review

Internal Audit (IA)

Provided independent evaluation on the

performance and remuneration package of audit
staff in accordance with the regulatory
requirements.

Performance

The Audit Committee also meets to discuss and

review the quarterly unaudited financial results and
the annual audited financial statements of the Bank
and the Maybank Group. The President & Chief
Executive Officer (PCEO) and the Group Chief Financial
Officer (GCFO) are invited to attend these meetings,
together with the External Auditors.

7.

Strategy

In addition to the monthly scheduled meetings, the

members of the Audit Committee also had two (2)
one-to-one sessions with the External Auditors
without the presence of the Management as required.

Reviewed the minutes of meetings of the

subsidiary companies ACB for an overview of the
risk management and internal control systems of
those subsidiary companies.

Who We Are

The Audit Committee meets on a scheduled basis at

least once a month. The Group Chief Financial Officer
(GCFO) and the Chief Audit Executive (CAE) are invited
to attend the meetings. The External Auditors are also
invited to discuss their management letters, Audit
Planning Memorandum and other matters deemed
relevant.

6.

Our Perspective

Securities Listing Requirements which requires at least

one qualified accountant as a member of the Audit
Committee.

230

Maybank Annual Report 2011

Corporate Governance

Audit
Committee Report

Employee Share Scheme (ESS)

15. Reviewed the allocation to ensure that it is
consistent with the approved matrix.

Directors Training
16. The training attended by the Committees is
reported under the Statement on Corporate
Governance in page 212.

D. INTERNAL AUDIT FUNCTION

The Group has a well established in-house Internal
Audit (IA) to assist the Board of Directors to oversee
that Management has in place a sound risk
management, internal control and governance
system. The total costs incurred for maintaining the IA
function for the year under review was approximately
RM33.0 million, comprising mainly salaries, travelling
and accommodation expenses and subsistence
allowances for audit assignments.
The internal audit function is guided by its Audit
Charter and reports functionally to the ACB of the
Bank and administratively to the President & Chief
Executive Officer, and is independent of the activities
or operations of other operating units. The principal
responsibility of IA is to undertake regular and
systematic reviews of the systems of internal control,
so as to provide reasonable assurance that such
systems continue to operate efficiently and effectively.
The scope of coverage of IA encompasses all units
and operations of the Bank, including the subsidiaries.
The selection of the units to be audited from the
audit universe leading to the formulation of the audit
plan is premised on a risk based approach and it is
the responsibility of the IA to provide the ACB with an
independent and objective report on the state of
affairs of the risk management, internal control and
governance processes.
The internal audit function for Maybank operations
and its subsidiary companies in Malaysia and Papua
New Guinea is organised on a Group basis within
Maybank. Technical support in the areas of credit risk,
market risk, information technology systems and
developmental initiatives are centrally driven to
ensure consistency of standards and applications.
When approving the Annual Audit Plan, the ACB
reviews Maybank IAs human resource requirements to
ensure that the function is adequately and

appropriately resourced. The internal audit functions

for the respective subsidiary companies in Philippines,
Indonesia, Singapore and Thailand are organised and
supported by the respective resident internal audit
teams with direct accountability to the respective
Board Audit Committees of these subsidiary
companies.
The audit reports which provide the results of the
audit conducted in terms of the risk management of
the unit, operating effectiveness of internal controls,
compliance with internal and regulatory requirements
and overall management of the unit are submitted to
the respective ACB for their review. Key control issues,
significant risks and recommendations are
highlighted, along with Managements responses and
action plans for improvement and/or rectification,
where applicable. This enables the ACB to execute its
oversight function by forming an opinion on the
adequacy of measures undertaken by Management.
The International Professional Practices Framework
(IPPF) issued by The Institute of Internal Auditors (IIA),
the Practice Advisories issued by the IIA, the
Guidelines on Internal Audit Functions, Bank Negara
Malaysias Guidelines on Internal Audit Function of
Licensed Institutions and Guidelines on Management
of IT Environment are used where relevant as
authoritative guides for internal auditing procedures.
During the year under review, the following activities
were carried out by IA:1.

Executed independent assurance role through

programmed reviews of units and operations
identified on a risk based audit approach in the
annual audit plan, to evaluate and improve the
effectiveness of risk management, internal
control and governance processes.

2.

Reviewed the adequacy and appropriateness of

the internal controls and risk exposures in the
new products/financing packages.

3.

Ascertained the extent of compliance with

established policies and procedures and
statutory requirements.

Corporate Governance

Maybank Annual Report 2011

231
At A Glance

5.

Carried out ad hoc assignments and special

reviews as instructed by the ACB.

6.

Recommended improvements and

enhancements to the existing system of internal
control and work procedures/processes.

7.

Developed an annual audit plan premised on a

risk based approach and in cognisance with the
Groups objectives and policies in the context of
its evolving business environment, taking into
consideration input from Senior Management
and the ACB.

Performance

8.

Carried out audit investigation into activities or

matters as instructed by the ACB and Senior
Management.

Business Review

9.

Witnessed the tender opening process for

procurement of services.

Responsibility

10. Preparation of Audit Committee Report and

Statement on Internal Control for the Companys
FY2011 Annual Report.

Who We Are

Besides the risk assurance activities, IA also

conducts audits on computer hardware,
operating and application systems as well as the
information communication technology (ICT)
network of Maybank Group.

Strategy

Our Perspective

4.

Leadership
Governance
Financial & Others
AGM Information

232

Maybank Annual Report 2011

Corporate Governance

Risk
Management
Key Highlights:

> Migrated successfully to Basel II Internal Ratings

Based approach for credit risk for risk weighted assets

computation;

We are strengthening our risk management

foundation and building from our current
capabilities to align and work more
effectively with our business to embed
risk management into the DNA of the
organisation so that we are able to better
optimise our risk-returns to create value
and to serve our customers better across the
Group
Dr John Lee
Group Chief Risk Officer

> Improved collaboration with business to streamline our

credit policies for better management of our credit risk
and reviewed our lending authority limits to be more
responsive to our customers;

> Strengthened our capital management framework to

ensure we have a robust capital structure in view of

our growth plans, and to better prepare for the Basel III
regime; and

> Enhanced our stress testing framework to better plan

and prepare the Group for unanticipated events that

could have an impact on the Group, particularly given
the current volatile environments.

Corporate Governance

Maybank Annual Report 2011

233
At A Glance
Our Perspective

Overview

Regulatory Landscape

Stricter capital requirements in terms of quality and quantity under the new Basel III regime.
Greater regulation of financial services industry.
v Increased focus on Pillar 2 and internal capital management process.
v

Increasing competition locally and regionally.

Global deleveraging process to continue to soften recovery of financial sector.
v Inflationary pressures are expected to increase.
v Volatile commodity and energy markets are expected.
v

Key Banking Trends

Leading players gaining traction regionally.

Enhanced consumer protection rules.
v Competition for cheaper sources of funding regionally.
v Focus on the higher risk SME sector.
v

Some of the key risk achievements and measures

undertaken by the Group during the year include:

The Bank and its Malaysian subsidiaries

implemented Pillar 3 disclosures based on IRB
approach.

The Bank and its Malaysian subsidiaries have

embedded the Internal Capital Adequacy
Assessment Process (ICAAP) in stages since 2008.

The Group continues to actively benchmark

against leading practices as announced by major
institutions such as the Basel Committee for
Banking Supervisors, Institute of International
Finance and international regulators, to produce
the best in house practice and stay ahead of the
curve.

AGM Information

The Bank and its Malaysian subsidiaries

successfully implemented the Risk Weighted
Capital Adequacy Framework (RWCAF) reporting
based on Basel II to BNM.

The Group has further enhanced its tools and

frameworks to cater for prudent liquidity
management and diversification of funding (by
tenor, product and customer type). During the
year, Maybank was awarded the Asian Bankers
Best Deposit Product and Liability Management
Award for the Asia Pacific region.

Financial & Others

Governance

Bank Negara Malaysia (BNM) formally approved

Maybank and Maybank Islamics application to
migrate fully to the Basel II Internal Ratings
Based (IRB) approach for credit risk from 1 July
2010.

The Group has integrated robust and regular

stress testing to help plan and prepare for future
events that could have an impact on the
organisation, particularly in volatile
environments.

Leadership

Responsibility

The Group continues to plan, monitor and respond to

these internal and external risk factors in an
anticipative manner.

Business Review

Performance

External Competitive
Environment

Strategy

During the year, some of the major risk factors impacting the Groups business operations include:

Who We Are

The Maybank Group takes proactive measures to manage various risks posed by the rapidly
changing business environment. These risks, which include credit risk, market risk, liquidity risk,
reputational risk, business risk, strategic risk and operational risk, are systematically managed
within the Groups risk governance, infrastructure and tools.

234

Maybank Annual Report 2011

Corporate Governance

Risk
Management

Moving On FY2012
As part of our risk management strategic initiatives, Maybank Group has embarked on a Risk
Transformation Programme (RTP).
The key objectives of the RTP is to redesign the current state risk architecture of the Group to
align the capabilities of the Group risk function to the strategic aspirations of the Group. The RTP
is aimed at enhancing our overall risk management processes globally, increase our ability to
manage risks in all markets that we operate in, improve business responsiveness, optimise our
risk-return capabilities, and be a market leader and thought leader in risk management in the
region.

CURRENT

MEDIUM TERM

FUTURE STATE

Consolidate and deploy

Enhance and Integrate

Value Creation

Establishing the
foundation and building
on current capabilities of
Risk Management
throughout the group

CURRENT STATE

Optimising and integrating

risk into the business to
drive value creation for the
Group

Fully integrating risk as a

key driver of risk-return
optimisation focused on
value creation and active
portfolio management for
the Group and its
subsidiaries

FUTURE STATE

Corporate Governance

Maybank Annual Report 2011

235
At A Glance
Our Perspective

Enhanced Risk Governance at Group Credit & Risk Management

Who We Are

Effective 1 July 2011, the Group Credit & Risk Management team was re-organised to provide a more robust and aligned platform with
enhanced capabilities to further strengthen the risk management functions across the Group in support of the Groups regional business
aspirations.

president & ceo

GROUP CREDIT & RISK MANAGEMENT

Group Risk
Management

Group Risk
Innovation

Risk Committee
Secretariat and
Management

Credit
Evaluation

Credit
Risk
Management

PMO
Office

Risk Assurance &

Surveillance

Credit
Approving

Market
Risk
Management

Model
Development

Enterprise Risk
Management

Credit Monitoring
& Analytics

Liquidity
Risk
Management

Infrastructure and
Data Management

Leadership

Risk Policy
Management

Regional
Credit

Operational
Risk
Management

New Product &

Process
Management

Governance

Business
Continuity
Management

Research and
Knowledge
Management

Financial & Others

AGM Information

Regional
Market Risk
Management

Business Review

Group Credit
Management

Responsibility

Performance

Group
Compliance

Group
Governance &
Assurance

Resource
Management,
Finance &
Administration

Local & Overseas

Subsidiaries/
Branches

Strategy

Board of
Directors

236

Maybank Annual Report 2011

Corporate Governance

Risk
Management

Risk Governance Structures

The following chart illustrates the risk governance structures of Maybank Group.

Board of Directors
The Board of Directors is Maybank Groups ultimate governing body who has overall risk oversight
responsibility. It approves the Groups risk management framework, risk appetite, plans and performance targets
for the Group and its principal operating subsidiaries, the appointment of senior officers, the delegation of
authorities for credit and other risks and the establishment of effective control procedures.
Board Level Committees

Risk Management Committee (RMC)

The RMC is a dedicated Board Committee responsible for the risk oversight function within the Group. It is
principally responsible to review and approve key risk frameworks and policies for the various risks.

Credit Review Committee (CRC)

The Credit Review Committee (CRC) is tasked by the Board to review fresh or additional loan applications
subject to pre-determined authority limits and credit risk ratings as may be recommended by the GMCC.
Management Level Committees
Executive Risk
Committee (ERC)

Asset & Liability Management

Committee (ALCO)

Group Management Credit

Committee (GMCC)

The ERC, ALCO and GMCC are Management Level committees responsible for the management of all material
risks within the Bank. The scope of the ERC encompasses all risk types except market and liquidity risks, which
are within the purview of the ALCO. GMCC is empowered as the centralised loans approval committee for the
Group.

The Risk function is independent of the origination

and sales functions to ensure that the necessary
balance in risk/return decisions is not in any way
compromised by business pressures to generate
revenues. This is particularly crucial given that
revenues are recognised immediately while losses
arising from risk positions only manifest themselves
over time.
The Risk function is also responsible for implementing
and maintaining the Groups Risk Management
Framework, ensuring that it remains relevant and
appropriate to the Groups activities. Other functions
include administering risk-related governance and
reporting processes.

Holistic Enterprise Risk Management

Approach
In light of the Groups operating structure and
geographic expansion, the Group continuously
enhances its integrated risk management approach
towards the effective management of enterprise-wide
risks in the Group. Key components of the Enterprise
Risk Management (ERM) framework include:
v
v
v
v
v

Structured risk governance model incorporating

Board and Senior Management oversight;
Sound capital management processes;
Risk appetite statement formulation;
Review of risk-reward matrix under a riskadjusted performance measurement framework;
Comprehensive assessment of material risks;

Corporate Governance

Maybank Annual Report 2011

237
At A Glance

The Seven Broad Principles define the key principles

on accountability, independence, structure and scope.

Three Lines of Defence Concept in

Managing Risks across the Group
Entities
Approach to
Managing Risk

Organisational
Units

1st Line of Defence

Business and Support

Pillars
Risk Management and
Compliance
Internal Audit

2nd Line of Defence

3rd Line of Defence

The 1st Line of Defence is primarily responsible for

managing specific risks assumed by them in their
day-to-day activities.

Financial & Others

The 3rd Line of Defence involves internal audit, whose

task would be to independently review on the
adequacy and effectiveness of the risk management
process.

Governance

The 2nd Line of Defence provides the specialised

resources for developing risk frameworks, policies,
methodologies and tools for the management of
material risks taken by the Group as a whole.

Leadership

The risk management approach is premised on

three lines of defence risk taking units, risk
control units and internal audit.
The risk taking units are responsible for the
day-to-day management of risks inherent in
their business activities while the risk control
units are responsible for setting the risk
management frameworks and developing tools
and methodologies for the identification,
measurement, monitoring, control and pricing
of risk. Complementing this is internal audit
which provides independent assurance of the
effectiveness of the risk management
approach.
Risk management provides risk oversight for
the major risk categories including credit risk,
market risk, liquidity risk, operational risk,
reputational risk, business and strategic risk,
model risk and other industry-specific risks.

Responsibility

No. Principles

Business Review

Maybank Groups Seven Broad

Principles of Risk Management

Risk management ensures that the core risk

policies of the Group are consistent, sets the
risk tolerance level and facilitates the
implementation of an integrated risk-adjusted
measurement framework.
Risk management is functionally and
organisationally independent of the business
sectors and other risk taking units within the
Group.
The Board, through the Board Risk
Management Committee, maintains overall
responsibility for risk oversight within the
Group.
Risk management is responsible for the
execution of various risk policies and related
business decisions empowered by the Board.

Performance

In line with the ERM, the Group has adopted and

consistently practised the Seven Broad Principles of
Risk Management to ensure integration in purpose,
policy, methodology and risk culture across its
regional footprint.

Strategy

The Group views the ERM process as a structured and

disciplined approach to align strategies, policies,
processes, people and technology with the specific
purpose of evaluating all risks in line with enhancing
shareholder value.

No. Principles

Who We Are

Rigorous and regular controls, reviews,

monitoring and reporting; and
Independent reviews by internal auditors,
external auditors and the relevant supervisory
authorities.

Our Perspective

AGM Information

238

Maybank Annual Report 2011

Corporate Governance

Risk
Management

With growing emphasis on risk management to be managed at the source, the Group has reinforced the 1st Line
of Defence through the formalisation of embedded risk management units within the Business sectors.

The principal risk types facing Maybank Group are addressed within the policies and processes as highlighted
below:
Risk Type

Definition of Risk Type

Risk Mitigation Strategies

Credit Risk

Credit Risk is the risk that the Bank will suffer

a financial loss in the event a customer or
counterparty fails to make a contractual
payment.

The Group has a strong credit culture which

incorporates a clear credit policy, robust credit
evaluation and approval and sound credit
portfolio management. Credit risk in the
portfolio is continuously evaluated and
reviewed by business together with risk units.
Senior management and the Board has good
oversight of the credit risks and plays an active
role in credit risk management.

Market Risk

Market risk is the risk of losses in earnings

and capital resulting from movements in
market factors such as interest rates, forex
and credit spreads.

The Group measures, manages and controls its

market risk exposure by using tools such as
VaR, PV01, Greek limits, Net Open Position
Limit, and so forth. Where appropriate, the
Group also mitigates/offsets the effect of its
currency exposures through the use of various
hedging instruments.

Operational Risk

Operational risk is defined as the risk of loss

resulting from inadequate or failed internal
processes, people and systems or from
external events. It includes legal risk, but
excludes strategic and reputational risk.

The ORM Framework is aimed at managing

operational risk throughout the Group. It is
periodically reviewed and aligned against the
Groups business strategy and directions
ensuring the business objectives and
operational risk management objectives are
aligned and consistent. Various tools and
techniques are used to minimise operational
risk to an acceptable level.

Liquidity &
Funding Risk

Liquidity risk arises when a bank is unable to

make a timely payment on any of its financial
obligations to customers or counterparties in
any currency. This may be due to the banks
inability to liquidate assets or to obtain
funding to meet its liquidity needs in a
timely manner.

The Group uses a range of tools to monitor

and control liquidity risk exposure such as
liquidity gap, early warning signals, liquidity
indicators and stress testing. The liquidity
positions of the Bank are monitored regularly
against the established policies, procedures
and limits.

Corporate Governance

Maybank Annual Report 2011

239
At A Glance

Definition of Risk Type

Risk Mitigation Strategies

Model Risk

Model Risk is defined as the risk that models

used in calculation of regulatory capital do
not meet the required standards set.

This risk is managed through ensuring there is

appropriate governance and standards on
model development, control over model
implementation and effective model validation
process and setting of model accuracy
thresholds.

Credit
Concentration
Risk

Credit concentration risk refers to the

concentration to any single exposure or
group of exposures that has the potential
to produce losses large enough to
undermine the financial health of the bank.

The Group adopts a proactive, robust and

controlled policy-driven approach in portfolio
policy development. The Groups guiding
principle in its lending activity is to diversify its
loan portfolio mix and avoid any undue
concentration of credit risks in its portfolio.
Independent assessment on the Groups
portfolio profile is undertaken to mitigate
concentration risk.

Responsibility
Leadership
Governance
Financial & Others

The Group keeps a close watch on key

regulatory developments in order to anticipate
changes and potential impact on performance
with the focus of continuously improving our
risk governance structure and framework.

Business Review

The Group has a well-established risk

governance structure and team that reviews
the overall risk appetite that is approved by
the Board. The Group adopts the Treat or
Tolerate strategies to balance risk and return
taking account of changing conditions
through the economic cycle and monitor
economic trends in market closely and
continuously review the suitability of our risk
policies and controls.

Performance

Business/Strategic The risk of current or prospective impact

Risk
on a banks earnings, capital, reputation
or standing arising from changes in the
operating environment, adverse strategic
decisions, improper implementation of
decisions or lack of responsiveness to
industry, economic or technological
changes.

Strategy

The Groups reputation is preserved through

managing all the risks that affect the Groups
reputation through good corporate
governance, effective risk management
processes and a structured management of
reputation events when they occur.

Who We Are

Reputational Risk The risk that a banks reputation is damaged

by one or more than one reputation event,
as reflected from negative publicity about
the banks business practices, conduct or
financial condition. Such negative publicity,
whether true or not, may impair public
confidence in the bank, result in costly
litigation, or lead to a decline in its customer
base, business or revenue.

Our Perspective

Risk Type

AGM Information

240

Maybank Annual Report 2011

Corporate Governance

Risk
Management

Risk Type

Definition of Risk Type

Risk Mitigation Strategies

Compliance Risk These are risks arising from non-compliance

with laws, rules, regulations or other
standards applicable to the bank.

The Compliance sector of the Group

continually reviews, enhances and implements
policies, procedures and operations to ensure
that all regulatory requirements are complied
with. The setting up of the Risk Assurance &
Surveillance function further strengthens this
mitigation process.

Effective Capital Management

Strategies
A strong capital position is essential to the Groups
business strategy and competitive position. The
Groups capital strategy focuses on long-term stability,
which enables it to build and invest in market leading
businesses.
The Groups objective in managing its capital
resources is to maintain sufficient and adequate
capital resources given current and future
requirements.
Detailed discussion on Capital Management can be
found in Note 48, page 396 of the financial
statements.

Internal Capital Adequacy Assessment

Process (ICAAP)
At Maybank Group, the overall capital adequacy in
relation to its risk profile is assessed through a process
articulated in the ICAAP. The ICAAP Framework has
been formalised and approved by the Board for
consistency and has been implemented within the
organisation to ensure all material risks are identified,
measured and reported, and adequate capital levels
consistent with the risk profiles are held.

In line with Bank Negara Malaysias Guideline on

ICAAP, the Groups ICAAP closely integrates the risk
and capital assessment processes. The ICAAP
framework is designed to ensure that adequate levels,
including capital buffers, are held to support the
Groups current and projected demand for capital
under existing and stressed conditions.
Detailed discussion on ICAAP can be found in Note
49, page 397 of the financial statements.

Regular Stress Testing

The Groups stress testing programme is embedded in
the risk and capital management process of the
Group and it is a key focus area during the capital
planning and business planning processes.
Detailed discussion on Regular Stress Testing can be
found in Note 49 (c), page 397 of the financial
statements.
For detailed disclosures on Risk Management refer to page 442
for Basel II Pillar 3 Disclosures.

Corporate Governance

Maybank Annual Report 2011

Provision of full and timely disclosure of

suspicious transactions/circumstances to the
relevant authorities as provided under all
applicable laws/respective jurisdictions;

Record keeping of all identification/transaction

details obtained for the purpose of customer
identification as well as of all documents in
accordance with statutory requirements; and

Regular communication, supplemented with

latest updates on AML/CFT and training
programs through various channels were
undertaken to raise staff awareness at all levels
within the Group.

The enterprise-wide AML/CFT programme is subject

to periodic reviews to ensure that it remains robust
and complies with the requirements of the AntiMoney Laundering and Anti-Terrorism Financing Act
2001 (AMLATFA 2001), the Financial Action Task Force
(FATF) Recommendations as well as International best
practices.
Key measures undertaken in Maybank Group include
having in place the following:

Policy and procedures which outline the roles

and responsibilities as well as establish clear
accountability of all employees within the Group;

Governance

The Group fully co-operates with the enforcement

agencies and competent authority in the investigation
of money laundering and/or financial crime.

Leadership

Customer Due Diligence measures which

emphasise the importance of ascertaining
customers identity and establishing the ultimate
economic beneficiary via documentary and/or
non documentary mechanisms;

Entities within the Group, regardless of geographic

locations, are strongly committed in ensuring
compliance with the Group-wide AML/CFT Policy as
well as applicable AML/CFT legislations within the
jurisdiction they operate in adopting the most
rigorous standards.

Responsibility

The extensive infrastructure and resources invested

reaffirms the Groups full commitment and strong
support to international efforts in combating money
laundering, the financing of terrorism and other
criminal activities.

Business Review

Performance

The Group demonstrates its full commitment and

support to high standards of compliance with the
Anti-Money Laundering/Counter Financing of
Terrorism (AML/CFT) requirements by establishing
robust and comprehensive policy, procedures,
processes and systems for the prevention and
detection of money laundering and terrorist financing
activities.

Strategy

Sophisticated filtering and effective detection

system to scrutinise customers transactions for
reporting of suspicious activities to the Financial
Intelligence Unit, Bank Negara Malaysia on
timely basis;

Who We Are

Our Perspective

Maybank Group is at the forefront of the Government

and Bank Negara Malaysias continuous initiatives and
efforts in the prevention of the use of the banking
system for illicit, laundering and terrorism financing
activities.

At A Glance

Anti-Money Laundering/
Counter Financing of Terrorism Policy

241

Financial & Others

AGM Information

Financial
Statements

243

Statement of Directors Responsibility

244

Analysis of Financial Statements

246

Directors Report

252

Statement by Directors

252

Statutory Declaration

253

Independent Auditors Report

254

Statements of Financial Position

256

Income Statements

257

Statements of Comprehensive Income

258

Consolidated Statement of Changes in Equity

260

Statement of Changes in Equity

261

Statements of Cash Flows

263

Notes to the Financial Statements

FINANCIAL STATEMENTS

Maybank Annual Report 2011

243

The directors are required by the Companies Act, 1965 and the Bursa Malaysias Listing Requirements to prepare financial statements for each financial year
which give a true and fair view of the state of affairs of the Group and the Bank at the end of the financial year and of their results and cash flows for the
financial year then ended.

The directors have the responsibility for ensuring that the Group and the Bank keep accounting records which disclose with reasonable accuracy the financial
position of the Group and the Bank which will enable them to ensure that the financial statements comply with the Companies Act, 1965 and the Bursa
Malaysias Listing Requirements.

Performance

The directors have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and the Bank and to
prevent and detect fraud and other irregularities.

Strategy

considered the applicable approved accounting standards in Malaysia;

adopted and consistently applied appropriate accounting policies;
made judgements and estimates that are prudent and reasonable; and
prepared the financial statements on a going concern basis as the Directors have a reasonable expectation, having made enquiries, that the Group and
the Bank have adequate resources to continue in operational existence for the foreseeable future.

Who We Are

In preparing the financial statements, the directors have:

Our Perspective

In Respect of the Audited Financial Statements

At A Glance

Statement of
Directors Responsibility

Business Review
Responsibility
Leadership
Governance
Financial & Others
AGM Information

244

FINANCIAL STATEMENTS

Maybank Annual Report 2011

Analysis of
Financial Statements
ANALYSIS OF SIGNIFICANT BALANCE SHEET MOVEMENTS
RM billion

Jun 11

Jun 10 Variance % Change

38.8

28.7

10.1

35.2%

10.3
61.0
254.0

8.9
54.2
205.6

1.4
6.8
48.4

15.4%
12.7%
23.6%

19.2
28.7

18.0
21.4

1.2
7.3

6.9%
33.9%

Total Assets

412.0

336.7

75.3

22.4%

Deposits from customers

Deposits and placements of
banks and Financial Institutions
Borrowings
Subordinated debts
Capital Securities
Insurance & Takaful liabilities
& policyholders funds
Other liabilities

282.0

236.9

45.1

19.0%

33.3
5.4
10.8
6.1

23.3
2.8
8.1
6.0

10.0
2.6
2.7
0.1

43.2%
92.8%
33.6%
2.8%

19.2
22.6

18.0
13.0

1.2
9.6

6.9%
73.7%

Total Liabilities

379.5

308.0

71.5

23.2%

Equity attributable to equity

holder of the Bank

31.5

27.9

3.6

12.9%

Total Liabilities and Equity

412.0

336.7

75.3

22.4%

90.1%

86.8%

3.3%

Cash and short-term funds

Deposits and placements with
Financial Institutions
Securities Portfolio
Loans, advances and financing
Life, General Takaful and Family
Takaful Fund Assets
Other Assets

Loan-to-deposit Ratio

Total Assets
For the financial year ended 30 June 2011, the Groups total assets grew by
22.4% or RM75.3 billion to RM412.0 billion. At the Bank level the total assets
rose by 18.2% or RM45.3 billion. The corresponding growth for the previous
year at the Group and Bank level were 8.4% and 4.2% respectively.
The Groups total assets growth was contributed mainly by growth in net
loans and advances of RM48.4 billion or 23.6% followed by growth in cash
and short-term funds of RM10.1 billion or 35.2% and securities portfolio of
RM6.8 billion or 12.7%.
The bulk of the Groups total assets consist of 61.7% in net loans and
advances which was higher as compared to 61.0% as at end June 2010.
Securities Portfolio
The Groups securities portfolio increased by RM6.8 billion or 12.7% mainly
due to increase in securities relating to government related papers. Around
77.4% of the securities portfolio comprised securities Available-for-Sale,
followed by 15.8% of securities Held-to-Maturity and 6.8% of securities
Held-for-Trading.
Deposits and Placements with Financial Institutions
The Groups deposits and placements with financial institutions grew by
RM1.4 billion to RM10.3 billion or 15.4%.
Life, General Takaful and Family Takaful Fund Assets
This balance sheet item grew by 6.9% to RM19.2 billion as at June 2011, in
line with the growing Insurance and Takaful business of the Group.

Loans, Advances and Financing

The Groups net loans, advances and financing for FY2011 grew 23.6% to
RM254.0 billion compared to a growth of 10.6% in the previous financial year.
The Groups gross loans grew at a faster pace of 21.7% compared to 10.3% in
the previous year as both domestic and overseas loans grew by double digit of
16.8% and 29.4% respectively.
The domestic operations growth of 16.8% was better than the 11.0% recorded
in the previous year driven by healthy loans growth in Community Financial
Services (CFS) and domestic Global Wholesale Banking of 12.9% and 25.6%
respectively. The Groups domestic gross loans growth of 16.8% was above the
industry growth of 13.5%.
Mortgage loans grew by RM4.0 billion or 11.6% compared to 9.8% in the
previous year with market share at 13.0% compared to 13.2% the previous year.
Credit card receivables for the financial year rose RM0.6 billion or 15.6%,
outperforming the industrys 12.4% growth leading to market share rising to
14.9% from 14.4% the previous year.
Automobile financing for domestic operations recorded a growth of 14.3%
compared to 12.2% in the previous financial year. As the growth exceeded the
industrys growth, market share for financing of motor vehicles rose to 18.8%
from 17.6% in June 2010.
As at June 2011, the overseas operations loan book accounted for 34.1% of the
Groups loan base from 32.3% in the previous year.
The gross loans book for Singapore recorded a growth of 25.8% or SGD4.53 billion
after registering a growth of 3.4% in FY2010. Indonesias gross loans, which was
driven mainly by Bank Internasional Indonesia recorded a growth of 25.8% or
Rp12.2 trillion. Gross loans in other overseas locations saw a growth of 38.6% or
RM4.54 billion compared to a contraction of 3.7% in the previous year.
The Groups Islamic gross financing and advances grew by 36.0% or RM12.5
billion during the year. Islamic banking constitutes a growing portion of the
Groups banking business, accounting for 18.0% of total gross loans and
financing from 16.3% in the previous year. Islamic banking gross financing
accounted for 28.1% of total domestic financing and advances compared with
24.3% in June 2010.
Post FRS139 net impaired loan ratio declined from 2.99% in September 2010 to
2.74% in December 2010, 2.39% in March 2011 and 2.25% in June 2011.
Total Liabilities
Outstanding liabilities of the Group grew by 23.2% or RM71.5 billion to RM379.5
billion. The bulk of the overall increase was attributed to a growth in deposits
from customers.
Deposits from Customers
The Groups customer deposits grew 19.0% or RM45.1 billion to RM282.0 billion
while at the Bank level it rose by 14.9% or RM26.1 billion to RM201.5 billion.
The Groups focus on growing deposits contributed to a growth of 18.3% for
demand deposits and 13.8% for savings deposits. The Banks domestic
operations remained the leader in both demand and savings deposits with
market shares of 20.5% and 27.9% compared to 20.5% and 27.7% respectively in
the previous year. Fixed deposits grew by 17.0% compared to 10.0% in the
previous year.

FINANCIAL STATEMENTS

Maybank Annual Report 2011

245
At A Glance

YoY Change
RM million

FY11

FY10 Variance % Change

415.0
127.2

6.1%
8.9%

557.3
4,114.7

424.9
3,692.7

132.4
422.0

31.2%
11.4%

Net income
13,419.8 12,323.2
Overhead expenses
(6,652.2) (5,825.5)
Operating Profit before
allowances for losses on loans 6,767.6
6,497.7
Allowance for losses on loan
(502.2) (1,226.1)
Impairment losses on
securities, net
(130.0)
(23.0)

1,096.6
(826.7)

8.9%
14.2%

269.9
723.9

4.2%
-59.0%

(107.0)

465.0%

5,248.6
121.8
5,370.4
(1,402.0)
(150.3)

886.9
13.2
900.1
(248.7)
(19.2)

16.9%
10.8%
16.8%
17.7%
12.8%

Profit after Tax and Minority

Interest (PATAMI)

4,450.3

3,818.2

632.1

16.6%

61.41

53.94

7.47

13.8%

EPS (sen)

AGM Information

Net Interest Income

Net interest income for the Group rose moderately by RM415.0 million or
6.1% even as the Group loans and debt securities grew 17.2%. This is largely
due to the narrowing in net interest margin which declined by 21 basis
points to 2.59% as a result of heightened competition for assets and deposits
in all key markets, as well as the effect of the implementation of Financial
Reporting Standards 139.

Taxation
The effective tax rate of the Group is 26.3% which is higher than the
statutory tax rate of 25% due to non-deductible expenses.

Financial & Others

6,135.5
135.0
6,270.5
(1,650.7)
(169.5)

Profit after Tax and Minority Interest (PATAMI)

The Groups PATAMI for FY2011 rose 16.6% to a record RM4.45 billion
contributed by 8.9% growth in net income and 59.0% decline in allowance
for losses on loans. This resulted in higher earnings per share of 61.4 sen
compared to 53.9 sen in FY2010.

Governance

Operating Profit
Share of profits in associates
Profit before taxation and zakat
Taxation & Zakat
Minority Interest

Loan and Financing Loss and Provisions

Allowance for losses on loans, advances and financing decreased significantly
by RM723.9 million or 59.0% to RM502.2 million. The decline was mainly due
to higher recoveries and lower allowances in the domestic banking
operations as a result of lower individual allowance and improvement in the
collective allowance. Asset quality continued to improve with net impaired
loans ratio improving to 2.25% as at 30 June 2011, compared to 2.99% as at
30 Sept 2010.

Leadership

6,770.9
1,434.7

Responsibility

7,185.9
1,561.9

Net interest income

Income from Islamic Banking
Net income from insurance
business
Non-interest income

Overhead Expenses
Overhead expenses of the Group increased by RM826.7 million or 14.2%
year-on-year compared to the previous period. Higher overhead expenses
was mainly contributed by personnel cost which grew by 22.3% to RM3,567.8
million. Other expenses component included IT expenses which rose 6.4%,
marketing expenses (9.0%) and administration, general expenses and fees &
brokerage (5.4%). The Groups cost to income ratio rose to 49.6% from 47.3%
previously as growth in expenses outpaced net income growth.

Business Review

Revenue (Net Income)

The Groups revenue (net income) registered a growth of 8.9% to RM13.4
billion in FY2011 from RM 12.3 billion in FY2010. The growth was attributed
to the growth in key component revenue generator mainly net interest
income (6.1%), income from Islamic Banking (8.9%), net income from
Insurance business (31.2%) and non-interest income (11.4%).

Non-Interest Income
Non-interest income continued to expand by RM422.0 million or 11.4% to
RM4,114.7 million compared to the previous corresponding financial year.
This was mainly due to growth in investment & trading income by 48.4%,
commission, service charges and fees (12.8%), foreign exchange profit (8.6%)
and other income (11.2%). However, this was mitigated by lower net
unrealised gain on revaluation of securities held-for-trading and derivatives.

Performance

ANALYSIS OF INCOME STATEMENT

Strategy

Shareholders Equity
The Groups shareholders equity rose by 12.9% or RM3.6 billion to RM31.5
billion mainly due to increase in share premium and share capital due to
shares issued pursuant to the Dividend Reinvestment Plans.

Net Income from Insurance business

Net income from insurance business for FY2011 increased by RM132.4 million
or 31.2% to RM557.3 million due to higher transfer of actuarial surplus from
insurance and takaful revenue account, and also the significant improvement
in the takaful businesses.

Who We Are

Deposits and Placements of Banks and Financial Institutions

This item rose by 43.2% or RM10.0 billion due to the need to access the
interbank market to fund the strong loans growth.

Islamic Banking
Income from Islamic Banking operations continued to grow, increasing by
RM127.1 million or 8.9% to RM1.561.9 million. This was attributed to the
growth of fund and fee based incomes of 53.3% and a decline in allowance
for losses on financing by 96.9%. The growth in Islamic Banking business can
be seen in its financing and advances which constituted 28.1% of total
domestic financing and advances in Malaysia as at 30 June 2011, compared
with 24.3% as at 30 June 2010.

Our Perspective

The Groups overall deposit funding mix shifted to a higher reliance on

money market deposits which grew 52.2% to RM24.6 billion. Although the
Groups higher cost fixed deposits declined to 54.2% from 55.1% of total
customer deposits in June 2010, lower cost fund consisting of savings and
demand deposits as a proportion of total customer deposits dipped slightly
to 36.1% from 37.0% in June 2010.

246

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Directors
Report
The directors have pleasure in presenting their report together with the
audited financial statements of the Group and of the Bank for the financial
year ended 30 June 2011.

Dividends
The amount of dividends paid by the Bank since 30 June 2010 were as
follows:
RM000

Principal activities
The Bank is principally engaged in the business of banking and finance in all
its aspects.
The subsidiaries are principally engaged in the businesses of banking and
finance, Islamic banking, investment banking including stock broking,
general and life insurance, general and family takaful, trustee and nominee
services, asset management and venture capital.
There were no significant changes in these activities during the financial year.

Results

In respect of the financial year ended 30 June 2010 as

reported in the directors report of that year:
Final dividend of 44 sen less 25% taxation consist of cash
portion of 4 sen (net 3 sen) per ordinary share and an
electable portion of 40 sen (net 30 sen) ordinary shares,
on 7,077,982,768 ordinary shares, declared on 29
September 2010 and paid on 20 December 2010.

2,335,734

The reinvestment rate subsequent to the completion of the

above was 88.59%.
In respect of the financial year ended 30 June 2011:

Group
RM000

Bank
RM000

Profit before taxation and zakat

Tax expense and zakat

6,270,467
(1,650,709)

4,561,429
(1,202,730)

Profit for the year

4,619,758

3,358,699

Attributable to:
Equity holders of the Bank
Non-controlling interests

4,450,278
169,480

3,358,699

4,619,758

3,358,699

There were no material transfers to or from reserves or provisions during the

financial year other than as disclosed in the financial statements.
In the opinion of the directors, the results of the operations of the Group and
the Bank during the financial year were not substantially affected by any
item, transaction or event of a material and unusual nature other than the
changes in accounting policies as disclosed in Note 3(ii) of the financial
statements.

First interim dividend of 28 sen less 25% taxation consist

of cash portion of 4 sen (net 3 sen) per ordinary shares
and electable portion of 24 sen (net 18 sen) per ordinary
share, on 7,322,240,391 ordinary shares declared on 21
February 2011 and paid on 12 May 2011.

1,537,670

The reinvestment rate subsequent to the completion of the above was

91.13%.
At the forthcoming Annual General Meeting, a final dividend in respect of
the financial year ended 30 June 2011 of 32 sen less 25% taxation on
7,478,206,067 ordinary shares, amounting to a net dividend payable of
RM1,794,769,456 (net 24 sen per ordinary share) will be proposed for the
shareholders approval.
The proposed gross dividend consists of cash portion of 4 sen (net 3 sen) per
ordinary share to be paid in cash amounting to RM224,346,182 and an
electable portion of 28 sen (net 21 sen) per ordinary share amounting to
RM1,570,423,274 which can be elected to be reinvested in new ordinary
shares in accordance with the Dividend Reinvestment Plan as disclosed in
Note 29(b) to the financial statements and subject to the relevant regulatory
approvals as well as shareholders approval at the forthcoming Annual
General Meeting.
The financial statements for the current financial year do not reflect this
proposed dividend. Such dividend, if approved by the shareholders, will be
accounted for in equity as an appropriation of retained profits in the next
financial period ending 31 December 2011. As disclosed in Note 53, the Bank
would change its financial year end from 30 June to 31 December which will
be implemented after the close of the current financial year ended 30 June
2011.

FINANCIAL STATEMENTS

247

Maybank Annual Report 2011

At A Glance
Our Perspective

Maybank Group EmployeeS Share Scheme (ESS)

During the financial year, the Bank granted five (5) tranches of ESOS amounting to 405, 308, 500 options based on the assumption that the eligible employees
met average performance target. The first tranche of ESOS amounting to 80, 871, 000 options have been vested and exercisable as at 30 June 2011, while the
remaining tranches of ESOS and the corresponding number of ESOS will be vested and exercisable upon fulfillment of predetermined vesting conditions
including service period, performance targets and performance period. Each option has an exercise price of RM8.82 and will expire on 23 June 2016.

Strategy

During the financial year, the Bank also granted a total of 3,590,000 RSU. The RSU will be vested and awarded upon fullfillment of predetermined vesting
conditions including service period, performance targets and performance period. The RSU will expire on 23 June 2018.

The names of option holders who are granted options which have been vested to subscribe for more than 150,000 ordinary shares of RM1 each during the
financial year are as follows:

Name

500

500

Lim Hong Tat

Abdul Farid bin Alias
Khairussaleh bin Ramli
John Chong Eng Chuan
Hans de Cuyper

200
200
200
200
200

200
200
200
200
200

Tengku Zafrul bin Tengku

Abdul Aziz
Sim Sio Hoong
Ahmad Shahril Azuar bin Jimin
Normala @ Noraziah binti A. Manaf
Mohd Din bin Merican
Geoffrey Micheal Steyck

192

192

150
150
150
150
150

150
150
150
150
150

All the options were granted on 23.06.2011 at an exercise price RM8.82.

Issue of share capital

The new ordinary shares issued during the financial year rank pari passu in all
respects with the existing shares of the Bank.

AGM Information

RM7,322,240,391 to RM7,478,206,067 via the issuance of 155,965,676

new ordinary shares of RM1 each arising from the Dividend
Reinvestment Plan (DRP) relating to the interim dividend of 28 sen
less 25% taxation in respect of financial year ended 30 June 2011, as
disclosed in Note 29 (a) and (b).

Tan Sri Dato Megat Zaharuddin bin Megat Mohd Nor (Chairman)
Dato Mohd Salleh bin Hj Harun (Vice Chairman)
Dato Sri Abdul Wahid bin Omar (President and Chief Executive Officer)
Tan Sri Datuk Dr Hadenan bin A. Jalil
Dato Seri Ismail bin Shahudin
Dato Dr Tan Tat Wai
Encik Zainal Abidin bin Jamal
Mr Sreesanthan Eliathamby
Dato Johan bin Ariffin
Mr Cheah Teik Seng
Mr Alister Maitland
Datuk Mohaiyani binti Shamsudin (appointed with effect from
22 August 2011)

Financial & Others

(b)

Directors
The directors who served since the date of the last report and the date of
this report are:

Governance

During the financial year, the Bank increased its issued and paid up capital
from:
(a) RM7,077,982,768 to RM7,322,240,391 via the issuance of 244,257,623
new ordinary shares of RM1 each arising from the Dividend
Reinvestment Plan (DRP) relating to the final dividend of 44 sen less
25% taxation in respect of financial year ended 30 June 2010, as
disclosed in Note 29 (a) and (b).

Leadership

Responsibility

Dato Sri Abdul Wahid bin Omar

Implementation
Granted
on 23.6.2011 and Vested 30.6.2011
000
000
000

Business Review

The Bank has been granted exemption by the Companies Commission of Malaysia from having to disclose the names of employees who have been granted
options which have been vested to subscribe for less than 150,000 ordinary shares of RM1 each during the financial year. The option holders with the number
of options granted which have been vested in respect of the ESS of 150,000 shares of RM1 each or above during the financial year include certain directors of
the Bank whose names and the number of options granted are disclosed in the section on Directors Interests in this report.

Performance

The maximum number of ordinary shares of RM1 each in the Bank available under the ESS should not exceed 10% of the total number of issued and paid-up
capital of the Bank at any point of time during the duration of the scheme. Other principal features of the ESS are disclosed in Note 29(d) to the financial
statements.

Implementation
Granted
on 23.6.2011 and Vested 30.6.2011
000
000
000 Name

Who We Are

The Maybank Group Employees Share Scheme (ESS) is governed by the by-laws approved by the shareholders at an Extraordinary General Meeting held on
13 June 2011. The ESS was implemented on 23 June 2011 and is in force for a maximum period of seven (7) years from the effective date. The ESS consists of
two (2) types of performance-based awards in the form of Employee Share Option Scheme (ESOS) and Restricted Share Unit (RSU).

248

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Directors
Report

Directors benefits
Neither at the end of the financial year, nor at any time during that year, did there subsist any arrangement to which the Bank or its subsidiary was a party,
whereby the directors might acquire benefits by means of acquisition of shares in or debentures of the Bank or any other body corporate, other than as may
arise from the share options and shares granted pursuant to the ESS.
Since the end of the previous financial year, no director has received or become entitled to receive a benefit (other than a benefit included in the aggregate
amount of emoluments received or due and receivable by the directors from the Bank and related corporations, or the fixed salary of a full time employee of
the Bank as disclosed in Note 37 to the financial statements) by reason of a contract made by the Bank or a related corporation with the director or with a firm
of which he is a member, or with a company in which he has a substantial financial interest.

Directors interests
According to the register of directors shareholdings, the interests of directors in office at the end of the financial year in shares, share options and RSU of the
Bank during the financial year were as follows:
Number of ordinary shares of RM1 each

1.7.2010

Acquired

Issued
pursuant
to DRP

Tan Sri Dato Megat Zaharuddin bin Megat Mohd Nor

Dato Mohd Salleh bin Hj Harun
Dato Seri Ismail bin Shahudin
Mr Sreesanthan Eliathamby
Dato Johan bin Ariffin

32,950
287,781
21,250
50,000
70,000

47,273

2,082
18,200
1,343
1,948
5,532

35,032
305,981
22,593
51,948
122,805

Indirect interest*
Tan Sri Dato Megat Zaharuddin bin Megat Mohd Nor

24,400

1,542

25,942

5,000

315

5,315

Vested

Exercised

30.6.2011

500,000

500,000

Direct interest

Dato Dr Tan Tat Wai

30.6.2011

*Interest by virtue of shares held by spouse.

Number of options over ordinary shares of RM1 each
Exercise Price
Dato Sri Abdul Wahid bin Omar

8.82

Granted Implementation
during year
on 23.6.2011
2,500,000

Number of Restricted Share Units (RSU) of ordinary shares

of RM1 each
Granted Implementation
during year
on 23.6.2011
Dato Sri Abdul Wahid bin Omar

200,000

Vested

Awarded

30.6.2011

As at 30 June 2011, 500,000 of the total options granted to the director during the financial year have been vested and exercisable while no RSU granted
during the financial year has been vested and awarded. The remaining ESOS and the RSU will be rested and exercisable or awarded upon fullfillment of vesting
conditions or predetermined performance metrics including service period, performance targets and performance period.
None of the other directors in office at the end of the financial year had any interest in shares in the Bank or its related corporations during the financial year.

FINANCIAL STATEMENTS

Maybank Annual Report 2011

249
At A Glance
Our Perspective

Rating by external rating agencies

Details of the Banks ratings are as follows:
Rating received

Standard & Poors

27 December 2010

Long-term counterparty
Short-term counterparty
Certificate of Deposit
Preferred Stock (1 Issue)
Subordinated (2 Issues)
Bank Fundamental Strength Rating (Local Currency)
Outlook

Fitch Ratings

19 April 2011

Foreign Long-term Issuer Default Rating

Local Long-term Issuer Default Rating
Individual Rating
Support Rating
Support Rating Floor
USD Sub Debt
SGD Tier 1 Capital Securities

RAM Ratings Services Bhd

6 December 2010

Long-term Financial Institution Ratings

Short-term Financial Institution Ratings
Tier-1 Capital Securities
Subordinated Bonds
Outlook (Long-term)

AAA
P1
AA2
AA1
Stable

Malaysian Rating Corporate Bhd

23 March 2011

Long-term Financial Institution Ratings

Short-term Financial Institution Ratings
Outlook

AAA
MARC-1
Stable

A3/Stable
P-1/Stable
A1/Stable
P-1/Stable
Baa2/Stable
A3/Stable
C/Stable
AA-2
A-/A-2
BBB
BBB+
B
Stable
A-/Stable
A-/Stable
B/C
2
BBB
BBB+
BBB

Leadership

Long-term Foreign Currency Bank Deposit/Outlook

Short-term Foreign Currency Bank Deposit
Long-term Local Currency Bank Deposit/Outlook
Short-term Local Currency Bank Deposit
Foreign Currency Tier 1 Capital/Outlook
Foreign Currency Subordinated Debt/Outlook
Bank Financial Strength Rating/Outlook

Responsibility

17 January 2010

Business Review

Moodys Investors Service

Performance

Rating classification

Strategy

Date

Who We Are

Rating agency

Governance
Financial & Others
AGM Information

250

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Directors
Report

Business outlook

Other statutory information

The Group has recently announced the change in financial year end from 30
June to 31 December, whereby the next financial period will be from 1 July
2011 to 31 December 2011, covering a 6-month period.

(a)

Before the statements of financial position and income statements of

the Group and of the Bank were made out, the directors took
reasonable steps:
(i) to ascertain that proper action had been taken in relation to the
writing off of bad debts and the making of allowance for
doubtful debts and satisfied themselves that all known bad debts
had been written off and that adequate allowances had been
made for doubtful debts; and
(ii) to ensure that any current assets which were unlikely to realise
their values as shown in the accounting records in the ordinary
course of business had been written down to an amount which
they might be expected so to realise.

(b)

At the date of this report, the directors are not aware of any
circumstances not otherwise dealt with in this report or the financial
statements of the Group and of the Bank which would render:
(i) the amount written off for bad debts or the amount of the
allowances for doubtful debts in the financial statements of the
Group and the Bank inadequate to any substantial extent; and
(ii) the values attributed to current assets in the financial statements
of the Group and of the Bank misleading.

(c)

The integrated Maybank Investment Bank Berhad (Maybank IB) and Kim
Eng Holdings Limited (Kim Eng) organisational structure and set up is in
place and is focused towards realising the synergy potentials, particularly
leveraging on the regional investment banking platform of Kim Eng and the
expertise Maybank IB has to further boost the Groups fee income base.

At the date of this report, the directors are not aware of any
circumstances which have arisen which would render adherence to the
existing method of valuation of assets or liabilities of the Group and of
the Bank misleading or inappropriate.

(d)

At the date of this report, the directors are not aware of any
circumstances not otherwise dealt with in this report or the financial
statements of the Group and of the Bank which would render any
amount stated in the financial statements misleading.

Shariah-based financial services and products will continue to feature

prominently in our growth plan, with greater contribution expected from
Indonesia and the wholesale market segment.

(e)

As at the date of this report, there does not exist:

(i) any charge on the assets of the Group and of the Bank which has
arisen since the end of the financial year which secures the
liabilities of any other person; or
(ii) any contingent liability of the Group or of the Bank which has
arisen since the end of the financial year other than those arising
in the normal course of business of the Group and of the Bank.

(f )

In the opinion of the directors:

(i) no contingent liability or other liability has become enforceable
or is likely to become enforceable within the period of twelve
months after the end of the financial year which will or may
affect the ability of the Group and of the Bank to meet their
obligations as and when they fall due; and
(ii) no item or transaction or event of a material and unusual nature
has arisen in the interval between the end of the financial year
and the date of this report which is likely to affect substantially
the results of the operations of the Group or of the Bank for the
financial year in which this report is made.

For the current financial period ending 31 December 2011, Maybanks

business momentum is expected to continue. In the three home markets,
Malaysias GDP is expected to grow 5.1% in 2011 and 5.5% in 2012, though
downward risk is possible, while Singapores GDP is expected to grow at 5.0%
and 6.0% in 2011 and 2012 respectively. Indonesias GDP growth is expected
to be 6.3% and 6.6% in 2011 and 2012 respectively. However, the group
remains cautiously optimistic in view of the challenging global economic
environment and outlook, potentially changing regulatory environment and
the threat of rising inflation. The pressure for interest rate increase has
lessened slightly in view of potentially slower than expected economic
growth and stiffer competition.
Demand for credit in Malaysia is expected to be led by the corporate
segment, where the gradual rollout of Economic Transformation Programme
projects will start to be visible. The retail businesses are expected to grow,
albeit at a moderate pace, amidst intense competition and the expectation of
further introduction of regulatory measures to reign on the household debt
levels. Loan growth rate in Indonesia is expected to be the highest for the
Group while in Singapore, demand remains to be broad based but the
growth rate is expected to moderate.

The implementation of FRS 139 had a positive impact to the Groups credit
costs for the financial year ended 30 June 2011. However, the Group expects
credit costs to rise with expected growth in loans.
Insurance and Takaful remains focused on driving their business through
product innovation and an expanded agency force.
Maybank is committed to investing in people and upgrading its information
technologies to build capabilities and drive implementation of business
initiatives. To sustain its strong asset quality, Maybank will remain focused on
its sound credit risk management policies and practices. It will also ensure
that a healthy capital level is maintained at all times by regularly monitoring
the development and impact of Basel III.
Barring any unforeseen circumstances, the Group expects its financial
performance for the financial period ending 31 December 2011 to be better
than the last financial year. The Group has set two Key Performance
Indicators (KPIs) for the six-month financial period ending 31 December 2011,
Return on Equity of 16.0% (FY 30 June 2011 : 15.2%) and growth in financial
assets of 12.0% (FY 30 June 2011 : 22.6%).

FINANCIAL STATEMENTS

Maybank Annual Report 2011

251
At A Glance
Our Perspective

OTHER STATuTORY INFORMATION (CONTD.)

(g)

For the purpose of the preparation of the consolidated financial statements of the Group for the financial year ended 30 June 2011, an audit was
performed on the financial statements of BII.

Performance

AuDITORS
The auditors, Ernst & Young, have expressed their willingness to continue in offi
ce.
Signed on behalf of the Board in accordance with a resolution of the directors dated 22 August 2011.

Responsibility

Kuala Lumpur, Malaysia

Abdul wahid bin Omar

Business Review

Megat Zaharuddin bin Megat Mohd Nor

Strategy

SIGNIFICANT AND SuBSEQuENT EVENTS

The significant and subsequent events are as disclosed in Note 52 and 53 respectively to the financial statements.

Who We Are

Pursuant to Section 168 of the Companies Act, 1965, the financial year end of subsidiary is required to coincide with the financial year end of the holding
company within two (2) years from date of acquisition. Approval from Companies Commission of Malaysia (CCM) was obtained for the financial year
end of a subsidiary, PT Bank Internasional Indonesia Tbk (BII) to be non-coterminous with the financial year end of the Bank as at
30 June 2011.

Leadership
Governance
Financial & Others
AGM Information

252

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Statement by
Directors

Pursuant to Section 169(15) of the Companies Act, 1965

We, Megat Zaharuddin bin Megat Mohd Nor and Abdul Wahid bin Omar, being two of the directors of Malayan Banking Berhad, do hereby state that, in the
opinion of the directors, the accompanying financial statements set out on pages 254 to 441 are drawn up in accordance with the provisions of the Companies
Act, 1965 and Financial Reporting Standards in Malaysia as modified by Bank Negara Malaysia Guidelines so as to give a true and fair view of the financial
position of the Group and of the Bank as at 30 June 2011 and of the results and the cash flows of the Group and of the Bank for the year then ended.

Signed on behalf of the Board in accordance with a resolution of the directors dated 22 August 2011.

Megat Zaharuddin bin Megat Mohd Nor

Abdul wahid bin Omar

Kuala Lumpur, Malaysia

Statutory
Declaration

Pursuant to Section 169(16) of the Companies Act, 1965

I, Khairussaleh bin Ramli, being the offi

cer primarily responsible for the fi nancial management of Malayan Banking Berhad, do solemnly and sincerely declare
that the accompanying financial statements set out on pages 254 to 441 are in my opinion correct and I make this solemn declaration conscientiously
believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by

the abovenamed Khairussaleh bin Ramli
at Kuala Lumpur in the Federal
Territory on 22 August 2011

Before me,

khairussaleh bin Ramli

FINANCIAL STATEMENTS

Maybank Annual Report 2011

253
At A Glance

to the members of Malayan Banking Berhad (Incorporated in Malaysia)

REPORT ON THE FINANCIAL STATEMENTS

(d)

The auditors reports on the financial statements of the subsidiaries

were not subject to any qualifi cation and in respect of the subsidiaries
incorporated in Malaysia, did not include any comment required to be
made under Section 174(3) of the Act.

Other matters
The supplementary information set out in Note 59 on page 441 is disclosed
to meet the requirement of Bursa Malaysia Securities Berhad. The directors
are responsible for the preparation of the supplementary information in
accordance with Guidance on Special Matter No. 1, Determination of Realised
and Unrealised Profi ts or Losses in the Context of Disclosure Pursuant to
Bursa Malaysia Securities Berhad Listing Requirements, as issued by the
Malaysian Institute of Accountants (MIA Guidance) and the directive of
Bursa Malaysia Securities Berhad. In our opinion, the supplementary
information is prepared, in all material respects, in accordance with the
directive of Bursa Malaysia Securities Berhad.

AGM Information

Kuala Lumpur, Malaysia

22 August 2011

Chan Hooi Lam

No. 2844/02/12(J)
Chartered Accountant

Financial & Others

Ernst & Young

AF: 0039
Chartered Accountants

Governance

This report is made solely to the members of the Bank, as a body, in

accordance with Section 174 of the Companies Act, 1965 in Malaysia and for
no other purpose. We do not assume responsibility to any other person for
the content of this report.

Leadership

Opinion
In our opinion, the financial statements have been properly drawn up in
accordance with the Companies Act, 1965 and Financial Reporting Standards
in Malaysia as modified by Bank Negara Malaysia Guidelines so as to give a
true and fair view of the financial position of the Group and of the Bank as at
30 June 2011 and of their financial performances and cash flows for the year
then ended.

We are satisfied that the financial statements of the subsidiaries that

have been consolidated with the financial statements of the Bank are
in form and content appropriate and proper for the purposes of the
preparation of the consolidated financial statements and we have
received satisfactory information and explanations required by us for
those purposes.

Responsibility

We believe that the audit evidence we have obtained is suffi

cient and
appropriate to provide a basis for our audit opinion.

(c)

Business Review

An audit involves performing procedures to obtain audit evidence about the

amounts and disclosures in the financial statements. The procedures selected
depend on our judgement, including the assessment of risks of material
misstatement of the financial statements, whether due to fraud or error. In
making those risk assessments, we consider internal control relevant to the
Banks preparation and fair presentation of the financial statements in order
to design audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the eff ectiveness of the Banks
internal control. An audit also includes evaluating the appropriateness of the
accounting policies used and the reasonableness of accounting estimates
made by the directors, as well as evaluating the overall presentation of the
financial statements.

We have considered the financial statements and the auditors reports

of all the subsidiaries of which we have not acted as auditors, which
are indicated in Note 57 (a) to the financial statements, being financial
statements that have been included in the consolidated financial
statements.

Performance

Auditors responsibility
Our responsibility is to express an opinion on these fi nancial statements
based on our audit. We conducted our audit in accordance with approved
standards on auditing in Malaysia. Those standards require that we comply
with ethical requirements and plan and perform the audit to obtain
reasonable assurance whether the financial statements are free from material
misstatement.

(b)

Strategy

Directors responsibility for the financial statements

The directors of the Bank are responsible for the preparation of financial
statements that give a true and fair view in accordance with the Financial
Reporting Standards as modified by Bank Negara Malaysia Guidelines, and
the Companies Act, 1965 in Malaysia, and for such internal control as the
directors determine are necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or
error.

In accordance with the requirements of the Companies Act, 1965 in Malaysia,

we also report the following:
(a) In our opinion, the accounting and other records and the registers
required by the Act to be kept by the Bank and its subsidiaries of which
we have acted as auditors have been properly kept in accordance with
the provisions of the Act.

Who We Are

We have audited the financial statements of Malayan Banking Berhad, which

comprise the statements of financial position as at 30 June 2011 of the
Group and of the Bank, and the statements of comprehensive income,
statements of changes in equity and statements of cash flows of the Group
and of the Bank for the year then ended, and a summary of significant
accounting policies and other explanatory notes, as set out on pages 254 to
441.

REPORT ON OTHER LEGAL AND REGuLATORY

REQuIREMENTS

Our Perspective

Independent
Auditors Report

254

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Statements of
Financial Position
As at 30 June 2011

Group

Assets
Cash and short-term funds
Deposits and placements with financial institutions
Securities purchased under resale agreements
Securities held-for-trading
Securities available-for-sale
Securities held-to-maturity
Loans, advances and financing
Derivative assets
Other assets
Investment properties
Statutory deposits with Central Banks
Investment in subsidiaries
Interest in associates
Property, plant and equipment
Intangible assets
Deferred tax assets
Life, general takaful and family takaful fund assets
Total assets

The accompanying notes form an integral part of the financial statements.

Bank

Note

2011
RM000

2010
RM000

2011
RM000

2010
RM000

5
6
7(a)
8
9
10
11
12
13
14
15
16
17
18
19
25
54

38,803,519
10,291,513

4,141,978
47,258,558
9,638,714
253,976,426
1,652,182
6,735,522
45,051
7,698,425

2,439,654
2,168,986
6,509,048
1,402,705
19,196,413

28,707,992
8,915,375
371,237
2,651,103
42,576,235
8,942,708
205,555,067
1,306,769
5,111,362
45,324
4,471,382

2,471,438
1,568,038
4,480,714
1,564,963
17,960,059

25,803,796
7,644,471

2,884,895
40,262,042
8,339,494
181,572,844
1,626,415
1,420,365

4,313,116
17,070,392
454,412
1,170,183
177,270
920,837

19,403,616
7,098,198
371,237
2,241,928
37,446,841
7,855,322
151,469,585
1,281,682
3,749,648

1,932,981
12,653,377
418,700
1,160,265
160,710
1,148,176

411,958,694

336,699,766

293,660,532

248,392,266

FINANCIAL STATEMENTS

Maybank Annual Report 2011

255
At A Glance

Bank

Deposits from customers

Deposits and placements of banks and other financial institutions
Obligations on securities sold under repurchase agreements
Bills and acceptances payable
Derivative liabilities
Other liabilities
Recourse obligation on loans sold to Cagamas
Provision for taxation and zakat
Deferred tax liabilities
Borrowings
Subordinated obligations
Capital securities
Life, general takaful and family takaful fund liabilities
Life, general takaful and family takaful policy holders funds

20
21
7(b)

236,909,788
23,257,868
407,056
3,061,586
1,346,242
6,951,520
649,977
466,889
151,109
2,824,864
8,069,116
5,978,752
5,021,911
12,938,148

201,465,408
31,441,675
373,562
7,115,673
1,446,311
4,240,156
528,285

3,420,499
9,509,786
6,120,774

175,379,741
22,929,822

2,898,997
1,291,498
3,555,869
649,977
283,353

2,098,317
8,069,116
5,978,752

12
22
23
24
25
26
27
28
54
54

Total liabilities

379,488,429

308,034,826

265,662,129

223,135,442

Equity attributable to equity holders of the Bank

Share capital
Reserves

29
30

7,478,206
23,983,293

7,077,983
20,799,193

7,478,206
20,520,197

7,077,983
18,178,841

Non-controlling interests

31,461,499
1,008,766

27,877,176
787,764

27,998,403

25,256,824

32,470,265

28,664,940

27,998,403

25,256,824

Total liabilities and shareholders equity

411,958,694

336,699,766

293,660,532

248,392,266

Commitments and contingencies

44

292,201,755

232,273,335

265,846,025

213,216,362

Leadership

281,976,379
33,303,655
373,562
8,513,401
1,533,935
11,311,854
528,285
134,620
247,892
5 ,447,120
10,800,539
6,120,774
5,408,600
13,787,813

Liabilities

Responsibility

2010
RM000

Business Review

2011
RM000

Performance

2010
RM000

Strategy

2011
RM000

Who We Are

Note

Our Perspective

Group

Governance
Financial & Others
AGM Information

The accompanying notes form an integral part of the financial statements.

256

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Income
Statements

For the year ended 30 June 2011

Group
Note

Bank

2011
RM000

2010
RM000

2011
RM000

2010
RM000

Operating revenue

32

21,039,643

18,560,232

13,588,308

13,280,253

Interest income
Interest expense

33
34

12,037,987
(4,852,057)

10,955,220
(4,184,347)

9,194,938
(3,654,518)

8,555,239
(3,160,604)

7,185,930

6,770,873

5,540,420

5,394,635

1,653,190
(91,317)

1,393,102
41,642

1,561,873

1,434,744

8,747,803

8,205,617

5,540,420

5,394,635

883,153
(325,847)

721,481
(296,574)

557,306

424,907

9,305,109

8,630,524

5,540,420

5,394,635

4,114,655

3,692,680

357,604
2,709,297

878,425
2,591,749

Net interest income

Income from Islamic Banking Scheme operations
Gross operating income
Profit equalisation reserves
56
Net income from insurance business
Income from insurance business
Claims incurred

Dividends from subsidiaries and associates

Other operating income

4,114,655

3,692,680

3,066,901

3,470,174

13,419,764

12,323,204

8,607,321

8,864,809

36

(6,652,184)

(5,825,534)

(3,933,798)

(3,714,809)

38
39

6,767,580
(502,166)
(129,955)

6,497,670
(1,226,067)
(23,030)

4,673,523
(2,196)
(109,898)

5,150,000
(347,956)
(15,500)

6,135,459
135,008

5,248,573
121,835

4,561,429

4,786,544

6,270,467
(1,650,709)

5,370,408
(1,401,958)

4,561,429
(1,202,730)

4,786,544
(1,233,859)

Profit for the year

4,619,758

3,968,450

3,358,699

3,552,685

Attributable to:
Equity holders of the Bank
Non-controlling interests

4,450,278
169,480

3,818,167
150,283

3,358,699

3,552,685

4,619,758

3,968,450

3,358,699

3,552,685

61.4
61.4

53.9
53.9

21.00
24.00

8.25
33.00

Total non-interest income

35

Net income
Overhead expenses
Allowance for losses on loans, advances and financing, net
Impairment losses on securities, net
Operating profit
Share of profits of associates
Profit before taxation and zakat
Taxation and zakat

40

Earnings per share attributable to equity holders of the Bank

Basic (sen)
Diluted (sen)

42
42

Net dividends per ordinary share held by equity holders of the Bank in
respect of financial year (sen)
Paid First Interim
Proposed Final

43
43

The accompanying notes form an integral part of the financial statements.

FINANCIAL STATEMENTS

Maybank Annual Report 2011

257
At A Glance

Statements of
Comprehensive Income
Group

Profit for the year

Other comprehensive income for the year, net of tax

Other comprehensive income attributable to:

Equity holders of the Bank
Non-controlling interests

2011
RM000

2010
RM000

4,619,758

3,968,450

3,358,699

3,552,685

175,030
(43,297)
(74,171)

702,073
(193,595)
(281,780)
9,145

67,162
(16,950)
251,756

469,292
(116,843)
(152,266)

(11,470)

57,562

224,373

301,968

200,183

4,677,320

4,192,823

3,660,667

3,752,868

65,507
(7,945)

209,798
14,575

301,968

200,183

57,562

224,373

301,968

200,183

4,515,785
161,535

4,027,965
164,858

3,660,667

3,752,868

4,677,320

4,192,823

3,660,667

3,752,868

Responsibility

Business Review

Total comprehensive income for the year attributable to:

Equity holders of the Bank
Non-controlling interests

2010
RM000

Performance

Total comprehensive income for the year

25

2011
RM000

Strategy

Other comprehensive income:

Net gain on available-for-sale financial assets
Income tax relating to components of other comprehensive income
Foreign currency translation
Revaluation reserve from investment properties
Effects on adoption of Risk Based Capital (RBC) Framework for insurance
subsidiaries

Bank

Who We Are

Note

Our Perspective

For the year ended 30 June 2011

Leadership
Governance
Financial & Others
AGM Information

The accompanying notes form an integral part of the financial statements.

258

FINANCIAL STATEMENTS

Maybank Annual Report 2011

Consolidated Statement of
Changes in Equity
For the year ended 30 June 2011

Group
<---------------------------------------------- Non-distributable ---------------------------------------------->

Share
Capital
RM000
At 1 July 2010
as previously
stated
7,077,983
effect of adopting
FRS 139
(Note 55 (b))

effect of adopting
FRS 4 (Note 55 (b))

At 1 July 2010, as
restated
7,077,983
Profit for the year

Other comprehensive
income

Total comprehensive
income for the year

Share-based payment
under ESS (Note
29(d))

Effect of net
acquisition/disposal
to non-controlling
interests

Effect of acquisition of
subsidiaries
(Note 16)

Effect of Redemption
on Redeemable
Convertible
Preference Shares
(RCPS)

Transfer to statutory
reserves

Issue of shares
pursuant to
Dividend
Reinvestment Plan
(DRP) (Note 29(b))
400,223
Dividends (Note 43)

Total transactions
with shareholders
400,223
At 30 June 2011

7,478,206

Unrealised
Holding
Exchange
Reserve/ Fluctuation
(Deficit)
Reserve
RM000
RM000

Statutory
Reserve
RM000

Capital
Reserve
RM000

5,903,497

5,553,999

15,250

340,936

(949,434)

9,057

(47,921)

(172,088)

(220,009)

(5,786)

(225,795)

1,800

1,800

807

2,607

5,903,497

5,553,999

15,250

293,015

(949,434)

9,057

124,050

(58,543)

65,507

(7,945)

57,562

124,050

(58,543)

4,450,278

4,515,785

161,535

4,677,320

65,000

65,000

65,000

14,714

14,714

3,415

18,129

112,741

112,741

(46,500)

(46,500)

855,923

(855,923)

2,680,214

3,080,437
(3,873,404) (3,873,404)

3,080,437
(5,210) (3,878,614)

2,680,214

855,923

65,000

(4,714,613)

64,446

8,583,711

6,409,922

15,250

417,065

(1,007,977)

65,000

9,057

The accompanying notes form an integral part of the financial statements.

ESS Revaluation
Reserve
Reserve
RM000
RM000

Distributable
Total
NonRetained Shareholders controlling
Profits
Equity
Interests
RM000
RM000
RM000

Share
Premium
RM000

9,925,888 27,877,176

9,755,600 27,658,967
4,450,278 4,450,278

(713,253)

9,491,265 31,461,499

Total
Equity
RM000

787,764 28,664,940

782,785 28,441,752
169,480 4,619,758

(648,807)

1,008,766 32,470,265

FINANCIAL STATEMENTS

Maybank Annual Report 2011

259
At A Glance
Our Perspective

Group
<---------------------------------------------- Non-distributable ---------------------------------------------->
Share
Distributable
Total
Nonoption Revaluation
Retained Shareholders controlling
Reserve
Reserve
Profits
Equity
Interests
RM000
RM000
RM000
RM000
RM000

At 1 July 2009
Profit for the year
Other comprehensive
income
Total comprehensive
income for the year
Effect of acquisition
from non-controlling
interests
Transfer to statutory
reserves
Issue of shares
pursuant to ESOS
2004/2009
Transfer from share
option reserve
Dividends (Note 43)
Total transactions
with shareholders

7,077,663

5,901,692

4,664,983

15,250

(148,388)

(666,885)

63,191

2,742

7,988,498
3,818,167

24,898,746
3,818,167

869,231
150,283

25,767,977
3,968,450

489,324

(282,549)

6,315

(3,292)

209,798

14,575

224,373

489,324

(282,549)

6,315

3,814,875

4,027,965

164,858

4,192,823

(43,047)

(43,047)

(246,325)

(289,372)

889,016

(889,016)

320

1,805

2,125

2,125

(63,191)

63,191
(1,008,613)

(1,008,613)

(1,008,613)

320

1,805

889,016

(63,191)

(1,877,485)

(1,049,535)

(246,325)

(1,295,860)

At 30 June 2010

7,077,983

5,903,497

5,553,999

15,250

340,936

(949,434)

9,057

9,925,888

27,877,176

787,764

28,664,940

Total
Equity
RM000

Responsibility

Capital
Reserve
RM000

Business Review

Statutory
Reserve
RM000

Performance

Share
Premium
RM000

Strategy

Share
Capital
RM000

Who We Are

Unrealised
Holding
Exchange
Reserve/ Fluctuation
(Deficit)
Reserve
RM000
RM000

Leadership
Governance
Financial & Others
AGM Information

The accompanying notes form an integral part of the financial statements.

260

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Statement of
Changes in Equity
For the year ended 30 June 2011

Bank
<-------------------------------- Non-distributable -------------------------------->

At 1 July 2010
as previously stated
effect of adopting FRS 139 (Note 55 (b))
At 1 July 2010, as restated
Profit for the year
Other comprehensive income
Total comprehensive income for the year
Share-based payment under ESS (Note 29(d))
Transfer to statutory reserve
Issue of shares pursuant to Dividend
Reinvestment Plan ("DRP") (Note 29(b))
Dividends (Note 43)
Total transactions with shareholders
At 30 June 2011

Share
Capital
RM000

Share
Premium
RM000

Statutory
Reserve
RM000

Unrealised
Holding
Reserve/
(Deficit)
RM000

7,077,983

5,903,497

5,372,770

269,016
(40,368)

(12,495)

6,646,053
(150,753)

25,256,824
(191,121)

7,077,983

5,903,497

5,372,770

839,690

228,648

50,212
50,212

(12,495)

251,756
251,756

65,000

6,495,300
3,358,699

3,358,699

(839,690)

25,065,703
3,358,699
301,968
3,660,667
65,000

400,223

400,223
7,478,206

2,680,214

2,680,214
8,583,711

839,690
6,212,460

278,860

239,261

65,000
65,000

(3,873,404)
(4,713,094)
5,140,905

3,080,437
(3,873,404)
(727,967)
27,998,403

Exchange
Fluctuation
Reserve
RM000

ESS
Reserve
RM000

Distributable
Retained
Profits
RM000

Total
Equity
RM000

<-------------------------------- Non-distributable -------------------------------->

At 1 July 2009
Profit for the year
Other comprehensive income
Total comprehensive income for the year
Transfer to statutory reserve
Transfer from share option reserve
Issue of ordinary shares pursuant to ESOS
2004/2009
Dividends (Note 43)
Total transactions with shareholders
At 30 June 2010

Share
Capital
RM000

Share
Premium
RM000

Statutory
Reserve
RM000

Unrealised
Holding
Reserve/
(Deficit)
RM000

7,077,663

5,901,692

4,483,770

889,000

(83,433)

352,449
352,449

139,771

(152,266)
(152,266)

63,191

(63,191)

4,927,790
3,552,685

3,552,685
(889,000)
63,191

22,510,444
3,552,685
200,183
3,752,868

320

320
7,077,983

1,805

1,805
5,903,497

889,000
5,372,770

269,016

(12,495)

(63,191)

(1,008,613)
(1,834,422)
6,646,053

2,125
(1,008,613)
(1,006,488)
25,256,824

The accompanying notes form an integral part of the financial statements.

Exchange
Fluctuation
Reserve
RM000

Share
Option
Reserve
RM000

Distributable
Retained
Profits
RM000

Total
Equity
RM000

FINANCIAL STATEMENTS

Maybank Annual Report 2011

261
At A Glance

Statements of
Cash Flows

Group

4,786,544

(135,008)
173,213
61,389
53,526
(16,631)

(121,835)
183,009
58,742
93,037
(19,115)

117,638
48,773

(14,414)

131,692
44,429

(12,883)

(3,926)

(1,784)
(341,934)
(439)
(16,111)
(235,524)
129,955
1,167,775
36,858

(31,205)
65,000
6,631
91,317
19
35,000
(24,997)
(321,208)

(66)
(659)
(28,612)
(191,045)
(2,267)
(46,404)
(311,297)
23,030
1,809,637
3,056
38,522
(30,427)

3,189
(41,642)

(3,389)
(191,401)

(93)
(595)
(11,019)
(276,304)
(439)
(20,980)
(245,982)
109,898
407,400
11,793

(373,545)
65,000
340

(24,997)

(29)
(14,320)
(123,752)
(1,838)
(50,200)
(326,350)
15,500
729,728
2,967
38,522
(902,804)

466

(3,389)

6,962,383
371,237
(1,288,798)
(5,795,415)
(48,163,251)
808,212
(3,227,043)
45,066,591
10,045,787
(33,494)
5,451,815
(3,269,149)
(915,146)

6,594,471
(24,775)
(1,757,675)
4,462,321
(21,620,062)
(10,434)
(420,450)
24,311,199
(5,523,995)
407,056
1,591,523
443,946
(986,757)

4,353,903
371,237
(626,455)
(3,785,576)
(30,240,402)
2,411,836
(2,380,135)
26,085,667
8,511,853
373,562
4,216,676
790,381

4,314,283
(24,775)
1,202,354
120,629
(7,806,038)
(8,084)
177,162
11,926,811
(7,192,094)

1,570,718
302,513

1,236,355
458,466

1,178,158
671,135

7,708,550
(2,166,363)

9,315,661
(1,178,589)

10,444,286
(1,666,114)

5,242,026
(1,020,629)

5,542,187

8,137,072

8,778,172

4,221,397

361,739

658,547

AGM Information

4,561,429

Financial & Others

5,370,408

Governance

6,270,467

Leadership

2010
RM000

Responsibility

Net cash generated from operating activities

2011
RM000

Business Review

Cash generated from operations

Taxes and zakat paid

2010
RM000

Performance

Operating profit before working capital changes

Change in securities purchased under resale agreements
Change in deposits and placements with banks and other financial institutions
Change in securities portfolio
Change in loans, advances and financing
Change in other assets
Change in statutory deposits with Central Banks
Change in deposits from customers
Change in deposits and placements of banks and other financial institutions
Change in obligations on securities sold under repurchase agreements
Change in bills and acceptances payable
Change in other liabilities
Change in life, general takaful and family takaful fund assets
Change in life, general takaful and family takaful fund liabilities and policy holders
funds
Exchange fluctuation

2011
RM000

Strategy

Gain on disposal of foreclosed properties (Note 35)

Gain on liquidation of subsidiaries (Note 35)
Net gain on disposal of held-for-trading securities (Note 35)
Net gain on disposal of available-for-sale securities (Note 35)
Net gain on redemption of held-to-maturity securities (Note 35)
Amortisation of premiums less accretion of discounts, net (Note 33)
Unrealised gain on revaluation of securities held-for-trading and derivatives (Note 35)
Impairment losses on securities, net (Note 39)
Loan and financing loss and allowances (Note 38)
Allowance for other debts (Note 38)
Interest income clawed back/suspended (Note 33)
Dividend income (Note 35)
Share options granted under ESS (Note 36)
Property, plant and equipment written off (Note 36)
Profit equalisation reserves
Impairment of property, plant and equipment
Expense related to acquisition of subsidiaries
Amortisation of transaction cost in relation to issuance of Stapled Capital Securities
Transfer of life, general takaful and family takaful fund surplus

Bank

Who We Are

Cash flows from operating activities

Profit before taxation and zakat
Adjustments for:
Share of profits of associates
Depreciation and amortisation of property, plant and equipment (Note 36)
Amortisation of computer software (Note 36)
Amortisation of Core Deposit Intangibles (Note 36)
Gain on disposal of property, plant and equipment (Note 35)

Our Perspective

For the year ended 30 June 2011

262

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Statements of
Cash Flows
For the year ended 30 June 2011 (contd.)

Group

Bank

2011
RM000

2010
RM000

(318,320)
(17,521)
18,129

(2,155,896)

(37,819)
(46,500)

(207,445)
(28,942)

(125,970)
(78,907)
(105,000)

25,395

24,949

25,313

16,649

31,205
65,560

30,427
67,806

15,942
5,913
351,690

24,379
8,563
869,862

Net cash used in investing activities

(2,435,767)

(423,082)

(4,240,308)

(298,985)

Cash flows from financing activities

Proceeds from issuance of shares
Drawdown of borrowings
Issuance/(redemption) of subordinated obligations
Loans sold to Cagamas, net
Dividends paid
Dividends paid to non-controlling interest

3,080,437
2,775,879
2,817,275
(121,692)
(3,873,404)
(5,210)

14,502
391,960
(520,135)
133,712
(1,008,613)

3,080,437
1,482,821
1,543,782
(121,692)
(3,873,404)

2,125
689,590

133,712
(1,008,613)

4,673,285

(988,574)

2,111,944

(183,186)

Net increase in cash and cash equivalents

Cash and cash equivalents at beginning of year *

7,779,705
29,119,951

6,725,416
22,549,455

6,649,808
19,810,389

3,739,226
16,400,973

Cash and cash equivalents at end of the year

36,899,656

29,274,871

26,460,197

20,140,199

Cash and short-term funds (Note 5)

Deposits with financial institutions maturing within 1 month (Note 45(d)(4))

38,803,519
954,598

28,707,992
867,258

25,803,796
656,401

19,403,616
736,583

39,758,117

29,575,250

26,460,197

20,140,199

Less: Monies held in trusts (Notes 5 and 6)

(2,858,461)

(300,379)

36,899,656

29,274,871

26,460,197

20,140,199

29,274,871
(154,920)

23,607,979
(1,058,524)

20,140,199
(329,810)

17,448,312
(1,047,339)

29,119,951

22,549,455

19,810,389

16,400,973

Cash flows from investing activities

Purchase of property, plant and equipment (Note 18)
Purchase of intangible assets (Note 19)
Proceeds from transaction with non-controlling interest
Subscription to additional ordinary shares in new and existing subsidiaries
Acquisition of subsidiaries (Note 16(a)(iii))
Purchase of non-redeemable preference shares in a subsidiary
Subscription to additional ordinary shares and private debt securities in associates
Redemption of preference shares from a non-controlling interest and the Bank
by a subsidiary
Proceeds from disposal of property, plant and equipment
Dividends received
from securities
from associates
from subsidiaries

Net cash generated from/(used in) financing activities

* Cash and cash equivalents at beginning of year:

As previously reported
Effects of foreign exchange rate changes

The accompanying notes form an integral part of the financial statements.

2011
RM000
(184,401)
(2,633)

(4,524,920)

(35,712)
108,500

2010
RM000
(138,444)
(11,318)

(1,112,055)

(125,970)
(75,651)
245,000

FINANCIAL STATEMENTS

Maybank Annual Report 2011

263
At A Glance

30 June 2011

1. Corporate information
The Bank is principally engaged in all aspects of commercial banking
and related financial services.

The subsidiaries are principally engaged in the businesses of banking

and finance, Islamic banking, investment banking including stock
broking, underwriting of general and life insurance, general and family
takaful, trustee and nominee services, asset management and venture
capital.

The Bank is a public limited liability company, incorporated and

domiciled in Malaysia, and is listed on the Main Market of Bursa
Malaysia Securities Berhad. The registered office of the Bank is located
at 14th Floor, Menara Maybank, 100, Jalan Tun Perak, 50050 Kuala
Lumpur.

These financial statements were authorised for issue by the Board of

Directors in accordance with a resolution of the directors on 22 August
2011.

2. Basis of preparation of the financial

statements
The financial statements of the Group and of the Bank have been
prepared in accordance with the provisions of the Companies Act, 1965
and Financial Reporting Standards (FRSs) in Malaysia as modified by
Bank Negara Malaysia (BNM) Guidelines.

The financial statements are presented in Ringgit Malaysia (RM) and

rounded to the nearest thousand (RM000), unless otherwise stated.

The financial statements of the Group and of the Bank have been
prepared under the historical cost convention unless otherwise
indicated in the accounting policies below.

The financial statements incorporate all activities relating to the

Islamic banking which have been undertaken by the Group.
Islamic banking refers generally to the acceptance of deposits,
granting of financing and delivering in Islamic Securities under
the Shariah principles.

Financial & Others

Basis of accounting

Governance

(i)

Leadership

3. Significant accounting policies

AGM Information

The significant accounting policies and methods of

computation applied by the Group and the Bank are
consistent with those adopted in the most recent audited
annual financial statements for the year ended 30 June
2010 except for adoption of the following Financial
Reporting Standards (FRSs):
(i) FRS 1: First-time Adoption of Financial Reporting
Standards
(ii) FRS 3: Business Combinations
(iii) FRS 4: Insurance Contracts
(iv) FRS 7: Financial Instruments-Disclosures
(v) FRS 101: Presentation of Financial Statements
(vi) FRS 123: Borrowing Costs
(vii) FRS 139: Financial Instruments - Recognition and
Measurement
(viii) Amendments to FRS 1 First-time Adoption of
Financial Reporting Standards and FRS 127:
Consolidated and Separate Financial Statements: Cost
of an Investment in a Subsidiary, Jointly Controlled
Entity or Associate
(ix) Amendments to FRS 2: Share-based Payment
(x) Amendments to FRS 2: Share-based Payment
Vesting Conditions and Cancellations
(xi) Amendments to FRS 5: Non-current Assets Held for
Sale and Discontinued Operations
(xii) Amendments to FRS 127: Consolidated and Separate
Financial Statements
(xiii) Amendments to FRS 132: Financial Instruments:
Presentation
(xiv) Amendments to FRS 138: Intangible Assets
(xv) Amendments to FRS 139: Financial Instruments:
Recognition and Measurement, FRS 7: Financial
Instruments: Disclosure and IC Interpretation 9:
Reassessment of Embedded Derivatives
(xvi) Amendments to FRSs contained in the document
entitled Improvements to FRSs (2009) including
amendments to FRS 117: Leases
(xvii) Interpretation 9: Reassessment of Embedded
Derivatives
(xviii) Amendments to FRS132: Financial Instruments:
Presentation (Classification of Rights Issues)
(xix) IC Interpretation 10: Interim Financial Reporting and
Impairment
(xx) IC Interpretation 11: FRS 2 - Group and Treasury Share
Transactions
(xxi) IC Interpretation 12: Service Concession
Arrangements

Responsibility

Business Review

Amendments to FRSs, Interpretations of the Issues

Committee (IC Interpretations) and Technical Release
(TR) effective from financial period commencing 1
July 2010

Performance

There were no significant changes in these activities during the

financial year.

(a)

Strategy

Changes in accounting policies and effects arising from

adoption of new and revised FRSs, amendments to FRSs and
interpretations

Who We Are

(ii)

Our Perspective

Notes to the
Financial Statements

264

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

3. Significant accounting policies (contd.)

(ii)

in connection with the recognition, derecognition

and measurement of financial instruments, including
derivative financial instruments, and hedge
accounting which are similar to those prescribed by
FRS 139 have already been adopted by the Group
and the Bank since then.

Changes in accounting policies and effects arising from

adoption of new and revised FRSs, amendments to FRSs and
interpretations (contd.)
(a)

Amendments to FRSs, Interpretations of the Issues

Committee (IC Interpretations) and Technical Release
(TR) effective from financial period commencing
1July 2010 (contd.)

(xxii) IC Interpretation 13: Customer Loyalty Programmes

(xxiii) IC Interpretation 14 FRS 119: The Limit on a Defined
Benefit Asset, Minimum Funding Requirements and
their Interaction
(xxiv) Amendments to IC Interpretation 15: Agreements
for the Construction of Real Estate
(xxv) IC Interpretation16: Hedges of a Net Investment in a
Foreign Operation
(xxvi) IC Interpretation 17: Distributions of Non-cash
Assets to Owners
(xxvii) Amendments to IC Interpretation 9: Reassessment
of Embedded Derivatives
(xxviii) TR 3: Guidance on Disclosures of Transition to IFRSs
(xxix) TR i-3: Presentation of Financial Statements of
Islamic Financial Institutions
(xxx) SOP i-1: Financial Reporting from an Islamic
Perspective

In addition to these, the Group and the Bank have also

adopted BNMs Revised Guidelines for Financial Reporting
for Banking Institutions revised on 10 March 2010 and
Revised Guidelines for Classification and Impairment
Provision for Loans/Financing revised in December 2010,
January 2011 and May 2011. The effects of adopting these
Guidelines are consistent with the application of FRS 139
and are disclosed in Note 55.

(b)

Effects of adoption

The adoption of the above FRSs, amendments to FRSs and

IC Intepretations did not have any material impact on the
financial statements of the Group and the Bank, except for
the following:
(1)

the changes in accounting policies arising from the

adoption of FRS 139 and its related amendments to
FRSs, IC Interpretations and relevant Bank Negara
Malaysia (BNM) Guidelines
This standard establishes the principles for the
recognition, derecognition and measurement of an
entitys financial instruments and for hedge
accounting. However, since the adoption of Bank
Negara Malaysias (BNM) revised BNM/GP8 Guidelines on Financial Reporting for Licensed
Financial Institutions on 1 July 2005, certain principles

Therefore, the adoption of FRS 139 and its related

amendments, IC interpretations and relevant BNM
Guidelines resulted in changes in accounting policies
pertaining to the following:

impairment and classification of loans, advances

and financing (loans) - the Group and the Bank
now assess at the end of each reporting period
whether there is any objective evidence that a
loan or a group of loans is impaired, as a result of
one or more events that have occurred after
initial recognition. Allowances for loan
impairment are determined either via individual
assessment or collective assessment basis.
Revised accounting policies are disclosed in Note
3(vi)(d).

interest and profit income recognition financial

assets classified as held-to-maturity and loans
and receivables are measured at amortised cost
using the effective interest or profit method.
Interest and profit income on loans, advances
and financing which were previously recognised
on contractual interest and profit rates are now
recognised using effective interest or profit rates.
Interest and profit-in-suspense are also no longer
recognised on loans, advances and financing.
Revised accounting policies are disclosed in Note
3(xxiv).

classification of loans, advances and financing as

impaired loans are classified as impaired when
there is objective evidence of impairment, in
which, the criteria are disclosed in Note 3(vi)(d).

The adoption is effected prospectively on 1 July 2010

and the details of the financial impact are disclosed in
Note 55.

(2)

the adoption of FRS 7 and amendments to FRS 132

which resulted in changes in presentation of the
financial statements and its relevant notes, but did not
affect the earnings, retained earnings or other reserves

FRS 7 requires disclosure on qualitative and

quantitative information about exposure to risks
arising from financial instruments and the
management thereof, including credit risk, market risk
and liquidity risk.

FINANCIAL STATEMENTS

Maybank Annual Report 2011

265
At A Glance

(ii)

(b)

(2)

the adoption of FRS 7 and amendments to FRS 132

which resulted in changes in presentation of the
financial statements and its relevant notes, but did not
affect the earnings, retained earnings or other reserves
(contd.)

The adoption is effected prospectively for positions as

at 30 June 2011 and the details of disclosure are
mainly disclosed in Note 45 and the relevant financial
instruments notes to the financial statements.

(3)

the adoption of FRS 101 and TRi-3 which resulted in

changes in presentation of the financial statements and
its relevant notes, but did not affect the earnings,
retained earnings or other reserves

The revised FRS 101 introduces changes as follows:

separation of owner and non owner changes in

equity

statement of comprehensive income, either in

one single statement or two linked statements
presenting all non-owner changes in equity

statement of financial position at the beginning

of earliest comparative period following a change
in accounting policy, error or reclassification of
items in financial statements

disclosure on capital management

The adoption is effected retrospectively, whereby the

Group and the Bank had elected to present the
statement of comprehensive income in two linked
statements while the disclosures on capital
management are disclosed in Note 48, 49 and 50.

(4)

FRS 4: Insurance Contracts

This standard specifies the financial reporting

requirements for insurance contracts by any entity
that issues such contracts (insurers). In particular, it
requires disclosures that identify and explain the
amounts in an insurers financial statements arising
from insurance contracts and helps users of those
financial statements understand the amount, timing
and uncertainty of future cash flows from insurance
contracts. The financial impact of adopting FRS 4 is
disclosed in Note 55.

The amendments to FRS 117 require leasehold land

which is in substance finance leases to be classified as
property, plant and equipment or investment
property as appropriate. The Group has reassessed
and determined that all leasehold land of the Group
are in substance finance leases and has reclassified all
leasehold land to property, plant and equipment. The
change in accounting policy has been applied
retrospectively in accordance with the transitional
provisions of the amendment. The effects to the
consolidated statement of financial positions as at 30
June 2011 arising from the above changes in
accounting policies are further explained in Note 55.

AGM Information

Financial & Others

Prior to 1 July 2010, for all leases of land and

buildings, if title is not expected to pass to the lessee
by the end of the lease term, the lessee normally
does not receive substantially the entire risks and
rewards incidental to ownership. Hence, all leasehold
land held for own use was classified by the Group as
operating lease and where necessary, the minimum
lease payments or the up-front payments made were
allocated between the land and the buildings
elements in proportion to the relative fair values for
leasehold interests in the land element and buildings
element of the lease at the inception of the lease.
The up-front payment represented prepaid lease
payments and were amortised on a straight-line basis
over the lease term.

Governance

Leadership

Leases

Responsibility

(6)

Effects of adoption (contd.)

Business Review

The revised FRS 3 introduces a number of changes in

the accounting for business combinations occurring
after 1 July 2010. These changes will impact the
amount of goodwill recognised, the reported results
in the period that an acquisition occurs, and future
reported results. The Amendments to FRS 127 require
that a change in the ownership interest of a
subsidiary (without loss of control) is accounted for as
an equity transaction. Therefore, such transactions
will no longer give rise to goodwill, nor will they give
rise to a gain or loss. Furthermore, the amended
standard changes the accounting for losses incurred
by the subsidiary as well as the loss of control of a
subsidiary. The changes from revised FRS 3 and
Amendments to FRS 127 are similar to existing
accounting policies of the Group, which have been
applied to acquisitions during the year and will affect
future acquisitions or loss of control and transactions
with non-controlling interests.

Performance

Strategy

Revised FRS 3 Business Combinations and Amendments

to FRS 127 Consolidated and Separate Financial
Statements

Who We Are

Changes in accounting policies and effects arising from

adoption of new and revised FRSs, amendments to FRSs and
interpretations (contd.)

(5)

Our Perspective

3. Significant accounting policies (contd.)

266

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

3. Significant accounting policies (contd.)

identifiable assets and liabilities is recorded as goodwill in

the statement of financial position. The accounting policy
for goodwill is set out in Note 3(v). In instances where the
latter amount exceeds the former, the excess is recognised
as a gain on bargain purchase in profit or loss on the
acquisition date.

(iii) Basis of consolidation

(a)

Subsidiaries

Subsidiaries are entities over which the Group has the

power to govern the financial and operating policies so as
to obtain benefits from their activities. The existence and
effect of potential voting rights that are currently
exercisable or convertible are considered when assessing
whether the Group has such power over another entity.

In the Banks separate financial statements, investments in

subsidiaries are stated at cost less impairment losses. The
policy for the recognition and measurement of impairment
losses is in accordance with Note 3(xvii) below. On disposal
of such investments, the difference between the net
disposal proceeds and their carrying amounts is included in
income statement.

(b)

Basis of consolidation

The consolidated financial statements comprise the

financial statements of the Bank and its subsidiaries as at
the reporting date. The financial statements of the
subsidiaries are prepared for the same reporting date as the
Bank. Consistent accounting policies are applied to like
transaction and events in similar cirumstances.

All intra-group balances, income and expenses and

unrealised gain and losses resulting from intra-group
transactions are eliminated in full.

Acquisitions of subsidiaries are accounted for by applying

the acquisition method. Identifiable assets acquired and
liabilities assumed in a business combination are measured
initially at their fair values at the acquisition date.
Acquisition-related costs are recognised as expenses in the
periods in which the costs are incurred and the services are
received.

In business combinations achieved in stages, previously

held equity interests in the acquiree are re-measured to fair
value at the acquisition date and any corresponding gain or
loss is recognised in profit or loss.
The Group elects for each individual business combination,
whether non-controlling interest in the acquiree (if any) is
recognised on the acquisition date at fair value, or at the
non-controlling interests proportionate share of the
acquiree net identifiable assets.
Any excess of the sum of the fair value of the consideration
transferred in the business combination, the amount of
non-controlling interest in the acquiree (if any), and the fair
value of the Groups previously held equity interest in the
acquiree (if any), over the net fair value of the acquirees

Subsidiaries are consolidated from the date of acquisition,

being the date on which the Group obtains control, and
continue to be consolidated until the date that such control
effectively ceases.

The accounting policies for business combination and

goodwill are disclosed in Note 3(v)(a).

(c)

Transactions with non-controlling interests (NCI)

Non-controlling interests (NCI) represent the portion of

profit or loss and net assets in subsidiaries not held directly
or indirectly by the Group. NCI are presented separately in
profit or loss of the Group and within equity in the
consolidated statements of financial position, separately
from parent shareholders equity.

Where losses applicable to the minority in a subsidiary

company exceed the NCI in the equity of that subsidiary
company, the excess and any further losses applicable to
the minority are attributable against the Groups interest
except to the extent that the minority has a binding
obligation to, and is able to make additional investment to
cover the losses. If the subsidiary company subsequently
reports profits, such profits are allocated to the Groups
interest until the minoritys share of losses previously
absorbed by the Group has been recovered.

Acquisitions of NCI are accounted for using the parent

entity extension method, whereby the difference between
the consideration and the fair value of the share of the net
assets acquired is recognised as equity.

(iv) Associates

Associates are entities in which the Group has significant

influence and that is neither a subsidiary nor an interest in a joint
venture. Significant influence is the power to participate in the
financial and operating policy decisions of the investee but not in
control or joint control over those policies.

Investments in associates are accounted for in the consolidated

financial statements using the equity method of accounting.
Under the equity method, the investment in associate is carried
in the consolidated statement of financial position at cost
adjusted for post-acquisition changes in the Groups share of net
assets of the associate. The Groups share of the net profit or loss
of the associate is recognised in the consolidated profit or loss.
Where there has been a change recognised directly in the equity
of the associate, the Group recognises its share of such changes.

FINANCIAL STATEMENTS

Maybank Annual Report 2011

267
At A Glance

(iv) Associates (contd.)

In the Banks separate financial statements, investments in

associates are stated at cost less impairment losses. The policy for
the recognition and measurement of impairment losses is in
accordance with Note 3(xvii) below. On disposal of such
investments, the difference between net disposal proceeds and
their carrying amounts is included in income statement.

Where goodwill forms part of a cash-generating unit and

part of the operation within that cash-generating unit is
disposed of, the goodwill associated with the operation
disposed of is included in the carrying amount of the
operation when determining the gain or loss on disposal of
the operation. Goodwill disposed of in this circumstance is
measured based on the relative fair values of the
operations disposed of and the portion of the cashgenerating unit retained.

When subsidiaries are sold, the difference between the

selling price and the net assets plus cumulative translation
differences and goodwill is recognised in the income
statement.

Goodwill and fair value adjustments arising on the

acquisition of foreign operations on or after 1 January 2006
are treated as assets and liabilities of the foreign operations
and are recorded in the functional currency of the foreign
operations and translated in accordance with accounting
policy set out in Note 3(xx).

Goodwill and fair value adjustments which arose on the

acquisition of foreign subsidiaries before 1 January 2006 are
deemed to be assets and liabilities of the parent entity and
are recorded in RM at the rates prevailing at the date of
acquisition.

Goodwill and Intangible assets

Business Combination and Goodwill

Business combinations are accounted for using the

purchase method of accounting. This involves recognising
identifiable assets (including previously unrecognised
intangible assets) and liabilities including contingent
liabilities but excluding future restructuring liabilities of the
acquired business at fair value. Any excess of the cost of
acquisition over the fair values of the identifiable net assets
(net fair value of identifiable assets, liabilities and

AGM Information

(a)

Financial & Others

(v)

Each unit to which the goodwill is allocated represents the

lowest level within the Bank at which the goodwill is
monitored for internal management purposes and is not
larger than an operating segment in accordance with the
Groups operating segment as disclosed in Note 3(xxxi) and
Note 51.

Governance

Leadership

The most recent available audited financial statements of the

associates are used by the Group in applying the equity method.
Where the dates of the audited financial statements used are not
coterminous with those of the Group, the share of results is
arrived at from the last audited financial statements available and
management financial statements to the end of the accounting
period. Where necessary, adjustments are made to bring the
accounting policies in line with those of the Group.

For the purpose of impairment testing, goodwill acquired is

allocated, from the acquisition date, to each of the Groups
cash-generating units that are expected to benefit from the
synergies of the combination, irrespective of whether other
assets or liabilities of the acquiree are assigned to those
units.

Responsibility

Business Review

When the Groups share of losses in an associate equals or

exceeds its interest in the associate, including any long-term
interests that, in substance, form part of the Groups net
investment in the associates, the Group does not recognise
further losses, unless it has incurred obligations or made
payments on behalf of the associate.

Goodwill is initially measured at cost. Following initial

recognition, goodwill is measured at cost less accumulated
impairment losses. Goodwill is reviewed for impairment
annually, or more frequently, if events or changes in
circumstances indicate that the carrying value may be
impaired.

Performance

Goodwill relating to an associate is included in the carrying

amount of the investment and is not amortised. Any excess of
the Groups share of the net fair value of the associates
identifiable assets, liabilities and contingent liabilities over the
cost of the investment is excluded from the carrying amount of
the investment and is instead included as income in the
determination of the Groups share of the associates profit or loss
in the period in which the investment is acquired.

Strategy

In applying the equity method, unrealised gains and losses on

transactions between the Group and the associate are eliminated
to the extent of the Groups interest in the associate. After
application of the equity method, the Group determines whether
it is necessary to recognise any additional impairment loss with
respect to the Groups net investment in the associate. The
associate is equity accounted for from the date the Group obtains
significant influence until the date the Group ceases to have
significant influence over the associate.

Who We Are

contingent liabilities) acquired is recognised as goodwill. If

the cost of acquisition is less than the fair values of the
identifiable net assets acquired, the discount on acquisition
is recognised directly in the income statement in the year
of acquisition.

Our Perspective

3. Significant accounting policies (contd.)

268

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

3. Significant accounting policies (contd.)

(v)

The classification of financial instruments at initial

recognition depends on the purpose and the
managements intention for which the financial assets were
acquired and their characteristics. When financial assets are
recognised initially, they are measured at fair value for
FVTPL and fair value plus directly attributable transaction
costs for financial assets other than FVTPL.

Included in financial assets are the following:

Goodwill and Intangible assets (contd.)

(b)

Other intangible assets

Other intangible assets include customer core deposits

intangible acquired in business combination and value of
computer software.

An intangible asset is recognised only when its cost can be

measured reliably and it is probable that the expected
future economic benefits that are attributable to it will flow
to the Group and the Bank.

Intangible assets acquired separately are measured on

initial recognition at cost. The cost of intangible assets
acquired in a business combination is their fair value as at
the date of acquisition. Following initial recognition,
intangible assets are carried at cost less any accumulated
amortisation and any accumulated impairment losses.
The useful lives of intangible assets are assessed to be
either finite or infinite. Intangible assets with finite lives are
amortised over the useful economic life. The amortisation
period and the amortisation method for an intangible asset
with a finite useful life are reviewed at least at each
financial year end. Changes in the expected useful life or
the expected pattern of consumption of future economic
benefits embodied in the asset are accounted for by
changing the amortisation period or method, as
appropriate, and treated as changes in accounting
estimates. The amortisation expense on intangible assets
with finite lives is recognised in the income statement in
the expense category consistent with the function of the
intangible asset.

Intangible assets are amortised over their finite useful lives

as follows:

Computer softwares
Core deposit intangibles

(1)

Financial Assets at Fair Value Through Profit and

Loss (FVTPL)

Financial assets are classified as FVTPL if they are

held-for-trading (HFT) or are designated as such
upon initial recognition. The Group and the Bank do
not have any financial instruments designated at
FVTPL upon initial recognition.

Subsequent to initial recognition, HFT are measured

at fair value. Any gains or losses arising from changes
in fair value are recognised in profit and loss under
the caption of non-interest income.

(2)

Loans and Receivables

Loans and receivables are non-derivative financial

assets with fixed or determinable payments that are
not quoted in an active market. Financial assets
classified in this category include cash and balances
with banks, reverse repurchase agreements and loans,
advances and financing. These financial assets are
initially recognised at fair value, including direct and
incremental transaction costs, and subsequently
measured at amortised cost using the effective
interest method.

(3)

Held to Maturity (HTM) Financial Assets

Financial assets with fixed or determinable payments

and fixed maturity are classified as HTM when the
Group and the Bank have the intention and ability to
hold to maturity.

Subsequent to initial recognition, HTM are measured

at amortised cost using effective interest method.
Amortisation of premium, accretion of discount,
impairment and gain or loss arising from
derecognition of securities HTM are recognised in the
income statement.

3 5 years
8 years

(vi) Financial assets

(a)

Date of recognition

All financial assets are initially recognised on the trade date

i.e. the date that the Group and the Bank become a party
to the contractual provision of the instruments.

(b)

Initial recognition and subsequent measurement

The Group and the Bank determine the classification of

financial assets at initial recognition and the categories
include Financial Assets at Fair Value Through Profit and
Loss (FVTPL), loans and receivables, held-to-maturity
(HTM) and available-for-sale securities (AFS) in which the
details are disclosed below.

FINANCIAL STATEMENTS

Maybank Annual Report 2011

269
At A Glance

(vi) Financial assets (contd.)

(b)

Initial recognition and subsequent measurement

(contd.)
(4)

Available for Sale (AFS) Financial Assets

AFS are financial assets that are designated as
available for sale or are not classified in any of the
three (3) preceding categories.

Derecognition

A financial asset is derecognised when:

(1)

Loans and receivables

Classification of loans, advances and financing as

impaired
Prior to the adoption of FRS 139

The rights to receive cash flows from the asset have

expired;

The Group and the Bank has transferred its rights to

receive cash flows from the asset or has assumed an
obligation to pay the received cash flows in full without
material delay to a third party under a pass through
arrangement; and either:

Loans were classified as non-performing when

principal or interest/profit or both are past due for
three (3) months or more.

Upon the adoption of FRS 139

Loans are classified as impaired when:

the Group and the Bank has neither transferred nor

retained substantially all the risks and rewards of
the asset, but has transferred control of the asset.

principal or interest/profit or both are past due

for three (3) months or more; or

where loans in arrears for less than three (3)

months exhibit indications of credit weaknesses,
whether or not impairment loss has been
provided for; or

where an impaired loan has been rescheduled or

restructured, the loan will continue to be
classified as impaired until repayments based on
the revised and/or restructured terms have been
observed continuously for a period of six (6)
months.

AGM Information

When the Group and the Bank has transferred its rights to
receive cash flows from an asset or has entered into a pass
through arrangement, and has neither transferred nor
retained substantially all the risks and rewards of the asset
nor transferred control of the asset, the asset is recognised

Financial & Others

the Group and the Bank has transferred

substantially all the risks and rewards of the asset,
or

Governance

Evidence of impairment may include indications that the

borrower or a group of borrowers is experiencing
significant financial difficulty, the probability that they will
enter bankruptcy or other financial reorganisation, default
or delinquency in interest or principal payments and where
observable data indicates that there is a measureable
decrease in the estimated future cash flows, such as
changes in arrears or economic conditions that correlate
with defaults.

Leadership

(c)

Responsibility

After initial recognition, AFS are measured at fair

value. Any gain or loss arising from a change in fair
value after applying amortised cost method are
recognised directly in other comprehensive income,
except that impairment losses, foreign exchange
gains and losses on monetary instruments and
interest calculated using the effective interest method
are recognised in profit or loss. The cumulative gain
or loss previously recognised in other comprehensive
income is reclassified from equity to profit or loss as a
reclassification adjustment when the financial asset is
derecognised in profit or loss. Dividends on an AFS
instrument are recognised in profit or loss when the
Groups and the Banks right to receive payment is
established.

Business Review

The Group and the Bank assesses at each reporting date

whether there is any objective evidence that a financial
assets, including security or group of securities (other than
held-for-trading financial assets) is impaired. A financial
asset or a group of financial assets is deemed to be
impaired if, and only if, there is objective evidence of
impairment as a result of one or more events that has
occurred after the initial recognition of the asset (an
incurred loss event) and that loss event(s) has an impact on
the estimated future cash flows of the financial asset or the
group of financial assets that can be reliably estimated.

Performance

AFS investments include equity and debt securities.

AFS investments include financial assets that are
intended to be held for an indefinite period of time
and which may be sold in response to liquidity needs
or changes in market condition.

Impairment of financial assets

Strategy

(d)

Who We Are

to the extent of the Groups and the Banks continuing

involvement in the asset. In that case, the Group and the
Bank also recognises an associated liability. The transferred
asset and associated liability are measured on a basis that
reflects the rights and obligations that the Group and the
Bank has retained.

Our Perspective

3. Significant accounting policies (contd.)

270

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

3. Significant accounting policies (contd.)

(vi) Financial assets (contd.)
(d)

Impairment Process Written off accounts

Where a loan is uncollectible, it is written off against

the related allowance for loan impairment. Such loans
are written off after the necessary procedures have
been completed and the amount of the loss has been
determined. Subsequent recoveries of the amounts
previously written off are recognised in the income
statement.

Allowances for doubtful debts Prior to implementation

of FRS 139

Specific allowances are made for doubtful debts

which have been individually reviewed and
specifically identified as bad and doubtful. Additional
allowances are made for long outstanding nonperforming loans aged more than five (5) years.

In addition, a general allowance based on a certain

percentage of total risk-weighted assets for credit risk,
which takes into account all statement of financial
position items and their perceived credit risk levels, is
maintained.

The allowance for doubtful debts and financing of the

Group and the Bank are computed based on the
requirements of BNM/GP3, which is consistent with
the adoption made in the previous audited annual
financial statements.

(2)

Available-for-Sale (AFS)

For AFS securities, the Group and the Bank assess at

each reporting date whether there is objective
evidence that an investment is impaired.

In the case of debt instruments classified as AFS, the

Group and the Bank assess individually whether there
is objective evidence of impairment based on the
same criteria as financial assets carried at amortised
cost. However, the amount recorded for impairment is
the cumulative loss measured as the difference
between the amortised cost and the current fair
value, less any impairment loss on that investment
previously recognised in the income statement.
Future interest income is based on the reduced
carrying amount and is accrued using the rate of
interest used to discount the future cash flows for the
purpose of measuring the impairment loss.

Impairment of financial assets (contd.)

(1)

Loans and receivables (contd.)

Impairment Process Individual assessment

The Group and the Bank assess if objective evidences

of impairment exist for loans, advances and financing
which are deemed to be individually significant.

If there is objective evidence that an impairment loss

has been incurred, the amount of the loss is
measured as the difference between the loans
carrying amount and the present value of the
estimated future cash flows discounted at the loans
original effective interest rate. The carrying amount of
the loan is reduced through the use of an allowance
account and the amount of the loss is recognised in
the income statement.

Impairment Process Collective assessment

Loans which are not individually significant and loans

that have been individually assessed with no
evidence of impairment loss are grouped together for
portfolio impairment assessment. These loans are
grouped within similar credit risk characteristics for
collective assessment, whereby data from the loan
portfolio (such as credit quality, levels of arrears,
credit utilisation, loan to collateral ratios etc.) and
concentrations of risks (such as the performance of
different individual groups) are taken into
consideration.

Future cash flows in a group of financial assets that

are collectively evaluated for impairment are
estimated on the basis of the contractual cash flows
of the assets in the Group and the Bank and historical
loss experience for assets with credit risk
characteristics similar to those in the Group and the
Bank. Historical loss experience is adjusted on the
basis of current observable data to reflect the effects
of current conditions that did not affect the period on
which the historical loss experience is based and to
remove the effects of conditions in the historical
period that do not currently exist.

Estimates of changes in future cash flows for groups

of assets should reflect and be directionally consistent
with changes in related observable data from period
to period. The methodology and assumptions used
for estimating future cash flows are reviewed
regularly by the Group and the Bank to reduce any
differences between loss estimates and actual loss
experience.

FINANCIAL STATEMENTS

Maybank Annual Report 2011

271
At A Glance

(vi) Financial assets (contd.)

(2)

Available-for-Sale (AFS) (contd.)

In the case of equity investments classified as AFS,

the objective evidence would also include a
significant or prolonged decline in the fair value of
the investment below its cost. The Group and the
Bank treats significant generally as 25% and for
consecutive quarters. Where there is evidence of
impairment, the cumulative loss measured as the
difference between the acquisition cost and the
current fair value, less any impairment loss on that
investment previously recognised in the income
statement is removed from equity and recognised in
the income statement.

Impairment losses on equity investments are not

reversed through the income statement; increases in
the fair value after impairment are recognised in
other comprehensive income.

Determination of fair value

For financial instruments measured at fair value, the fair

value is determined by reference to quoted market prices
or by using valuation models. For financial instruments with
observable market prices which are traded in active
markets, the fair values are based on their quoted market
price or dealer price quotations. These include listed equity
securities and broker quotes from Bloomberg and Reuters.

(1)

Held to Maturity (HTM)

For securities carried at amortised cost in which there

are objective evidence of impairment, impairment
loss is measured as the difference between the
securities carrying amount and the present value of
the estimated future cash flows discounted at the
securities original effective interest rate. The amount
of the impairment loss is recognised in the income
statement.

For all other financial instruments, fair value is determined

using appropriate valuation techniques. In such cases, the
fair values are estimated using discounted cash flow
models and option pricing models, and based on
observable data in respect of similar financial instruments
and using inputs (such as yield curves) existing as at the
reporting date. The Group and the Bank generally use
widely recognised valuation models with market
observable inputs for the determination of fair values, due
to the low complexity of financial instruments held.

Subsequent reversals in the impairment loss is

recognised when the decrease can be objectively
related to an event occurring after the impairment
loss was recognised, to the extent that the securities
carrying amount does not exceed its amortised cost
at the reversal date. The reversal is recognised in the
income statement.

Investments in unquoted equity instruments whose fair

value cannot be reliably measured are measured at cost,
and assessed for impairment at each reporting date.

(vii) Financial liabilities

(a)

Date of recognition

All financial liabilities are initially recognised on the trade

date i.e. the date that the Group and the Bank become a
party to the contractual provision of the instruments.

Financial & Others

For unquoted equity securities carried at cost,

impairment loss is measured as the difference
between the securities carrying amount and the
present value of estimated future cash flows
discounted at the current market rate of return for
similar securities. The amount of impairment loss is
recognised in the income statement and such
impairment losses are not reversed subsequent to its
recognition.

Governance

(f)

Leadership

Reclassifications are made at fair value as at the

reclassification date, whereby the fair value becomes the
new cost or amortised cost, as applicable. Any fair value
gains or losses previously recognised in the income
statement are not reversed.

Responsibility

Impairment of financial assets (contd.)

Business Review

The Group and the Bank may choose to reclassify

non-derivative assets out from the held-for-trading
category, in rare circumstances, where the financial assets
are no longer held for the purpose of selling or
repurchasing in the short term. In addition, the Group and
the Bank may also choose to reclassify financial assets that
would meet the definition of loans and receivables out of
the held-for-trading or available-for-sale categories if the
Group and the Bank have the intention and ability to hold
the financial asset for the foreseeable future or until
maturity.

Performance

Strategy

Reclassification of financial assets

Who We Are

(d)

(e)

Our Perspective

3. Significant accounting policies (contd.)

AGM Information

272

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

3. Significant accounting policies (contd.)

These debt securities are classified as liabilities

in the statement of financial position as there is
a contractual obligation by the Group and the
Bank to make cash payments of either principal
or interest or both to holders of the debt
securities and that the Group and the Bank is
contractually obliged to settle the financial
instrument in cash or another financial
instrument.

Subsequent to initial recognition, debt

securities issued are recognised at amortised
cost, with any difference between proceeds net
of transaction costs and the redemption value
being recognised in the income statement over
the period of the borrowings on an effective
interest method.

(3)

Payables
Payables are recognised initially at fair value
plus directly attributable transaction costs and
subsequently measured at amortised cost using
the effective interest method.

(4)

Bills and acceptance payable

Bills and acceptances payable represent the
Groups and the Banks own bills and
acceptances rediscounted and outstanding in
the market.

(vii) Financial liabilities (contd.)

(b)

Initial recognition and subsequent measurement

Financial liabilities are classified according to the substance

of the contractual arrangements entered into and the
definitions of a financial liability.

Financial liabilities, within the scope of FRS 139, are

recognised in the statement of financial position when, and
only when, the Group and the Bank become a party to the
contractual provisions of the financial instrument. Financial
liabilities are classified as either financial liabilities at fair
value through profit or loss or other financial liabilities.

Financial liabilities at fair value through profit or

loss

Financial liabilities at fair value through profit or loss

include financial liabilities held for trading and
financial liabilities designated upon initial recognition
as at fair value through profit or loss.

Financial liabilities held for trading include derivatives

entered into by the Group and the Bank that do not
meet the hedge accounting criteria. Derivative
liabilities are initially measured at fair value and
subsequently stated at fair value, with any resultant
gains or losses recognised in profit or loss. Net gains
or losses on derivatives include exchange differences.

The Group and the Bank have not designated any

financial liabilities as at fair value through profit or
loss.

Other financial liabilities

The Groups and the Banks other financial liabilities

include deposits from customers, deposits and
placements of banks and financial institutions, debt
securities (including borrowings), payables, bills and
acceptance payable and other liabilities.
(1)

(2)

(5)

(c)

Derecognition

A financial liability is derecognised when the obligation

under the liability is redeemed or otherwise extinguished.
When an existing financial liability is replaced by another
from the same lender on substantially different terms, or
the terms of an existing liability are substantially modified,
such an exchange or modification is treated as a
derecognition of the original liability and the recognition of
a new liability, and the difference in the respective carrying
amounts is recognised in profit or loss.

Deposits from customers, deposits and placements

of banks and financial institutions
Deposits from customers, deposits and
placements of banks and financial institutions
are stated at placement values.
Debt securities
Debt securities issued are classified as financial
liabilities or equity in accordance with the
substance of the contractual terms of the
instruments. The Groups debt securities issued
consist mainly of subordinated notes,
Innovative Tier I capital securities and
borrowings.

Other liabilities
Other liabilities are stated at cost which is the
fair value of the consideration expected to be
paid in the future for goods and services
received.

(viii) Derivative instruments and hedge accounting

(a)

Derivative instruments

The Group and the Bank use and trade derivatives such as
interest rate swap and futures, credit default swaps, cross
currency swaps, forward foreign exchange contracts and
options on interest rates, foreign currencies and equities.

FINANCIAL STATEMENTS

Maybank Annual Report 2011

273
At A Glance

(viii) Derivative instruments and hedge accounting (contd.)

Derivative instruments are initially recognised at fair value,

which is normally zero or negligible at inception for
non-option derivatives and equivalent to the market
premium paid or received for purchased or written options.
The derivatives are subsequently re-measured at their fair
value. Fair values are obtained from quoted market prices
in active markets, including recent market transactions, and
valuation techniques that include discounted cash flow
models and option pricing models, as appropriate. All
derivatives are carried as assets when fair value is positive
and as liabilities when fair value is negative. Changes in the
fair value of any derivatives that do not qualify for hedge
accounting are recognised immediately in the income
statement.
Hedge accounting

The Group and the Bank use derivative instruments to

manage exposures to interest rate, foreign currency and
credit risks. In order to manage particular risks, the Group
and the Bank applies hedge accounting for transactions
which meet specified criteria.

Where a derivative financial instrument hedges the

changes in fair value of a recognised asset or liability,
any gain or loss on the hedging instrument is
recognised in the income statement. The hedged
item is also stated at fair value in respect of the risk
being hedged, with any gain or loss being recognised
in the income statement.

When a forecast transaction is no longer expected to

occur, the cumulative gain or loss that was reported
in other comprehensive income is immediately
transferred to income statement.

The Group and the Bank did not apply cash flow
hedge as at the financial year end.

(3)

Hedge of net investments in foreign operations

Hedges of net investments in foreign operations are

accounted for similarly to cash flow hedges. Any gain
or loss on the hedging instrument relating to the
effective portion of the hedge is recognised in other
comprehensive income. The gain or loss relating to
the ineffective portion is recognised immediately in
the income statement.

On disposal of the foreign operations, the cumulative

value of any such gains or losses recognised in other
comprehensive income is transferred to the income
statement.

The Group and the Bank did not apply hedge of net
investments in foreign operations as at the financial
year end.

Financial & Others

AGM Information

If the hedging instrument expired or is sold,

terminated or exercised or where the hedge no
longer meets the criteria for hedge accounting, the
hedge relationship is terminated. For hedged items
recorded at amortised cost, the difference between
the carrying value of the hedged item on termination
and the face value is amortised over the remaining
term of the original hedge using the effective interest
rate. If the hedged item is derecognised, the
unamortised fair value adjustment is recognised
immediately in the income statement.

When a hedging instrument expires, or is sold,

terminated, exercised or when a hedge no longer
meets the criteria for hedge accounting, any
cumulative gain or loss existing in other
comprehensive income at that time remains in other
comprehensive income and is recognised when the
hedged forecast transaction is ultimately recognised
in the income statement.

Governance

Fair value hedge

Leadership

(1)

When the hedged cash flow affects the income

statement, the gain or loss on the hedging
instrument is recorded in the corresponding income
or expense line of the income statement.

Responsibility

At the inception of the hedge relationship, the Group and

the Bank formally documents the relationship between the
hedged item and the hedging instrument, including the
nature of the risk, the objective and strategy for
undertaking the hedge and the method that will be used
to assess the effectiveness of the hedging relationship.

Business Review

(b)

For designated and qualifying cash flow hedges, the

effective portion of the gain or loss on the hedging
instrument is initially recognised directly in equity in
the cash flow hedge reserve. The ineffective portion
of the gain or loss on the hedging instrument is
recognised immediately in non-interest income.

Performance

Strategy

Derivative instruments (contd.)

Cash flow hedge

Who We Are

(a)

(2)

Our Perspective

3. Significant accounting policies (contd.)

274

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

3. Significant accounting policies (contd.)

Any revaluation surplus is recognised in other comprehensive

income and accumulated in equity under the asset revaluation
reserve, except to the extent that it reverses a revaluation
decrease of the same asset previously recognised in profit or loss,
in which case the increase is recognised in profit or loss. A
revaluation deficit is recognised in profit or loss, except to the
extent that it offsets an existing surplus on the same asset carried
in the asset revaluation reserve.

Any accumulated depreciation as at the revaluation date is

eliminated against the gross carrying amount of the asset and
the net amount is restated to the revalued amount of the asset.
The revaluation surplus included in the asset revaluation reserve
in respect of an asset is transferred directly to retained earnings
on retirement or disposal of the asset.

(ix) Embedded derivatives

Derivatives embedded in other financial instruments are treated

as separate derivatives and recorded at fair value if their
economic characteristics and risks are not closely related to those
of the host contract, and the host contract is not itself held for
trading or designated at fair value through profit or loss. The
embedded derivatives separated from the host are carried at fair
value in the trading portfolio with changes in fair value
recognised in the income statement.

(x)

Other financial assets and financial liabilities: Repurchase

agreements

Securities purchased under resale agreements are securities

which the Group and the Bank had purchased with a
commitment to resell at future dates. The commitments to resell
the securities are reflected as assets on the statement of financial
position.

Conversely, obligations on securities sold under repurchase

agreements are securities which the Group and the Bank had
sold from its portfolio, with a commitment to repurchase at
future dates. Such financing transactions and corresponding
obligations to purchase the securities are reflected as liabilities
on the statement of financial position.

Freehold land has an unlimited useful life and therefore is not

depreciated. Buildings-in-progress are also not depreciated as
these assets are not available for use. Leasehold land is
depreciated over the period of the respective leases which ranges
from 35 to 999 years. The remaining period of respective leases
ranges from 6 to 906 years.

Depreciation of other property, plant and equipment is

computed on a straight-line basis over its estimated useful life at
the following annual rates:

Buildings on freehold land

50 years
Buildings on leasehold land 50 years or remaining life of
the lease, whichever is
shorter
Office furniture, fittings, equipment 10% - 25%
and renovations
Computers and peripherals
14% - 25%
Electrical and security equipment 8% - 25%
Motor vehicles
20% - 25%

(xi) Property, plant and equipment and depreciation

All items of property, plant and equipment are initially recorded

at cost. The cost of an item of property, plant and equipment is
recognised as an asset if, and only if, it is probable that future
economic benefits associated with the item will flow to the
Group and the cost of the item can be measured reliably.
Subsequent to recognition, plant and equipment and furniture
and fixtures are measured at cost less accumulated depreciation
and accumulated impairment losses. When significant parts of
property, plant and equipment are required to be replaced in
intervals, the Group recognises such parts as individual assets
with specific useful lives and depreciation, respectively. Likewise,
when a major inspection is performed, its cost is recognised in
the carrying amount of the plant and equipment as a
replacement if the recognition criteria are satisfied. All other
repair and maintenance costs are recognised in profit or loss as
incurred. Freehold land and buildings are measured at fair value
less accumulated depreciation on buildings and impairment
losses recognised after the date of the revaluation. Valuations are
performed with sufficient regularity to ensure that the carrying
amount does not differ materially from the fair value of the
freehold land and buildings at the reporting date.

The carrying values of property, plant and equipment are

reviewed for impairment when events or changes in
circumstances indicate that the carrying value may not be
recoverable.

The residual value, useful life and depreciation method are

reviewed at each financial year-end, and adjusted prospectively, if
appropriate.

An item of property, plant and equipment is derecognised upon

disposal or when no future economic benefits are expected from
its use or disposal. The difference between the net disposal
proceeds, if any and the net carrying amount is recognised in
profit or loss.

FINANCIAL STATEMENTS

Maybank Annual Report 2011

275
At A Glance

properties are also capitalised, on a specific identification basis, as

part of the cost of the development properties until the
completion of the development.

(xii) Investment properties

(xv) Foreclosed properties

(xvi) Cash and cash equivalents

The carrying amounts of assets, other than securities portfolio,

goodwill, intangible assets with indefinite useful life, investment
properties and deferred tax, are reviewed at each reporting date
to determine whether there is any indication of impairment. If
any such indication exists, the assets recoverable amount is
estimated to determine the amount of impairment loss.

For goodwill, intangible assets that have an indefinite useful life

and intangible assets that are not yet available for use, the
recoverable amount is estimated at each reporting date or more
frequently when indicators of impairment are identified.

For the purpose of impairment testing of these assets,

recoverable amount is determined on an individual asset basis
unless the asset does not generate cash flows that are largely
independent of those from other assets. If this is the case,
recoverable amount is determined for the cash-generating unit
(CGU) to which the asset belongs to. Goodwill acquired in a
business combination is, from the acquisition date, allocated to
each of the Groups CGUs, or groups of CGUs, that are expected
to benefit from the synergies of the combination, irrespective of
whether other assets or liabilities of the Group are assigned to
those units or groups of units.

The cost of properties under development comprise specifically

identified costs, including acquisition costs, development
expenditure, borrowing costs and other related expenditure.
Borrowing costs payable on loans funding development

(xviii) Provisions for liabilities

Provisions for liabilities are recognised when the Group and the
Bank have a present obligation as a result of a past event and it is
probable that an outflow of resources embodying economic
benefits will be required to settle the obligation, and a reliable
estimate of the amount can be made.

AGM Information

Development properties that are unsold are carried at the lower

of cost and net realisable value. Net realisable value is the
estimated selling price in the ordinary course of business less
cost to complete the development and selling expenses.

Financial & Others

Governance

(xiv) Development properties for sale

Development properties are those properties which are held with
the intention of development and sale in the ordinary course of
business.

For the purpose of the cash flow statements, cash and cash
equivalents include cash and bank balances and short-term funds
with remaining maturity of less than one month.

(xvii) Impairment of non-financial assets

Other assets are carried at anticipated realisable values. Bad

debts are written off when identified. An estimate is made for
doubtful debts based on a review of all outstanding amounts as
at the reporting date.

Foreclosed properties are those acquired in full or partial

satisfaction of debts and are stated at the lower of cost and fair
value.

Leadership

(xiii) Other assets

The Group uses the Completion of Contract method to recognise

revenue from the sale of development properties.

Responsibility

Transfers are made to or from investment property only when

there is a change in use. For a transfer from investment property
to owner-occupied property, the deemed cost for subsequent
accounting is the fair value at the date of change in use. For a
transfer from owner-occupied property to investment property,
the property is accounted for in accordance with the accounting
policy for property, plant and equipment set out in Note 3(xi) up
to the date of change in use.

Business Review

A property interest under an operating lease is classified and

accounted for as an investment property on a property-byproperty basis when the Group holds it to earn rentals or for
capital appreciation or both. Any such property interest under an
operating lease classified as an investment property is carried at
fair value.

Revenue from the sale of development properties is recognised

on the transfer of risk and rewards of ownership.

Performance

Gains or losses arising from changes in the fair values of

investment properties are recognised in profit or loss in the year
in which they arise.

Strategy

Investment properties are properties which are held either to

earn rental income or for capital appreciation or for both. Such
properties are initially measured at cost, including transaction
costs. Subsequent to initial recognition, investment properties are
stated at fair value which reflects market conditions at the
reporting date. Fair value is arrived at by reference to market
evidence of transaction prices for similar properties and is
performed by registered independent valuers having an
appropriate recognised professional qualification and recent
experience in the location and category of the properties being
valued.

Who We Are

Our Perspective

3. Significant accounting policies (contd.)

276

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

3. Significant accounting policies (contd.)

reclassified from equity to profit or loss of the Group on

disposal of the foreign operation.

(xviii) Provisions for liabilities (contd.)

Provisions are reviewed at each reporting date and adjusted to

reflect the current best estimate. Where the effect of the time
value of money is material, the amount of the provision is the
present value of the expenditure expected to be required to
settle the obligation.

Exchange differences arising on the translation of

non-monetary items carried at fair value are included in
profit or loss for the period except for the differences
arising on the translation of non-monetary items in respect
of which gains and losses are recognised directly in equity.
Exchange differences arising from such non-monetary items
are also recognised directly in equity.

(c)

Foreign operations

The results and financial position of foreign operations that

have a functional currency different from the presentation
currency (RM) of the consolidated financial statements are
translated into RM as follows:

(xix) Profit equalisation reserves (PER) on IBS operations

PER is the amount appropriated out of the total gross income in

order to maintain a certain level of return to depositors in
conformity with Bank Negara Malaysias The Framework of the
Rate of Return (BNM/GP2-i). PER is appropriated from and
written back to the total gross income in deriving the net
distributable gross income. The amount appropriated is shared by
the depositors and the Group. The PER is deducted at a rate
which does not exceed the maximum amount of the total of 15%
of monthly gross income, monthly net trading income, other
income and irregular income. PER is maintained up to the
maximum of 30% of total Islamic banking capital fund.

Assets and liabilities of foreign operations are

translated at the closing rate prevailing at the reporting
date;

Income and expenses for each income statement are

translated at average exchange rates for the year, which
approximates the exchange rates at the dates of the
transactions; and

All resulting exchange differences are taken directly to

other comprehensive income through the foreign
currency translation reserve.

(xx) Foreign currencies

(a)

Functional and presentation currency

The individual financial statements of each entity in the

Group are measured using the currency of the primary
economic environment in which the entity operates (the
functional currency). The consolidated financial statements
are presented in Ringgit Malaysia (RM), which is also the
Banks functional currency.

(b)

Foreign currency transactions

Transactions in foreign currencies are measured in the

respective functional currencies of the Bank and its
subsidiaries and are recorded on initial recognition in the
functional currencies at exchange rates approximating
those ruling at the transaction dates. Monetary assets and
liabilities denominated in foreign currencies are translated
at the rate of exchange ruling at the reporting date.
Non-monetary items denominated in foreign currencies
that are measured at historical cost are translated using the
exchange rates as at the dates of the initial transactions.
Non-monetary items denominated in foreign currencies
measured at fair value are translated using the exchange
rates at the date when the fair value was determined.

Exchange differences arising on the settlement of monetary

items or on translating monetary items at the reporting
date are recognised in profit or loss except for exchange
differences arising on monetary items that form part of the
Groups net investment in foreign operations, which are
recognised initially in other comprehensive income and
accumulated under foreign currency translation reserve in
equity. The foreign currency translation reserve is

On disposal of a foreign operation, the cumulative amount

recognised in other comprehensive income and
accumulated in equity under foreign currency translation
reserve relating to that particular foreign operation is
recognised in the profit or loss.

Goodwill and fair value adjustments arising on the

acquisition of foreign operations on or after 1 January 2006
are treated as assets and liabilities of the foreign operations
and are recorded in the functional currency of the foreign
operations and translated at the closing rate at the
reporting date. Goodwill and fair value adjustments which
arose on the acquisition of foreign subsidiaries before 1
January 2006 are deemed to be assets and liabilities of the
parent entity and are recorded in RM at the rates prevailing
at the date of acquisition.

(xxi) Income tax and zakat

(a)

Income tax

Income tax on the profit or loss for the year comprises

current and deferred taxes. Current tax is the expected
amount of income taxes payable in respect of the taxable
profit for the year and is measured using the tax rates that
have been enacted at the reporting date.

FINANCIAL STATEMENTS

Maybank Annual Report 2011

277
At A Glance

(xxi) Income tax and zakat (contd.)

Deferred tax is provided for using the liability method. In

principle, deferred tax liabilities are recognised for all
taxable temporary differences and deferred tax assets are
recognised for all deductible temporary differences, unused
tax losses and unused tax credits to the extent that it is
probable that taxable profit will be available against which
the deductible temporary differences, unused tax losses
and unused tax credits can be utilised. Deferred tax is not
recognised if the temporary difference arises from goodwill
or negative goodwill or from the initial recognition of an
asset or liability in a transaction which is not a business
combination and at the time of the transaction, affects
neither accounting profit nor taxable profit.

This represent business zakat payable by the Group in

compliance with Shariah principles and as approved by the
Groups Shariah Committee.

The depreciation policy for leased assets is in accordance

with that for depreciable property, plant and equipment as
described in Note 3(xi).

(c)

Operating lease the Group as lessee

Operating lease payments are recognised as an expense on

a straight-line basis over the term of the relevant lease. The
aggregate benefit of incentives provided by the lessor is
recognised as a reduction of rental expense over the lease
term on a straight-line basis.

In the case of a lease of land and buildings, the minimum

lease payments or the up-front payments made are
allocated, whenever necessary, between the land and the
buildings elements in proportion to the relative fair values
for leasehold interests in the land element and building
element of the lease at the inception of the lease. The
up-front payment represents prepaid lease payments and
are amortised on a straight-line basis over the lease term.

(xxii) Leases
(a)

Classification

A lease is recognised as a finance lease if it transfers

substantially to the Group all the risks and rewards
incidental to ownership. Leases of land and buildings are
classified as operating or finance leases in the same way as
leases of other assets and the land and buildings elements
of a lease of land and buildings are considered separately
for the purposes of lease classification. All leases that do
not transfer substantially all the risks and rewards are
classified as operating leases, with the following exceptions:

AGM Information

Property held under operating leases that would

otherwise meet the definition of an investment
property is classified as an investment property on a
property-by-property basis and, if classified as
investment property, is accounted for as if held under a
finance lease and

Financial & Others

Lease payments are apportioned between the finance costs

and the reduction of the outstanding liability. Finance costs,
which represent the difference between the total leasing
commitments and the fair value of the assets acquired, are
recognised in the profit or loss over the term of the
relevant lease so as to produce a constant periodic rate of
charge on the remaining balance of the obligations for
each accounting period.

Governance

Leadership

Zakat

Assets acquired by way of hire purchase or finance leases

are stated at an amount equal to the lower of their fair
values and the present value of the minimum lease
payments at the inception of the leases, less accumulated
depreciation and impairment losses. The corresponding
liability is included in the statement of financial position as
borrowings. In calculating the present value of the
minimum lease payments, the discount factor used is the
interest rate implicit in the lease, when it is practical to
determine; otherwise, the Banks incremental borrowing
rate is used. Any initial direct costs are also added to the
carrying amount of such assets.

Responsibility

(b)

Finance lease the Group as lessee

Business Review

Deferred tax is measured at the tax rates that are expected

to apply in the period when the asset is realised or the
liability is settled, based on tax rates that have been
enacted or substantively enacted at the reporting date.
Deferred tax is recognised as income or an expense and
included in the profit or loss for the period, except when it
arises from a transaction which is recognised directly in
equity, in which case the deferred tax is also recognised
directly in equity, or when it arises from a business
combination that is an acquisition, in which case the
deferred tax is included in the resulting goodwill or the
amount of any excess of the acquirers interest in the net
fair value of the acquirees identifiable assets, liabilities and
contingent liabilities over the cost of the combination.

(b)

Performance

Strategy

Income tax (contd.)

Who We Are

(a)

Land held for own use under an operating lease, the

fair value of which cannot be measured separately from
the fair value of the building situated thereon at the
inception of the lease, is accounted for as being held
under a finance lease, unless the building is also clearly
held under an operating lease.

Our Perspective

3. Significant accounting policies (contd.)

278

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

3. Significant accounting policies (contd.)

(xxii) Leases (contd.)

(d)

Operating lease the Group as lessor

Assets leased out under operating leases are presented on

the statement of financial positions according to the nature
of the assets. Rental income from operating leases is
recognised on a straight-line basis over the term of the
relevant lease. Initial direct costs incurred in negotiating
and arranging an operating lease are added to the carrying
amount of the leased asset and recognised on a straightline basis over the lease term.

(xxiii) Insurance
(a)

Life funds

The Life funds consist of long-term liabilities to

policyholders, determined by an annual actuarial valuation,
as well as accumulated surplus. Surplus is transferred to
the shareholders, and recognised in the income statement
as determined by the Appointed Actuary.

(b)

Takaful funds

The Groups Takaful funds are operated under the

Mudharabah and Wakalah models and are maintained in
accordance with the requirements of the Takaful Act, 1984
and comply with the principles of Shariah.

(c)

Premium and contribution liabilities

Premium and contribution liabilities is determined as

the higher of the aggregate of the Unearned
Premium Reserves (UPR) or the Unearned
Contribution Reserves (UCR) for all lines of business
and the best estimate value of the Unexpired Risk
Reserves (URR) with a provision of risk margin for
adverse deviation calculated at least 75% confidence
level at the overall subsidiary level.

(2) Unearned premium reserves and unearned

contribution reserves

Unearned Premium Reserves (UPR) and Unearned

Contribution Reserves (UCR) represent the portion
of the net premiums and contribution of insurance
policies and takaful certificates written that relate to
the unexpired periods of policies and certificates at
the end of the financial year. In determining the UPR
and UCR at the reporting date, the method that most
accurately reflect the actual unearned premium is
used as follows:

25% method for marine cargo and aviation cargo,

and transit business.

1/8th method for all classes of overseas inward

treaty business with a deduction of 20% for
commissions.

Bond policies and non-annual certificates are

time-apportioned over the periods of the risks.

(3) Unexpired risk reserves

Premium liabilities, unearned premium reserves and

unearned contribution reserves and unexpired risk
reserves
(1)

1/24th method for other classes of Malaysian

general policies and 1/365th method for all
classes of general takaful within Malaysia,
reduced by the corresponding percentage of
accounted gross direct business commissions and
agency-related expenses not exceeding limits
specified by Bank Negara Malaysia as follows:
Motor and bonds
10%
Fire, engineering, aviation and marine hull 15%
Medical health
Standalone individuals
15%
Group of 3 or more
10%
Workmen compensation and
employers liability
Foreign workers
10%
Others
25%
Other classes
25%

The URR is the prospective estimate of the expected

future payments arising from future events insured
under policies/certificates in force as at the valuation
date and also includes allowance for expenses,
including overheads and cost of reinsurance/retakaful,
expected to be incurred during the unexpired period
in administering these policies/certificates and
settling the relevant claims, and expected future
premium/contribution refunds.

(d)

Family Takaful fund

The Family Takaful fund consists of the amounts

attributable to participants as determined by the annual
actuarial valuation, the accumulated surplus attributable to
participants and AFS reserves pertaining to investments of
the Family Takaful fund. Any deficit in the general takaful
fund will be made good by the shareholders funds via a
benevolent loan or Qardhul Hassan. Surplus distributable to
participants is distributed in accordance with the terms and
conditions prescribed by the Shariah Committee of the
takaful subsidiary.

FINANCIAL STATEMENTS

Maybank Annual Report 2011

279
At A Glance

General Takaful fund

The General Takaful fund consists of unearned contribution

reserves, the accumulated surplus attributable to
participants and AFS reserves pertaining to investments of
the General Takaful fund. Any deficit in the General Takaful
fund will be made good by the shareholders funds via a
benevolent loan or Qardhul Hassan. Surplus distributable to
participants is distributed in accordance with the terms and
conditions prescribed by the Shariah Committee of the
respective takaful subsidiary.

(f)

Claims liabilities/provision for outstanding claims

For general insurance and general takaful businesses, a

liability for outstanding claims is recognised in respect of
both direct insurance and inward reinsurance. The amount
of outstanding claims is the best estimate of the
expenditure required together with related expenses less
recoveries to settle the present obligation at the reporting
date. Provision is also made for the cost of claims together
with related expenses incurred but not reported (IBNR) at
the reporting date. These are based on an actuarial
valuation by a qualified actuary, using a mathematical
method of estimation based on, amongst others, actual
claims development patterns.

A financial asset or a group of financial assets is deemed to be

impaired if, and only if, there is objective evidence of impairment
as a result of one or more events that has occurred after the
initial recognition of the asset (an incurred loss event) and that
loss event (or events) has an impact on the estimated future cash
flows of the financial asset or the group of financial assets that
can be reliably estimated.

Income and expense from Islamic banking business is recognised

on an accrual basis in accordance with the principles of Shariah.

Claims and provisions for claims arising on life insurance

and family takaful policies, including settlement costs, are
accounted for using the case basis method and for this
purpose, the benefits payable under a life insurance policy
are recognised as follows:
(i)

Dividend income is recognised when the shareholders right to

receive payment is established.

Premiums and contributions from general insurance and general

takaful businesses, respectively, are recognised as income in a
financial period in respect of risks assumed during that particular
financial period. Inward treaty reinsurance premiums are
recognised on the basis of periodic advices received from ceding
insurers.

Premiums and contributions for life assurance and family takaful

businesses, respectively, are recognised as income on assumption
of risks and subsequent premiums are recognised on due dates.
Premiums outstanding at reporting date are recognised as
income for the period, provided they are still within the grace
period allowed for payment. Contribution income on long term
policies is recognised as earned based on the timeapportionment method.

For all financial instruments measured at amortised cost and

interest/profit-bearing financial assets classified as held-fortrading and available-for-sale, interest income and expense for all
interest-bearing financial instruments are recognised within
interest income and interest expense in the profit or loss using
the effective interest method.

AGM Information

Financial & Others

Loan arrangement, management and participation fees, factoring

commissions, underwriting commissions, brokerage fees and
guarantee fees are recognised as income based on accrual on
time apportionment method. Fees from advisory and corporate
finance activities are recognised net of service taxes and
discounts on completion of each stage of the assignment.

death, surrender and other benefits without due

dates are treated as claims payable, on the date of
receipt of intimation of death of the assured or
occurrence of the contingency covered.

(xxiv) Recognition of interest, financing and profit income and

expense

Governance

(ii)

maturity or other policy benefit payments due on

specified dates are treated as claims payable on the
due dates;

(xxv) Recognition of fee and other income

Leadership

For life insurance and family takaful businesses, claims and

settlement costs that are incurred during the financial
period are recognised when a claimable event occurs and/
or the insurer is notified.

Responsibility

Interest on impaired financial assets is recognised using the rate

of interest used to discount the future cash flows for the purpose
of measuring the impairment loss.

Business Review

(e)

Performance

(xxiii) Insurance (contd.)

Strategy

The effective interest method is a method of calculating the

amortised cost of a financial asset or a financial liability and of
allocating the interest income or interest expense over the
relevant period. The effective interest rate is the rate that exactly
discounts estimated future cash payments or receipts through
the expected life of the financial instruments or, when
appropriate, a shorter period to the net carrying amount of the
financial asset or financial liability. When calculating the effective
interest rate, the Group takes into account all contractual terms
of the financial instrument and includes any fees or incremental
costs that are directly attributable to the instrument and are an
integral part of the effective interest rate, but does not consider
future credit losses.

Who We Are

Our Perspective

3. Significant accounting policies (contd.)

280

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

3. Significant accounting policies (contd.)

At each reporting date, the Group revises its

estimates of the number of options that are expected
to become exercisable on vesting date. It recognises
the impact of the revision of original estimates, if any,
in the profit or loss, and a corresponding adjustment
to equity over the remaining vesting period. The
equity amount is recognised in the share option
reserve.

The proceeds received net of any directly attributable

transaction costs are credited to share capital when
the options are exercised. The share option reserve is
transferred to retained earnings upon expiry of the
share option.

(ii)

Restricted share units (RSU)

Senior management personnel of the Group are

entitled to performance-based restricted shares as
consideration for services rendered. The RSU may be
settled by way of issuance and transfer of new
Maybank Shares or by cash at the absolute discretion
of the ESS Committee. The total fair value of RSU
granted to senior management employees is
recognised as an employee cost with a corresponding
increase in the reserve within equity over the vesting
period and taking into account the probability that
the RSU will vest. The fair value of RSU is measured at
grant date, taking into account, the market vesting
conditions upon which the RSU were granted but
excluding the impact of any non-market vesting
conditions. Non-market vesting conditions are
included in assumptions about the number of share
that are expected to be awarded on the vesting date.

At each reporting date, the Group revises its

estimates of the number of RSU that are expected to
be awarded on vesting date. It recognises the impact
of the revision of original estimates, if any, in the
profit or loss, and a corresponding adjustment to
equity over the remaining vesting period. The equity
amount is recognised in the ESS reserve.

(xxv) Recognition of fee and other income (contd.)

Gross contributions for takaful business are accounted for on

accrual basis in accordance with the Principles of Shariah as
advised by Etiqa Takaful Berhads Shariah Committee. Unrealised
income is deferred and receipts in advance are treated as
liabilities in the statement of financial position.

Rollover fees on margin accounts and management fees from

asset management are recognised on an accrual basis.

(xxvi) Employee benefits

(a)

Short-term benefits

Wages, salaries, bonuses and social security contributions

are recognised as an expense in the year in which the
associated services are rendered by employees of the
Group and the Bank. Short-term accumulating
compensated absences such as paid annual leave are
recognised when services are rendered by employees that
increase their entitlement to future compensated absences.
Short-term non-accumulating compensated absences such
as sick leave are recognised when the absences occur.

(b)

Defined contribution plans

As required by law, companies in Malaysia make

contributions to the Employees Provident Fund (EPF).
Certain foreign branches of the Bank and subsidiaries make
contributions to their respective countries statutory
pension schemes. Such contributions are recognised as an
expense in the income statement when incurred.

(c)

Share-based compensation

(i) ESOS

The ESOS is an equity-settled share-based

compensation plan that allows the Groups Directors
and employees to acquire shares of the Bank. The
total fair value of share options granted to employees
is recognised as an employee cost with a
corresponding increase in the share option reserve
within equity over the vesting period and taking into
account the probability that the options will vest. The
fair value of share options is measured at grant date,
taking into account, if any, the market vesting
conditions upon which the options were granted but
excluding the impact of any non-market vesting
conditions. Non-market vesting conditions are
included in assumptions about the number of
options that are expected to become exercisable on
vesting date.

(xxvii) Non-current assets held-for-sale and discontinued operation

Non-current assets are classified as held-for-sale if their carrying

amount will be recovered principally through a sale transaction
rather than through continuing use. The condition is regarded as
met only when the sale is highly probable and the asset is
available for immediate sale in its present condition subject only
to terms that are usual and customary.

FINANCIAL STATEMENTS

Maybank Annual Report 2011

281
At A Glance

(xxvii) Non-current assets held-for-sale and discontinued operation

(contd.)

Ordinary share are clasified as equity when there is no contracted

obligation to transfer cash on other financial assets. Cost directly
attributable to the issuance of new equity shares are taken for
equity as a deduction for the proceeds.

Dividends declared on ordinary shares are accounted for as an

appropriation of retained profits in the period in which all
relevant approvals have been obtained.

All transactions between business segments are conducted on an

arms length basis, with intra-segment revenue and costs being
eliminated in head office. Income and expenses directly
associated with each segment are included in determining
business segment performance.

(xxxii) Standards and interpretations issued but not yet effective

Where it is not probable that an outflow of economic benefits

will be required, or the amount cannot be estimated reliably, the
obligation is desclosed as a contingent liability, unless the
probability or outflow of economic benefits is remote. Possible
obligations, whose existence will only be confirmed by the
occurence or non-occurence of one of more future events are
also disclosed as contingent liabilities unless the probability of
outflow of economic benefits is remote.

A contingent asset is a possible asset that arises from past events

whose existence will be confirmed by the occurrence or
non-occurrence of one or more uncertain future events beyond
the control of the Group. The Group does not recognise
contingent assets but discloses its existence where inflows of
economic benefits are probable, but not virtually certain.

(xxx) Earnings per share

The Group and the Bank plan to adopt the above

pronouncements when they become effective in the respective
financial period. These pronouncements are expected to have no
significant impact to the financial statements of the Group and
the Bank upon their initial application.

AGM Information

The Group presents basic and diluted (where applicable) earnings

per share (EPS) date for its ordinary shares. Basic EPS is
calculated by dividing the profit or loss attributable to ordinary
shareholders of the Bank by the weighted average number or
ordinary shares outstanding during the period net of treasury

Financial & Others

(xxix) Contingent liabilities and contingent assets

Governance

At the date of authorisation of these financial statements, the

following new FRSs, amendments to FRS and Interpretations of
the Issues Committee (IC Interpretations) have been issued but
are not yet effective and have not been adopted by the Group
and the Bank:
(i) Amendments to FRS 1: Limited Exemption from
Comparative FRS 7 Disclosures for First-time Adopters
(ii) Amendments to FRS 7: Improving Disclosures about
Financial Instruments
(iii) Amendments to FRSs [Improvements to FRSs (2010)]
(iv) Additional Exemptions for First-time Adopters
(Amendments to FRS 1)
(v) Group Cash-Settled Share-based Payment Transactions
(Amendments to FRS 2)
(vi) FRS 124: Related Party Disclosures
(vii) Amendments to IC Interpretation 13 [Improvements to FRSs
(2010)]
(viii) Amendments to IC Interpretation 14: Prepayments of a
Minimum Funding Requirement (Amendments to IC
Interpretation 14)
(ix) IC Interpretation 18: Transfers of Assets from Customers
(x) IC Interpretation 4: Determining Whether an Arrangement
contains a Lease
(xi) IC Interpretation 19: Extinguishing Financial Liabilities with
Equity Instruments
(xii) TR i-4: Shariah Compliant Sale Contracts

Leadership

Responsibility

Operating segments are reported in a manner consistent with the

internal reporting provided to the chief operating decision-maker.
The chief operating decision-maker is the person or group that
allocates resources to and assesses the performance of the
operating segments of an entity. The Group has determined the
Group Executive Committee as its chief operating decision-maker.

Business Review

(xxviii) Share capital and dividends declared

Performance

A component of the Bank is classified as a discontinued operation

when the criteria to be classified as held-for-sale have been met
or it has been disposed off and such a component represents a
separate major line of business or geographical area of
operations, is part of a single co-ordinated major line of business
or geographical area of operations or a subsidiary acquired
exclusively with a view to resale.

(xxxi) Segment reporting

Strategy

Immediately before classification as held-for-sale, the

measurement of the non-current assets is brought up-to-date in
accordance with applicable FRSs. Then, on initial classification as
held-for-sale, non-current assets (other than the investment
properties, deferred tax assets, employees benefits assets,
financial assets and inventories) are measured in accordance with
FRS 5 that is at the lower of carrying amount and fair value less
costs to sell. Any differences are included in profit or loss.

Who We Are

shares. Diluted EPS is determined by adjusting the profit or loss

attributable to ordinary shareholders and the weighted average
number of ordinary shares outstanding for the effects of all
dilutive potential ordinary shares. No adjustment is made for antidilutive potential ordinary shares.

Our Perspective

3. Significant accounting policies (contd.)

282

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

4. Significant accounting estimates and

judgements

(v)

The preparation of financial statements requires management to make

judgements, estimates and assumptions that affect the application of
policies and reported amounts of assets, liabilities, income and
expenses. Although these estimates are based on managements best
knowledge of current events and actions, actual results may differ from
those estimates. Critical accounting estimates and assumptions used
that are significant to the financial statements, and areas involving
higher degree of judgement and complexity, are as follows:
(i)

Fair value estimation of securities held-for-trading (Note 8),

securities available-for-sale (Note 9) and derivative financial
instruments (Note 12)
The fair value of securities and derivatives that are not traded in
an active market are determined using valuation techniques
based on assumptions of market conditions existing at the
reporting date, including reference to quoted market prices and
independent dealer quotes for similar securities and discounted
cash flow method.

(ii)

Valuation of investment properties (Note 14)

The measurement of the fair value for investment properties is

arrived at by reference to market evidence of transaction prices
for similar properties and is performed by independent
professional valuers.

(iii) Impairment of goodwill (Note 19)

The Group tests annually whether the goodwill that has an

indefinite life has suffered any impairment by measuring the
recoverable amount of the goodwill based on the value-in-use
method, which requires the use of estimates of cash flow
projections, growth rates and discount rates. Changes to the
assumptions used by management, particularly the discount rate
and the terminal value, may affect the results of the impairment
assessment.

The Groups and the Banks intangible assets that can be

separated and sold and have a finite useful life are amortised
over their estimated useful life.

The determination of the estimated useful life of these intangible

assets requires the Banks management to analyse the
circumstances, the industry and market practice and also to use
judgement. At each reporting date, or more frequently when
events or changes in circumstances dictate, intangible assets are
assessed for indications of impairment. If indications are present,
these assets are subject to an impairment review. The impairment
review comprises a comparison of the carrying amount of the
assets with its recoverable amount.

(a)

Life fund

With effect from 1 January 2010, liabilities of the life

insurance business are determined in accordance with
BNMs Risk-Based Capital Framework for insurers and valued
using an actuarial valuation methodology, which is defined
by the Framework as the Gross Premium Valuation method.
The expected future cash flows are determined using best
estimate assumptions with a provision of risk margin for
adverse deviation on a 75% confidence level at the overall
subsidiary level.

(b)

Family Takaful fund

Liabilities of the Family Takaful fund is determined based

on annual actuarial valuation whereby estimates are made
for future deaths, disabilities, maturities, instruments
returns, voluntary terminations and expenses in accordance
with contractual and regulatory requirements.

(c)

General Insurance and General Takaful Businesses

The establishment of technical provisions for general

insurance and general takaful businesses, including
unearned premium/contribution reserves, unexpired risk
reserves and claim liabilities/provision for outstanding
claims, are based on specific methodologies as described in
Note 3(xxiii). The eventual development of premium/
contribution and claim liabilities may vary from initial
estimates due to uncertainties including but not restricted
to inflation, economic conditions, judicial interpretations
and legislative changes.

(vi) Deferred tax (Note 25) and income taxes (Note 40)

(iv) Impairment of other intangible assets (Note 19)

Liabilities of insurance business (Note 54)

The Group and the Bank are subject to income taxes in many
jurisdictions and significant judgement is required in estimating
the provision for income taxes. There are many transactions and
interpretations of tax law for which the final outcome will not be
established until some time later. Liabilities for taxation are
recognised based on estimates of whether additional taxes will
be payable. The estimation process includes seeking expert
advice where appropriate. Where the final liability for taxation is
different from the amounts that were initially recorded, the
differences will affect the income tax and deferred tax provisions
in the period in which the estimate is revised or the final liability
is established.

(vii) Impairment of investment in subsidiaries (Note 16) and

interest in associates (Note 17)

The Group and the Bank assess whether there is any indication
that an investment in subsidiaries and interest in associates may
be impaired at each reporting date.

FINANCIAL STATEMENTS

283

Maybank Annual Report 2011

At A Glance

If indicators are present, these assets are subject to impairment

review. The impairment review comprises a comparison of the
carrying amount of the investment and the investments
estimated recoverable amount.

Judgements made by management in the process of applying

the Groups and the Banks accounting policies in respect of
investment in subsidiaries and interest in associates are as
follows:
(i)

Group

(viii) Impairment of securities portfolio (Notes 8, 9 and 10)

2010
RM000

Cash balances
and deposits
with banks
and other
financial
institutions
38,697,294
Money at call
106,225

28,629,055
78,937

25,780,477
23,319

19,403,616

38,803,519

28,707,992

25,803,796

19,403,616

Included in cash and short-term funds of the Group are monies held in
trust of RM2,288,415,000 (2010: RM291,646,000) in respect of the
stockbroking business.

6. Deposits and placements with financial

institutions
Group

Licensed
banks (a)
Bank Negara
Malaysia
Other financial
institutions
(b)

Bank

2011
RM000

2010
RM000

2011
RM000

2010
RM000

9,141,989

7,901,083

6,535,522

6,164,976

438,018

393,648

397,443

313,178

711,506

620,644

711,506

620,044

10,291,513

8,915,375

7,644,471

7,098,198

AGM Information

The Group and the Bank review the Securities Portfolio of HFT,
AFS and HTM and assess at each reporting date whether there is
any objective evidence that the investment is impaired. If there
are indicators or objective evidence, the assets are subject to
impairment review.

2011
RM000

Financial & Others

Management believes that no reasonably expected possible

change in the key assumptions described above would cause the
carrying amounts of the investments to materially exceed their
recoverable amounts.

2010
RM000

Governance

2011
RM000

Leadership

Sensitivity to changes in assumptions

Bank

Responsibility

5. Cash and short-term funds

Depending on their nature and the industries in which the

investments relate to, judgements are made by
management to select suitable methods of valuation such
as, amongst others, discounted cash flow, realisable net
asset value and sector average price-earning ratio methods.

Once a suitable method of valuation is selected, management

makes certain assumptions concerning the future to estimate the
recoverable amount of the investment. These assumptions and
other key sources of estimation uncertainty at the reporting date,
may have a significant risk of causing a material adjustment to
the carrying amounts of the investments within the next financial
year. Depending on the specific individual investment,
assumptions made by management may include, amongst
others, assumptions on expected future cash flows, revenue
growth, discount rate used for purposes of discounting future
cash flows which incorporates the relevant risks, and expected
future outcome of certain past events.

Determination of significant or prolonged requires

judgement and management evaluation on various factors,
such as historical fair value movement and the significant
reduction in fair value.

Business Review

(ii)

Performance

(ii)

The Bank determines whether its investments are impaired

following certain indications of impairment such as,
amongst others, prolonged shortfall between market value
and carrying amount, significant changes with adverse
effects on the investment and deteriorating financial
performance of the investment due to observed changes
and fundamentals.

Determination whether its investment is impaired following

certain indicators such as, amongst others, prolonged
decline in fair value, significant financial difficulties of the
issuer or obligors, the disappearance of an active trading
market and deterioration of the credit quality of the issuers
or obligors.

Strategy

(i)

Who We Are

(vii) Impairment of investment in subsidiaries (Note 16) and

interest in associates (Note 17) (contd.)

The impairment review comprises the following judgement made

by management:

Our Perspective

4. Significant accounting estimates and

judgements (contd.)

284

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

6. Deposits and placements with financial institutions (contd.)

(a)

Included in deposits and placements with licensed banks of the Group are monies held in trusts of RM570,046,000 (2010: RM8,733,000) in respect
of the stockbroking business.

(b)

Included in deposits and placements with other financial institutions in satisfaction of capital equivalency deposit requirements are as follows:
(i)

USD10.0 million (2010: USD10.0 million) or Ringgit Malaysia equivalent of RM30.2 million (2010: RM32.4 million) pledged with the New York
State Banking Department;

(ii)

SGD73.1 million (2010: SGD69.9 million) or Ringgit Malaysia equivalent of RM179.7 million (2010: RM161.8 million) placed with Monetary
Authority of Singapore; and

(iii) USD73.6 million (2010: USD57.0 million) or Ringgit Malaysia equivalent of RM222.7 million (2010: RM184.6 million) placed with National Bank
of Cambodia.

7. Securities purchased under resale agreements and obligations on securities sold under
repurchase agreements
(a)

The underlying securities purchased under resale agreements are as follows:

Group

Malaysian Government Securities

(b)

Bank

2011
RM000

2010
RM000

2011
RM000

2010
RM000

371,237

371,237

The securities sold under repurchase agreements are as follows:

Group

Securities held-for-trading (Note 8(a))

Securities available-for-sale (Note 9(b))

Bank

2011
RM000

2010
RM000

2011
RM000

2010
RM000

275,415
98,147

407,056

275,415
98,147

373,562

407,056

373,562

8. Securities held-for-trading
Group

At fair value
Money market instruments:
Malaysian Government Securities
Malaysian Government Treasury Bills
Malaysian Government Investment Issues
Bank Negara Malaysia Bills and Notes
Khazanah Bonds
Bank Negara Malaysia Monetary Notes
Foreign Government Treasury Bills
Foreign Government Securities
Foreign Certificates of Deposits
Sukuk Ijarah Bonds

Bank

2011
RM000

2010
RM000

2011
RM000

2010
RM000

311,479
111,888
50,537
3,658
59,953
251,412
155,361
315,915
240,590

267,762
25,727
50,818

605,006
509,037
90,780
228,598
69,902

311,479
111,888
20,256
3,658
59,953
9,060
155,360

267,762
25,727
25,453

581,545
509,037

49,930

1,500,793

1,847,630

671,654

1,459,454

FINANCIAL STATEMENTS

Maybank Annual Report 2011

285
At A Glance
Our Perspective

8. Securities held-for-trading (contd.)

Group

Bank
2011
RM000

2010
RM000

358,871

22,802

12,104

22,802

358,871

22,802

12,104

22,802

Unquoted securities:
Foreign private debt securities

1,172,900

185,855

1,091,723

164,856

Private and Islamic Debt Securities in Malaysia

1,109,414

594,816

1,109,414

594,816

2,282,314

780,671

2,201,137

759,672

4,141,978

2,651,103

2,884,895

2,241,928

Business Review

Quoted securities:
Shares

Total securities held-for-trading

(a)

Strategy

2010
RM000

Performance

Who We Are

2011
RM000

Included in security held-for-trading are securities sold under repurchase agreements

Group

Private debt securities

Bank

2011
RM000

2010
RM000

2011
RM000

2010
RM000

275,415

275,415

Responsibility

9. Securities available-for-sale
Group

Bank

3,750,910
11,104
1,526,312
9,053,992
7,070,669
1,157,497
775,683
588,285
1,173,829

5,284,696

1,978,555
7,357,037
5,655,221
2,489,382
1,304,946
1,104,706
830,758
99,890

3,679,217

1,342,316
6,751,494
3,349,048
842,567
4,798,186
367,352
867,407

5,195,698

1,746,559
5,012,151
3,153,796
2,352,420
5,021,821
1,026,207
578,002
99,890

25,108,281

26,105,191

21,997,587

24,186,544

Quoted securities:
In Malaysia:
Shares, warrants, trust units and loan stocks

406,380

407,559

104,814

182,936

Outside Malaysia:
Shares, warrants, trust units and loan stocks

311,845

82,056

18,722

35,387

718,225

489,615

123,536

218,323

At fair value, or at cost less impairment losses for certain unquoted equity instruments
Money market instruments:
Malaysian Government Securities
Sukuk BNM Ijarah
Cagamas Bonds
Foreign Government Securities
Malaysian Government Investment Issues
Foreign Government Treasury Bills
Negotiable instruments of deposits
Bankers acceptances and Islamic accepted bills
Khazanah Bonds
Bank Negara Malaysia Monetary Notes

AGM Information

2010
RM000

Financial & Others

2011
RM000

Governance

2010
RM000

Leadership

2011
RM000

286

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

9. Securities available-for-sale (contd.)

Group

At fair value, or at cost less impairment losses for certain unquoted equity instruments (contd.)
Unquoted securities:
Shares, trust units and loan stocks in Malaysia
Shares, trust units and loan stocks outside Malaysia
Private and Islamic Debt Securities in Malaysia
Malaysian Government Bonds
Foreign Government Bonds
Credit linked notes (Note 9(a))
Foreign Islamic private debt securities
Malaysia Global Sukuk
Structured Deposits

Total securities available-for-sale

Bank

2011
RM000

2010
RM000

2011
RM000

2010
RM000

571,573
36,112
9,791,228
135,336
1,329,748
75,439
9,284,751
162,485
45,380

701,289
27,449
9,925,149
144,475
110,006
151,784
4,713,610
207,667

376,358
13,908
7,633,368
135,336
1,248,718
75,439
8,612,607
45,185

447,159
17,024
8,156,657
144,475

151,784
4,091,929
32,946

21,432,052

15,981,429

18,140,919

13,041,974

47,258,558

42,576,235

40,262,042

37,446,841

(a)

Included in securities available-for-sale are credit linked notes with a face value of USD25,000,000 (2010: USD50,000,000) or Ringgit Malaysia
equivalent to RM75,575,000 (2010: RM161,825,000) with embedded credit default swaps. The notes would be redeemed at face values on their
respective maturity dates provided there is no occurrence of a specified credit event affecting the reference entities or their obligations. If there is
an occurrence of a credit event, the underlying asset (the reference obligation of the reference entity), or a cash settlement amount to be
determined with reference to the market value of the underlying asset in accordance with the terms of the contract, would be delivered by the
issuer of the note.

(b)

Included in security available-for-sale are securities sold under repurchase agreements

Group

Private debt securities

Foreign government securities

(c)

Bank

2011
RM000

2010
RM000

2011
RM000

2010
RM000

98,147

407,056

98,147

98,147

407,056

98,147

The maturity structure of money market instruments, available-for-sale are as follows:

Group

Maturing within one year

One year to three years
Three years to five years
After five years

Bank

2011
RM000

2010
RM000

2011
RM000

2010
RM000

3,769,819
2,496,567
10,879,178
7,962,717

6,221,687
5,791,080
2,901,588
11,190,836

3,880,055
3,715,602
9,534,955
4,866,975

5,611,005
8,103,252
2,671,492
7,800,795

25,108,281

26,105,191

21,997,587

24,186,544

FINANCIAL STATEMENTS

Maybank Annual Report 2011

287
At A Glance
Our Perspective

10. Securities held-to-maturity

Group

6,275,068
11,738
801,772
495,864
17,362

6,237,200
11,794
824,404
527,466
16,603

6,274,961
11,738

353,971
17,362

6,237,092
11,794

377,000
16,603

7,601,804

7,617,467

6,658,032

6,642,489

1,451,903
6,056
49,438
558,757
2,044

953,988
6,761

394,513
2,044

1,421,871
6,056
49,162
233,616
2,044

923,955
6,761

312,135
2,044

2,068,198

1,357,306

1,712,749

1,244,895

(31,288)
9,638,714

(32,065)
8,942,708

8,339,494

(32,062)
7,855,322

Indicative value of unquoted securities held-to-maturity are as follows:

Group

Bank
2010
RM000

2011
RM000

2010
RM000

6,390,445
11,735
499,138
801,772
17,778
1,463,679
6,056
49,438
567,359
2,044

6,356,914
11,829
530,545
827,187
16,960
956,182
6,875

409,800
2,013

6,390,338
11,735
355,772

17,778
1,433,448
6,056
49,162
242,219
2,044

6,356,809
11,829
378,808

16,960
926,026
6,875

330,204
2,013

Financial & Others

Included in Malaysian Government Securities in securities held-to-maturity of the Group and the Bank above is an amount of RM350,000,000 (2010:
RM Nil) pledged with the Bank Negara Malaysia in satisfaction of capital equivalency deposit requirements.

Governance

2011
RM000

Leadership

Malaysian Government Securities

Cagamas Bonds
Malaysian Government Investment Issues
Foreign Government Securities
Khazanah Bonds
Private and Islamic Debt Securities in Malaysia
Malaysian Government Bonds
Foreign Government Bonds
Foreign Islamic private debt securities
Others

(b)

(31,287)

Responsibility

(a)

2010
RM000

Business Review

Total securities held-to-maturity

2011
RM000

Performance

Accumulated impairment losses

2010
RM000

Strategy

Unquoted securities:
Private and Islamic Debt Securities in Malaysia
Malaysian Government Bonds
Foreign Government Bonds
Foreign Islamic private debt securities
Others

2011
RM000

Who We Are

At amortised cost
Money market instruments:
Malaysian Government Securities (Note 10(b))
Cagamas Bonds
Foreign Government Securities
Malaysian Government Investment Issues
Khazanah Bonds

Bank

AGM Information

288

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

10. Securities held-to-maturity (contd.)

(c)

The maturity structure of money market instruments, held-to-maturity are as follows:

Group

Maturing within one year

One year to three years
Three years to five years
After five years

Bank

2011
RM000

2010
RM000

2011
RM000

2010
RM000

452,690
3,999,022
2,035,275
1,114,817

86,947
1,832,492
2,631,339
3,066,689

336,801
3,821,348
1,892,156
607,727

25,554
1,656,264
2,455,908
2,504,763

7,601,804

7,617,467

6,658,032

6,642,489

11. Loans, advances and financing

Group

Overdrafts
Term loans
Housing loans/financing
Syndicated loans/financing
Hire purchase receivables*
Lease receivables
Other loans/financing
Credit card receivables
Bills receivable
Trust receipts
Claims on customers under acceptance credits
Loans/financing to banks and other financial institutions
Revolving credits
Staff loans

Bank

2011
RM000

2010
RM000

2011
RM000

2010
RM000

15,602,979

15,393,797

11,130,114

11,442,783

42,588,643
16,156,890
46,847,564
4,495
107,382,363
5,773,326
4,069,296
2,394,297
12,201,913
6,714,542
25,876,169
1,976,167

36,293,612
13,053,818
40,748,909
3,462
74,264,535
4,973,369
2,289,004
2,250,995
10,316,581
10,406,605
20,853,403
1,636,344

33,710,861
13,020,361
23,088,371
3,264
62,659,172
4,863,738
4,038,085
1,976,949
8,554,699
7,255,622
18,392,134
1,001,750

28,805,714
10,487,792
21,414,413
3,272
44,827,809
4,233,074
2,256,164
1,826,866
7,434,317
10,232,000
15,930,021
959,607

287,588,644 232,484,434 189,695,120 159,853,832

Loans to:
Executive directors of the Bank
Executive directors of subsidiaries
Others
Unearned interest and income

3,416
1,764,438

839
348,403

123

435

289,356,498 232,833,676 189,695,243 159,854,267

(28,176,735) (19,575,236) (2,826,729) (2,775,394)

Gross loans, advances and financing

Allowances for impaired loans and financing
Individual
Collective
Specific
General

261,179,763 213,258,440 186,868,514 157,078,873

Net loans, advances and financing

253,976,426 205,555,067 181,572,844 151,469,585

(2,932,129)
(4,271,208)

(3,864,832)
(3,838,541)

(2,115,897)
(3,179,773)

(2,842,531)
(2,766,757)

The hire purchase receivables of a subsidiary of RM487,122,592 (2010: RM221,346,000) are pledged as collateral to the secured borrowing as
disclosed in Note 26(a)(i).

FINANCIAL STATEMENTS

Maybank Annual Report 2011

289
At A Glance
Our Perspective

11. Loans, advances and financing (contd.)

(i)

Loans, advances and financing analysed by type of customer are as follows:

2011
RM000

2010
RM000

2011
RM000

2010
RM000

55,754

62,033

55,896

62,033

662
17,649,116

149,044
16,228,487

664
13,026,400

148,864
13,102,740

45,677,647
57,198,653
2,973,103
119,733,544
1,785,113
16,106,171

32,103,764
51,359,497
2,470,659
97,938,204
1,657,466
11,289,286

39,498,099
38,861,878
2,638,335
79,854,546
497,646
12,435,050

27,940,298
35,600,785
2,403,508
68,428,192
281,718
9,110,735

Gross loans, advances and financing

261,179,763 213,258,440 186,868,514 157,078,873

Group
2010
RM000

2011
RM000

2010
RM000

261,179,763 213,258,440 186,868,514 157,078,873

Financial & Others

Gross loans, advances and financing

Governance

169,773,543 144,271,765 123,380,078 109,508,669

54,830,450
40,588,966 54,283,692
40,588,966
21,328,288
17,102,481

3,875,185
3,268,810

4,471,402
3,068,938
4,347,640
3,068,938
1,176,644
753,244
1,176,644
753,244
986,362
1,017,861
986,362
1,017,861
524,916
480,568
524,916
480,568
1,357,952
994,784
1,357,952
994,784
159,334
158,352
159,334
158,352
425,790
270,905
425,790
270,905
226,106
236,586
226,106
236,586
1,419,000
969,478

115,297
75,702

466,214
43,280

Leadership

Malaysia
Singapore
Indonesia
Labuan offshore
Hong Kong SAR
United States of America
Peoples Republic of China
Vietnam
United Kingdom
Brunei
Cambodia
Bahrain
Philippines
Papua New Guinea
Thailand
Others

Responsibility

2011
RM000

Bank

Business Review

Loans, advances and financing analysed by geographical distribution are as follows:

Performance

Domestic banking institutions

Domestic non-bank financial institutions
Stockbroking companies
Others
Domestic business enterprise
Small and medium enterprise
Others
Government and statutory bodies
Individuals
Other domestic entities
Foreign entities

Strategy

(ii)

Bank

Who We Are

Group

AGM Information

290

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

11. Loans, advances and financing (contd.)

(iii) Loans, advances and financing analysed by interest/profit rate sensitivity are as follows:
Group

Fixed rate
Housing loans/financing
Hire purchase receivables
Other fixed rate loans/financing
Variable rate
Base lending rate plus
Cost plus
Other variable rates
Gross loans, advances and financing

Bank

2011
RM000

2010
RM000

2011
RM000

2010
RM000

11,855,759
35,588,698
23,960,007

12,681,639
30,943,085
22,327,061

9,147,350
19,968,614
13,826,800

9,534,313
18,263,418
14,004,422

94,310,265
31,832,925
63,632,109

75,881,193
22,753,403
48,672,059

78,337,866
27,507,286
38,080,598

65,916,914
19,510,888
29,848,918

261,179,763 213,258,440 186,868,514 157,078,873

(iv) Loans, advances and financing analysed by economic purpose are as follows:
Group
2011
RM000
Purchase of securities
Purchase of transport vehicles
Less: Islamic transport vehicles sold to Cagamas
Purchase of landed properties
Residential
Non-residential
Purchase of fixed assets (exclude landed properties)
Personal use
Credit card
Purchase of consumer durables
Construction
Merger and acquisition
Working capital
Others
Gross loans, advances and financing

(v)

Bank
2010
RM000

2011
RM000

2010
RM000

20,743,919
39,687,127
(682,679)

14,913,407 11,575,901
34,863,190 19,967,508
(1,137,321)

10,761,268
17,960,857

46,621,777
14,623,280
2,966,538
6,362,067
5,772,335
254,111
13,861,422
52,272
96,753,084
14,164,510

37,684,964
9,163,803
2,543,374
5,061,634
4,974,295
77,583
12,489,787
45,229
79,384,139
13,194,356

38,190,785
13,435,251
2,963,248
5,456,581
4,874,082
254,744
11,526,219
52,405
71,342,270
7,229,520

30,447,644
8,231,420
2,543,167
4,303,538
4,233,084
76,463
11,213,226
45,229
59,186,942
8,076,035

261,179,763 213,258,440 186,868,514 157,078,873

The maturity structure of loans, advances and financing are as follows:

Group
2011
RM000

Bank
2010
RM000

2011
RM000

2010
RM000

Maturing within one year

One year to three years
Three years to five years
After five years

75,170,061
69,370,810
27,181,422
18,691,972
35,685,924
18,941,903
123,142,356 106,253,755

58,385,457
17,817,419
22,244,753
88,420,885

56,025,479
10,608,438
9,460,481
80,984,475

Gross loans, advances and financing

261,179,763 213,258,440 186,868,514 157,078,873

FINANCIAL STATEMENTS

Maybank Annual Report 2011

291
At A Glance
Our Perspective

11. Loans, advances and financing (contd.)

(vi) Movements in impaired loans, advances and financing (impaired loans) (2010: non-performing loans) are as follows:
Movements in impaired loans, advances and financing
Group

2011
RM000

2010
RM000

6,186,320
3,772,543

6,715,232

4,639,731
3,189,043

5,036,313

9,958,863
5,929,985
(2,730,159)
(2,004,428)
(2,610,648)
(37,863)

89,751
161,361

6,715,232
4,622,381
(2,190,759)
(1,430,570)
(1,682,059)

97,095
55,000

7,828,774
3,211,874
(1,677,728)
(1,420,027)
(1,624,278)
(37,863)

96,744

5,036,313
2,795,711
(1,525,988)
(874,761)
(925,144)

97,095
36,505

8,756,862

6,186,320

6,377,496

4,639,731

At 30 June
Less:
Individual allowance

(2,932,129)

(2,115,897)

on impaired loans

(2,932,129)

(2,115,897)

(3,864,832)

(2,842,531)

on non-performing loans
on performing loans

(3,619,792)
(245,040)

(2,602,091)
(240,440)

5,824,733

2,321,488

4,261,599

1,797,200

Net impaired loans, advances and financing

261,179,763 213,258,440 186,868,514 157,078,873

682,679
1,137,321

Leadership

Net loans, advances and financing

Gross loans, advances and financing
Add: Islamic loans sold to Cagamas

Responsibility

Less:
Specific allowance

Business Review

2010
RM000

Performance

At 1 July, as restated
Impaired during the year
Reclassified as performing
Recovered during the year
Amount written off
Converted to securities
Amount transferred from other debts
Exchange differences and expenses debited
Acquisition of subsidiaries

2011
RM000

Strategy

At 1 July
as previously stated
effect of adopting FRS 139

Bank

Who We Are

261,862,442 214,395,761 186,868,514 157,078,873

Net loans, advances and financing (including Islamic loans sold to Cagamas)

(2,932,129)

(3,864,832)

(2,115,897)

(2,842,531)

Governance

Less:
Individual allowance
Less:
Specific allowance

258,930,313 210,530,929 184,752,617 154,236,342

Financial & Others
AGM Information

292

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

11. Loans, advances and financing (contd.)

(vi) Movements in impaired loans, advances and financing (impaired loans) (2010: non-performing loans) are as follows: (contd.)

Ratio of net impaired loans (2010: non-performing loans)

Group

Bank

2011

2010

2011

2010

2.25%

2.31%

Pre FRS 139

Including specific allowance on performing loans

1.10%

1.17%

Excluding specific allowance on performing loans

1.22%

1.32%

Post FRS 139

(vii) Impaired (2010: non-performing) loans, advances and financing by economic purpose are as follows:
Group

Purchase of securities
Purchase of transport vehicles
Purchase of landed properties
Residential
Non-residential
Personal use
Credit card
Purchase of consumer durables
Construction
Working capital
Others

Bank

2011
RM000

2010
RM000

2011
RM000

2010
RM000

116,667
276,671

47,268
239,296

82,257
111,271

39,213
131,263

1,277,777
290,538
126,271
77,764
1,163
523,361
5,575,238
491,412

1,754,048
331,100
168,062
68,790
1,635
511,676
2,824,549
239,896

1,058,965
264,828
111,542
53,642
1,159
433,545
3,996,647
263,640

1,391,121
300,608
137,982
50,203
1,632
415,140
2,057,314
115,255

8,756,862

6,186,320

6,377,496

4,639,731

FINANCIAL STATEMENTS

Maybank Annual Report 2011

293
At A Glance
Our Perspective

11. Loans, advances and financing (contd.)

(viii) Impaired (2010: non-performing) loans, advances and financing by geographical distribution are as follows:

2011
RM000

2010
RM000

6,712,570
402,468
873,692
351,094
84,853
2,613
75,692
141,478

12,499

50,733
48,708
462

5,129,136
209,550
483,397
79,900
114,136
2,056
17,500
68,511
20,290
24,047
1,909
35,888

5,769,484
242,169

84,853
2,613
75,692
141,478

12,499

48,708

4,183,641
209,550

114,136
2,056
17,500
68,511
20,290
24,047

8,756,862

6,186,320

6,377,496

4,639,731

Movements in the allowances for impaired (2010: non-performing) loans, advances and financing are as follows:

2011
RM000

2010
RM000

3,981,073

2,909,013

3,981,073
651,725
(291,066)
(1,185,904)
(51,475)
(173,038)
50,315
(49,501)

2,909,013
471,883
(207,265)
(936,464)
(51,475)
(57,227)

(12,568)

2,932,129

2,115,897

Financial & Others

At 30 June

2010
RM000

Governance

At 1 July, as restated
Allowance made during the year (Note 38)
Amount written back (Note 38)
Amount written off
Transferred to impairment losses in securities
Transferred to collective allowance
Acquisition of subsidiaries
Exchange differences

2011
RM000

Leadership

Individual Allowance
At 1 July
as previously stated
effect of adopting FRS 139

Bank

Responsibility

Group

Business Review

2010
RM000

Performance

(ix)

2011
RM000

Strategy

Malaysia
Singapore
Indonesia
Labuan Offshore
Hong Kong SAR
Brunei
Vietnam
United Kingdom
Peoples Republic of China
Cambodia
Papua New Guinea
Philippines
Bahrain
Thailand

Bank

Who We Are

Group

AGM Information

294

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

11. Loans, advances and financing (contd.)

(ix)

Movements in the allowances for impaired (2010: non-performing) loans, advances and financing are as follows: (contd.)
Group

Bank

2011
RM000

2010
RM000

2011
RM000

2010
RM000

4,741,229

3,665,506

4,741,229
774,955
(42)
(1,424,744)
13,612
173,038
(6,840)

3,665,506
117,091

(687,814)
13,612
57,227
14,151

4,271,208

3,179,773

As a percentage of total loans (including Islamic loans sold to Cagamas), less individual
allowance

1.65%

1.72%

As a percentage of total risk-weighted assets for credit risk

2.05%

1.98%

Collective Allowance
At 1 July
as previously stated
effect of adopting FRS 139
At 1 July, as restated
Allowance made during the year (Note 38)
Amount written back (Note 38)
Amount written off
Transferred from impairment losses in securities
Transferred from individual allowance
Exchange differences
At 30 June

Group
2011
RM000
Specific allowance:
At 1 July
as previously stated
effect of adopting FRS 139

3,864,832
(3,864,832)

Bank
2010
RM000

3,854,026

2011
RM000

2,842,531
(2,842,531)

2010
RM000

2,847,031

At 1 July, as restated
Allowance made during the year (Note 38)
Amount written back in respect of recoveries (Note 38)
Amount written off
Transferred to general allowance
Amount transferred from other debts
Exchange differences

3,854,026
2,148,300
(516,138)
(1,682,059)
(1,278)
97,095
(35,114)

2,847,031
1,307,829
(452,438)
(925,144)

97,095
(31,842)

At 30 June

3,864,832

2,842,531

FINANCIAL STATEMENTS

Maybank Annual Report 2011

295
At A Glance
Our Perspective

11. Loans, advances and financing (contd.)

(ix)

Movements in the allowances for impaired (2010: non-performing) loans, advances and financing are as follows: (contd.)

2011
RM000

3,838,541
(3,838,541)

2010
RM000

3,725,599

2011
RM000

2,766,757
(2,766,757)

2010
RM000

2,937,055

3,725,599
477,569
(331,891)
1,278
(34,014)

2,937,055

(155,815)

(14,483)

At 30 June

3,838,541

2,766,757

As a percentage of total loans (including Islamic loans sold to Cagamas), less specific
allowance

1.82%

1.79%

As a percentage of total risk-weighted assets for credit risk excluding deferred tax assets

1.76%

1.68%

12. Derivative financial instruments

2011 (contd.)

Fair Value
Assets
Liabilities
Amount
Amount
RM000
RM000

115,780
11,639
18,349

(128,485) 17,215,104
(13,146)
428,114
(111)
290,945

78,689
11,639
18,349

(91,170)
(13,146)
(111)

22,874,046

145,768

(141,742) 17,934,163

108,677

(104,427)

43,497,687
589,231
290,944

298,339
19,791
123

(228,440) 43,497,687
(7,071)
589,231
(17,160)
290,945

298,339
19,791
123

(228,440)
(7,071)
(17,160)

44,377,862

318,253

(252,671) 44,377,863

318,253

(252,671)

2,305,804

8,571

(15,047)

2,203,170

8,541

(14,977)

2,305,804

8,571

(15,047)

2,203,170

8,541

(14,977)

AGM Information

22,154,987
428,114
290,945

Financial & Others

Currency spots
Less than one year
One year to three years
More than three years

Principal
Amount
RM000

Governance

Currency swaps
Less than one year
One year to three years
More than three years

Fair Value
Assets
Liabilities
Amount
Amount
RM000
RM000

Leadership

Trading derivatives
Foreign exchange related contracts:
Currency forward
Less than one year
One year to three years
More than three years

Principal
Amount
RM000

Bank

Responsibility

Group

Business Review

Performance

At 1 July, as restated
Allowance made during the year (Note 38)
Amount written back (Note 38)
Transferred from specific allowance
Exchange differences

Strategy

General allowance:
At 1 July
as previously stated
effect of adopting FRS 139

Bank

Who We Are

Group

296

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

12. Derivative financial instruments (contd.)

Group

2011 (contd.)
Currency options
Less than one year
One year to three years
More than three years

Cross currency interest rate swaps

Less than one year
One year to three years
More than three years

Interest rate derivatives

Interest rate swaps
Less than one year
One year to three years
More than three years

Interest rate futures

Less than one year
One year to three years
More than three years

Interest rate options

Less than one year
One year to three years
More than three years

Equity related derivatives

Equity options
Less than one year
One year to three years
More than three years

Commodity options
Less than one year
One year to three years
More than three years

Hedging derivatives
Interest rate swaps
Less than one year
One year to three years
More than three years

Principal
Amount
RM000

Bank

Fair Value
Assets
Liabilities
Amount
Amount
RM000
RM000

Principal
Amount
RM000

Fair Value
Assets
Liabilities
Amount
Amount
RM000
RM000

4,546,215

13,388

(8,344)

4,546,215

13,388

(8,344)

4,546,215

13,388

(8,344)

4,546,215

13,388

(8,344)

607,365
3,495,130
5,307,678

26,284
182,155
87,568

(26,006)
(53,499)
(162,431)

607,365
3,495,130
5,307,678

26,284
182,155
87,568

(26,006)
(53,499)
(162,431)

9,410,173

296,007

(241,936)

9,410,173

296,007

(241,936)

12,300,584
23,972,146
21,713,328

105,386
162,163
191,563

(113,058) 10,700,584
(183,755) 23,972,146
(233,589) 21,713,328

104,483
162,163
206,964

(112,623)
(183,755)
(233,588)

57,986,058

459,112

(530,402) 56,386,058

473,610

(529,966)

1,252,719

281

1,252,719

243

1,252,719

281

1,252,719

243

610,117
1,483,240
872,904

2,431
14,548
1,110

(44,206)

(105,905)

36,813
1,483,240
872,904

14,548
1,110

(105,905)

2,966,261

18,089

(150,111)

2,392,957

15,658

(105,905)

808,651
44,468
55,074

1,686
2,231
5,822

(6,443)
(2,231)
(5,822)

808,654
44,468
55,074

1,011
2,231
5,822

(1,011)
(2,231)
(5,822)

908,193

9,739

(14,496)

908,196

9,064

(9,064)

56,065

4,766

(4,766)

56,065

4,766

(4,766)

56,065

4,766

(4,766)

56,065

4,766

(4,766)

532,917
516,860
1,886,165

1
1
324

(46,117)
(46,539)
(79,661)

411,020
441,263
1,580,744

1
1
324

(45,951)
(46,539)
(79,661)

2,935,942

326

(172,317)

2,433,027

326

(172,151)

FINANCIAL STATEMENTS

Maybank Annual Report 2011

297
At A Glance
Our Perspective

12. Derivative financial instruments (contd.)

Group

Total derivative assets/(liabilities)

Principal
Amount
RM000

2,472,085
607,900

316,017
61,865

(2,103)

2,472,085
607,900

316,017
61,865

(2,104)

3,079,985

377,882

(2,103)

3,079,985

377,882

(2,104)

152,699,323

1,652,182

(1,533,935) 144,980,591

1,626,415

(1,446,311)

108,229
343,019
955
3,161
135,038

(201,492)
(134,592)
(927)
(2,507)
(90,031)

26,480,036
18,659,934
932,181
1,282,235
4,504,621

97,537
343,019
955
3,161
135,038

(190,803)
(134,592)
(927)
(2,507)
(90,031)

59,073,600

590,402

(429,549)

51,859,007

579,710

(418,860)

45,080,147
1,100,000
686,086

526,539

14,601

(554,438)
(8,113)
(46,214)

49,475,908
1,100,000
233,836

526,539

852

(554,438)
(8,113)
(30,823)

46,866,233

541,140

(608,765)

50,809,744

527,391

(593,374)

752,306
581,323

230
1,709

(229)
(1,710)

752,303
581,323

229
1,709

(228)
(1,710)

1,333,629

1,939

(1,939)

1,333,626

1,938

(1,938)

4,738,383
4,057,340

645
172,643

(303,071)
(2,918)

3,221,400
4,057,340

172,643

(274,408)
(2,918)

8,795,723

173,288

(305,989)

7,278,740

172,643

(277,326)

116,069,185

1,306,769

(1,346,242) 111,281,117

1,281,682

(1,291,498)

Financial & Others

Total derivative assets/(liabilities)

41,805,095
10,549,470
932,180
1,282,234
4,504,621

Governance

Hedging derivatives
Interest rate swaps
Cross currency interest rate swaps

Fair Value
Assets
Liabilities
Amount
Amount
RM000
RM000

Leadership

Equity related derivatives

Equity options
Commodity options

Principal
Amount
RM000

Responsibility

Interest rate derivatives

Interest rate swaps
Interest rate futures
Interest rate options

Fair Value
Assets
Liabilities
Amount
Amount
RM000
RM000

Business Review

Trading derivatives
Foreign exchange related contracts:
Currency forward
Currency swaps
Currency spots
Currency options
Cross currency interest rate swaps

Principal
Amount
RM000

Bank

Performance

Group

2010

Fair Value
Assets
Liabilities
Amount
Amount
RM000
RM000

Strategy

Cross currency interest rate swaps

Less than one year
One year to three years
More than three years

Fair Value
Assets
Liabilities
Amount
Amount
RM000
RM000

Who We Are

2011 (contd.)

Principal
Amount
RM000

Bank

AGM Information

298

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

12. Derivative financial instruments (contd.)

Included within hedging derivatives are derivatives where the Group and Bank apply hedge accounting. The principal amount and fair values of
derivatives where hedge accounting is applied by the Group and Bank are as follows:
Group
Principal
Amount
RM000

2011
Interest rate swaps

707,382

Bank

Fair Value
Assets
Liabilities
Amount
Amount
RM000
RM000

(55,947)

Principal
Amount
RM000
707,382

Fair Value
Assets
Liabilities
Amount
Amount
RM000
RM000

(55,947)

Fair value hedges

Fair value hedges are used by the Group and the Bank to protect them against changes in the fair value of financial assets due to movements in interest
rates. The financial instruments hedged for interest rate risk include the Groups and the Banks available-for-sale debt securities.
For the year ended 30 June 2011, the Group and the Bank recognised a net gain of RM43,229,164 on the hedging instruments. The total net loss on the
hedged items attributable to the hedged risk amounted to RM20,434,522.

13. Other assets

Group
2011
RM000

2010
RM000

2011
RM000

2010
RM000

3,643,484
2,016,672
345,616
330,525
274,266
124,959

3,064,999
146,372

390,089
113,029
131,592
1,265,281

1,146,591

71,098
159,874
42,802

2,494,749

250,400

41,709
962,790

6,735,522

5,111,362

1,420,365

3,749,648

Group

Freehold Development
Land
Costs
RM000
RM000

Total
RM000

At 1 July 2010
Acquisition of subsidiaries (Note 16)
Cost incurred during the year
Exchange differences

156,660

2,531

164,378
19,389
2,658

321,038
19,389
5,189

At 30 June 2011

159,191

186,425

345,616

Other debtors
Amount due from brokers and clients
Development properties for sale (Note a)
Prepayments and deposits
Tax recoverable
Foreclosed properties
Interest receivables

(a)

(i)

Bank

Development properties for sale

Borrowing costs of RM215,000 (2010: RM Nil) arising on financing specifically entered into for the development of properties for sale were
capitalised during the financial year and are included in the development properties. A capitalisation rate of 2.1% (2010: RM Nil) per annum was
used, representing the borrowing costs of the loans used to finance the project.

FINANCIAL STATEMENTS

Maybank Annual Report 2011

299
At A Glance
Our Perspective

13. Other assets (contd.)

(ii)

Details of development properties are as follows:

Freehold

Second
quarter
2012

Site area/ Groups effective

gross floor area
interest in
(sq metres)
the property
5,903/
19,164

96.87%
Strategy

Expected
completion
date

Who We Are

Beacon Heights
A residential development comprising 212 units of condominium apartments in
Singapore

Tenure of
land

As at 30 June 2011, reinforced concrete framework for the development properties has been completed.

14. Investment properties

2011
RM000
At 1 July 2010/2009
Fair value adjustment (Note 36)
Revaluation reserve (Note 30(c))
Reclassification from property, plant and equipment (Note 18)
Disposal
Exchange differences

45,324
(220)

(53)

26,578
(209)
9,057
11,028
(1,063)
(67)

At 30 June

45,051

45,324

Group
2010
RM000

31,000
6,710

31,000
6,764

37,710

37,764

Group
2011
RM000

2010
RM000

2011
RM000

2010
RM000

3,626,161

676,053

2,712,156

522,948

4,072,264

3,795,329

1,600,960

1,410,033

7,698,425

4,471,382

4,313,116

1,932,981

The non-interest-bearing statutory deposits maintained with Bank Negara Malaysia are in compliance with Section 37(1)(c) of the Central Bank of
Malaysia Act, 1958 (Revised 1994), the amount of which are determined as set percentages of total eligible liabilities.

(b)

The statutory deposits of the foreign branches and subsidiaries are denominated in foreign currencies and maintained with the Central Banks of
respective countries, in compliance with the applicable legislations.

AGM Information

(a)

Financial & Others

With Bank Negara Malaysia (Note a)

With other Central Banks
(Note b)

Bank

Governance

15. Statutory deposits with Central Banks

Leadership

Leasehold land
Buildings

2011
RM000

Responsibility

The following investment properties are held under lease terms:

Business Review

2010
RM000

Performance

Group

300

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

16. Investment in subsidiaries

(ii)
Bank
2011
RM000

2010
RM000

Unquoted shares, at cost

In Malaysia
Outside Malaysia

19,146,742
1,054,369

14,887,252
896,844

Less: Accumulated impairment losses

20,201,111
(3,130,719)

15,784,096
(3,130,719)

17,070,392

12,653,377

(a)

On 10 May 2011, the Bank via its wholly owned subsidiary,

Maybank IB Holdings Sdn Bhd (formerly known as Aseam Credit
Sdn Bhd) acquired Kim Eng Holdings Limited (Kim Eng) and its
subsidiaries (KEH Group), as disclosed in Note 52(b). Kim Eng is
incorporated in Singapore and is involved in the stockbroking,
futures broking, investment advisory, provision of corporate
finance services, margin financing, money lending, fund
management, provision of nominees and fiduciary services,
investment holding, property investment and real estate
development.
The Group acquired various tranches of shareholdings in KEH
Group from 7 January 2011 to 30 June 2011, resulting in a
shareholding of 96.87% as at 30 June 2011.
As at 30 June 2011, Kim Eng was listed but pursuant to the
compulsory acquisition exercise, Kim Eng has become a
wholly-owned subsidiary of the Group as at 29 July 2011. Kim
Eng was also delisted from the official list of Singapore Exchange
on 4 August 2011.
(i)

The total cost of the business combination is as follows:

RM000
Total cost of business combination

4,223,650

The fair values of the identifiable assets and liabilities of

KEH Group as at the date of acquisition were:
Preacquisition Provisional Recognised
carrying
fair value acquisition
amounts adjustments
values
RM000
RM000
RM000

Cash and cash equivalents

Property, plant and
equipment
Securities portfolio
Loans, advances and
financing
Derivative assets
Trade and other receivables
Development properties for
sale (Note 13(a))
Interest in associates
Intangible assets

Trade and other payables

Derivative liabilities
Deferred tax (Note 25)
Provision for taxation

Net identifiable assets

Non-controlling interest
Non-controlling interest
re-classified as financial
liabilities*

2,102,754

2,102,754

343,591
716,404

171,149

514,740
716,404

1,428,213
5,348
1,978,504

1,428,213
5,348
1,978,504

321,038
109,123
18,335

173,038

321,038
109,123
191,373

7,023,310

344,187

7,367,497

(4,316,758)
(2,479)
(3,070)
(64,194)

(4,316,758)

(2,479)
(70,250)
(73,320)

(64,194)

(4,386,501)

(70,250) (4,456,751)
2,910,746
(112,741)

(256,031)
2,541,974

Goodwill on acquisition
representing Maybanks
portion
Goodwill attributable to
non-controlling interest

1,681,676
247,460
1,929,136

Add: Existing goodwill in

Kim Engs books

18,335

Total goodwill recognised

(Note 19)

1,947,471

Financial liabilities refer to amounts payable in relation to the

outstanding mandatory general offers of Kim Eng and Kim Eng
Securities (Thailand) Public Company Limited as at 30 June 2011.

FINANCIAL STATEMENTS

Maybank Annual Report 2011

301
At A Glance
Our Perspective

16. Investment in subsidiaries (contd.)

(contd.)

(iii)

The effect of the acquisition on cash flows is as follows:

RM000
Purchase consideration satisfied by cash
Direct costs attributable to the acquisition, paid in cash

Net cash outflow of the Group

4,258,650
(2,102,754)
2,155,896

RM000
Revenue
Profit after tax and non-controlling interest

171,279
12,192

As at 30 June 2011, the Group has accounted for the acquisition of KEH Group on a provisional basis as the purchase price allocation (PPA)
exercise and allocation of goodwill to specific cash generating units (CGU) are still on-going.

The fair values of the identifiable assets and liabilities of KEH Group, the intangible assets in the form of agency force and customer
relationship, and the residual goodwill are applied on best estimates based on all relevant information available.

The Group anticipates to be able to complete the PPA and allocation of goodwill exercises by the next financial period ending 31 December
2011.

Upon the completion of these exercise, the carrying amount of the intangible assets i.e. agency force and customer relationship, and residual
goodwill will be adjusted accordingly on a retrospective basis.

On 29 November 2010, the Bank injected additional capital of USD50,000,000 (or equivalent amount of approximately RM157,525,000) to meet the
minimum capital requirement of Bangko Sentral ng Pilipinas (BSP), the Central Bank of Philippines.

(c)

Redemption of Redeemable Convertible Preference Shares (RCPS) of Mayban Ageas Holdings Berhad (formerly known as Mayban Fortis Holdings
Berhad, a subsidiary).

On 15 December 2010, Mayban Ageas Holdings Berhad redeemed 155,000,000 RCPS of RM1 each at RM1.00 per RCPS. The Bank received
RM108,500,000 from the redemption.

(d)

Details of subsidiaries are disclosed in Note 57(a).

Financial & Others

Capital injection into Maybank Philippines Incorporated (MPI)

Governance

(b)

Leadership

Responsibility

Provisional accounting for the acquisition of KEH Group.

Business Review

(v)

Performance

(iv) The newly acquired subsidiaries contributed the following results to the Group.

Strategy

Net cash outflow of the Bank

Cash and cash equivalents of subsidiaries acquired

4,223,650
35,000

Who We Are

(a)

AGM Information

302

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

17. Interest in associates

Group
2011
RM000

Bank
2010
RM000

2011
RM000

2010
RM000

Equity interest
Unquoted shares, at cost
Quoted shares, at cost
Unquoted foreign mandatory convertible private debt securities
Exchange differences

591,224
2,864,864
19,038
(828,697)

476,036
2,864,864

(580,523)

473,000

19,038

468,700

Share of post-acquisition reserves

2,646,429
134,408

2,760,377
64,208

492,038

468,700

Less: Accumulated impairment losses

2,780,837
(353,557)

2,824,585
(353,147)

492,038
(50,000)

468,700
(50,000)

2,427,280

2,471,438

442,038

418,700

12,374

12,374

2,439,654

2,471,438

454,412

418,700

969,669

922,358

Other interest in associates

Unquoted foreign private debt securities

Market value of quoted shares

(a)

The summarised financial information of the associates are as follows:

Group
2011
RM000
Total assets
Total liabilities
Operating revenue
Profit after tax

2010
RM000

27,353,797
26,307,746
(23,662,716) (22,356,472)
3,138,700
2,899,032
678,004
604,285

(b)

Details of the associates are disclosed in Note 57(b).

(c)

The financial year end of the above associates is coterminous with those of the Group, except for UzbekLeasing International A.O., Pelaburan
Hartanah Nasional Berhad, An Binh Commercial Joint Stock Bank, Asian Forum Inc. and MCB Bank Limited, which all have a financial year end of 31
December to conform with their holding companies financial year end and/or regulatory requirement. For the purpose of applying the equity
method of accounting, the financial statements of UzbekLeasing International A.O., Pelaburan Hartanah Nasional Berhad, An Binh Commercial Joint
Stock Bank, Asian Forum Inc. and MCB Bank Limited for the year ended 31 December 2010 have been used and appropriate adjustments have
been made for the effects of significant transactions between 31 December 2010 and 30 June 2011.

(d)

The details of goodwill included within the Groups carrying amount of interest in associates are as follows:
2011
RM000

2010
RM000

As at 1 July 2010/2009
Arising from interest in associates
Exchange differences

1,785,307

(170,652)

2,060,601
15,909
(291,203)

As at 30 June

1,614,655

1,785,307

FINANCIAL STATEMENTS

Maybank Annual Report 2011

303
At A Glance
Our Perspective

18. Property, plant and equipment

Electrical
and
Security
Equipment
RM000

Motor BuildingsVehicles in-Progress

RM000
RM000

Who We Are

Group

Office
Furniture,
Fittings,
Equipment Computers
and
and
*Properties Renovations Peripherals
RM000
RM000
RM000

Total
RM000

145,017
5,897
1,741
(95)
(978)
10,613

707

28,961
11,847
7,471
(2,552)
(613)

(75)

64,287

46,605
(201)

(54,030)

3,614,550
731,524
318,320
(26,629)
(110,409)

(62,117)
27,539

Balance at 30 June 2011

2,032,742

822,217

1,373,209

162,902

45,039

56,669

4,492,778

128,748
4,691
5,217

(90)
(971)
60
458

14,648
7,244
6,719

(2,117)
(613)

92

2,046,512
216,784
173,213
19
(17,862)
(103,778)

8,904

558,225
78,402
76,133

(4,651)
(18,633)
(94,886)
1,010

Balance at 30 June 2011

435,496

595,600

1,128,610

138,113

25,973

2,323,792

Analysed as:
Accumulated depreciation
Accumulated impairment losses

428,169
7,327

595,596
4

1,128,610

138,113

25,973

2,316,461
7,331

435,496

595,600

1,128,610

138,113

25,973

2,323,792

1,597,246

226,617

244,599

24,789

19,066

56,669

2,168,986

Net carrying amount

At 30 June 2011

985,254
79,975
54,353

(5,092)
(82,838)
94,826
2,132

Governance

359,637
46,472
30,791
19
(5,912)
(723)

5,212

Leadership

Accumulated depreciation and impairment losses

At 1 July 2010, as restated
Acquisition of subsidiaries (Note 16)
Charge for the year (Note 36)
Impairment losses
Disposals
Write-offs (Note 36)
Transfers
Exchange differences

Responsibility

1,167,293
95,104
147,446
(5,083)
(83,064)
111,035
(62,117)
2,595

Business Review

779,848
94,094
60,197
(4,726)
(20,418)
(87,194)

416

Performance

1,429,144
524,582
54,860
(13,972)
(5,336)
19,576

23,888

Strategy

As at 30 June 2011
Cost
At 1 July 2010, as restated
Acquisition of subsidiaries (Note 16)
Additions
Disposals
Write-offs (Note 36)
Transfers
Reclassification to intangible assets (Note 19)
Exchange differences

Financial & Others

AGM Information

304

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

18. Property, plant and equipment (contd.)

Group

Office
Furniture,
Fittings,
Equipment Computers
and
and
*Properties Renovations Peripherals
RM000
RM000
RM000

Electrical
and
Security
Equipment
RM000

Motor BuildingsVehicles in-Progress

RM000
RM000

Total
RM000

As at 30 June 2010
Cost
At 1 July 2009
as previously stated
effect of adopting FRS 117 (revised)

1,229,202
237,575

731,883

1,145,977

147,119

25,288

30,548

3,310,017
237,575

At 1 July 2009, as restated

Additions
Disposals
Write-offs (Note 36)
Transfers
Reclassification to investment properties (Note 14)
Reclassification to intangible assets (Note 19)
Exchange differences

1,466,777
1,468
(8,683)
(1,693)

(11,004)

(17,721)

731,883
53,190
(7,383)
(38,836)
38,226
(24)

2,792

1,145,977
68,916
(12,627)
(2,956)
(1,531)

(26,266)
(4,220)

147,119
1,796
(3,140)
(451)
197

(504)

25,288
9,063
(5,163)
(99)
6

(134)

30,548
73,012

(36,898)

(2,375)

3,547,592
207,445
(36,996)
(44,035)

(11,028)
(28,641)
(19,787)

Balance at 30 June 2010

1,429,144

779,848

1,167,293

145,017

28,961

64,287

3,614,550

306,402
7,308

507,437
4

954,653

125,091

13,560

1,907,143
7,312

27,893

27,893

Accumulated depreciation and impairment losses

At 1 July 2009
as previously stated
Accumulated depreciation
Accumulated impairment losses
effect of adopting FRS 117 (revised)
At 1 July 2009, as restated
Charge for the year (Note 36)
Disposals
Write-offs (Note 36)
Transfers
Exchange differences

341,603
28,618
(2,878)
(408)

(7,298)

507,441
92,583
(7,337)
(36,972)
(112)
2,622

954,653
48,504
(12,624)
(2,955)
82
(2,406)

125,091
7,470
(3,140)
(448)
30
(255)

13,560
5,834
(4,455)
(63)

(228)

1,942,348
183,009
(30,434)
(40,846)

(7,565)

Balance at 30 June 2010

359,637

558,225

985,254

128,748

14,648

2,046,512

Analysed as:
Accumulated depreciation
Accumulated impairment losses

352,329
7,308

558,221
4

985,254

128,748

14,648

2,039,200
7,312

359,637

558,225

985,254

128,748

14,648

2,046,512

1,069,507

221,623

182,039

16,269

14,313

64,287

1,568,038

Net carrying amount

At 30 June 2010

FINANCIAL STATEMENTS

Maybank Annual Report 2011

305
At A Glance
Our Perspective

18. Property, plant and equipment (contd.)

Less Than
50 Years
RM000

50 Years
or More
RM000

Prepaid Land Lease

Less Than
50 Years
RM000

50 Years
or More
RM000

Total
RM000

431,862
4,108
24,100
(5,271)

230
983

152,088

3,428
(6,078)
(43)
197,478
159

497,288
223,793
23,515

(546)
(187,216)
20,207

120,340
43,058
3,817
(42)
(1,430)
4,917
(1,547)

116,550
249,902

(3,317)
4,397
3,233

1,429,144
524,582
54,860
(13,972)
(5,336)
19,576
23,888

Balance at 30 June 2011

112,779

456,012

347,032

577,041

169,113

370,765

2,032,742

Balance at 30 June 2011

175,519

111,180

113,593

Analysed as:
Accumulated depreciation
Accumulated impairment losses

169,486
6,033

110,858
322

175,519

112,779

280,493

Net carrying amount

At 30 June 2011

36,045

11,564

(2,197)
(25)
64,794
999

129,021
38,849
7,150

(71)
(64,794)
3,438

2,995

615

(10)
8,616

25,709
4,990
1,064

(617)
(8,616)
458

359,637
46,472
30,791
19
(5,912)
(723)

5,212

12,216

22,988

435,496

112,621
972

12,216

22,988

428,169
7,327

111,180

113,593

12,216

22,988

435,496

235,852

463,448

156,897

347,777

1,597,246

Leadership

165,867
2,633
10,398
19
(3,715)

317

Responsibility

Business Review

Accumulated depreciation and impairment losses

At 1 July 2010, as restated
Acquisition of subsidiaries
Charge for the year
Impairment losses
Disposals
Write-offs
Transfers
Exchange differences

Performance

111,016
3,721

(2,581)

(230)
853

Strategy

* Properties consist of:

Cost
At 1 July 2010, as restated
Acquisition of subsidiaries
Additions
Disposals
Write-offs
Transfers
Exchange differences

Who We Are

Group

Buildings
Freehold on Freehold
Land
Land
RM000
RM000

Buildings on Leasehold
Land

Governance
Financial & Others
AGM Information

306

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

18. Property, plant and equipment (contd.)

Group

Buildings
Freehold on Freehold
Land
Land
RM000
RM000

Buildings on Leasehold
Land

Prepaid Land Lease

Less Than
50 Years
RM000

50 Years
or More
RM000

Less Than
50 Years
RM000

50 Years
or More
RM000

Total
RM000

* Properties consist of:

Cost
At 1 July 2009
as previously stated
effect of adopting FRS 117 (revised)

112,756

449,077

152,501

514,868

116,121

121,454

1,229,202
237,575

At 1 July 2009, as restated

Additions
Disposals
Write-offs
Transfers
Reclassification to investment properties
Exchange differences

112,756
69
(1,140)

(669)

449,077
111
(4,833)

(3,599)
(6,171)
(2,723)

152,501
964

(1,351)

(26)

514,868
44
(1,769)

3,599
(4,833)
(14,621)

116,121
280

(342)
2,933

1,348

121,454

(941)

(2,933)

(1,030)

1,466,777
1,468
(8,683)
(1,693)

(11,004)
(17,721)

Balance at 30 June 2010

111,016

431,862

152,088

497,288

120,340

116,550

1,429,144

154,352
6,014

28,316
322

123,734
972

306,402
7,308

2,801

25,092

27,893

At 1 July 2009, as restated

Charge for the year
Disposals
Write-offs
Transfers
Exchange differences

160,366
9,166
(1,980)

(278)
(1,407)

28,638
7,624

(408)

191

124,706
10,461
(685)

278
(5,739)

2,801
194

25,092
1,173
(213)

(343)

341,603
28,618
(2,878)
(408)

(7,298)

Balance at 30 June 2010

165,867

36,045

129,021

2,995

25,709

359,637

Analysed as:
Accumulated depreciation
Accumulated impairment losses

159,853
6,014

35,723
322

128,049
972

2,995

25,709

352,329
7,308

165,867

36,045

129,021

2,995

25,709

359,637

111,016

265,995

116,043

368,267

117,345

90,841

1,069,507

Accumulated depreciation and impairment losses

At 1 July 2009
as previously stated
Accumulated depreciation
Accumulated impairment losses
effect of adopting FRS 117 (revised)
Accumulated depreciation

Net carrying amount

At 30 June 2010

FINANCIAL STATEMENTS

Maybank Annual Report 2011

307
At A Glance
Our Perspective

18. Property, plant and equipment (contd.)

Electrical
and
Security
Equipment
RM000

Motor BuildingsVehicles in-Progress

RM000
RM000

Who We Are

Bank

Office
Furniture,
Fittings,
Equipment Computers
and
and
*Properties Renovations Peripherals
RM000
RM000
RM000

Total
RM000

536,588
13,887
(115)
(6,931)
7,961

3,481

1,031,964
119,004
(23)
(82,863)

(62,117)
2,006

123,819
1,587
(87)
(978)
10,613

575

11,085
1,112
(625)
(579)

(51)

59,617
25,755

(38,150)

24

2,856,538
184,401
(17,960)
(91,394)

(62,117)
25,674

Balance at 30 June 2011

1,138,583

554,871

1,007,971

135,529

10,942

47,246

2,895,142

403,933
45,346
(97)
(6,825)
3,035

859,319
45,159
(13)
(82,654)
1,485

110,394
3,868
(85)
(971)
361

7,729
1,466
(625)
(579)
(27)

1,696,273
117,638
(7,287)
(91,054)
9,389

Balance at 30 June 2011

334,740

445,392

823,296

113,567

7,964

1,724,959

Net carrying amount

At 30 June 2011

803,843

109,479

184,675

21,962

2,978

47,246

1,170,183

Responsibility

314,898
21,799
(6,467)
(25)
4,535

Business Review

Accumulated depreciation
At 1 July 2010, as restated
Charge for the year (Note 36)
Disposals
Write-offs (Note 36)
Exchange differences

Performance

1,093,465
23,056
(17,110)
(43)
19,576

19,639

Strategy

As at 30 June 2011
Cost
At 1 July 2010, as restated
Additions
Disposals
Write-offs (Note 36)
Transfers
Reclassification to intangible assets (Note 19)
Exchange differences

Leadership
Governance
Financial & Others
AGM Information

308

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

18. Property, plant and equipment (contd.)

Bank

Office
Furniture,
Fittings,
Equipment Computers
and
and
*Properties Renovations Peripherals
RM000
RM000
RM000

Electrical
and
Security
Equipment
RM000

Motor BuildingsVehicles in-Progress

RM000
RM000

Total
RM000

As at 30 June 2010
Cost
At 1 July 2009
as previously stated
effect of adopting FRS 117 (revised)

1,012,556
105,800

531,274

1,011,840

125,936

10,820

29,764

2,722,190
105,800

At 1 July 2009, as restated

Additions
Disposals
Write-offs (Note 36)
Transfers
Reclassification to intangible assets (Note 19)
Exchange differences

1,118,356
224
(7,191)

(17,924)

531,274
16,389
(5,203)
(28,578)
26,958

(4,252)

1,011,840
61,075
(8,633)
(2,912)

(26,266)
(3,140)

125,936
1,738
(3,140)
(451)
204

(468)

10,820
2,003
(1,410)
(8)

(320)

29,764
57,015

(27,162)

2,827,990
138,444
(25,577)
(31,949)

(26,266)
(26,104)

Balance at 30 June 2010

1,093,465

536,588

1,031,964

123,819

11,085

59,617

2,856,538

Accumulated depreciation
At 1 July 2009, as restated
as previously stated
effect of adopting FRS 117 (revised)

281,000
20,463

382,162

827,089

108,916

7,883

1,607,050
20,463

At 1 July 2009, as restated

Charge for the year (Note 36)
Disposals
Write-offs (Note 36)
Exchange differences

301,463
20,457
(2,878)

(4,144)

382,162
58,363
(5,182)
(28,119)
(3,291)

827,089
46,189
(8,633)
(2,912)
(2,414)

108,916
5,363
(3,140)
(448)
(297)

7,883
1,320
(1,249)
(4)
(221)

1,627,513
131,692
(21,082)
(31,483)
(10,367)

Balance at 30 June 2010

314,898

403,933

859,319

110,394

7,729

1,696,273

Net carrying amount

At 30 June 2010

778,567

132,655

172,645

13,425

3,356

59,617

1,160,265

FINANCIAL STATEMENTS

Maybank Annual Report 2011

309
At A Glance
Our Perspective

18. Property, plant and equipment (contd.)

Prepaid Land Lease

Less Than
50 Years
RM000

50 Years
or More
RM000

Less Than
50 Years
RM000

50 Years
or More
RM000

Total
RM000

424,214

(187,216)
15,437

9,881

(475)

4,917

93,948

(2,732)

4,397
1,265

1,093,465
23,056
(17,110)
(43)
19,576
19,639

Balance at 30 June 2011

105,599

405,453

263,895

252,435

14,323

96,878

1,138,583

Accumulated depreciation
At 1 July 2010, as restated
Charge for the year
Disposals
Write-offs
Transfers
Exchange differences

155,737
8,970
(3,715)

220

26,824
6,378
(2,188)
(25)
64,794
1,050

111,176
5,226

(64,794)
2,895

2,995
615
(10)

8,616

18,166
610
(554)

(8,616)
370

314,898
21,799
(6,467)
(25)

4,535

Balance at 30 June 2011

161,212

96,833

54,503

12,216

9,976

334,740

105,599

244,241

167,062

197,932

2,107

86,902

803,843

Net carrying amount

At 30 June 2011

Responsibility

70,899

(6,050)
(43)
197,478
1,611

Business Review

386,926
23,056
(5,272)

230
513

Performance

107,597

(2,581)

(230)
813

Strategy

* Properties consist of:

Cost
At 1 July 2010, as restated
Additions
Disposals
Write-offs
Transfers
Exchange differences

Who We Are

Bank

Buildings
Freehold on Freehold
Land
Land
RM000
RM000

Buildings on Leasehold
Land

Leadership
Governance
Financial & Others
AGM Information

310

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

18. Property, plant and equipment (contd.)

Bank

Buildings
Freehold on Freehold
Land
Land
RM000
RM000

Buildings on Leasehold
Land

Prepaid Land Lease

Less Than
50 Years
RM000

50 Years
or More
RM000

Less Than
50 Years
RM000

50 Years
or More
RM000

Total
RM000

* Properties consist of:

Cost
At 1 July 2009, as restated
as previously stated
effect of adopting FRS 117 (revised)

109,195

390,708

73,264

439,389

6,948

98,852

1,012,556
105,800

At 1 July 2009, as restated

Additions
Disposals
Transfers
Exchange differences

109,195
69
(1,005)

(662)

390,708
111
(3,476)

(417)

73,264

(2,365)

439,389
44
(1,769)

(13,450)

6,948

2,933

98,852

(941)
(2,933)
(1,030)

1,118,356
224
(7,191)

(17,924)

Balance at 30 June 2010

107,597

386,926

70,899

424,214

9,881

93,948

1,093,465

Accumulated depreciation
At 1 July 2009
as previously stated
effect of adopting FRS 117 (revised)

150,144

24,440

106,416

2,801

17,662

281,000
20,463

At 1 July 2009, as restated

Charge for the year
Disposals
Exchange differences

150,144
7,745
(1,980)
(172)

24,440
2,464

(80)

106,416
9,040
(685)
(3,595)

2,801
194

17,662
1,014
(213)
(297)

301,463
20,457
(2,878)
(4,144)

Balance at 30 June 2010

155,737

26,824

111,176

2,995

18,166

314,898

107,597

231,189

44,075

313,038

6,886

75,782

778,567

Net carrying amount

At 30 June 2010

FINANCIAL STATEMENTS

Maybank Annual Report 2011

311
At A Glance
Our Perspective

19. Intangible asset

Exchange differences

(52,056)
7,669,418

380,562

(5,330)
375,232

82,742

90,296

474,024

17,521
(28,144)
62,117

3,263

82,742

90,296

528,781

Total
RM000

6,628,589
2,120,509
17,521
(28,144)
62,117
(54,123)
8,746,469
528,357
114,915
(28,144)
2,775

As at 30 June 2011

220,246

397,657

617,903

Accumulated impairment loss

As at 1 July 2010/30 June 2011

1,619,518

1,619,518

Net carrying amount

6,049,900

154,986

82,742

90,296

131,124

6,509,048

5,582,728

367,770

420,554
28,942
(298)
(1,288)
28,641

6,371,052
28,942
(298)
(1,288)
28,641

191,275

12,792

(2,527)

201,540

5,774,003

380,562

474,024

6,628,589

Accumulated amortisation
As at 1 July 2009
Amortisation charged (Note 36)
Disposals
Write-offs
Exchange differences

73,140
93,037

2,256

304,384
58,742
(298)
(1,288)
(1,616)

377,524
151,779
(298)
(1,288)
640

As at 30 June 2010

168,433

359,924

528,357

Accumulated impairment loss

As at 1 July 2009/30 June 2010

1,619,518

1,619,518

Net carrying amount

4,154,485

212,129

114,100

4,480,714

As at 30 June 2010
Cost
As at 1 July 2009
Additions
Disposals
Write-offs
Reclassification from property, plant and equipment (Note 18)
Exchange differences
As at 30 June 2010

AGM Information

359,924
61,389
(28,144)
4,488

Financial & Others

Governance

Leadership

168,433
53,526

(1,713)

Responsibility

Business Review

Accumulated amortisation
As at 1 July 2010
Amortisation charged (Note 36)
Write-offs
Exchange differences

Performance

As at 30 June 2011

5,774,003
1,947,471

Computer
Software
RM000

Strategy

As at 30 June 2011
Cost
As at 1 July 2010
Acquisition of subsidiaries (Note 16)
Additions
Write-offs
Reclassification from property, plant and equipment (Note 18)

Agency
Customer
Force Relationship
RM000
RM000

Who We Are

Group

Core
Deposit
Goodwill Intangibles
RM000
RM000

312

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

19. Intangible asset (contd.)

Bank
As at 30 June 2010
Cost
As at 1 July 2010
Additions
Write-offs
Reclassification from
property, plant and
equipment (Note 18)
Exchange differences
As at 30 June 2011
Accumulated amortisation
As at 1 July 2010
Amortisation charged
(Note 36)
Write-offs
Exchange differences
As at 30 June 2011
Net carrying amount

Bank
As at 30 June 2010
Cost
As at 1 July 2009
Additions
Write-offs
Reclassification from
property, plant and
equipment (Note 18)
Exchange differences
As at 30 June 2010
Accumulated amortisation
As at 1 July 2009
Amortisation charged
(Note 36)
Write-offs
Exchange differences
As at 30 June 2010
Net carrying amount

Goodwill
RM000

Computer
Software
RM000

(a)

Goodwill

Goodwill has been allocated to the Groups Cash-Generating

Units (CGU) identified according to the following business
segments:

Total
RM000

2011

81,015

354,953
2,633
(28,144)

435,968
2,633
(28,144)

62,117
4,012

62,117
4,012

81,015

395,571

476,586

275,258

275,258

48,773
(28,144)
3,429

48,773
(28,144)
3,429

299,316

299,316

81,015

96,255

177,270

Goodwill
RM000

Computer
Software
RM000

Total
RM000

81,015

322,443
11,318
(1,272)

403,458
11,318
(1,272)

26,266
(3,802)

26,266
(3,802)

81,015

354,953

435,968

235,326

235,326

44,429
(1,272)
(3,225)

44,429
(1,272)
(3,225)

275,258

275,258

81,015

79,695

160,710

Cash
Generating
Unit
American
Express
(AMEX)
card services
business in
Malaysia (i)
Acquisition of
BII Group
Impairment
loss
(ii)

Acquisition of
KEH Group
(iii)

Less: Foreign
exchange
fluctuation

Group
RM000

Bank
RM000

Group
RM000

Bank
RM000

81,015

81,015

81,015

81,015

5,807,085

5,807,085

(1,619,518)

(1,619,518)

4,187,567

4,187,567

1,947,471

1,947,471

(114,097)

81,015

4,154,485

81,015

(166,153)
6,049,900

2010

Goodwill is allocated to the Groups CGUs expected to benefit

from the synergies of the acquisitions. The recoverable amount of
the CGUs are assessed based on value-in-use and compared to
the carrying value of the CGU to determine whether any
impairment exists. Impairment is recognised in the income
statement when the carrying amount of the CGU exceeds its
recoverable amount.
(i)

The value-in-use calculations apply discounted cash flow

projections prepared and approved by management,
covering a 10 year period.

The other key assumptions for the computation of

value-in-use are as follows:
(a)

The Bank expects the AMEX card services business to

be a going concern;

(b)

The growth in business volume is expected to be

equivalent to the current industry growth rate of 13%
per annum;

FINANCIAL STATEMENTS

313

Maybank Annual Report 2011

At A Glance

(a)

Goodwill (contd.)

(ii)

The value-in-use calculations discounted cash flow model

using free cash flow to equity (FCFE) projections prepared
and approved by management covering a 10 year period.
The compounded annual growth rate (CAGR) of Blls FCFE
projections was 22.84%.

Group
2011
RM000

The Bank expects the BII banking business operations

to be a going concern;

(b)

The discount rate applied is based on current specific

country risks which is estimated to be approximately
16.5% per annum;

Fixed deposits
and
negotiable
instruments
of deposits
One year or
less
147,568,388 126,868,356
More than
one year
5,307,137
3,777,611

Terminal value whereby cash flow growth rate of 6%,

consistent with the Gross Domestic Product rates of
Indonesia.

Core deposits intangible arises from the acquisition of BII banking

business operations. The CDI is deemed to have a finite useful life
of 8 years and the CDI is amortised based on reducing balance
method.
Agency force

As disclosed in Note 16(a), the PPA exercise is provisional on best

estimate based on all relevant information available. The
estimated agency force is deemed to have a finite useful life of
approximately 11 years and will be amortised based on reducing
balance method.

4,547,863

2,485,808

98,854,067

90,179,956

24,614,815

16,175,570

32,024,849

28,860,081

43,853,536

38,084,642

2,118,141

2,079,492

281,976,379 236,909,788 201,465,408 175,379,741

*

Structured deposits represent time deposits with embedded

foreign exchange, and commodity-linked time deposits.

The maturity structure of fixed deposits and negotiable instruments of

deposits are as follows:
Group
2011
RM000

Bank
2010
RM000

Due within six

months
121,375,160 102,449,544
Six months to
one year
26,193,228
24,418,812
One year to
three years
4,876,438
3,298,907
Three years to
five years
424,590
343,318
After five
years
6,109
135,386
152,875,525 130,645,967

2011
RM000

2010
RM000

70,896,420

65,061,280

23,409,784

22,632,868

4,414,265

2,377,628

133,598

91,880

16,300

98,854,067

90,179,956

AGM Information

(c)

87,694,148

Financial & Others

94,306,204

Governance

Core Deposits Intangible (CDI)

2010
RM000

Leadership

(b)

2011
RM000

Responsibility

152,875,525 130,645,967
Money market
deposits
24,614,815
16,175,570
Savings
deposits
44,128,596
38,779,000
Demand
deposits
57,696,718
48,779,470
Structured
deposits*
2,660,725
2,529,781

Included in the goodwill of acquisition of KEH Group is an

existing amount of goodwill recorded in KEH Groups books
of RM18,335,000.
Management believes that any reasonably possible changes
in any of the above key assumptions would not cause the
carrying value of the CGU to exceed its recoverable
amount. Based on the above review, there is no evidence of
impairment on the Groups and Banks goodwill, other than
an impairment loss incurred previously.

2010
RM000

Business Review

(a)

Bank

Performance

As disclosed in Note 16(a) the PPA exercise is provisional on best

estimate based on all relevant information available. The
estimated customer relationship is deemed to have a finite useful
life of approximately 9 years and will be amortised based on
reducing balance method.

20. Deposits from customers

(iii) The allocation of goodwill exercise for KEH Group is

provisional in nature, as at 30 June 2011, as disclosed in
Note 16(a).

The discount rate applied is the internal weighted

average cost of capital of the Bank at the time of
assessment, which is estimated to be 7.98% per
annum.

The other key assumptions for the computation of

value-in-use are as follows:

(c)

Customer relationship

Strategy

(c)

(d)

Who We Are

Our Perspective

19. Intangible asset (contd.)

314

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

20. Deposits from customers (contd.)

22. Other liabilities

The deposits are sourced from the following types of customers:

Group
2011
RM000
Business
enterprises
Individuals
Government
and
statutory
bodies
Others

Bank
2010
RM000

2011
RM000

2010
RM000

125,471,400 102,732,216
123,589,127 111,773,287

88,232,244
96,557,071

74,625,538
91,052,361

10,418,229
22,497,623

Group

10,566,271
11,838,014

3,464,642
13,211,451

Due to
brokers and
clients
Deposits and
other
creditors
Provisions and
accruals
Provision for
outstanding
claims
Unearned
premium
reserves
Profit
equalisation
reserves (IBS
operations)
(Note 56(r))
Interest/profit
payable

3,770,907
5,930,935

281,976,379 236,909,788 201,465,408 175,379,741

21. Deposits and placements of banks and other

financial institutions
Group
2011
RM000
Licensed
banks
23,712,986
Licensed
finance
companies
41,326
Licensed
investment
banks
429,662
Other financial
institutions
9,119,681
33,303,655

Bank
2010
RM000

2011
RM000

2010
RM000

13,116,287

24,816,195

14,072,624

347,957

30,652

214,524

990,017

429,663

990,017

8,803,607

6,165,165

7,652,657

23,257,868

31,441,675

22,929,822

The maturity structure of deposits and placements of banks and other

financial institutions are as follows:
Group

One year or
less
More than
one year

Bank

2011
RM000

2010
RM000

2011
RM000

2010
RM000

27,731,454

17,429,944

26,060,606

17,331,142

5,572,201

5,827,924

5,381,069

5,598,680

33,303,655

23,257,868

31,441,675

22,929,822

Bank

2011
RM000

2010
RM000

2011
RM000

2010
RM000

4,200,630

511,829

3,870,733

2,680,035

2,631,835

1,134,818

2,356,192

2,006,024

1,608,321

1,563,740

464,123

437,200

324,929

317,570

95,247

4,228

994,634

857,311

11,311,854

6,951,520

4,240,156

3,555,869

Movements in provision for outstanding claims are as follows:

Group
2011
RM000

2010
RM000

Balance at beginning of year

Net provision/(utilisation) during the year
Exchange differences

437,200
19,188
7,735

441,712
(650)
(3,862)

Balance at end of year

464,123

437,200

FINANCIAL STATEMENTS

315

Maybank Annual Report 2011

At A Glance
Our Perspective

23. Recourse obligation on loans sold to Cagamas

Group and Bank

649,977

(121,692)

516,265
250,000
(116,288)

528,285

649,977

24. Provision for taxation and zakat

Group
2011
RM000

2010
RM000

2011
RM000

2010
RM000

128,874
5,746

462,572
4,317

283,353

134,620

466,889

283,353

Group
2011
RM000

2010
RM000

2011
RM000

2010
RM000

(1,435,702)

(1,148,176)
302,715

(1,194,897)

At 1 July 2010/2009, as restated

Acquisition of subsidiaries (Note 16)
Recognised in profit or loss (net) (Note 40)
Recognised in other comprehensive income (net)
Exchange differences

(1,156,138)
73,320
(119,191)
43,297
3,899

(1,435,702)

(166,355)
193,595
(5,392)

(845,461)

(92,192)
16,950
(134)

(1,194,897)

(70,122)
116,843

At 30 June

(1,154,813)

(1,413,854)

(920,837)

(1,148,176)

Presented after appropriate offsetting as follows:

Deferred tax assets
Deferred tax liabilities

(1,402,705)
247,892

(1,564,963)
151,109

(920,837)

(1,148,176)

(1,154,813)

(1,413,854)

(920,837)

(1,148,176)

AGM Information

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set-off current tax assets against current tax liabilities and when
the deferred income taxes relates to the same fiscal authority.

Financial & Others

(1,413,854)
257,022
694

Governance

At 1 July 2010/2009
as previously stated
effect of adopting FRS 139
effect of adopting FRS 4

Leadership

Bank

Responsibility

25. Deferred tax

Business Review

Taxation
Zakat

Bank

Performance

Recourse obligation on loans sold to Cagamas represents those acquired from the originators and sold to Cagamas Berhad with recourse. Under the
agreement, the Bank undertakes to administer the loans on behalf of Cagamas Berhad and to buy back any loans which are regarded as defective based
on pre-determined and agreed-upon prudential criteria with recourse against the originators.

Strategy

At 30 June

2010
RM000

Who We Are

At 1 July 2010/2009
Amount sold during the year
Repayment forwarded

2011
RM000

316

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

25. Deferred tax (contd.)

The components and movements of deferred tax assets and liabilities during the financial year prior to offsetting are as follows:

Deferred tax assets of the Group:

Loans loss
and
allowances
RM000

Unrealised
holding
reserve,
impairment
loss on
securities
and
amortisation
of premium
RM000

Provision
for
liabilities
RM000

Other
temporary
differences
RM000

Total
RM000

30 June 2011
At 1 July 2010
as previously stated
effect of adopting FRS 139
effect of adopting FRS 4

(905,919)
269,837
694

(12,815)

(427,152)

(231,892) (1,564,963)

257,022

694

At 1 July 2010, as restated

Acquisition of subsidiaries
Recognised in profit or loss
Recognised in other comprehensive income
Exchange differences

(635,388)

35,263

75

(12,815)

7,994
13,775
84

(427,152)

(48,426)

830

(231,892) (1,307,247)
(8,991)
(8,991)
(114,976)
(120,145)
16,398
30,173
2,516
3,505

At 30 June 2011

(600,050)

9,038

(474,748)

(336,945) (1,402,705)

30 June 2010
At 1 July 2009
Recognised in profit or loss
Recognised in other comprehensive income
Exchange differences

(896,973)
(7,907)

(1,039)

(24,485)
(15,666)
40,248
(97)

(330,041)
(98,486)
2,090
(715)

(241,633)
(25,288)
37,782
(2,753)

(1,493,132)
(147,347)
80,120
(4,604)

At 30 June 2010

(905,919)

(427,152)

(231,892)

(1,564,963)

Accelerated
capital
allowance
RM000

Unrealised
holding
reserve
and
accretion of
discounts
RM000

Other
temporary
differences
RM000

Total
RM000

30 June 2011
At 1 July 2010
Acquisition of subsidiaries
Recognised in profit or loss
Recognised in other comprehensive income
Exchange differences

43,465
1,415
53

21

72,019

1,567
176
2

At 30 June 2011

44,954

73,764

Deferred tax liabilities of the Group:

35,625
80,896
(666)
12,948
371
129,174

151,109
82,311
954
13,124
394
247,892

FINANCIAL STATEMENTS

Maybank Annual Report 2011

317
At A Glance
Our Perspective

25. Deferred tax (contd.)

Who We Are

Other
temporary
differences
RM000

Total
RM000

30 June 2010
At 1 July 2009
Recognised in profit or loss
Recognised in other comprehensive income
Exchange differences

44,344
3,102
(3,982)
1

(16,434)
1,259
87,207
(13)

29,520
(23,369)
30,250
(776)

57,430
(19,008)
113,475
(788)

At 30 June 2010

43,465

72,019

35,625

151,109

Unrealised
holding
reserve,
impairment
loss on
securities
and
amortisation
of premium
RM000

Provision
for
liabilities
RM000

Other
temporary
differences
RM000

Total
RM000

Performance

Accelerated
capital
allowance
RM000

Unrealised
holding
reserve
and
accretion of
discounts
RM000

Strategy

Deferred tax liabilities of the Group: (contd.)

Deferred tax assets of the Bank:

Business Review

(387,060)

At 1 July 2010, as restated

Recognised in profit or loss
Exchange differences

(466,194)
41,065

(28,257)

(387,060)
(24,351)

(77,458)
(110,273)
(134)

At 30 June 2011

(425,129)

(28,257)

(411,411)

(187,865) (1,052,662)

30 June 2010
At 1 July 2010
Recognised in profit or loss
Recognised in other comprehensive income

(806,815)
25,091

(53,634)
(2,435)
27,812

(300,800)
(86,260)

(71,564)
(5,894)

(1,232,813)
(69,498)
27,812

At 30 June 2011

(781,724)

(28,257)

(387,060)

(77,458)

(1,274,499)

(77,458) (1,274,499)

315,530
(958,969)
(93,559)
(134)

Financial & Others

(28,257)

Governance

(781,724)
315,530

Leadership

30 June 2011
At 1 July 2010
as previously stated
effect of adopting FRS 139

Responsibility

Loans loss
and
allowances
RM000

AGM Information

318

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

25. Deferred tax (contd.)

Deferred tax liabilities of the Bank:

Accelerated capital
allowance
RM000
30 June 2011
At 1 July 2010
as previously stated
effect of adopting FRS 139
At 1 July 2010, as restated
Recognised in profit or loss
Recognised in other comprehensive income
At 30 June 2011
30 June 2010
At 1 July 2010
Recognised in profit or loss
Recognised in other comprehensive income
At 30 June 2011

Unrealised
holding reserve
RM000

Total
RM000

37,292

37,292
1,367

38,659

89,031
(12,815)
76,216

16,950
93,166

126,323
(12,815)
113,508
1,367
16,950
131,825

37,916
(624)

37,292

89,031
89,031

37,916
(624)
89,031
126,323

Deferred tax assets have not been recognised in respect of the following items:
Group

Unutilised tax losses

2010
RM000

49,152

49,053

992

992

Loan loss and provisions and interest suspended

53,618

53,464

Others

83,627

81,076

187,389

184,585

Unabsorbed capital allowances

2011
RM000

The unutilised tax losses and unabsorbed capital allowances are available for offset against future taxable profits of the respective subsidiaries in which
those items arose. Deferred tax assets have not been recognised in respect of those items as they may not be used to offset taxable profits of other
subsidiaries of the Group. They have arisen in subsidiaries that have past losses of which the deferred tax assets are recognised to the extent that future
taxable profits will be available.

26. Borrowings
Group

Bank

2011
RM000

2010
RM000

2011
RM000

2010
RM000

less than one year

727,523

137,042

more than one year

666,667

353,211

1,394,190

490,253

Note
Secured:

Unsecured:
(i)

Borrowings

less than one year

more than one year

(ii)

Medium Term Notes

(a)

(b)
335,474

1,324,515

120,920

1,289,192

3,299,579

1,010,096

3,299,579

809,125

less than one year

294,972

more than one year

122,905

4,052,930

2,334,611

3,420,499

2,098,317

5,447,120

2,824,864

3,420,499

2,098,317

FINANCIAL STATEMENTS

319

Maybank Annual Report 2011

At A Glance
Our Perspective

26. Borrowings (contd.)

Secured borrowings

The secured borrowings are secured against the following collaterals:

(i)

fiduciary transfer of a subsidiarys receivables from third parties in connection with the financing of the purchases of motor vehicles with an
aggregate amount of not less than specific amount of the principal bonds issued;

(ii)

fiduciary transfer of account receivables amounting to specific balances;

Who We Are

(a)

(iii) fiduciary transfer of consumer financing receivables with an aggregate amount if not less than 100% to 125% of total outstanding loan; and

(1)

certain trade receivables.

(2)

by a first legal mortgage over the development properties for sale (Note 13(a)); and/or assignment of all rights and benefits with
respect to the development properties and a continuing corporate guarantee.

(3)

first mortgage over the land located at 50 North Canal Road and the building to be erected thereon, assignment of rights and benefits
of all tenancy agreements to be entered into between one of the subsidiaries and the tenants, assignment of all insurance proceeds
and construction contracts in relation to the building, and a corporate guarantee from a subsidiary.

The interest rates of these borrowings range from 5.0% to 16.0% per annum (2010: 7.3% to 17.0%) and have maturity ranging from 0.5 month to
44 months (2010: 3 months to 24 months).

(ii)

Multi-currency medium term notes (MTN)

In November 2006, two entities that have become subsidiaries during the year jointly established a SGD300 million Multi-currency Medium
Term Notes (MTN) Programme. The maximum aggregate principal amount of notes that may be issued under the programme was increased
to SGD800 million with effect from 18 June 2010. Under this MTN Programme, the subsidiaries may from time to time issue notes in series or
tranches, which may be denominated in Singapore Dollars or any other currency deemed appropriate at the time. Each series or tranche of
notes may be issued in various amounts and tenors, and may bear fixed, floating, variable or hybrid rates of interest or may not bear interest.
The Notes constitute direct, unconditional, unsubordinated and unsecured obligations of the subsidiaries, and rank pari passu, without any
preference or priority among themselves, and pari passu with all other present and future unsecured obligations of the subsidiaries.

The interest rate of these borrowings range from 2.2% to 2.4% per annum and have maturity ranging from 3 months to 12 months.

Leadership

The unsecured borrowings are term loans and Bankers Acceptance denominated in US Dollar and IDR Rupiah. The borrowings are unsecured
and bear interest rates ranging between 0.84% to 10.29% (2010: ranging between 0.52% and 10.3%) per annum for IDR Loans.

Responsibility

(i)

Business Review

(b) Unsecured borrowings

Performance

Strategy

(iv) specific collaterals as follows:

27. Subordinated obligations

2011
RM000

2010
RM000

2011
RM000

2010
RM000

(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(ix)

1,469,579
1,512,986
907,272
3,110,871
2,469,078
1,010,637
320,116

1,000,000
1,500,000
1,500,000
969,116
3,100,000

1,509,579
1,512,986
907,272
3,110,871
2,469,078

1,000,000
1,500,000
1,500,000
969,116
3,100,000

10,800,539

8,069,116

9,509,786

8,069,116

AGM Information

Note

Financial & Others

RM1,000 million subordinated Islamic bonds due in 2015

RM1,500 million subordinated Islamic bonds due in 2018
RM1,500 million subordinated bonds due in 2017
USD300 million subordinated certificates due in 2017
RM3,100 million subordinated Term Loan due in 2023
SGD1,000 million capital subordinated notes due in 2021
RM1,000 million subordinated sukuk due in 2021
BII subordinated Bond due in 2018
USD150 million subordinated notes due in 2015

Bank

Governance

Group

320

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

27. Subordinated obligations (contd.)

(i)

On 24 November 2005, the Bank issued RM1.0 billion nominal

value Islamic Subordinated Bonds under the Shariah principle of
Bai Bithaman Ajil. The Bonds were under a 10 non-callable 5
basis feature, payable semi-annually in arrears in May and
November each year, and are due in November 2015. Under the
10 non-callable 5 basis feature, the Bank has the option to
redeem the Bonds on the 5th anniversary or any semi-annual
date thereafter. Should the Bank decide not to exercise its option
to redeem the Bonds, the holders of the Bonds will be entitled to
an annual incremental step-up profit rate ranging from 10 to 40
basis points from the beginning of the 6th year to the final
maturity date.

The subordinated bonds were fully redeemed on 24 November

2010.

(ii)

On 15 May 2006, the Bank issued RM1.5 billion nominal value

Islamic Subordinated Bonds under the Shariah principle of Bai
Bithaman Ajil. The Bonds are under a 12 non-callable 7 basis
feature, payable semi-annually in arrears in May and November
each year, and are due in May 2018. Under the 12 non-callable 7
basis feature, the Bank has the option to redeem the Bonds on
the 7th anniversary or any semi-annual date thereafter. Should
the Bank decide not to exercise its option to redeem the Bonds,
the holders of the Bonds will be entitled to a permissible step-up
profit rate ranging from 0 to 70 basis points from the beginning
of the 8th year to the final maturity date.

(iii) On 11 April 2007, the Bank issued RM1.5 billion nominal value
Subordinated Bonds payable semi-annually in arrears in April and
October each year, subject to the revision of interest explained
below and are due in 2017. The Bank may, subject to the prior
consent of Bank Negara Malaysia, redeem the Notes, in whole but
not in part, any time on or after the 5th anniversary of the issue
date and on every semi-annual date thereafter at par together
with accrued interest due on the redemption date. Should the
Bank decide not to exercise its call option, the holders of the
Bonds are entitled to a step-up in the coupon rate of 100 basis
points from the beginning of the 6th year to the final maturity
date.
(iv) On 25 April 2007, MBB Sukuk Inc., the Issuer, (a Special Purpose
Vehicle (SPV) formed solely for the purpose of participating in
this transaction and issuing the subordinated certificates) issued
USD300 million Subordinated Certificates with a distribution rate
based on 6 months LIBOR plus a margin of 0.33% per annum
payable semi-annually in arrears in April and October each year.
The proceeds from the Subordinated Certificates are paid to
Premier Sukuk Inc., another SPV incorporated for this transaction,
and ultimately paid to the Bank. In return, the Bank transfers the
beneficial ownership of a portfolio of assets (comprising hire
purchase contracts and cash) by way of an equitable assignment
to Premier Sukuk and subsequently to the Issuer. The portfolio
assets are managed by the Bank pursuant to a Management
Agreement.

The Subordinated Certificates are due in 2017. The Issuer may,

subject to the prior consent of Bank Negara Malaysia, redeem the
Certificates, in whole but not in part, on the 5th anniversary of
the issue date or at any semi-annual distribution payment date
thereafter.

Should the Issuer decide not to exercise its call option, the
Certificate holders are entitled to a step-up margin of 1.33% per
annum from the beginning of the 6th year to the final maturity
date.

The Certificate holders will have recourse on a subordinated basis

to the Bank pursuant to the Sale and Purchase Undertaking
Deeds.

(v)

On 28 November 2008, the Bank (Borrower) secured RM3.1

billion Tier 2 Capital Subordinated Term Loan Facility (the
Facility) for a term of fifteen (15) years from the drawdown date,
with an option by the Borrower to redeem the Facility on the
Optional Redemption Date or such other period as may be
agreed between the Lender and Borrower. The Optional
Redemption Date is the tenth (10th) anniversary from the
drawdown date or any semi-annual interest payment date
thereafter.

The Facility bears a fixed interest rate payment, payable

semi-annually in arrears. On the 10th anniversary of the issue
date, there will be a one-time step-up in the interest rate which
shall be equivalent to the aggregate of one hundred (100) basis
points and the then prevailing market rate to be agreed between
the Lender and the Borrower based on the then Borrowers
prevailing credit rating for a Tier 2 subordinated bond and upon
having considered amongst others, the yield for a five (5) year
bond maturity and last traded yields for Tier 2 subordinated
bonds and other comparables of equivalent ratings.

The Facility qualifies as Tier 2 Capital of the Bank in accordance

with the capital adequacy requirements issued by Bank Negara
Malaysia.

(vi) On 28 April 2011, the Bank issued SGD1.0 billion nominal value
Subordinated Notes under the MTN Programme which is payable
semi-annually in arrears in April and October each year, subject
to the revision of interest explained below and are due in 2021.
The Bank may, subject to the prior consent of Bank Negara
Malaysia, redeem the Notes, in whole but not in part, on 28 April
2016 (first Optional Redemption Date) and each semi-annual
interest payment date thereafter at par together with accrued
interest due on the redemption date. Should the Bank decide not
to exercise its call option, the holders of the Subordinated Notes
are entitled to a revised interest rate from the first Optional
Redemption Date to (but excluding) the maturity date, being the
sum of (i) the initial spread; and (ii) the ask rate for 5 year Swap
Offer Rate on the first Optional Redemption Date.

FINANCIAL STATEMENTS

321

Maybank Annual Report 2011

At A Glance

(a)
SGD600 million 6.00% Innovative
Tier 1 Capital Securities (SGD600
million IT1CS)
Less: Transaction cost
Add: Accumulated amortisation of
transaction cost
(b)
RM1,100 million 6.30% Innovative
Tier 1 Capital Securities (RM1.1
billion IT1CS)
Less: Transaction cost
Add: Accumulated amortisation of
transaction cost
(c)

All the subordinated instruments above constitute unsecured liabilities

of the Group and the Bank and are subordinated to the senior
indebtedness of the Group and the Bank in accordance with the
respective terms and conditions of their issues.

3,500,565

3,497,721

1,508,921
(8,514)

1,389,180
(8,514)

2,024

1,282

1,502,431

1,381,948

1,118,607
(1,063)

1,100,000
(1,063)

234

146

1,117,778

1,099,083

6,120,774

5,978,752

NCPCS

On 27 June 2008, the Group issued RM3,500 million in nominal

value comprising:

(a)

Non-Cumulative Perpetual Capital Securities (NCPCS),

which are issued by the Bank and stapled to the
Subordinated Notes described below; and

(b)

Subordinated Notes (Sub-Notes), which are issued by

Cekap Mentari Berhad (CMB), a wholly-owned subsidiary
of the Bank.

(collectively known as Stapled Capital Securities).

Financial & Others

407

Governance

The coupon rates for all the subordinated instruments above range
between 4.00% and 6.13% per annum.

631

(a)

On 28 April 2010, the subsidiary exercised the option to call the

Subordinated Notes.

3,500,000
(2,686)

Leadership

The Subordinated Notes bear interest at the rate of 7.75% per

annum, payable semi-annually in arrears on 28 April and 28
October. Unless previously redeemed, on 28 April 2010, the
interest rate will be reset at the U.S. Treasury Rate plus 7.424%
per annum from that date. The trustee of the Subordinated Notes
issuance is The Bank of New York.

3,502,620
(2,686)

Responsibility

On 28 April 2005, a subsidiary, BII, through its Cayman Island

branch, issued USD 150,000,000 subordinated notes (the
Subordinated Notes) which is listed on the Singapore Stock
Exchange. The Subordinated Notes are unsecured and
subordinated to all other obligations of BII. The Subordinated
Notes will mature on 28 April 2015, with an option to call by BII
on 28 April 2010 subject to an approval from Bank Indonesia.

RM3,500 million 6.85% Stapled

Capital Securities (NCPCS)
Less: Transaction cost
Add: Accumulated amortisation of
transaction cost

2010
RM000

Business Review

(ix)

The notes bear interest at the Fixed rate of 10.75% per annum,
payable quarterly, the first coupon payment will be made on 19
August 2011. The notes have been approved by Bank Indonesia
through its letter dated 23 June 2011 to be qualified as Tier 2
Capital of the subsidiary.

2011
RM000

Performance

Group and Bank

Strategy

(viii) On 19 May 2011, a subsidiary, BII, issued IDR1.5 trillion

subordinated notes, of which IDR0.6 trillion is held by the Bank.
The notes are not guaranteed with specific guarantee, but
guaranteed with all assets of BII, whether present or future fixed
or non-fixed assets. The notes will mature on 19 May 2018.

28. Capital securities

Who We Are

(vii) On 31 March 2011, Maybank Islamic Berhad, a wholly owned

subsidiary of the Bank, issued RM1.0 billion nominal value Tier 2
Islamic subordinated sukuk under the Shariah Principle of
Musyarakah. The sukuk carries a tenure of 10 years from issue
date on 10 non-callable 5 basis, with a profit rate of 4.22% per
annum payable semi-annually in arrears in March and September
each year, and is due in March 2021. The subsidiary has the
option to redeem the sukuk on any semi-annual distribution date
on or after the 5th anniversary from the issue date. Should the
subsidiary decide not to exercise its option to redeem the sukuk,
the sukuk shall continue to be outstanding until the final
maturity date.

Our Perspective

27. Subordinated obligations (contd.)

AGM Information

322

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

28. Capital securities (contd.)

(c)

Appointment of an administrator in connection with a

restructuring of the Bank; or

(a)

NCPCS (contd.)

Until an assignment event occurs, the Stapled Capital Securities

cannot be transferred, dealt with or traded separately. Upon
occurrence of an assignment event, the Stapled Capital Securities
will unstaple, leaving the investors to hold only the NCPCS while
ownership of the Sub-Notes will be re-assigned to the Bank
pursuant to a forward purchase contract entered into by the
Bank. Unless there is an earlier occurrence of any other events
stated under the terms of the Stapled Capital Securities, the
assignment event would occur on the 20th interest payment date
or 10 years from the issuance date of the Sub-Notes.

(d)

Occurrence of a default of the NCPCS distribution payments

or Sub-Notes interest payments; or

(e)

CMB ceases to be, directly or indirectly, a wholly-owned

subsidiary of the Bank; or

(f )

Bank Negara Malaysia requires that an assignment event

occur; or

(g)

The Bank elects that an assignment event occurs; or

Each of the NCPCS and Sub-Notes has a fixed interest rate of

6.85% per annum. However, the NCPCS distribution will not
begin to accrue until the Sub-Notes are re-assigned to the Bank
as referred to above. Thus effectively, the Stapled Capital
Securities are issued by the Bank at a fixed rate of 6.85% per
annum. Interest is payable semi-annually in arrears.

(h)

The 20th Interest Payment Date of the Sub-Notes; or

(i)

60 days after a regulatory event (means at any time there is

more than an insubstantial risk, as determined by the Bank,
that the NCPCS will no longer qualify as Non-Innovative
Tier 1 capital of the Bank for the purposes of Bank Negara
Malaysias capital adequacy requirements under any
applicable regulations) has occurred, subject to such
regulatory event continuing to exist at the end of such 60
days; or

(j)

Any deferral of interest payment of the Sub-Notes; or

(k)

30 years from the issue date of the Sub-Notes.

The NCPCS are issued in perpetuity unless redeemed under the

terms of the NCPCS. The NCPCS are redeemable at the option of
Maybank on the 20th interest payment date or 10 years from the
issuance date of the Sub-Notes, or any NCPCS distribution date
thereafter, subject to redemption conditions being satisfied. The
Sub-Notes have a tenure of 30 years unless redeemed earlier
under the terms of the Sub-Notes. The Sub-Notes are redeemable
at the option of CMB on any interest payment date, which cannot
be earlier than the occurrence of an assignment event, subject to
redemption conditions being satisfied.
The Stapled Capital Securities comply with Bank Negara
Malaysias Guidelines on Non-Innovative Tier 1 capital
instruments. They constitute unsecured and subordinated
obligations of the Group. Claims in respect of the NCPCS rank
pari passu and without preference among themselves, other Tier
1 capital securities of the Bank and with the most junior class of
preference shares of the Bank but in priority to the rights and
claims of the ordinary shareholders of the Bank. The Sub-Notes
rank pari passu and without preference among themselves and
with the most junior class of notes or preference shares of CMB.

In addition to the modes of redemption, the NCPCS and the

Sub-Notes can be redeemed in the following circumstances:
(a)

If the NCPCS and the Sub-Notes were issued for the

purpose of funding a merger or acquisition which is
subsequently aborted, at the option of the Bank and
CMB subject to Bank Negara Malaysias prior approval;

(b)

At any time if there is more than an insubstantial risk

in relation to changes in applicable tax regulations, as
determined by the Bank or CMB, that could result in
the Bank or CMB paying additional amounts or will
no longer be able to deduct interest in respect of the
Sub-Notes or the inter-company loan (between the
Bank and CMB) for taxation purposes;

(c)

At any time if there is more than an insubstantial risk

in relation to changes in applicable regulatory capital
requirements, as determined by the Bank or CMB,
that could disqualify the NCPCS to be regarded as
part of Non-Innovative Tier 1 capital for the purpose
of regulatory capital requirements.

An assignment event means the occurrence of any of the

following events:
(a)

The Bank is in breach of Bank Negara Malaysias minimum

capital adequacy ratio requirements applicable to the
NCPCS Issuer; or

(b)

Commencement of a winding up proceeding in respect of

the Bank or CMB; or

FINANCIAL STATEMENTS

Maybank Annual Report 2011

323
At A Glance
Our Perspective

28. Capital securities (contd.)

The SGD IT1CS bears a fixed interest rate payment from and including 11 August 2008 to (but excluding) 11 August 2018 (the First Reset Date),
payable semi-annually in arrears on 11 February and 11 August in each year commencing on 11 February 2009. The SGD IT1CS has a principal stock
settlement mechanism to redeem the IT1CS on the 60th year from the date of issuance. The Bank, however, has the option to redeem the IT1CS on
the 10th anniversary of the issue date and on any interest payment date thereafter. On the 10th anniversary of the issue date, there will be a
step-up in the interest rate to a floating rate, reset quarterly, at the initial credit spread plus 100 basis points above the three month SGD Swap
Offer Rate.

The IT1CS will constitute direct, unsecured and subordinated obligations of the Bank and will rank pari passu and without any preference among
themselves, and will rank pari passu with other Tier 1 securities.

(c)

RM1.1 billion IT1CS

On 25 September 2008, the Bank issued RM1.1 billion IT1CS callable with step-up in 2018 at a fixed rate of 6.30% under its RM4.0 billion Innovative
Tier 1 Capital Securities. The RM1.1 billion IT1CS which matures on 25 September 2068 also bears a fixed interest rate and is callable on 25
September 2018 and on every interest payment date thereafter. On the 10th anniversary of the issue date, there will be a step-up in the interest
rate to a floating rate, reset quarterly, at the initial credit spread plus 100 basis points above the Kuala Lumpur Inter-Bank Offer Rate for 3-months
RM deposits.

The IT1CS will constitute direct, unsecured and subordinated obligations of the Bank and will rank pari passu and without any preference among
themselves, and will rank pari passu with other Tier 1 securities.

29. Share capital

Created during the year

At 30 June

2011
RM000

2010
RM000

10,000,000

10,000,000

10,000,000

10,000,000

10,000,000

10,000,000

10,000,000

10,000,000

7,077,983

7,077,663

7,077,983

7,077,663

244,257
155,966

320

244,257
155,966

320

7,478,206

7,077,983

7,478,206

7,077,983

Financial & Others

At 30 June

2010
000

Governance

Issued and fully paid:

At 1 July 2010/2009
Shares issued under the:
Dividend Reinvestment Plan (DRP):
Issued on:
20 December 2010
13 May 2011
Maybank Group Employees Share Option Scheme 2004/2009

2011
000

Leadership

Authorised:
At 1 July 2010/2009

Amount

Responsibility

Number of ordinary
shares of RM1 each

Business Review

Performance

On 11 August 2008, the Bank issued SGD600 million IT1CS callable with step-up in 2018 at a fixed rate of 6.00%.

Strategy

SGD600 million IT1CS

Who We Are

(b)

AGM Information

324

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

29. Share capital (contd.)

(a)

Increase in issued and paid-up capital

During the year, the Bank increased its issued and paid up capital from:
(i)

RM7,077,982,768 to RM7,322,240,391 via the issuance of 244,257,623 new ordinary shares of RM1.00 each arising from the DRP relating to
electable portion of the final dividend of 44 sen less 25% taxation in respect of financial year ended 30 June 2010.

(ii)

RM7,322,240,391 to RM7,478,206,067 via the issuance of 155,965,676 new ordinary shares of RM1.00 each arising from the DRP relating to
electable portion of the interim dividend of 28 sen less 25% taxation in respect of financial year ended 30 June 2011.

(b)

Dividend Reinvestment Plan (DRP)

Maybank via the announcement on 25 March 2010 proposed to undertake a recurrent and optional dividend reinvestment plan that allows
shareholders of Maybank (Shareholders) to reinvest their Dividend (as defined below) into new ordinary share(s) of RM1.00 each in Maybank
(Maybank Shares) (Dividend Reinvestment Plan).

The rationale of Maybank embarking on the Dividend Reinvestment Plan are as follows:
(i)

To enhance and maximise shareholders value via the subscription of new Maybank Shares where the issue price of a new Maybank Share
shall be at a discount;

(ii)

To provide the shareholders with greater flexibility in meeting their investment objectives, as they would have the choice of receiving cash or
reinvesting in the Bank through subscription of additional Maybank Shares without having to incur material transaction or other related
costs; and

(iii) To benefit from the participation by shareholders in the Dividend Reinvestment Plan to the extent that if the shareholders elect to reinvest
into new Maybank Shares, the cash which would otherwise be payable by way of dividend will be reinvested to fund the continuing business
growth of the Group. The Dividend Reinvestment Plan will not only enlarge Maybanks share capital base and strengthen its capital position,
but will also add liquidity of Maybank Shares on the Main Market of Bursa Malaysia Securities Berhad (Bursa Securities).

Whenever a cash dividend (either an interim, final, special or other dividend) is announced, the Board may, in its absolute discretion,
determine that the Dividend Reinvestment Plan will apply to the whole or a portion of the cash dividend (Electable Portion) and where
applicable any remaining portion of the dividend will be paid in cash.

(iv) Each shareholder has the following options in respect of the Electable Portion:
(1)

elect to receive the Electable Portion in cash; or

(2)

elect to reinvest the entire Electable Portion into new Maybank Shares credited as fully paid-up at an issue price to be determined on a
price fixing date subsequent to the receipt of all relevant regulatory approvals.

(c)

Employees Share Option Scheme (ESOS) 2004/2009

ESOS movement in financial year ended 2010 related to the previous ESOS governed under by-laws approved in EGM held on 11 August 2004. The
ESOS expired on 26 August 2009 (collectively known as ESOS 2004/2009).

Grant Date
2010
1.9.2004

Movement During the Year

Granted
Exercised
Forfeited
Outstanding
at 1 July (Adjusted for and vested
2009
Rights issue)
000
000
000
000

Expired Outstanding
at 30 June
2010
000
000

Exercisable
at 30 June
2010
000

16,984

(299)

(16,685)

4,926

(3)

(4,923)

210

(210)

14.11.2005

10,379

(6)

(10,373)

14.11.2006

17,890

(12)

(17,878)

50,389

(320)

(50,069)

7.00

6.65

7.01

15.10.2004
30.6.2005

Weighted Average Exercise Price (WAEP)

FINANCIAL STATEMENTS

Maybank Annual Report 2011

325
At A Glance

The Maybank Group Employees Share Scheme (ESS) is

governed by the by-laws approved by the shareholders at an
Extraordinary General Meeting held on 13 June 2011. The ESS
was implemented on 23 June 2011 and is in force for a maximum
period of seven (7) years from the effective date.

The maximum number of ordinary shares of RM1.00 each in the

Bank available under the ESS should not exceed 10% of the total
number of issued and paid-up capital of the Bank at any point of
time during the duration of the scheme. Other principal features
of the ESS are as follows:

Participating Maybank Group includes the Bank and its

branches and subsidiaries in Malaysia, but exclude listed
subsidiaries, overseas subsidiaries and dormant subsidiaries;

(ii)

The entitlement under the ESS for the Executive Directors,

including any persons connected to the directors, is subject
to the approval of the shareholders of the Bank in a general
meeting;

(v)

Key features of the ESOS award are as follows:

consent of Maybanks shareholders at a general

meeting, wherein at least a majority of the
shareholders, present and voting, vote in favour of
termination; and

written consent of all participants of ESS who have yet

to exercise their ESS option either in part or in whole,
and all participants whose Restricted Shares Unit
(RSU) Agreement are still subsisting.

Upon the termination of the ESS all unexercised ESS and/or

unvested RSU shall be deemed to have been cancelled and
be null and void.

The subscription price of the ESOS shall be at the

Volume Weighted Average Market Price (VWAMP) of
Maybank Shares for the five (5) market days
immediately preceding the offer date with no
entitlement to any discount.

(iv) ESS consists of two (2) types of performance-based awards

i.e. Employee Share Option Scheme (ESOS) and Restricted
Shares Unit (RSU).

Financial & Others

The new ordinary shares in the Bank allotted upon any

exercise of options under the scheme will upon
allotment, rank pari passu in all aspects with the then
existing ordinary shares in the Bank, except that the
new ordinary shares so issued will not rank for any
dividends or other distribution declared, made or paid
to shareholders prior to the date of allotment of such
new ordinary shares, and will be subject to all the
provisions of the Article of Association of the Bank
relating to transfer, transmission and otherwise.

Notwithstanding the above, the Bank may terminate the

ESS at any time during the duration of the scheme subject
to:

Governance

(iii) The ESS shall be in force for a maximum period of seven (7)
years from the effective date;

Leadership

During the financial year, the Bank granted five (5)

tranches of ESOS amounting to 405,308,500 options
based on the assumption that the eligible employees
met average performance target. The first tranche of
ESOS amounting to 80,871,000 options have been
vested and exercisable as at 30 June 2011, while the
remaining tranches of ESOS and the corresponding
number of ESOS will be vested and exercisable upon
fulfillment of predetermined vesting conditions
including service period, performance targets and
performance period.

Responsibility

Business Review

The employees eligible to participate in the ESS must be

employed on a full time basis and on the payroll of the
Participating Maybank Group and is confirmed in service.

Under the RSU award, the Bank may from time to time
within the offer period, invite selected participants to enter
into an agreement with the Bank, whereupon the Bank
shall agree to award the scheme shares to the participants,
subject to fulfilling the relevant service and performance
objectives and provided all performance-related conditions
are duly and fully satisfied. The scheme shares as specified
under the RSU award will only vest based on a three (3)
year cliff vesting schedule or a two (2) year cliff vesting
schedule in the case of supplemental RSU award, provided
all the RSU vesting conditions are fully and duly satisfied.

Performance

(i)

Strategy

Employees Share Scheme (ESS)

Under the ESOS award, the Bank may from time to time
within the offer period, offer to eligible employees a certain
number of options at the Offer Date. Subject to the
acceptance of the participants, the participants will be
granted the ESOS options which can then be exercised
within a period of five (5) years to subscribe for fully
paid-up ordinary shares of RM1.00 each in the Bank,
provided all the conditions including performance-related
conditions are duly and fully satisfied.

Who We Are

(d)

Our Perspective

29. Share capital (contd.)

AGM Information

326

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

29. Share capital (contd.)

(d)

Employees Share Scheme (ESS) (contd.)

(v)

Key features of the ESOS award are as follows: (contd.)

In the implementation of ESS, the ESS Committee subject to compliance can decide whether the scheme shares be satisfied by way of
issuance and/or transfer of new Maybank Shares. The Bank will establish a Trust to be administered by the Trustee. To enable the Trustee
to subscribe for new shares for the purposes of the ESS implementation, the Trustee will be entitled from time to time to accept funding
and/or assistance from the Bank.

The first tranche of ESOS shall be exercisable by way of self-funding by the respective eligible employees within twelve (12) months from
the ESOS commencement date.

Subsequent tranches and any ESOS unexercised after the initial twelve (12) months from the ESOS commencement date may be
exercised during the remainder of the ESOS option period by way of self funding or ESOS Trust Funding (ETF) mechanism. The ETF
mechanism is the Trust funding mechanism for the ESOS award involving an arrangement under which Maybank will fund a certain
quantum of money for the subscription of Maybank Shares by the Trustee to be held in a pool for the benefit of eligible employees and
set aside and held in an omnibus Central Depository System (CDS) account of the Trustee or an authorised nominee, to facilitate the
exercise of ESOS options by the eligible employees and at the request of selected employees whereupon part of the proceeds of such
sale shall be utilised towards payment of the ESOS option price and the related costs.

(vi) Key features of the RSU award are as follows:

(e)

The RSU granted will be vested and awarded upon fulfillment of predetermined vesting conditions including service period, performance
targets and performance period.

The scheme shares on RSU may be settled by way of issuance and transfer of new Maybank Shares or by cash at the absolute discretion
of the ESS Committee. The new Maybank Shares to be issued and transferred to the eligible employees pursuant to physical settlement
will not require any payment to the Bank by the RSU participants.

In the case of settlement by way of cash, the RSU vesting price will be based on the value of the scheme shares with no entitlement to
any discount, taking into account the VWAMP of Maybank Shares for the five (5) market days immediately preceding the RSU vesting
date.

Details of share options

(i)

Details of share options granted at the end of the financial year ended 30 June 2011:

Grant date
23.6.2011

Number of share options

(000)

Exercise price
RM

Exercise
period

405,309

8.82

30.6.2011
30.6.2016

The following table illustrates the number and weighted average exercise price (WAEP) of, and movements in, share options during the
year:
Number of Share Options
Grant Date
2011
23.6.2011
WAEP

Granted
during year
000

Implementation on
23.6.2011
000

Vested
000

Exercised
000

30.6.2011
000

405,309

80,871

80,870

8.82

8.82

8.93

8.93

(ii)

Share options exercised during the year

As disclosed above, options exercised during the year resulted in the issuance of approximately 1,000 (2010: 319,400) ordinary shares as at
30June 2011 at an average price of RM8.82 (2010: RM6.65) each. The option was exercised on 30 June 2011 and the corresponding ordinary
shares were issued and listed on 6 July 2011. The related weighted average share price at the date of exercise was RM8.93 (2010: RM6.54).

FINANCIAL STATEMENTS

Maybank Annual Report 2011

327
At A Glance

(e)

Our Perspective

29. Share capital (contd.)

30. Reserves

Details of share options (contd.)

Group

Details of RSU
RSU granted during the year

On 23 June 2011, a total of 3,590,000 RSU shares, with a fair

value of RM7.247 has been granted but not vested. The
vesting date of RSU is based on 3-year cliff vesting from the
grant date and performance metrics. None of the RSU has
been vested as at 30 June 2011.

The fair value of share options granted on 23 June 2011

was estimated by an external valuer using a Monte-Carlo
Simulation model, taking into account the terms and
conditions upon which the RSU were granted. The fair value
of RSU measured and the assumptions were as follows:

Fair value of RSU (RM)

Weighted average share price (RM)
Weighted average exercise price (RM)
Expected volatility (%)
Expected life (years)
Risk free rate (%)
Expected dividend yield (%)

7.247
8.93
8.82
14.59%
3
3.31%
4.49%

5,553,999 6,212,460
15,250

5,372,770

417,065

340,936

278,860

269,016

(1,007,977)
65,000

(949,434)

239,261
65,000

(12,495)

9,057

9,057

14,492,028 10,873,305 15,379,292 11,532,788

Distributable:
Retained profits
(Note 31)
Total reserves

9,491,265

9,925,888 5,140,905

6,646,053

23,983,293 20,799,193 20,520,197 18,178,841

(a)

The statutory reserves are maintained in compliance with the

requirements of Bank Negara Malaysia and certain Central Banks
of the respective countries in which the Group and the Bank
operate and are not distributable as cash dividends.

(b)

The capital reserve of the Group arose from the capitalisation of

bonus issue in certain subsidiaries in previous years.

(c)

Revaluation reserve relates to the transfer of self-occupied

properties to investment properties subsequent to the change on
occupation intention.

AGM Information

(a) 6,409,922
(b)
15,250

Financial & Others

Fair value of RSU granted on 23 June 2011

5,903,497

Governance

(ii)

5,903,497 8,583,711

Leadership

(i)

8,583,711

Responsibility

(f)

The expected life of the options was based on historical

data and was not necessarily indicative of exercise patterns
that may occur. The expected volatility reflected the
assumption that the historical volatility were indicative of
future trends, which may also not necessarily be the actual
outcome. No other features of the option grant were
incorporated into the measurement of fair value.

2010
RM000

(c)

2010
RM000

Business Review

Nondistributable:
Share premium
Statutory
reserve
Capital reserve
Unrealised
holding
reserve
Exchange
fluctuation
reserve
ESS reserve
Revaluation
reserve

2011
RM000

Performance

Fair value of share options (RM)

granted on 23 June 2011 and vested as at
30 June 2011
0.627
granted on 23 June 2011 but not vested 0.687 0.769
Weighted average share price (RM)
8.93
Weighted average exercise price (RM)
8.82
Expected volatility (%)
0.1459
Expected life (years)
35
Risk free rate (%)
3.24 3.64%
Expected dividend yield (%)
0.0449

2011
RM000

Note

Strategy

The fair value of share options granted on 23 June 2011

was estimated by an external valuer using a BinomialLattice model, taking into account the terms and conditions
upon which the options were granted. The fair value of
share options measured and the assumptions were as
follows:

Bank
Who We Are

(iii) Fair value of share options granted on 23 June 2011

328

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

31. Retained profits

Prior to the year of assessment 2009, Malaysian companies adopted the full imputation system. In accordance with the Finance Act, 2007 which was
gazetted on 28 December 2007, companies shall not be entitled to deduct tax on dividend paid, credited or distributed to its shareholders, and such
dividends will be exempted from tax in the hands of the shareholders (single tier system). However, there is a transitional period of six years, expiring
on 31 December 2013, to allow companies to pay franked dividends to their shareholders under limited circumstances. Companies also have an
irrevocable option to disregard the Section 108 balance and opt to pay dividends under the single tier system. The change in the tax legislation also
provides for the Section 108 balance to be locked-in as at 31 December 2007 in accordance with Section 39 of the Finance Act, 2007.

The Bank did not elect for the irrevocable option to disregard the Section 108 balance. Accordingly, during the transitional period, the Bank may utilise
the credit in the Section 108 balance as at 30 June 2011 to distribute cash dividend payments to ordinary shareholdings as defined under the Finance
Act, 2007. As at 30 June 2011, the Bank has sufficient credit in the Section 108 balance to pay franked dividends out of its entire retained earnings.

32. Operating revenue

Operating revenue of the Group comprises all types of revenue derived from the business of banking, income from Islamic Banking Scheme operations,
finance, investment banking, general and life insurance (including takaful), stock broking, leasing and factoring, trustee and nominee services, asset
management and venture capital but excluding all transactions between related companies.

Operating revenue of the Bank comprises gross interest income, fee and commission income, investment income, gross dividends and other income
derived from banking and finance operations.

33. Interest income

Group

Loans, advances and financing

Money at call and deposits and placements with financial institutions
Securities purchased under resale agreements
Securities held-for-trading
Securities available-for-sale
Securities held-to-maturity
Amortisation of premiums less accretion of discounts
Net interest income clawed back/suspended

Bank

2011
RM000

2010
RM000

2011
RM000

2010
RM000

9,538,327
428,458
10,695
88,785
1,555,760
432,073

8,599,892
411,668
5,817
59,930
1,543,461
419,378

7,040,484
354,306
67
76,293
1,376,684
368,084

6,568,933
344,712
600
52,671
1,336,057
340,988

12,054,098
(16,111)

11,040,146
(46,404)
(38,522)

9,215,918
(20,980)

8,643,961
(50,200)
(38,522)

12,037,987

10,955,220

9,194,938

8,555,239

Included in interest income for the current financial year was interest on impaired assets amounting to approximately RM345.3 million.

FINANCIAL STATEMENTS

Maybank Annual Report 2011

329
At A Glance
Our Perspective

34. Interest expense

Group

2011
RM000

2010
RM000

357,708
3,527,148
1,121
2,017
213,001
149,080
150,423
397,258
54,301

191,008
2,913,339
5,100
1,075
164,984
137,995
220,113
397,927
152,806

355,418
2,537,891
1,121
2,017
26,723
149,080
152,774
397,258
32,236

193,627
2,084,960
5,100
1,075
20,890
137,995
179,800
397,927
139,230

4,852,057

4,184,347

3,654,518

3,160,604

35. Non-interest income

2011
RM000

2010
RM000

705,594
1,028,009
135,734
57,094
219,767
524,313

663,387
951,169
134,090
41,508
89,060
487,584

626,850
737,584
118,160
23,492
235
125,226

569,303
716,528
113,546
30,134
57
135,647

2,670,511

2,366,798

1,631,547

1,565,215

1,784
341,934
439

28,612
191,045
2,267
659

11,019
276,304
439
595

14,320
123,752
1,838
29

344,157

222,583

288,357

139,939

Governance

2010
RM000

Leadership

Investment income:
Net gain on sale of held-for-trading securities
Net gain on sale of available-for-sale securities
Net gain on redemption of held-to-maturity securities
Gain on liquidation of subsidiaries

2011
RM000

Responsibility

Fee income:
Commission
Service charges and fees
Guarantee fees
Underwriting fees
Brokerage income
Fees on loans, advances and financing

Bank

Business Review

Group

Performance

2010
RM000

Strategy

2011
RM000

Who We Are

Deposits and placements of banks and other financial institutions

Deposits from customers
Loans sold to Cagamas
Floating rate certificates of deposits
Borrowings
Subordinated notes
Subordinated bonds
Capital securities
Net interest on derivatives

Bank

Financial & Others

AGM Information

330

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

35. Non-interest income (contd.)

Group

Bank

2011
RM000

2010
RM000

2011
RM000

2010
RM000

Gross dividends from:

Securities available-for-sale
Quoted outside Malaysia
Quoted in Malaysia
Unquoted outside Malaysia
Unquoted in Malaysia

1,333
15,329
4,348
10,195

1,408
14,002
1,096
13,921

6,869
196
8,877

10,919
909
12,551

Sub-total
Subsidiaries
Associates

31,205

30,427

15,942
351,690
5,913

24,379
869,862
8,563

31,205

30,427

373,545

902,804

(47,958)
283,482

5,060
306,237

(31,761)
277,743

11,322
315,028

235,524

311,297

245,982

326,350

561,508
23,169
16,631
3,926
37,929
164,511
25,584

517,220
24,175
19,115
66

176,836
24,163

456,028
22,035
14,414
93

2,455
32,445

442,345
23,449
12,883

30,984
26,205

833,258

761,575

527,470

535,866

4,114,655

3,692,680

3,066,901

3,470,174

Unrealised (loss)/gain on revaluation of:

Securities held-for-trading
Derivatives

Other income:
Foreign exchange gain
Rental income
Gain on disposal of property, plant and equipment
Gain on disposal of foreclosed properties
Sale of development properties
Other operating income
Other non-operating income

36. Overhead expenses

Group

Bank

2011
RM000

2010
RM000

2011
RM000

2010
RM000

Personnel expenses
Salaries, allowances and bonuses
Social security cost
Pension costs Defined contribution plan
Share options granted under ESS
Other staff related expenses

2,691,440
16,050
300,408
65,000
494,856

2,265,710
12,427
278,299

361,985

1,889,916
13,598
261,920
65,000
316,136

1,703,243
11,652
257,950

211,457

Sub-total

3,567,754

2,918,421

2,546,570

2,184,302

FINANCIAL STATEMENTS

Maybank Annual Report 2011

331
At A Glance
Our Perspective

36. Overhead expenses (contd.)

Group

Bank

1,112,948

1,108,492

795,562

785,871

Marketing costs
Advertisement and publicity
Others

375,240
102,785

363,459
75,000

218,776
95,516

221,396
56,891

Sub-total

478,025

438,459

314,292

278,287

Administration and general expenses

Fees and brokerage
Administrative expenses
General expenses
Cost of development property
Others

505,198
466,650
453,192
32,235
36,182

420,405
398,793
508,394

32,570

361,714
245,685
138,578

9,543

380,215
213,235
219,469

30,521

1,493,457

1,360,162

755,520

843,440

(478,146)

(377,091)

6,652,184

5,825,534

3,933,798

3,714,809

19,809
13,438

15,526
6,286

8,027
11,466

8,682
4,607

413

198

9,486

8,167

5,388

4,285

4,882
3,572
1,032

3,948
3,321
898

3,014
1,468
906

2,150
1,365
770

3,863

3,452

3,161

2,543

3,535
328

2,659
793

2,920
241

2,031
512

6,631

3,189

340

466

Sub-total

Sub-total
Overhead expenses allocated to subsidiary company
Total
Included in overhead expenses are:
Directors fees and remuneration (Note 37)
Rental of equipment
Direct operating expenses of investment properties:
Revenue generating
Auditors remuneration:
Statutory audit:
Ernst & Young Malaysia
Other member firms of Ernst & Young Global
Other auditors*
Non-audit services:
Reporting accountants, review engagements and regulatory-related services
Other services
Property, plant and equipment written off (Note 18)
Relates to fees paid and payable to accounting firms other than the Banks auditors.

AGM Information

Financial & Others

131,692

44,429
81,454
68,916
443,473

15,907

Governance

117,638

48,773
88,314
64,988
465,280

10,569

Leadership

183,009
93,037
58,742
158,538
111,533
479,322
209
24,102

Responsibility

173,213
53,526
61,389
174,916
122,633
510,130
220
16,921

Establishment costs
Depreciation of property, plant and equipment (Note 18)
Amortisation of core deposit intangibles (Note 19)
Amortisation of computer software (Note 19)
Rental of leasehold land and premises
Repairs and maintenance of property, plant and equipment
Information technology expenses
Fair value adjustment on investment properties (Note 14)
Others

Business Review

2010
RM000

Performance

2011
RM000

Strategy

2010
RM000

Who We Are

2011
RM000

332

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

37. Directors fees and remuneration

Group

Bank

2011
RM000

2010
RM000

2011
RM000

2010
RM000

1,156
598
1,920
528
323
114
45

1,080
631
2,160
652

95
79

1,156

1,920
528
323
109
45

1,080

2,160
652

91
79

4,684

4,697

4,081

4,062

4,559

1,243
74

4,381
15
1,897
36

2,863

1,128
74

2,892
15
1,792
36

5,876

6,329

4,065

4,735

10,560

11,026

8,146

8,797

2,566
2,671
300
159
98

2,371
995
512

38

5,794

3,916

2,992
164
516

615
122

3,672

737

9,466

4,653

Total

20,026

15,679

8,146

8,797

Total (excluding benefits-in-kind)

19,809

15,526

8,027

8,682

Directors of the Bank:

Executive directors:
Salary
Fees
Bonuses
Pension cost defined contribution plan
ESS costs
Other remuneration
Estimated money value of benefits-in-kind

Non-executive directors:
Fees
Pension cost defined contribution plan
Other remuneration
Estimated money value of benefits-in-kind

Sub-total for directors of the Bank

Directors of the subsidiaries:
Executive directors:
Salary and other remuneration, including meeting allowance
Bonuses
Pension cost defined contribution plan
ESS costs
Estimated money value of benefits-in-kind

Non-executive directors:
Fees
Other remuneration
ESS costs

Sub-total for directors of the subsidiaries

FINANCIAL STATEMENTS

Maybank Annual Report 2011

333
At A Glance
Our Perspective

37. Directors fees and remuneration (contd.)

The remuneration attributable to the President/Chief Executive Officer of the Bank including benefits-in-kind during the year amounted to RM4,812,439
(2010: RM4,697,263).

The total directors fees and remuneration of the Group above has excluded the amount of RM409,242 (2010: RM315,493) which has been allocated to
the life, general takaful and family takaful funds.

The total remuneration (including benefits-in-kind) of the Directors of the Bank are as follows:
Strategy

603

4,684

Performance

609

1,547

330

12

342

778

345

43

52

397

Business Review

403
347

66
193

9
6

75
199

478
546

367

89

26

115

482

47
75
58
41

287
325
319
298

25
110
231

14
23
3
13

39
133
234
13

326
458
553
311

1,128

74

4,065

1,696

115

1,811

5,876

528

1,237

323

119

8,146

2,294

120

2,414

10,560

Bank
Total
RM000

109

323

45

4,081

598

583

39

938

609

71

35

436

295

50

331
295

72
52

288

79

240
250
261
257

2,863

1,156

2,863

1,920

2011
Executive Directors:
Dato Sri Abdul Wahid
bin Omar

1,156

1,920

528

316

330

Total Directors
Remuneration
*

Other Subsidiaries
Fees Emolument
Total
RM000
RM000
RM000

Includes duty allowances, social allowance, leave passage, staff mess, EPF, retention sum and retirement gratuity.

Governance

Others
RM000

Bonus
RM000

Leadership

ESS
RM000

Fees
RM000

Responsibility

Group
Total
RM000

Pension
Other
Cost Emolument*
RM000
RM000

Salary
RM000

Existing NonExecutive Directors:

Tan Sri Dato Megat
Zaharuddin bin
Megat Mohd Nor
Dato Mohd Salleh
Harun
Tan Sri Hadenan A.
Jalil
Dato Seri Ismail
Shahudin
Dato Dr Tan Tat Wai
Encik Zainal Abidin
Jamal
Mr Sreesanthan
Eliathamby
Dato Johan Ariffin
Mr Cheah Teik Seng
Mr Alister Maitland

Benefits-In-Kind

Who We Are

Financial & Others

AGM Information

334

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

37. Directors fees and remuneration (contd.)

2010
Executive Directors:
Dato Sri Abdul Wahid
bin Omar
Existing NonExecutive Directors:
Tan Sri Dato Megat
Zaharuddin bin
Megat Mohd Nor
Dato Mohd Salleh
Harun
Tan Sri Hadenan A.
Jalil
Dato Seri Ismail
Shahudin
Dato Dr Tan Tat Wai
Dato Johan Ariffin
Encik Zainal Abidin
Jamal
Mr Sreesanthan
Eliathamby
Mr Cheah Teik Seng
Mr Alister Maitland

Retired/Resigned
Non-Executive
Directors:
Tan Sri Mohamed
Basir bin Ahmad
Tuan Hj Mohd Hashir
bin Hj Abdullah
Dato Zainun Aishah
binti Ahmad
Datuk Syed Tamim
Ansari Syed
Mohamed
Tan Sri Dato Sri Chua
Hock Chin
Spencer Lee Tien Chye

Total Directors
Remuneration
*

Pension
Other
Cost Emolument*
RM000
RM000

Benefits-In-Kind
ESOS
RM000

Others
RM000

Bank
Total
RM000

91

79

4,062

631

635

4,697

399

27

657

247

247

904

62

265

44

50

315

338

130

468

476

363
280
217

105
69
90

468
349
307

9
15
38

2
3
11

11
18
49

479
367
356

318

131

449

38

11

49

498

186
209
218

44
58
48

230
267
266

16
24
6

12
2
13

28
26
19

258
293
285

2,563

1,136

27

3,726

443

62

505

4,231

87

15

581

692

287

290

982

16

20

75

79

99

21

26

35

85

22

107

74

12

86

193

12
108

44

12
152

603

22

625

12
777

329

15

656

1,009

1,046

43

1,089

2,098

1,080

2,892

2,160

667

1,883

115

8,797

2,120

109

2,229

11,026

Salary
RM000

Fees
RM000

Bonus
RM000

1,080

2,160

652

231

203

Other Subsidiaries
Fees Emolument
Total
RM000
RM000
RM000

Includes duty allowances, social allowance, leave passage, staff mess, EPF, retention sum and retirement gratuity.

Group
Total
RM000

FINANCIAL STATEMENTS

Maybank Annual Report 2011

335
At A Glance
Our Perspective

38. Allowances for losses on loans, advances and financing, net

Group

Allowance for other debts

651,725
(291,066)

471,883
(207,265)

360,659
774,913

264,618
117,091

2,148,300
(516,138)

1,307,829
(452,438)

1,632,162
145,678

855,391
(155,815)

32,203
(702,467)

31,797
(586,626)

25,691
(416,997)

30,152
(384,739)

465,308
36,858

1,223,011
3,056

(9,597)
11,793

344,989
2,967

502,166

1,226,067

2,196

347,956

Group
2011
RM000

2010
RM000

2011
RM000

2010
RM000

130,182
(227)

8,623
14,407

110,125
(227)

1,088
14,412

129,955

23,030

109,898

15,500

Group
2011
RM000

2011
RM000

2010
RM000

1,657,985
346,006
(175,189)

1,597,595
121,847
(40,064)

1,342,701
179,168
(175,189)

1,406,212
50,930
(40,064)

1,828,802

1,679,378

1,346,680

1,417,078

(22,551)
(51,856)
1,754,395

(8,546)
(113,097)
1,557,735

(51,856)
1,294,824

(113,097)
1,303,981

AGM Information

Overprovision in respect of prior years:

Malaysian income tax
Foreign income tax

2010
RM000

Financial & Others

Malaysian income tax

Foreign tax
Less: Double taxation relief

Bank

Governance

40. Taxation and zakat

Leadership

Securities available-for-sale
Securities held-to-maturity

Bank

Responsibility

39. Impairment losses/(writeback of impairment losses) of securities, net

Business Review

Net
General allowance (Note11(ix))
Bad debts and financing:
Written off
Recovered

2010
RM000

Performance

Net
Collective allowance (Note11(ix))
Specific allowance (Note11(ix)):
Made in the year
Written back

2011
RM000

Strategy

Allowances for impaired loans and financing:

Individual allowance (Note11(ix)):
Made in the year
Written back

2010
RM000

Who We Are

2011
RM000

Bank

336

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

40. Taxation and zakat (contd.)

Group

Deferred tax (Note 25):

Relating to originating and reversal of temporary differences (net)
Overprovision in prior years

Tax expense for the year

Zakat

Bank

2011
RM000

2010
RM000

2011
RM000

2010
RM000

(119,191)

(165,611)
(744)

(92,192)

(69,378)
(744)

(119,191)

(166,355)

(92,192)

(70,122)

1,635,204
15,505

1,391,380
10,578

1,202,632
98

1,233,859

1,650,709

1,401,958

1,202,730

1,233,859

Domestic income tax is calculated at the Malaysian statutory tax rate of 25% (2010: 25%) of the estimated chargeable profit for the year.

Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions.

A reconciliation of income tax expense applicable to profit before taxation at the statutory income tax rate to income tax expense at the effective income
tax rate of the Group and of the Bank is as follows:
2011
RM000

2010
RM000

Group
Profit before taxation

6,270,467

5,370,408

Taxation at Malaysian statutory tax rate of 25% (2010: 25%)

Different tax rates in other countries
Income not subject to tax
Expenses not deductible for tax purposes
Overprovision in deferred tax in prior years
Overprovision in tax expense in prior years

1,567,617
15,715
(111,393)
237,672

(74,407)

1,342,602
10,866
(115,330)
275,629
(744)
(121,643)

Tax expense for the year

1,635,204

1,391,380

Bank
Profit before taxation

4,561,429

4,786,544

Taxation at Malaysian statutory tax rate of 25% (2010: 25%)

Different tax rates in other countries
Income not subject to tax
Expenses not deductible for tax purposes
Overprovision in deferred tax in prior years
Overprovision in tax expense in prior years

1,140,357
12,014
(93,386)
195,503

(51,856)

1,196,636
10,866
(73,063)
213,261
(744)
(113,097)

Tax expense for the year

1,202,632

1,233,859

FINANCIAL STATEMENTS

Maybank Annual Report 2011

337
At A Glance
Our Perspective

41. Significant related party transactions and balances

(a)

Bank

128,230
878,425
2,403
465,712

1,010,363

1,474,770

288,113
8,959

280,432
10,587

297,072

291,019

Included in the statement of financial position of the Bank are amounts due from/(to) subsidiaries represented by the following:
Bank
2010
RM000

2,218,541
4,886,333
131,856
2,239,152
211,916

321,847
4,236,292

934,176

9,687,798

5,492,315

Leadership

6,219,839
40,808
15,956
8,261,501

3,013,391

19,259
4,270,589

Governance

Amounts due to subsidiaries:

Current accounts and deposits
Private debt securities
Interest payable on deposits
Deposits and other creditors

14,538,104

7,303,239

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Group
and the Bank directly or indirectly. The key management personnel of the Group and the Bank include all the directors and chief executive officers
of the Group and the Bank.

AGM Information

Key management personnel compensation

Financial & Others

(c)

Responsibility

2011
RM000
Amounts due from subsidiaries:
Current accounts and deposits
Negotiable instruments deposits
Loans, advances and financing
Interest and other receivable on deposits
Private debt securities

Business Review

(b)

74,048
357,603
2,403
576,309

Performance

Expenditure:
Interest on deposits
Other expenses

2010
RM000

Strategy

Transactions with subsidiaries and associates:

Income:
Interest on deposits
Dividend income
Rental of premises
Other income

2011
RM000

Who We Are

In addition to the transactions detailed else where in the financial statements, the Bank has the following transactions with related parties during
the financial year:

338

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

41. Significant related party transactions and balances (contd.)

The remuneration of key management personnel during the year are as follows:
Group

Short-term employee benefits

Fees
Salaries, allowances and bonuses
Contribution to Employees Provident Fund (EPF)
Other staff benefits
Share-based payment
ESS costs
Post employment benefits
Retirement gratuity

Bank

2011
RM000

2010
RM000

2011
RM000

2010
RM000

8,161
14,670
2,574
1,002

5,675
14,270
1,460
552

2,863
4,313
528
119

2,892
5,123
667
115

1,267

323

250

27,674

22,207

8,146

8,797

Included in the total key management personnel compensation are:

Group

Directors remuneration including benefits-in-kind (Note 37)

Bank

2011
RM000

2010
RM000

2011
RM000

2010
RM000

20,026

15,679

8,146

8,797

The movement in number of share options granted and vested to key management personnel is as follows:
Group

Bank

2011
000

2010
000

2011
000

2010
000

Granted during year

9,825

2,500

At 1 July 2010/2009
Vested and exercisable
Expired

1,965

2,026

(2,026)

500

1,300

(1,300)

At 30 June

1,965

500

The share options in financial year ended 30 June 2010 were granted on the same terms and conditions as those offered to other employees of the
Group, as disclosed in Note 29(c) and expired on 26 August 2009.

The share option in financial year ended 30 June 2011 were also granted on the same terms and condition as those offered to other employees of the
Group, as disclosed in Note 29(d).

FINANCIAL STATEMENTS

339

Maybank Annual Report 2011

At A Glance
Our Perspective

41. Significant related party transactions and balances (contd.)

The movement in number of RSU granted to key management personnel is as follows:
Group

Granted during the year

Bank

2011
000

2010
000

2011
000

2010
000

3,750

1,000

Strategy

None of the RSU granted was vested and awarded as at the end of the financial year.

(d)

Credit exposure arising from credit transactions with connected parties

Outstanding credit exposure with connected parties (RM000)

Percentage of outstanding credit exposures to connected parties which is non-performing

or in default

2011

2010

2011

2010

26,226,304

5,020,680

21,934,288

4,814,535

10.3%

2.5%

12.1%

3.2%

The credit exposure above are based on paragraph 9.1 of Bank Negara Malaysias revised guidelines on Credit Transactions and Exposures with
Connected Parties.

Based on these guidelines, a connected party refers to the following:

(i)

Directors of the Bank and their close relatives;

(ii)

Controlling shareholder of the Bank and his close relatives;

(iv) Officers who are responsible for or have the authority to appraise and/or approve credit transactions or review the status of existing credit
transactions, either as a member of a committee or individually, and their close relatives;
(v)

Firms, partnerships, companies or any legal entities which control, or are controlled by any person listed in (i) to (iv) above, or in which they
have an interest, as a director, partner, executive officer, agent or guarantor, and their subsidiaries or entities controlled by them;

(vii) Subsidiary of or an entity controlled by the Bank and its connected parties.
Credit transactions and exposures to connected parties as disclosed above include the extension of credit facilities and/or off-balance sheet credit exposures
such as guarantees, trade-related facilities and loan commitments.

Governance

(vi) Any person for whom the persons listed in (i) to (iv) above is a guarantor; and

Leadership

(iii) Executive officer, being a member of management having authority and responsibility for planning, directing and/or controlling activities of
the Bank, and his close relatives;

Responsibility

Business Review

Percentage of outstanding credit exposures to connected parties as proportion of total

credit exposures

Bank

Performance

Group

Who We Are

Financial & Others

AGM Information

340

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

42. Earnings per share (EPS)

(a)

Basic

The basic EPS of the Group and the Bank are calculated by dividing the net profit for the year by the weighted average number of ordinary shares
in issue during the financial year.
Group

Bank

2011

2010

2011

2010

Net profit for the year attributable to equity holders of the Bank (RM000)

4,450,278

3,818,167

3,358,699

3,552,685

Weighted average number of ordinary shares in issue (000)

7,246,461

7,077,957

7,246,461

7,077,957

61.4

53.9

46.3

50.2

Basic earnings per share (sen)

(b)

Diluted

The diluted EPS of the Group and the Bank is calculated by dividing the net profit for the financial year by the weighted average number of
ordinary shares in issue, which has been adjusted for the number of shares that could have been issued under the Maybank Group Employee Share
Scheme (ESS), details are as disclosed in Note 29(d).

In the diluted EPS calculation, it was assumed that the ESS relating to the RSU were vested and awarded to employees through issuance of
additional ordinary shares. A calculation is done to determine the number of shares that could have been issued at fair value (determined as the
average price of the Banks shares during the financial year) based on the monetary value of the ESS entitlement attached to the outstanding RSU
granted. This calculation serves to determine the number of dilutive shares to be added to the weighted average ordinary shares in issue for the
purpose of computing the dilution. No adjustment was made to the net profit for the financial year.
Group
2010

2011

2010

Net profit for the year attributable to equity holders of the Bank (RM000)

4,450,278

3,818,167

3,358,699

3,552,685

Weighted average number of ordinary shares in issue (000)

7,246,461

7,077,957

7,246,461

7,077,957

15

15

7,246,476

7,077,957

7,246,476

7,077,957

61.4

53.9

46.3

50.2

Effects of dilution (000)

Adjusted weighted average number of ordinary shares in shares in issue (000)
Fully diluted earnings per share (sen)

Bank

2011

Share options granted to employees under the ESS have not been included in the calculation of diluted earnings per share because they are
anti-dilutive.

FINANCIAL STATEMENTS

Maybank Annual Report 2011

341
At A Glance
Our Perspective

43. Dividends
Group and Bank
2010
RM000

2011
Sen

2010
Sen

2,335,734

33.00

1,537,670

424,679

21.00

6.00

583,934

8.25

3,873,404

1,008,613

54.00

14.25

The proposed gross dividend consists of an electable portion of 28 sen (net 21 sen per ordinary share) which can be elected to be reinvested in
new ordinary shares in accordance with the Dividend Reinvestment Plan as disclosed in Note 29(b) to the financial statements and subject to the
relevant regulatory approvals as well as shareholders approval for the issuance and allotment of new shares at the forthcoming Annual General
Meeting.

The financial statements for the current financial year do not reflect this proposed dividend. Such dividend, if approved by the shareholders, will be
accounted for in equity as an appropriation of retained profits in the next financial period ending 31 December 2011.

(b)

Dividend Reinvestment Plan (DRP)

The Bank via the announcement on 25 March 2010 proposed to undertake a recurrent and optional dividend reinvestment plan that allows
shareholders of the bank to reinvest electable portion of their dividends into new ordinary share(s) of RM1.00 each in the Bank.

Details of the DRP are disclosed in Note 29(b).

(c)

Dividends paid during financial year

The reinvestment rate subsequent to the completion of the dividend payment was 88.59%.

(ii)

The dividend consists of cash portion of 4 sen (net 3 sen) per ordinary share to be paid in cash amounting to RM219,667,211 and an
electable portion of 24 sen (net 18 sen) per ordinary share amounting to RM1,318,003,270 which could be elected to be reinvested in new
Maybank Shares in accordance with the DRP.

The reinvestment rate subsequent to the completion of the dividend payment was 91.13%.

Dividends paid by Maybanks subsidiaries to non-controlling interest

Dividends paid by Maybanks subsidiaries to non-controlling interest amounted to RM5,210,000 during the year.

AGM Information

(d)

Financial & Others

The dividend consists of cash portion of 4 sen (net 3 sen) per ordinary share to be paid in cash amounting to RM212,339,483 and an
electable portion of 40 sen (net 30 sen) per ordinary share amounting to RM2,123,394,830 which could be elected to be reinvested in new
Maybank Shares in accordance with the DRP.

Governance

(i)

Leadership

At the forthcoming Annual General Meeting, a final dividend in respect of the financial year ended 30 June 2011 of 32 sen less 25% taxation on
7,478,206,067 ordinary shares, amounting to a net dividend payable of RM1,794,769,456 (net 24 sen per ordinary share) will be proposed for the
shareholders approval.

Responsibility

Business Review

Proposed final dividend

Performance

(a)

Strategy

2011
RM000

Who We Are

Final dividend of 44 sen less 25% taxation in respect of the financial year ended 30 June 2010
(Note c(i))
First interim dividend of 28 sen less 25% taxation in respect of the financial year ended 30 June
2011 (Note c(ii))
Final dividend of 8 sen less 25% taxation in respect of the financial year ended 30 June 2009
First interim dividend of 11 sen less 25% taxation in respect of the financial year ended 30 June
2010

Net dividend per share

342

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

44. Commitments and contingencies

(a)

In the normal course of business, the Bank and its subsidiaries make various commitments and incur certain contingent liabilities with legal
recourse to their customers. No material losses are anticipated as a result of these transactions.

The risk-weighted exposures of the Bank and its subsidiaries as at 30 June, are as follows:
2011

Group
Credit-related
Direct credit substitutes
Certain transaction-related contingent items
Short-term self-liquidating trade-related contingencies
Islamic hire purchase financing sold to Cagamas Berhad
Obligations under underwriting agreements
Irrevocable commitments to extend credit:
maturity within one year
maturity exceeding one year
Miscellaneous commitments and contingencies
Total credit-related commitment and contingencies
Derivative Financial Instruments
Foreign exchange related contracts:
less than one year
one year to less than five years
five years and above

Interest rate related contracts:

less than one year
one year to less than five years
five years and above

Equity and commodity related contracts:

less than one year
one year to less than five years

Total treasury-related commitments and contingencies

2010

Full
commitment
RM000

Credit
equivalent
amount*
RM000

Risk
weighted
Full
amount* commitment
RM000
RM000

Credit
equivalent
amount*
RM000

Risk
weighted
amount*
RM000

6,752,978
11,877,557
2,568,575
682,679

6,227,511
5,432,538
823,220
623,084

4,099,984
4,249,138
466,841
226,105

5,209,922
11,443,670
3,137,785
1,137,321
123,871

5,209,922
5,721,837
627,557
1,137,321
46,936

4,151,936
5,062,677
487,491
1,137,321
9,387

90,585,383
17,429,274
9,605,986

3,377,523
6,027,366
95,365

1,577,558
2,818,245
71,442

79,635,652
10,950,125
4,565,804

5,475,064

5,296,484

139,502,432

22,606,607

13,509,313 116,204,150

18,218,637

16,145,296

73,596,336
12,391,864
605,885

999,219
98,952
54,096

341,316
65,569
52,937

52,397,492
2,280,351

882,747
43,330

251,119
15,103

86,594,085

1,152,267

459,822

54,677,843

926,077

266,222

42,098,665
17,922,122
5,120,193

625,318
2,944,133
733,014

389,499
1,495,547
316,936

41,784,791
15,615,090
2,657,835

1,815,893
459,891
433,752

440,726
143,487
158,705

65,140,980

4,302,465

2,201,982

60,057,716

2,709,536

742,918

808,651
155,607

1,333,626

964,258

1,333,626

152,699,323

5,454,732

2,661,804 116,069,185

3,635,613

1,009,140

292,201,755

28,061,339

16,171,117 232,273,335

21,854,250

17,154,436

FINANCIAL STATEMENTS

Maybank Annual Report 2011

343
At A Glance
Our Perspective

44. Commitments and contingencies (contd.)

(a)

2011

Total treasury-related commitments and

contingencies

4,649,552
4,935,629

2,664,930
3,801,327

3,659,767
10,618,480

3,659,767
5,309,241

3,269,184
4,683,204

2,408,875

760,622

431,034

2,961,992
93,871

592,399
46,936

461,530
9,387

78,255,915
15,431,262
9,576,083

2,613,454
5,632,158
95,365

1,366,897
2,648,543
71,442

70,392,423
9,663,589
4,545,123

4,831,795

4,684,632

120,865,434

18,686,780

10,984,173 101,935,245

14,440,138

13,107,937

69,241,688
11,703,995
605,885

974,508
98,952
54,096

330,847
65,569
52,937

49,578,656
2,280,351

860,175
43,330

246,408
15,103

81,551,568

1,127,556

449,353

51,859,007

903,505

261,511

39,794,395
17,674,164
4,996,206

618,202
2,899,881
733,014

386,088
1,473,840
344,942

41,625,767
14,047,226
2,415,491

1,815,310
419,989
418,729

440,580
133,449
151,194

62,464,765

4,251,097

2,204,870

58,088,484

2,654,028

725,223

808,651
155,607

1,333,626

964,258

1,333,626

144,980,591

5,378,653

2,654,223 111,281,117

3,557,533

986,734

265,846,025

24,065,433

13,638,396 213,216,362

17,997,671

14,094,671

The credit equivalent amount and the risk weighted amount are arrived at using the credit conversion factors and risk weights, respectively as
specified by Bank Negara Malaysia.

Financial & Others

4,649,552
10,543,747

Governance

Equity and commodity related contracts:

less than one year
one year to less than five years

Risk
weighted
amount*
RM000

Leadership

Interest rate related contracts:

less than one year
one year to less than five years
five years and above

Credit
equivalent
amount*
RM000

Responsibility

Derivative Financial Instruments

Foreign exchange related contracts:
less than one year
one year to less than five years
five years and above

Risk
weighted
Full
amount* commitment
RM000
RM000

Business Review

Total credit-related commitment and contingencies

Credit
equivalent
amount*
RM000

Performance

Credit-related
Direct credit substitutes
Certain transaction-related contingent items
Short-term self-liquidating trade-related
contingencies
Obligations under underwriting agreements
Irrevocable commitments to extend credit:
maturity within one year
maturity exceeding one year
Miscellaneous commitments and contingencies

Full
commitment
RM000

Strategy

Bank

2010

Who We Are

In the normal course of business, the Bank and its subsidiaries make various commitments and incur certain contingent liabilities with legal
recourse to their customers. No material losses are anticipated as a result of these transactions. (contd.)

AGM Information

344

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

44. Commitments and contingencies (contd.)

(a)

(b)

The Group is contingently liable in respect of loans sold to

Cagamas Berhad on the condition that they undertake to
administer the loans on behalf of Cagamas Berhad and to buy
back any loans which are regarded as defective based on
pre-determined and agreed-upon prudential criteria.

(c)

Contingent liabilities

In the normal course of business, the Bank and its subsidiaries

make various commitments and incur certain contingent
liabilities with legal recourse to their customers. No material
losses are anticipated as a result of these transactions. (contd.)
(i)

The Groups and the Banks derivative financial instruments

are subject to market, credit and liquidity risk, as follows:

Market risk on derivatives is the potential loss to the

value of these contracts due to changes in price of
the underlying items such as equities, interest rates,
foreign exchange, credit spreads, commodities or
other indices. The notional or contractual amounts
provide only the volume of transactions outstanding
at the reporting date and do not represent the
amount at risk. Exposure to market risk may be
reduced through offsetting items from on and
off-balance sheet positions.
Credit risk arises from the possibility that a counterparty may be unable to meet the terms of a contract
in which the Bank and certain subsidiaries have a
gain position. As at 30 June 2011, the amount of
credit risk in the Group and the Bank, measured in
terms of the cost to replace the profitable contracts,
was RM435.4 million (30 June 2010: RM509.2 million).
This amount will increase or decrease over the life of
the contracts, mainly as a function of maturity dates
and market rates or prices.
Liquidity risk on derivatives is the risk that the
derivative position cannot be closed out promptly.
Exposure to liquidity risk is reduced through
contracting derivatives where the underlying items
are widely traded.

(i)

In 2004, Etiqa Takaful Berhad (ETB), commenced a civil

suit against a borrower (the 1st Defendant) and three
guarantors, for the sum of approximately RM25.8 million,
following the recall of the relevant facility which was
preceded by the 1st Defendants failure to pay monthly
installments.

The 1st Defendant counterclaimed for loss and damage

amounting to approximately RM284 million as a result of
ETBs alleged failure to release the balance of the facility of
RM7.5 million. It is alleged that the 1st Defendant was
unable to carry on its project and therefore suffered loss
and damage. ETB are proceeding with their claim and are
resisting the 1st Defendants counterclaim. ETB had filed its
Defence to the counterclaim and applied to strike out the
counterclaim.

On 14 May 2009, the Court allowed ETBs application for

summary judgment, but directed that a rebate be given if
there is early settlement. The Court has also dismissed the
1st Defendants counterclaim against ETB with costs. The
1st, 2nd and 4th Defendants filed their application for stay
of execution of the summary judgment through their
solicitors and the 3rd Defendant filed its application for stay
of execution of the summary judgment through its own
solicitors. Both applications for stay of execution were
dismissed by the Kuala Lumpur High Court with costs.

All four Defendants then filed an appeal against the

decision of the High Court at the Court of Appeal. On 4
March 2010 the Court of Appeal reversed the decision of
the High Court and ordered that the matter be returned to
the High Court for full hearing. Accordingly, the summary
judgement obtained against all four Defendants is no
longer operative. The full trial including the counterclaim
had since proceeded and recently concluded on 4 May
2011. Oral submissions by both parties were heard on 29
June 2011 and the matter is fixed for decision on 21
September 2011.

ETBs solicitors are of the view that ETB has a good chance
of succeeding in this action.

(ii)

There have been no changes since the end of the previous

financial year in respect of the following:

the types of derivative financial contracts entered into

and the rationale for entering into such contracts, as
well as the expected benefits accruing from these
contracts;

the risk management policies in place for mitigating

and controlling the risks associated with these
financial derivative contracts; and

the related accounting policies.

FINANCIAL STATEMENTS

Maybank Annual Report 2011

345
At A Glance

(c)

Contingent liabilities (contd.)

A corporate borrower had issued a writ of summons and
statement of claim against a subsidiary, Maybank
Investment Bank Berhad (Maybank IB), in 2005 in the
latters capacity as agent bank for three financial
institutions, claiming general, special and exemplary
damages arising from alleged breach of duty owed by
Maybank IB in connection with a syndicated facility.

Maybank IB filed an appeal against the Judgment (Appeal)

and an application for stay of execution of the Judgment
on 8 May 2009. On 24 June 2009, Maybank IB successfully
obtained a stay order for execution of the Judgment
pending the disposal of the Appeal against the Judgment.
The corporate borrowers appeal to the Court of Appeal
against the decision on the stay order was dismissed on 23
November 2009.

The Appeal is now fixed for case management before the

Court of Appeal on 29 September 2011 pending the
issuance of the notes of proceedings.

(iv) On 8 April 2010, a corporate borrower (the Plaintiff) had

filed a civil suit against Malayan Banking Berhad
(Maybank) and two other Defendants at the Johor Bahru
High Court (JB High Court Suit) alleging that Maybank
was in breach of its obligations to the Plaintiff under several
banking facilities between them for refusing to allow the
drawdown and/or refusing to allow the further drawdown
of the banking facilities.
Maybank had offered several banking facilities to finance
the Plaintiffs development in a mixed development project.
Amongst the many securities granted were several
debentures which gave Maybank a right to appoint a
receiver and manager over the Plaintiff in the event of
default of the banking facilities.

The 2nd and 3rd Defendants were receivers and managers

(R&M) appointed by Maybank under debentures given by
the Plaintiff.

The Plaintiff had defaulted under the banking facilities

granted by Maybank resulting in Maybank appointing the
R&M.

Financial & Others

Governance

At this juncture, Maybank as one of the syndicated lenders

has an exposure of RM48 million out of the RM115.5 million
awarded pursuant to the Judgment.

The solicitors are of the view that both Maybank IB and

MTB have a very good chance of success in defending this
claim against them.

Leadership

Responsibility

The High Court on 6 May 2009 entered judgment against

Maybank IB as agent for the syndicated lenders for, inter
alia, a sum of RM115.5 million with interest at 6% per
annum from date of disbursement to realisation, with the
balance of the corporate borrowers claim (including
general damages) ordered to be assessed at a later date. In
the same Judgment, the recovery action by Maybank IB
and the three syndicated lenders was also dismissed.

An individual as the sole Junior Noteholder of the Junior

Notes issued, claimed against both MTB and Maybank IB,
the sum of RM556.5 million together with interests and
costs arising from the declaration made by MTB of an Event
Of Default of the Senior Bonds and subsequent Event Of
Default of the Junior Notes and for an alleged breach of
fiduciary duties and duty of care by Maybank IB. MTB and
Maybank IB do not admit any liability to this claim and will
defend the suit. The trial has concluded and the decision is
fixed for 30 September 2011.

Business Review

Performance

The credit facilities consist of a bridging loan of RM58.5

million and a revolving credit facility of RM4 million which
were granted by Maybank IB and the three syndicated
lenders. The loan was subsequently restructured to RM38
million with terms for repayment. In 2006, Maybank IB and
the three syndicated lenders filed a suit against the
corporate borrower for the recovery of the said credit
facilities. The 2 claims were heard together.

Strategy

(iii) Mayban Trustees Berhad (MTB), as Trustee and Maybank

Investment Bank Berhad (Maybank IB) as Security Agent
for the Senior Bonds and Junior Notes issued by a
corporation were served with a Writ of Summons,
Statement of Claim and Amended Statement of Claim on
29 December 2010 and 30 December 2010 respectively.

Who We Are

(ii)

Maybank IBs solicitors are of the view that Maybank IB has

a more than even chance of succeeding in its Appeal
against the said Judgment.

Our Perspective

44. Commitments and contingencies (contd.)

AGM Information

346

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

44. Commitments and contingencies (contd.)

(c)

Contingent liabilities (contd.)

(iv) (contd.)

Concurrent with this suit, the Plaintiff also filed an

application for an interlocutory injunction to restrain
Maybank from exercising its right to appoint a R&M. The
application was heard on 23 November 2010 and allowed.

Maybank has filed an application to strike out the JB High

Court Suit and the said application was dismissed by the JB
High Court on 12 April 2011. Maybanks solicitors had filed
an appeal on 25 April 2011. Maybank has also filed a
counterclaim in the JB High Court Suit against the Plaintiff
and its guarantors to recover all sums due and owing under
the banking facilities granted to the Plaintiff. Pursuant
thereto, Maybank has also filed an application for summary
judgment against the Plaintiff and its guarantors that was
fixed for case management on 13 May 2011. The case
management was deferred to 31 May 2011 where the JB
High Court has allowed Maybanks application to transfer
the JB High Court Suit to KL High Court to be heard with
the KL High Court Suit described below. As for the appeal,
Maybank had requested the Court of Appeal to fix an early
hearing date thereto.

Maybank was also subsequently served with a Writ of

Summons and Statement of Claim on 25 March 2011 by the
Plaintiff at the Kuala Lumpur High Court (KL High Court
Suit) for a sum of RM1.2 billion alleging that the
appointment of the R&M was mala fide and with malice
and that as a consequence thereof, it has purportedly
suffered loss and damages.
The KL High Court has fixed trial dates for the KL High
Court Suit on 21, 22 and 28 September 2011. Maybank has
filed an application to strike out the KL High Court Suit
which is fixed for hearing on 1 December 2011.
Maybank has been advised by its solicitors that there are
no merits to the KL High Court Suit and it is frivolous and
vexatious.

(v)

In 2005, a subsidiary, Mayban Trustees Berhad (MTB) and

eleven other defendants were served with a writ of
summons by ten plaintiffs/bondholders all of which are
institutions, for an amount of approximately RM149.3
million. MTB was alleged to have acted in breach of trust
and negligently in its capacity as Trustee for the bonds
issued. MTB has defended the suit.

On 7 July 2008, the plaintiffs entered judgment by consent

against certain defendants for the sum of RM149.3 million.
The entering of the said judgment by consent is not in any
way an admission of liability on the part of MTB.

On 4 August 2008, a defendant served a counterclaim on

MTB for approximately RM535 million being losses allegedly
incurred by it as a result of MTB unlawfully declaring an
Event Of Default on the bonds. The defendant had however
on 25 August 2009 withdrawn the counterclaim against
MTB.

The High Court on 30 June 2010 awarded judgement

against MTB and another defendant, being the Arranger for
the bonds, for RM149.3 million. The judgment sum in
favour of the plaintiffs/bondholders was apportioned at
40% against MTB and 60% against the other defendant. The
High Court also dismissed MTBs other claims.

MTB had on 26 July 2010 filed the respective Notices of

Appeal against the entire decision of the High Court. On 19
August 2010, MTBs solicitors filed an application for a joint
hearing of MTBs appeals (hereinafter referred to as
Application) .The other defendant (the Arranger for the
bonds) served its Notice of Appeal against the entire
decision of the High Court on 27 July 2010.

The Application was fixed for hearing on 22 September

2010 and the Court granted order in terms for the
Application. MTBs Record Of Appeal has been filed on 1
December 2010. The Plaintiffs have on 9 December 2010
served on MTBs lawyers their Notice Of Cross Appeal
wherein the Plaintiffs have sought to vary the judgement of
the High Court to include pre-judgement interest at 8%
from 1 October 2005 to 29 June 2010.

FINANCIAL STATEMENTS

Maybank Annual Report 2011

347
At A Glance

(v) (contd.)

The Court of Appeal had on 15 April 2011, fixed the hearing

of MTBs appeals as well as the appeals of the Plaintiffs and
the other defendant (the Arranger for the bonds) on 20
September 2011 to 23 September 2011 and 26 September
2011 to 30 September 2011.

The above contingent liability is covered by an existing

Banker Blanket Bond Policy between the Bank and a
subsidiary, Etiqa Insurance Berhad, which had entered into
a facultative reinsurance contract for an insured sum of
RM150 million with three (3) other re-insurers.

45. Financial risk management policies

Risk Management is a critical pillar of the Groups operating

model, complementing the other two pillars, which are business
sector and support sector. A dedicated Board-level Risk
Management Committee provides risk oversight of all material
risks across the Maybank Group.

At the management level, the Executive Risk Committee and the

Asset and Liability Management Committee ensure all key risks
are managed in line with their respective Terms of Reference.

The Groups approach to risk management is premised on the

following Seven Broad Principles of Risk Management:

(e)

Risk Management is functionally and organisationally

independent of business sectors and other risk taking units
within the Group.

(f )

The Maybank Board, through the Risk Management

Committee, maintains overall responsibility for the risk
oversight function within the Group.

(g)

Risk Management ensures the execution of various risk

policies and related decisions of the Board.

Responsibility

Financial risk management overview

Risk Management ensures that the core risk policies of the

Group are consistent, sets the risk tolerance level and
facilitates the implementation of an integrated risk-adjusted
measurement framework.

Business Review

(a)

(d)

Performance

Strategy

Contingent liabilities (contd.)

Risk Management provides risk oversight for the major risk

categories including credit, market, liquidity, operational
and other industry-specific risk types (e.g. insurance and
stockbroking risks).

Who We Are

(c)

(c)

Our Perspective

44. Commitments and contingencies (contd.)

The risk management approach is premised on the three

lines of defence concept risk taking units, risk control
units and internal audit.

Leadership

(b)

The risk taking units are responsible for the day-to-day

management of risks inherent in their business activities
while the risk control units are responsible for setting the
risk management frameworks and developing tools and
methodologies for the identification, measurement,
monitoring, control and pricing of risks. Complementing
this is Internal Audit which provides independent assurance
of the effectiveness of the risk management approach.

Governance
Financial & Others

(a)

AGM Information

348

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

45. Financial risk management POLICIES (contd.)

(b)

Financial instrument by category

Group
2011
Assets
Cash and short-term funds
Deposits and placements with financial
institutions
Securities portfolio
Loans, advances and financing
Derivative assets
Other assets
Investment properties
Statutory deposits with Central Banks
Interest in associates
Property, plant and equipment
Intangible assets
Deferred tax assets
Life, general takaful and family takaful fund
assets
TOTAL ASSETS

Held-fortrading
RM000

Availablefor-sale
RM000

4,141,978

1,652,182

47,258,558

5,794,160

47,258,558

Group
2011

Held-to- Loans and

maturity receivables
RM000
RM000

38,803,519

Sub-total
RM000

Assets not
in scope
of FRS 139
RM000

Total
RM000

38,803,519

38,803,519

10,291,513 10,291,513
9,638,714
61,039,250
253,976,426 253,976,426

1,652,182

5,660,156
5,660,156

7,698,425
7,698,425

9,638,714 316,430,039 379,121,471

Held-fortrading
RM000

Other
financial
liabilities
RM000

10,291,513
61,039,250
253,976,426

1,652,182
1,075,366
6,735,522
45,051
45,051

7,698,425
2,439,654
2,439,654
2,168,986
2,168,986
6,509,048
6,509,048
1,402,705
1,402,705
19,196,413

19,196,413

32,837,223 411,958,694

Liabilities
not in scope
Sub-total of FRS 139
RM000
RM000

Total
RM000

Liabilities
Deposits from customers
Deposits and placements of banks and other financial institutions
Obligations on securities sold under repurchase agreements
Bills and acceptances payable
Derivative liabilities
Other liabilities
Recourse obligation on loans sold to Cagamas
Provision for taxation and zakat
Deferred tax liabilities
Borrowings
Subordinated obligations
Capital securities
Life, general takaful and family takaful fund liabilities
Life, general takaful and family takaful policy holders fund

281,976,379 281,976,379
33,303,655 33,303,655

373,562
373,562

8,513,401
8,513,401
1,533,935

1,533,935

8,071,363
8,071,363

528,285
528,285

5,447,120
5,447,120
10,800,539 10,800,539

6,120,774
6,120,774

281,976,379
33,303,655

373,562

8,513,401

1,533,935
3,240,491 11,311,854

528,285
134,620
134,620
247,892
247,892

5,447,120
10,800,539

6,120,774
5,408,600
5,408,600
13,787,813 13,787,813

TOTAL LIABILITIES

1,533,935 355,135,078 356,669,013

22,819,416 379,488,429

FINANCIAL STATEMENTS

Maybank Annual Report 2011

349
At A Glance
Our Perspective

45. Financial risk management POLICIES (contd.)

(b)

Financial instrument by category (contd.)

Availablefor-sale
RM000

Held-to- Loans and

maturity receivables
RM000
RM000

Total
RM000

25,803,796

25,803,796

2,884,895

1,626,415

40,262,042

7,644,471
7,644,471
8,339,494
51,486,431
181,572,844 181,572,844

1,626,415

1,146,591
1,146,591

4,313,116
4,313,116

7,644,471
51,486,431
181,572,844

1,626,415
273,774
1,420,365

4,313,116
17,070,392 17,070,392
454,412
454,412
1,170,183
1,170,183
177,270
177,270
920,837
920,837

TOTAL ASSETS

4,511,310

40,262,042

8,339,494 220,480,818 273,593,664

20,066,868 293,660,532

Held-fortrading
RM000

25,803,796

Other
financial
liabilities
RM000

Liabilities
not in scope
Sub-total of FRS 139
RM000
RM000

Total
RM000

201,465,408
31,441,675

373,562

7,115,673

1,446,311
1,608,321
4,240,156

528,285

3,420,499

9,509,786

6,120,774

TOTAL LIABILITIES

1,446,311 262,607,497 264,053,808

1,608,321 265,662,129

Governance

201,465,408 201,465,408
31,441,675 31,441,675

373,562
373,562

7,115,673
7,115,673
1,446,311

1,446,311

2,631,835
2,631,835

528,285
528,285

3,420,499
3,420,499

9,509,786
9,509,786

6,120,774
6,120,774

Leadership

Liabilities
Deposits from customers
Deposits and placements of banks and other financial institutions
Obligations on securities sold under repurchase agreements
Bills and acceptances payable
Derivative liabilities
Other liabilities
Recourse obligation on loans sold to Cagamas
Borrowings
Subordinated obligations
Capital Securities

Responsibility

Bank
2011

Business Review

Performance

Assets
Cash and short-term funds
Deposits and placements with financial
institutions
Securities portfolio
Loans, advances and financing
Derivative assets
Other assets
Statutory deposits with Central Banks
Investment in subsidiaries
Interest in associates
Property, plant and equipment
Intangible assets
Deferred tax assets

Strategy

Sub-total
RM000

Assets not
in scope
of FRS 139
RM000

Who We Are

Bank
2011

Held-fortrading
RM000

Financial & Others

AGM Information

350

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

45. Financial risk management POLICIES (contd.)

(c)

Credit risk management

1.

Credit risk management overview

Risk appetite for credit risk is an expression of the amount

of risk that the Group is willing to take in pursuing its
strategic objectives. It reflects the Groups capacity to
sustain potential losses arising from a range of potential
consequences under different stress scenarios. This is
defined in terms of both impact to earnings and
maintenance of minimum regulatory capital requirements.

These are used as a basis for establishing the risk

parameters within which businesses must operate,
including policies, concentration limits and business mix.
Credit concentration risk is managed within concentration
caps set by counterparties, industry sector and country.
Additional monitoring on concentration by credit rating,
credit exposures and external trends are also being
conducted regularly for proactive management of our
credit portfolio.

Credit risk definition

Credit risk arises as a result of customers or counter-parties

failure or unwillingness to fulfill their financial and
contractual obligations as and when they arise. These
obligations arise from the Groups direct lending operations,
trade finance and its funding, investment and trading
activities undertaken by the Group. As the Groups primary
business is in commercial banking, the Groups exposure to
credit risk is primarily from its lending activities and
financing to consumer retail, small and medium-sized
enterprises (SMEs) and corporate customers. Other
activities such as trading or holding of debt securities,
settlement of transactions, also expose the Group to credit
risk and counterparty credit risk.

Management of credit risk

Corporate and institutional credit risks are assessed by

business units and approved by various level of authorities,
highest being Group Credit Management Committee. Each
customer is assigned a credit rating based on the
assessment of relevant factors including customers
financial position, types of facilities and securities offered.

Reviews are conducted at least once a year with updated

information on customers financial position, market
position, industry and economic condition and account
conduct. Corrective actions are taken when the accounts
show signs of credit deterioration.

A two-pronged approach is adopted:

i)
ii)

Managing the credit risk

Managing the credit portfolio

To manage large exposures, the Group has in place,

amongst others, the following limits and related lending
guidelines to avoid undue concentration of credit risk in its
loan portfolio:

Countries
Business Segments
Economic Sectors
Single Customer Groups
Banks & Non-Bank Financial Institutions
Counterparties
Collaterals

To effectively manage vulnerable corporate and

institutional credits of the Group, there are dedicated teams
comprising Corporate Remedial Management at Head
Office and Loan Management Centres at Regional Offices.
Vulnerable consumer credits are managed by the Recovery
Management Unit at Head Office and Asset Quality
Management Centres at Regional Offices. Special attention
is given to these vulnerable credits where more frequent
and intensive reviews are performed in order to accelerate
remedial action.

A post-approval evaluation of credit facilities is emplaced

and performed by the Credit Review team, with checks to
ensure that credit facilities are properly appraised and
approved. The team also reviews credit applications with
overrides and/or policy breaches to assess the adequacy of
justification and mitigation when approving such overrides/
breaches. This is to ensure that the Groups credit
evaluation process is properly benchmarked against best
practices and that credit policies and product guidelines
are continuously enhanced to ensure that they remain
relevant in managing credit risks. Findings of the Credit
Review team are tabled at the risk committees for review
and remedial actions.

A dedicated Credit Risk Management team designs

strategies to achieve a desired ideal portfolio risk tolerance
level. The teams also prepares regular credit risk reports
which are submitted to the various risk committees as part
of on-going monitoring and review of borrowers and loan
portfolios. Periodic credit stress testing exercises under
selected scenarios are also performed and the results
reported.

FINANCIAL STATEMENTS

Maybank Annual Report 2011

351
At A Glance
Our Perspective

45. Financial risk management POLICIES (contd.)

(c)

Credit risk management (contd.)

Credit risk management overview (contd.)

Credit risk management (CRM) Framework

The Credit Risk Management framework includes comprehensive credit risk policies, frameworks, tools and methodologies for identification,
measurement, monitoring and control of credit risk on a consistent basis. Components of the CRM framework constitute:

Strong emphasis in creating and enhancing credit risk awareness.

Comprehensive selection and training of lending personnel in the management of credit risk.

Leveraging on knowledge sharing tools including e-learning courses to enhance credit skills within the Group.

Strategy

In view that authority limits are directly related to the risk levels of the borrower and transaction, a Risk-Based Authority Limit structure was
implemented based on the Expected Loss framework and internally developed Credit Risk Rating System (CRRS).

2.

Maximum exposure to credit risk

The following analysis represents the Groups maximum exposure to credit risk of on-balance sheet financial assets and off-balance sheet
exposures, without taking into account of any collateral held or other credit enhancements. For on-balance sheet financial assets, the
exposure to credit risk equals their carrying amount. For off-balance sheet exposures, the maximum exposure to credit risk is the maximum
amount that the Group would have to pay if the obligations of the instruments issued are called upon and/or the full amount of the undrawn
credit facilities granted to customers.

Bank
2010
RM000

38,803,519
10,291,513

25,803,796
7,644,471

378,044,376 273,458,023
6,752,978
11,877,557
2,568,575
682,679
108,014,657
9,605,986

4,649,552
10,543,747
2,408,875

93,687,177
9,576,083

Total maximum credit risk exposure

517,546,808 394,323,457

AGM Information

139,502,432 120,865,434

Financial & Others

Credit exposure for off-balance sheet items:

Direct credit substitutes
Certain transaction-related contingent items
Short-term self-liquidating trade-related contingencies
Islamic hire purchase financial sold to Cagamas
Irrevocable commitments to extend credit
Miscellaneous

Governance

59,962,155 51,350,790
253,976,426 181,572,844
1,652,182
1,626,415
5,660,156
1,146,591
7,698,425
4,313,116

Leadership

Securities portfolio
Loans, advances and financing
Derivative assets
Other assets
Statutory deposits with Central Banks

Group
2011
RM000

Responsibility

Maximum exposure

Business Review

The Groups credit approving process encompasses pre-approval evaluation, approval and post-approval evaluation. The Credit Risk
Management sub-sector (CRM) is responsible for developing, enhancing and communicating an effective and consistent credit risk
management framework across the Group to ensure appropriate credit policies are in place to identify, measure, control and monitor such
risks.

Performance

Credit exposure for on-balance sheet assets:

Cash and short-term funds
Deposits and placements with financial institutions

Who We Are

1.

352

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

45. Financial risk management POLICIES (contd.)

(c)

Credit risk management (contd.)

3.

Credit risk concentration profile

A concentration of credit risk exists when a number of counterparties are engaged in similar activities and have similar economic
characteristics that would cause their ability to meet contractual obligations to be similarly affected by changes in economic or other
conditions. The Group analysed the concentration credit risk by geographic purpose and industry segment as follows:
(a)

Concentration of credit risk for both on-balance sheet financial assets and off-balance sheet exposures analysed by geographic purpose
are as follows:

Group
2011

Deposits and
Cash and
placements
short-term with financial
funds
institutions
RM000
RM000

Malaysia
28,261,629
Singapore
3,572,065
Indonesia
1,996,092
Labuan offshore 1,218,224
Hong Kong SAR 1,996,787
United States of
America
171,394
Peoples
Republic of
China
93,423
Vietnam
52,746
United Kingdom 1,114,072
Philippines
86,470
Brunei
16,025
Cambodia
66,685
Bahrain
202
Papua New
Guinea

Thailand
49,529
India
6,905
Others
101,271

3,937,844
1,352,591
836,193
1,405,747
1,222,740

38,803,519

10,291,513

38,803,519

10,291,513

Less: Collective
allowance

Loans,
Securities advances and
portfolio
financing
RM000
RM000

Derivative
assets
RM000

Statutory
Other deposits with
assets Central Banks
RM000
RM000

39,984,918 167,618,176
10,340,991 54,725,102
3,484,158 21,154,585
776,995
3,661,171
2,679,524
4,394,796

1,054,685
570,338
26,642

394

3,548,113
602,114
585,088
1,634
308,241

Commitment
and
Total contingencies
RM000
RM000

3,607,104 248,012,469 105,237,593

1,523,923 72,687,124 24,578,168
1,975,346 30,058,104
1,407,711

7,063,771
1,781,069
10,602,482
2,963,321

779,690

978,011

1,176,644

140,341

3,246,080

1,381,451

58,656
38,643
235,305
3,956
55,087
249,565

322,506
867,019
49,162

209,994

986,362
516,692
1,257,980
1,396,499
159,334
419,304
184,690

1,078
272
38,344
60,766
13

1,460

486,700
19,056
75,577

1,139,519
609,813
2,968,207
2,901,410
298,677
811,131
394,886

407,443
446,890
996,906
21,266
124,617
115,012

23,725
30,268
61,503

265,516

3,361

115,297
437,722

43,280

123

8,543
302,685
1,282
61,642

9,259

398,615
813,661
38,455
271,180

40,985

59,962,155 258,247,634

1,652,182

5,660,156

(4,271,208)

59,962,155 253,976,426

1,652,182

5,660,156

7,698,425 382,315,584 139,502,432

(4,271,208)

7,698,425 378,044,376 139,502,432

FINANCIAL STATEMENTS

Maybank Annual Report 2011

353
At A Glance
Our Perspective

45. Financial risk management POLICIES (contd.)

(c)

Credit risk management (contd.)

Credit risk concentration profile (contd.)
(a)

Concentration of credit risk for both on-balance sheet financial assets and off-balance sheet exposures analysed by geographic purpose
are as follows: (contd.)

Statutory
Other deposits with
assets Central Banks
RM000
RM000

36,780,833 121,591,575
10,330,760 54,188,181
2,679,524
4,271,855

1,055,683
570,338
394

993,986
141,292
5,671

Commitment
and
Total contingencies
RM000
RM000

4,100,957
1,187,932
1,091,041

140,004

695,827

978,011

1,176,644

5,214

2,995,700

1,381,451

86,865
49,032
1,017,323
14,932
62,139
188

52,347
34,487
209,996
49,162
222,722

322,506
49,162

209,994

986,362
516,692
1,257,980
159,334
419,304
184,690

19
288
107
14

1,460

19,056
75,577

1,125,593
601,959
2,807,912
291,660
779,742
394,872

407,443
446,890
996,906
124,617
115,012

25,803,796

7,644,471

51,350,790 184,752,617

1,626,415

1,146,591

(3,179,773)

25,803,796

7,644,471

51,350,790 181,572,844

1,626,415

1,146,591

2,693,100 186,717,268
1,523,923 70,964,745

9,958,345

89,851,626
24,578,168
2,963,321

4,313,116 276,637,796 120,865,434

(3,179,773)

4,313,116 273,458,023 120,865,434

Responsibility

19,501,134
3,022,319
1,909,860

Business Review

Less: Collective
allowance

Derivative
assets
RM000

Performance

Malaysia
Singapore
Hong Kong SAR
United States of
America
Peoples Republic of
China
Vietnam
United Kingdom
Brunei
Cambodia
Bahrain

Loans,
Securities advances and
portfolio
financing
RM000
RM000

Strategy

Bank
2011

Deposits and
Cash and
placements
short-term with financial
funds
institutions
RM000
RM000

Who We Are

3.

Leadership
Governance
Financial & Others
AGM Information

354

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

45. Financial risk management POLICIES (contd.)

(c)

Credit risk management (contd.)

3.

Credit risk concentration profile (contd.)

(b)

Concentration of credit risk for both on-balance sheet financial assets and off-balance sheet exposures analysed by industry sector are
as follows:

Group
2011

Deposits and
Cash and
placements
short-term with financial
funds
institutions
RM000
RM000

Securities
portfolio
RM000

Loans,
advances
and
financing
RM000

Derivative
assets
RM000

255,679
23,050
399,863
827,304

4,716,612
1,311,519
26,406,978
19,514,562

4,972,291
1,334,569
26,806,841
20,341,866

1,814,330
486,968
9,781,499
10,255,527

2,827,977

6,457,513

9,285,490

3,388,165

265,247

22,026,618

22,291,865

8,134,038

10,288,635

47,181,345

41,427,342

1,652,182

5,634,658

7,698,425 152,685,851

55,713,260

2,641,323

10,842,967

2,878

11,008
4,735,128
81,542 110,616,466
5,447,817 10,191,929

25,498

38,803,519

10,291,513

59,962,155 258,247,634

1,652,182

5,660,156

(4,271,208)

38,803,519

10,291,513

59,962,155 253,976,426

1,652,182

5,660,156

Agriculture

Mining and quarrying

Manufacturing

Construction

Electricity, gas and

water supply

Wholesale, retail trade,

restaurants and
hotels

Finance, insurance, real

estate and business 38,803,264
Transport, storage and
communication

Education, health and

others

Household

Others
255
Less: Collective
allowance

Statutory
Other deposits with
assets Central Banks
RM000
RM000

Commitment
and
Total contingencies
RM000
RM000

13,484,290

4,920,258

4,746,136
110,698,008
15,668,377

2,292,071
40,392,393
2,323,923

7,698,425 382,315,584 139,502,432

(4,271,208)

7,698,425 378,044,376 139,502,432

FINANCIAL STATEMENTS

Maybank Annual Report 2011

355
At A Glance
Our Perspective

45. Financial risk management POLICIES (contd.)

(c)

Credit risk management (contd.)

Credit risk concentration profile (contd.)
(b)

Concentration of credit risk for both on-balance sheet financial assets and off-balance sheet exposures analysed by industry sector are
as follows: (contd.)

Loans,
Securities advances and
portfolio
financing
RM000
RM000

Derivative
assets
RM000

Statutory
Other deposits with
assets Central Banks
RM000
RM000

Commitment
and
Total contingencies
RM000
RM000

3,076,615

3,231,368

1,411,812

Mining and quarrying

Manufacturing

Construction

Electricity, gas and

water supply

Wholesale, retail trade,

restaurants and
hotels

Finance, insurance, real

estate and business 25,803,796
Transport, storage and
communication

Education, health and

others

Household

Others

22,807
319,944
672,218

591,234
18,244,673
17,571,166

614,041
18,564,617
18,243,384

268,280
8,111,041
7,970,691

2,267,142

5,072,218

7,339,360

3,206,630

256,655

16,004,572

16,261,227

7,104,670

7,644,471

42,649,592

33,606,866

1,626,415

1,121,993

4,313,116 116,766,249

51,016,179

2,492,814

7,218,438

9,711,252

4,242,930

10,639
10,676
2,493,550

4,066,687
77,684,310
1,615,838

24,598

4,077,326
77,694,986
4,133,986

1,781,419
33,945,608
1,806,174

51,350,790 184,752,617

1,626,415

1,146,591

(3,179,773)

51,350,790 181,572,844

1,626,415

1,146,591

Less: Collective
allowance

7,644,471

25,803,796

7,644,471

4,313,116 276,637,796 120,865,434

(3,179,773)

4,313,116 273,458,023 120,865,434

Leadership

25,803,796

Responsibility

154,753

Business Review

Performance

Agriculture

Strategy

Bank
2011

Deposits and
Cash and
placements
short-term with financial
funds
institutions
RM000
RM000

Who We Are

3.

Governance
Financial & Others
AGM Information

356

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

45. Financial risk management POLICIES (contd.)

(c)

Credit risk management (contd.)

4.

Collateral

The main types of collateral obtained by the Group and the

Bank to mitigate credit risk are as follows:

For mortgages charges over residential properties

For auto loans and financing ownership claims over

the vehicles financed

For share margin financing pledges over securities

from listed exchanges

For commercial property loans and financing charges

over the properties being financed

For other loans and financing charges over business

assets such as premises, inventories, trade receivables
or deposits

5.

Credit quality of financial assets

Credit classification for financial assets

For the purposes of disclosure relating to FRS 7, all financial

assets are categorised into the following:

neither past due nor impaired

past due but not impaired
past due and impaired

The four credit quality categories set out and defined

below, from very low to high, apart from impaired, describe
the credit quality of the Groups lending. These
classifications encompass a range of more granular, internal
gradings assigned to loans, advances and financing whilst
external gradings are applied to securities. There is no
direct correlation between the internal and external ratings
at a granular level, except the extent each falls within a
single credit quality band.

Risk Category
Very low
Low
Moderate
High

Probability
of default
(PD)
Grade
15
610
1115
1621

External
credit
ratings
based on
S&Ps
ratings
AAA to AA- to BBBBB+ to B+
B+ to CCC

External
credit
ratings
based on
RAMs
ratings
AAA to AA
AA to A
A to BBB
BBB to C

Risk category is as described below:

Very Low:

Low: Obligors rated in this category have a good

capacity to meet financial commitments
with very low credit risk.

Moderate: Obligors rated in this category have a fairly

acceptable capacity to meet financial
commitments with moderate credit risk.

High: Obligors rated in this category have

uncertain capacity to meet financial
commitments and are subject to high credit
risk.

Other than the above rated risk categories, other categories

used internally are as follows:

Impaired/
Obligors with objective evidence of
default: impairment as a result of one or more
events that has an impact on the estimated
future cash flows of the obligors that can
be reliably estimated. The detailed
definition is further disclosed in Note 3(vi)
(d) to the financial statements.

Unrated: Refer to borrower which are currently not

assigned with borrowers ratings due to
unavailability of ratings models.

Sovereign: Refer to obligors which are governments

and/or government-related agencies.

bligors rated in this category have an

O
excellent capacity to meet financial
commitments with very low credit risk.

FINANCIAL STATEMENTS

Maybank Annual Report 2011

357
At A Glance
Our Perspective

45. Financial risk management POLICIES (contd.)

(c)

Credit risk management (contd.)

Credit quality of financial assets gross loans, advances and financing

Who We Are

6.

Past due but not impaired

Due within
31 to 60
days
RM000

Due within
61 to 90
days
RM000

Total
RM000

Overdrafts
Term loans
Others

13,378,291
163,850,472
54,545,446

182,653
9,840,170
3,618,463

119,516
1,876,128
833,448

105,072
3,621,787
451,455

407,241
15,338,085
4,903,366

1,817,447 15,602,979
5,620,290 184,808,847
1,319,125 60,767,937

Gross loans, advances and financing

231,774,209

13,641,286

2,829,092

4,178,314

20,648,692

8,756,862 261,179,763

Impaired
RM000

Less:
Individual allowance
Collective allowance

Total
RM000

(2,932,129)
(4,271,208)

Performance

Due within
30 days
RM000

Strategy

Group
2011

Neither past
due nor
impaired
RM000

(7,203,337)

As a percentage of total gross loans,

advances and financing

5.22%

1.08%

1.60%

7.91%

3.35%

100.00%

Summary of risk categories of gross loans, advances and financing of the Group are assessed based on credit quality classification as
described in Note 45 (c) (5).

Responsibility

88.74%

Neither past due but not impaired

Low
RM000

Moderate
RM000

High
RM000

Overdrafts
Term loans
Others

824,877
34,106,825
11,230,198

2,638,928
54,165,935
15,618,229

5,837,043
35,569,505
12,879,015

2,391,226
12,168,441
2,487,354

1,686,217 13,378,291
27,839,766 163,850,472
12,330,650 54,545,446

neither past due nor impaired

46,161,900

72,423,092

54,285,563

17,047,021

41,856,633 231,774,209

17.67%

27.73%

20.78%

6.53%

As a percentage of total gross loans, advances and

financing

Unrated
RM000

16.03%

Total
RM000

88.74%

Governance

Very low
RM000

Leadership

Group
2011

Business Review

253,976,426

Financial & Others

AGM Information

358

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

45. Financial risk management POLICIES (contd.)

(c)

Credit risk management (contd.)

6.

Credit quality of financial assets gross loans, advances and financing (contd.)
Past due but not impaired

Bank
2011

Neither past
due nor
impaired
RM000

Due within
30 days
RM000

Due within
31 to 60
days
RM000

Due within
61 to 90
days
RM000

Total
RM000

Overdrafts
Term loans
Others

9,333,680
112,192,258
44,970,781

150,386
8,664,481
228,654

108,449
1,616,355
65,589

31,624
3,052,737
76,024

290,459
13,333,573
370,267

1,505,975 11,130,114
4,129,469 129,655,300
742,052 46,083,100

Gross loans, advances and financing

166,496,719

9,043,521

1,790,393

3,160,385

13,994,299

6,377,496 186,868,514

Impaired
RM000

Less:
Individual allowance
Collective allowance

Total
RM000

(2,115,897)
(3,179,773)
(5,295,670)
181,572,844

As a percentage of total gross loans,

advances and financing

89.10%

4.84%

0.96%

1.69%

7.49%

3.41%

100.00%

Summary of risk categories of gross loans, advances and financing of the Bank are assessed based on credit quality classification as described
in Note 45 (c) (5).
Neither past due but not impaired
Bank
2011

Very low
RM000

Low
RM000

Moderate
RM000

High
RM000

Overdrafts
Term loans
Others

238,841
16,819,459
11,176,776

1,636,716
41,934,966
12,947,582

4,290,654
23,589,832
10,417,123

1,817,916
6,785,164
2,128,517

1,349,553
9,333,680
23,062,837 112,192,258
8,300,783 44,970,781

neither past due nor impaired

28,235,076

56,519,264

38,297,609

10,731,597

32,713,173 166,496,719

15.11%

30.25%

20.49%

5.74%

As a percentage of total gross loans, advances and

financing

Unrated
RM000

17.51%

Total
RM000

89.10%

FINANCIAL STATEMENTS

Maybank Annual Report 2011

359
At A Glance
Our Perspective

45. Financial risk management POLICIES (contd.)

(c)

Credit risk management (contd.)

Credit quality of financial assetssecurities portfolio and other financial assets

Group
2011

Neither past
due nor
impaired
RM000

Impaired
RM000

Total
RM000

38,803,519
10,291,513
58,985,122
1,652,182
5,640,516
7,698,425

2,000,020

82,606

38,803,519
10,291,513
60,985,142
1,652,182
5,723,122
7,698,425

38,803,519
10,291,513
(1,022,987) 59,962,155

1,652,182
(62,966) 5,660,156

7,698,425

2,082,626 125,153,903

(1,085,953) 124,067,950

98.34%

As percentage of gross balances

100.00%

Summary of risk categories of securities portfolio and other financial assets of the Group are assessed based on credit quality classification as
described in Note 45 (c) (5).
Group
2011

Low
RM000

Moderate
RM000

High
RM000

Unrated
RM000

Total
RM000

21,061,621

5,484,862

3,477,722

628,067

35,200

8,116,047

38,803,519

941,785
30,332,971
6,250

7,698,425

213,031
23,182,421
772,185

3,530,608
1,347,087
595,941

602,263
1,001,434
238,969

33,255
464,456
808

4,970,571
2,656,753
38,029
5,640,516

10,291,513
58,985,122
1,652,182
5,640,516
7,698,425

60,041,052

29,652,499

8,951,358

2,470,733

533,719

47.97%

23.69%

7.15%

1.97%

0.43%

21,421,916 123,071,277
17.12%

98.34%

Leadership

As percentage of gross balances

Very low
RM000

Responsibility

Cash and short-term funds

Deposits and placements with financial
institutions
Securities portfolio
Derivative assets
Other assets
Statutory deposits with Central Banks

Sovereign
RM000

Business Review

1.66%

Net Total
RM000

Performance

123,071,277

Impairment
allowance
RM000

Strategy

Cash and short-term funds

Deposits and placements with financial institutions
Securities portfolio
Derivative assets
Other assets
Statutory deposits with Central Banks

Who We Are

7.

Governance
Financial & Others
AGM Information

360

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

45. Financial risk management POLICIES (contd.)

(c)

Credit risk management (contd.)

7.

Credit quality of financial assetssecurities portfolio and other financial assets (contd.)

Bank
2011
Cash and short-term funds
Deposits and placements with financial institutions
Securities portfolio
Derivative assets
Other assets
Statutory deposits with Central Banks

As percentage of gross balances

Neither past
due nor
impaired
RM000

Impaired
RM000

Total
RM000

25,803,796
7,644,471
50,433,902
1,626,415
1,126,951
4,313,116

1,887,843

82,606

25,803,796
7,644,471
52,321,745
1,626,415
1,209,557
4,313,116

25,803,796

7,644,471
(970,955) 51,350,790

1,626,415
(62,966) 1,146,591

4,313,116

90,948,651

1,970,449

92,919,100

(1,033,921) 91,885,179

97.88%

2.12%

100.00%

Impairment
allowance
RM000

Net Total
RM000

Summary of risk categories of securities portfolio and other financial assets of the Bank are assessed based on credit quality classification as
described in Note 45 (c) (5).
Bank
2011
Cash and short-term funds
Deposits and placements with financial
institutions
Securities portfolio
Derivative assets
Other assets
Statutory deposits with Central Banks

As percentage of gross balances

Sovereign
RM000

Very low
RM000

Low
RM000

Moderate
RM000

High
RM000

Unrated
RM000

Total
RM000

11,142,491

5,190,781

3,462,945

351,855

5,655,724

25,803,796

186,032
23,685,785

4,313,116

100,778
21,785,476
703,791

3,523,722
837,056
567,372

198,828
510,068
226,518

246,179
768

3,635,111
3,369,338
127,966
1,126,951

7,644,471
50,433,902
1,626,415
1,126,951
4,313,116

39,327,424

27,780,826

8,391,095

1,287,269

246,947

13,915,090

90,948,651

42.32%

29.90%

9.03%

1.39%

0.27%

14.98%

97.88%

FINANCIAL STATEMENTS

Maybank Annual Report 2011

361
At A Glance
Our Perspective

45. Financial risk management POLICIES (contd.)

(c)

Credit risk management (contd.)

Credit quality of impaired financial assets
(i)

Who We Are

8.

Impaired financial assets analysed by geographic purpose are as follows:

Total
RM000

6,712,570
402,468
873,692
351,094
84,853

75,692
141,478
50,733
2,613
12,499
48,708
462

1,676,022

62,501

49,254
30,230

127,179
13,204

34,005

7,625

82,606

8,471,198
402,468
936,193
351,094
134,107
30,230
75,692
268,657
63,937
2,613
12,499
82,713
462
7,625

8,756,862

2,000,020

82,606

10,839,488

Loans, advances
and financing
RM000

Securities
portfolio
RM000

Other assets
RM000

Total
RM000

Responsibility

5,769,484
242,169
84,853

75,692
141,478
2,613
12,499
48,708

1,647,175

49,254
30,230

127,179

34,005

82,606

7,499,265
242,169
134,107
30,230
75,692
268,657
2,613
12,499
82,713

6,377,496

1,887,843

82,606

8,347,945

Leadership
Governance

Malaysia
Singapore
Hong Kong SAR
United States of America
Vietnam
United Kingdom
Brunei
Cambodia
Bahrain

Other assets
RM000

Performance

Bank
2011

Securities
portfolio
RM000

Strategy

Malaysia
Singapore
Indonesia
Labuan offshore
Hong Kong SAR
United States of America
Vietnam
United Kingdom
Philippines
Brunei
Cambodia
Bahrain
Thailand
Others

Loans, advances
and financing
RM000

Business Review

Group
2011

Financial & Others

AGM Information

362

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

45. Financial risk management POLICIES (contd.)

(c)

Credit risk management (contd.)

8.

Credit quality of impaired financial assets (contd.)

(ii)

Impaired financial assets analysed by industry sectors are as follows:

Group
2011
Agriculture
Mining and quarrying
Manufacturing
Construction
Electricity, gas and water supply
Wholesale, retail trade, restaurants and hotels
Finance, insurance, real estate and business
Transport, storage and communication
Education, health and others
Household
Others

Bank
2011
Agriculture
Mining and quarrying

Loans, advances
and financing
RM000

Securities
portfolio
RM000

Other assets
RM000

Total
RM000

154,061
210,375
2,526,157
852,027
434,290
877,377
501,392
904,040
124,549
1,303,994
868,600
8,756,862

27,560

56,567
90,803
251,405

349,865
46,271

1,177,549
2,000,020

82,606

82,606

181,621
210,375
2,582,724
942,830
685,695
877,377
933,863
950,311
124,549
1,303,994
2,046,149
10,839,488

Loans, advances
and financing
RM000

Securities
portfolio
RM000

Other assets
RM000

Total
RM000

140,765

140,765

5,940

5,940
2,027,633

1,971,066

56,567

Construction

720,305

90,349

810,654

Electricity, gas and water supply

411,533

251,405

662,938

Manufacturing

Wholesale, retail trade, restaurants and hotels

693,278

693,278

Finance, insurance, real estate and business

315,683

335,828

82,606

734,117

Transport, storage and communication

578,221

578,221

41,237

41,237

1,266,969

1,266,969

Education, health and others

Household
Others

232,499

1,153,694

1,386,193

6,377,496

1,887,843

82,606

8,347,945

9.

Fair value of collateral held

Financial assets past due but not impaired

The fair value of collateral held as security in respect of financial assets past due but not impaired is not disclosed by the Group and the Bank
as it is not practicable to do so.

Impaired financial assets

Group
RM000

Bank
RM000

Loans, advances and financing

8,756,862

6,377,496

Securities portfolio

2,000,020

1,887,843

2011
Gross impaired financial assets

Others
Fair value of collateral

82,606

82,606

10,839,488

8,347,945

5,790,680

4,571,591

FINANCIAL STATEMENTS

Maybank Annual Report 2011

363
At A Glance
Our Perspective

45.

Financial risk management POLICIES (contd.)

(c)

Credit risk management (contd.)

2011

Group
RM000

Bank
RM000

Financial assets that would have been past due or impaired had they not been renegotiated

947,111

546,676

2011

Group
RM000

Bank
RM000

Residential properties
Non residential properties

14,946
110,013

1,575
41,227

124,959

42,802
Business Review

Repossessed collateral are sold as soon as practicable. Repossessed collateral are included under other assets on the statement of financial
position. The Group and the Bank do not occupy repossessed properties for its business use.

Performance

Assets obtained by taking possession of collateral held as security against loans, advances and financing, and held as at the end of the year
are as follows:

Strategy

11. Possessed collateral

Who We Are

10. Renegotiated financial assets for neither past due nor impaired financial assets

12. Reconciliation of allowance account

Movements in allowances for impairment losses for financial assets are as follows:

3,981,073

839,365
35,460

3,981,073
651,725
(291,066)
(1,185,904)
(51,475)
(173,038)
50,315
(49,501)
2,932,129

At 1 July 2010, as restated

Allowance made during the year
Amount written back
Amount written off
Transferred (to)/from impairment losses in securities
Transferred to collective allowance
Acquisition of subsidiaries
Exchange differences
At 30 June 2011

Other
assets
RM000

Total
RM000

32,062

64,689

936,116
4,016,533

874,825
151,530
(54,865)
(16,184)
37,864

(8,067)

32,062
6,597
(775)

64,689
4,952,649
4,432
814,284

(346,706)
(2,739) (1,204,827)
(13,611)

(173,038)

50,315
(3,416)
(60,984)

985,103

37,884

62,966

4,018,082

Financial & Others

Individual allowance
At 1 July 2010
as previously stated
effect of adopting FRS 139

Securities
held-tomaturity
RM000

Governance

Securities
availablefor-sale
RM000

Leadership

Group

Loans,
advances
and
financing
RM000

Responsibility

AGM Information

364

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

45. Financial risk management POLICIES (contd.)

(c)

Credit risk management (contd.)

12. Reconciliation of allowance account (contd.)

Movements in allowances for impairment losses for financial assets are as follows: (contd.)

Group

Loans,
advances
and
financing
RM000

Collective allowance
At 1 July 2010
as previously stated
effect of adopting FRS 139

4,741,229

4,741,229

4,741,229
774,955
(42)
(1,424,744)
13,612
173,038
(6,840)

4,741,229
774,955
(42)
(1,424,744)
13,612
173,038
(6,840)

4,271,208

4,271,208

Other
assets
RM000

Total
RM000

At 1 July 2010, as restated

Allowance made during the year
Amount written back
Amount written off
Transferred from impairment losses in securities
Transferred from individual allowance
Exchange differences
At 30 June 2011

Securities
availablefor-sale
RM000

Securities
held-tomaturity
RM000

Other
assets
RM000

Total
RM000

Movements in allowances for impairment losses for financial assets are as follows:

Bank

Loans,
advances
Securities
and available-forfinancing
sale
RM000
RM000

Individual allowance
At 1 July 2010
as previously stated
effect of adopting FRS 139

2,909 013

794,664
35,460

32,062

64,689

891,415
2,944,473

At 1 July 2010, as restated

Allowance made during the year
Amount written back
Amount written off
Transferred (to)/from impairment losses in securities
Transferred to collective allowance
Exchange differences

2,909,013
471,883
(207,265)
(936,464)
(51,475)
(57,227)
(12,568)

830,124
150,796
(54,865)
(16,184)
37,863

(8,066)

32,062

(775)

64,689
4,432

(2,739)

(3,416)

3,835,888
627,111
(262,905)
(955,387)
(13,612)
(57,227)
(24,050)

At 30 June 2011

2,115,897

939,668

31,287

62,966

3,149,818

Securities
held-tomaturity
RM000

FINANCIAL STATEMENTS

Maybank Annual Report 2011

365
At A Glance
Our Perspective

45. Financial risk management POLICIES (contd.)

(c)

Credit risk management (contd.)

Who We Are

12. Reconciliation of allowance account (contd.)

Movements in allowances for impairment losses for financial assets are as follows: (contd.)

3,665,506

At 1 July 2010, as restated

Allowance made during the year
Amount written off
Transferred from impairment losses in securities
Transferred from individual allowance
Exchange differences

3,665,506
117,091
(687,814)
13,612
57,227
14,151

3,665,506
117,091
(687,814)
13,612
57,227
14,151

At 30 June 2011

3,179,773

3,179,773

Total
RM000

Business Review

3,665,506

Other
assets
RM000

Performance

Collective allowance
At 1 July 2010
as previously stated
effect of adopting FRS 139

Securities
held-tomaturity
RM000

Strategy

Bank

Loans,
advances
Securities
and available-forfinancing
sale
RM000
RM000

Responsibility
Leadership
Governance
Financial & Others
AGM Information

366

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

45. Financial risk management POLICIES (contd.)

(d)

Market risk management

3.

Market risk management framework

1.

Market risk management overview

Market risk management

Maybank Group recognises market risk as the risk of losses

in earnings and capital resulting from changes in market
prices and interest rates. The Groups market risk exposures
are primarily from the proprietary trading and customer
driven activities. The primary categories of market risk for
Maybank Group are:

The market risk management framework covers key risk

management activities such as identification, measurement,
monitoring, control and reporting of the market risk
exposures, which are benchmarked against industry best
practices and regulatory requirements. The principles
mentioned under the framework are intended for trading
and non-trading activities.

Measurement and monitoring

The risk measurement techniques employed by the Group

comprise of both quantitative and qualitative measures.

Value at risk

Value at Risk (VaR) measures the potential loss of future

value resulting from adverse movement in market rates
over a specified period of time within a specified
confidence level, under a normal business situation. The
Groups VaR is computed based on the Historical Simulation
approach on a 10-day holding period at 99% confidence for
1 year observation period as per Bank Negara Malaysia/
Basel requirement. To ensure the relevancy and accuracy of
the VaR computation, VaR is back tested on a daily basis
against actual clean profit and loss. It is also validated by an
independent model validation team.

Besides VaR as risk management tools, additional measures

such as interest rate sensitivity e.g. exposure to one basis
point increase in yields (PV01), net open position limit for
managing foreign currency exposure, greek limits for
controlling options risk, etc are utilised.

Stress Testing

To supplement the valuable insight from VaR measurement,

the Group performs stress testing to assess its ability to
withstand any changes/stress economic and financial
conditions that could have unfavourable effects on the
Groups profitability and capital base. By identifying and
evaluating the business risk profile, the Group is able to
undertake appropriate measures. Stress test scenarios
should cover a range of factors that can create
extraordinary losses or gains in trading portfolios, or make
the control of risk in those portfolios very difficult.

Qualitative Measures

The goal of the risk measurement process is to attempt to

quantify the risk exposures. However, not all risks are
quantifiable. Where risk quantification is not an effective
option, qualitative/judgmental measures are applied, e.g.
notification alert upon 75% utilisation of risk limits,
monitoring of large ticket items, etc.

(i)

Interest rate risk : arising from changes in yield

curves, credit spreads and implied volatilities on
interest rate options;

(ii)

Foreign exchange rate risk : arising from changes in

exchange rates and implied volatilities on foreign
exchange options;

(iii) Commodity price risk : arising from changes in

commodity prices and commodity option implied
volatilities; and
(iv) Equity price risk : arising from changes in the prices
of equities, equity indices, equity baskets and implied
volatilities on related options.
2.

Management of market risk

The Risk Management Committee (RMC) approves the

Groups market risk management framework and market
risk appetite taking into account of business volumes,
targeted returns, market volatility and ranges of products
and services.

The Asset and Liability Management Committee (ALCO) is

responsible, under the authority delegated by the RMC, for
setting market risk limits by entity, business level,
geographical location and portfolio level. ALCO is also
responsible for policies, limits and control standards for the
managing market risk and overseeing their effective
implementation. The Group has an approved Trading Book
Policy Statement with clearly defined policies and
procedures to determine exposures arising from trading
activities for regulatory capital calculation. This is in
accordance to Bank Negara Malaysias requirement as per
Risk Weighted Capital Adequacy Framework (Basel II Risk
Weighted Asset Computation) guidelines dated 30 June
2007.
Market Risk Management (MRM) is the independent risk
control unit and is responsible for ensuring efficient
implementation of market risk management frameworks
and that adequate risk controls are in place to support
business growth. Its primary objective is to facilitate risk/
return decisions, reduce volatility in earnings, highlight
transparent market risk and liquidity risk profile to senior
management, ALCO, RMC, Board of Directors and
regulators.

FINANCIAL STATEMENTS

Maybank Annual Report 2011

367
At A Glance
Our Perspective

45. Financial risk management POLICIES (contd.)

(d)

Market risk management (contd.)

The Group and Bank are exposed to various risks associated with the effects of fluctuations in the prevailing levels of market interest rates on
the financial position and cash flows. Interest rate risk exposure is identified, measured, monitored and controlled through limits and
procedures set by the Asset and Liability Management Committee (ALCO) to protect total net interest income from changes in market
interest rates.

The table below summarises the Groups and Banks exposure to interest rate risk. The table indicates effective average interest rates at the
reporting date and the periods in which the financial instruments reprice or mature, whichever is earlier.
Up to 1
month
RM000

Non-interest
sensitive
RM000

Trading
books
RM000

Total
RM000

Effective
interest rate
%

8,699,781

38,803,519

2.34

6,055,102

2,769,943

52,328

459,542

10,291,513

1.29

4,141,978

4,141,978

3.39

625,224

2,136,362

14,840,056

20,961,984

4,221,517

3,397,416

47,258,558

4.07

174,352

927,425

4,569,448

3,710,916

94,993

9,638,714

3.98

25,527,648

24,505,384

29,940,783

33,971,533

(4,271,208)

6,735,522

1,652,182

252,422,901
5,824,733
(4,271,208)
1,652,182
6,735,522

6.52

20,263,869

20,263,869

19,196,413

19,196,413

32,382,326

30,339,114

49,402,615

58,644,433

55,400,429

9,191,576

411,958,694

Governance

Over 5
years
RM000

Leadership

176,598,201

>15
years
RM000

Responsibility

Total Assets

>312
months
RM000

Business Review

Assets
Cash and short-term
funds
30,103,738
Deposits and placements
with financial
institutions
954,598
Securities purchased
under resale
agreements

Securities held-for-trading

Securities available-forsale
1,075,999
Securities held-tomaturity
161,580
Loans, advances and
financing
Non-impaired
138,477,553
Impaired*
5,824,733
Collective allowance

Derivative assets

Other assets

Other non-interest
sensitive balances

Life, general takaful and

family takaful fund
assets

>13
months
RM000

Performance

Group
2011

Strategy

Interest rate risk

Who We Are

4.

Financial & Others

AGM Information

368

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

45. Financial risk management POLICIES (contd.)

(d)

Market risk management (contd.)

4.

Interest rate risk (contd.)

Up to 1
month
RM000

>13
months
RM000

>312
months
RM000

>15
years
RM000

Over 5
years
RM000

Non-interest
sensitive
RM000

Trading
books
RM000

Total
RM000

Effective
interest rate
%

Deposits from customers 117,849,709

45,679,943

65,466,779

49,041,307

6,110

3,932,531

281,976,379

1.94

Group
2011 (contd.)
Liabilities and
Shareholders Equity
Deposits and placements
of banks and other
financial institutions

16,477,657

7,656,832

4,861,121

1,531,225

11,904

2,764,916

33,303,655

1.83

Obligation on securities
sold under repurchase
agreement

373,562

373,562

0.85

Bills and acceptances

payable

2,897,085

3,417,788

586,991

1,611,537

8,513,401

3.09

Derivative liabilities

1,533,935

1,533,935

Other liabilities

11,311,854

11,311,854

Recourse obligation on
loans sold to Cagamas

9,357

518,928

528,285

4.96

200,948

104,366

1,166,489

2,791,840

1,183,477

5,447,120

3.67

Subordinated obligations

2,400,880

3,935,470

4,464,189

10,800,539

3.83

Capital securities

6,120,774

6,120,774

6.54

Other non-interest
sensitive balances

382,512

382,512

Life, general takaful and

family takaful fund
liabilities

5,408,600

5,408,600

Borrowings

Life, general takaful and

family takaful policy
holders funds

13,787,813

13,787,813

137,798,961

56,868,286

74,482,260

57,818,770

11,786,454

39,199,763

1,533,935

379,488,429

Shareholders equity

31,461,499

31,461,499

Non-controlling interests

1,008,766

1,008,766

32,470,265

32,470,265

Total Liabilities and

Shareholders Equity

137,798,961

56,868,286

74,482,260

57,818,770

11,786,454

71,670,028

1,533,935

411,958,694

On-balance sheet interest

sensitivity gap

38,799,240

(24,485,960)

(44,143,146)

(8,416,155)

46,857,979

(16,269,599)

7,657,641

Off-balance sheet interest

sensitivity gap (interest
rate swaps)

(1,649,323)

5,999,105

3,581,821

(5,025,062)

(2,906,541)

Total interest sensitivity

gap

37,149,917

(18,486,855)

(40,561,325)

(13,441,217)

43,951,438

(16,269,599)

7,657,641

Cumulative interest rate

sensitivity gap

37,149,917

18,663,062

(21,898,263)

(35,339,480)

8,611,958

(7,657,641)

Total Liabilities

* This is arrived after reducting the individual allowance from gross impaired loans.

FINANCIAL STATEMENTS

Maybank Annual Report 2011

369
At A Glance
Our Perspective

45. Financial risk management POLICIES (contd.)

(d)

Market risk management (contd.)

Interest rate risk (contd.)

Group
2010

Non-interest
sensitive
RM000

Trading
books
RM000

Total
RM000

Effective
interest rate
%

25,097,194

3,610,798

28,707,992

1.65

867,258

6,426,270

1,141,060

51,331

429,456

8,915,375

1.20

371,237

2,651,103

371,237
2,651,103

2.21
3.39

301,579

4,401,848

3,371,150

3,246,745

31,254,913

42,576,235

4.18

67,904

657

128,141

5,126,154

3,523,210

96,642

8,942,708

4.97

93,071,656

16,915,742

20,496,595

29,631,508

46,956,619

(1,517,053)

5,111,362

1,306,769

207,072,120
(1,517,053)
1,306,769
5,111,362

6.22

14,601,859

14,601,859

17,960,059

17,960,059

119,475,249

23,342,669

22,067,375

39,210,841

53,850,979

43,539,868

35,212,785

336,699,766

Leadership

Over 5
years
RM000

Responsibility

>15
years
RM000

Business Review

>312
months
RM000

Performance

Total Assets

>13
months
RM000

Strategy

Assets
Cash and short-term
funds
Deposits and placements
with banks and other
financial institutions
Securities purchased
under resale
agreements
Securities held-for-trading
Securities available-forsale
Securities held-tomaturity
Loans, advances and
financing
Performing
Non-performing*
Derivative assets
Other assets
Other non-interest
sensitive balances
Life, general takaful and
family takaful fund
assets

Up to 1
month
RM000

Who We Are

4.

Governance
Financial & Others
AGM Information

370

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

45. Financial risk management POLICIES (contd.)

(d)

Market risk management (contd.)

4.

Interest rate risk (contd.)

Up to 1
month
RM000

>13
months
RM000

>312
months
RM000

>15
years
RM000

Over 5
years
RM000

Non-interest
sensitive
RM000

Trading
books
RM000

Total
RM000

Effective
interest rate
%

Deposits from customers

92,181,901

35,935,301

53,587,986

51,204,076

209,509

3,791,015

236,909,788

1.63

Deposits and placements

of banks and other
financial institutions

12,820,856

2,495,075

954,840

1,894,099

3,513,079

1,579,919

23,257,868

1.24

Obligations on securities
sold under repurchase
agreement

54,252

352,804

407,056

7.00

Group
2010 (contd.)
Liabilities and
Shareholders Equity

Bills and acceptances

payable

293,803

1,568,520

18,297

1,180,966

3,061,586

2.60

Derivative liabilities

1,346,242

1,346,242

Other liabilities

6,951,520

6,951,520

Recourse obligation on
loans sold to Cagamas
Borrowings
Subordinated obligations

15,952

114,446

519,579

649,977

4.83

2,636

43,976

1,300,695

181,096

809,125

487,336

2,824,864

3.19

969,116

1,000,000

3,000,000

3,100,000

8,069,116

3.87

Capital securities

5,978,752

5,978,752

6.55

Other non-interest
sensitive balances

617,998

617,998

Life, general takaful and

family takaful fund
liabilities

5,021,911

5,021,911

Life, general takaful and

family takaful policy
holders funds

12,938,148

12,938,148

106,322,564

40,411,628

56,976,264

56,798,850

13,610,465

32,568,813

1,346,242

308,034,826

Shareholders equity

27,877,176

27,877,176

Non-controlling interests

787,764

787,764

28,664,940

28,664,940

Total Liabilities and

Shareholders Equity

106,322,564

40,411,628

56,976,264

56,798,850

13,610,465

61,233,753

1,346,242

336,699,766

On-balance sheet interest

sensitivity gap

13,152,685

(17,068,959)

(34,908,889)

(17,588,009)

40,240,514

(17,693,885)

33,866,543

Off-balance sheet interest

sensitivity gap (interest
rate swaps)

(2,461,179)

6,807,288

558,053

(4,593,964)

(310,198)

Total interest sensitivity

gap

10,691,506

(10,261,671)

(34,350,836)

(22,181,973)

39,930,316

(17,693,885)

33,866,543

Cumulative interest rate

sensitivity gap

10,691,506

429,835

(33,921,001)

(56,102,974)

(16,172,658)

(33,866,543)

Total Liabilities

This is arrived after deducting the general allowance and specific allowance from gross non-performing loans outstanding.

FINANCIAL STATEMENTS

Maybank Annual Report 2011

371
At A Glance
Our Perspective

45. Financial risk management POLICIES (contd.)

(d)

Market risk management (contd.)

Interest rate risk (contd.)

Bank
2011

Up to 1
month
RM000

4,965,394

25,803,796

1.92

4,302,746

2,243,674

52,328

389,322

7,644,471

0.97

2,884,895

2,884,895

3.16

126,834

1,646,715

11,380,274

17,621,897

3,783,380

5,013,718

40,262,042

3.46

74,173

788,875

4,171,522

3,203,780

95,088

8,339,494

3.38

22,432,329

19,730,461

18,462,127

11,019,867

(3,179,773)

1,420,365

1,626,415

180,491,018
4,261,599
(3,179,773)
1,626,415
1,420,365

6.12

24,106,210

24,106,210

135,297,916

26,936,082

24,409,725

34,066,251

31,845,544

31,579,986

9,525,028

293,660,532

80,875,288

29,673,901

51,998,559

33,835,232

5,082,428

201,465,408

1.45

14,862,256

8,651,518

5,273,576

1,264,687

6,904

1,382,734

31,441,675

1.33

373,562

373,562

0.85

2,202,596

2,810,320

545,812

1,556,945

4,240,156

1,446,311

7,115,673
1,446,311
4,240,156

3.15

9,357

120,920
2,400,880

518,928
2,116,100
3,975,470

1,183,479
3,133,436
6,120,774

528,285
3,420,499
9,509,786
6,120,774

4.96
1.08
3.80
6.54

98,313,702

41,145,096

60,339,747

41,710,417

10,444,593

12,262,263

1,446,311

265,662,129

Assets
Cash and short-term
funds
20,838,402
Deposits and placements
with financial
institutions
656,401
Securities purchased
under resale
agreements

Securities held-for-trading

Securities available-forsale
689,224
Securities held-tomaturity
6,056
Loans, advances and
financing
Non-impaired
108,846,234
Impaired*
4,261,599
Collective allowance

Derivative assets

Other assets

Other non-interest
sensitive balances

Total Assets
Liabilities and
Shareholders Equity
Deposits from customers
Deposits and placements
with of banks and other
financial institutions
Obligation on securities
sold under repurchase
agreement
Bills and acceptances
payable
Derivative liabilities
Other liabilities
Recourse obligation on
loans sold to Cagamas
Borrowings
Subordinated obligations
Capital securities
Total Liabilities

AGM Information

Effective
interest rate
%

Financial & Others

Total
RM000

Governance

Trading
books
RM000

Leadership

Non-interest
sensitive
RM000

Responsibility

Over 5
years
RM000

Business Review

>15
years
RM000

Performance

>312
months
RM000

Strategy

>13
months
RM000

Who We Are

4.

372

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

45. Financial risk management POLICIES (contd.)

(d)

Market risk management (contd.)

4.

Interest rate risk (contd.)

Up to 1
month
RM000

>13
months
RM000

>312
months
RM000

>15
years
RM000

Over 5
years
RM000

Non-interest
sensitive
RM000

Trading
books
RM000

Total
RM000

Effective
interest rate
%

27,998,403

27,998,403

98,313,702

41,145,096

60,339,747

41,710,417

10,444,593

40,260,666

1,446,311

293,660,532

36,984,214

(14,209,014)

(35,930,022)

(7,644,166)

21,400,951

(8,680,680)

8,078,717

(1,798,551)

5,962,829

3,640,359

(4,928,326)

(2,876,311)

Total interest sensitivity

gap

35,185,663

(8,246,185)

(32,289,663)

(12,572,492)

18,524,640

(8,680,680)

8,078,717

Cumulative interest rate

sensitivity gap

35,185,663

26,939,478

(5,350,185)

(17,922,677)

601,963

(8,078,717)

Bank
2011(contd.)
Shareholders equity
Total Liabilities and
Shareholders Equity
On-balance sheet interest
sensitivity gap
Off-balance sheet interest
sensitivity gap (interest
rate swaps)

* This is arrived after deducting the individual allowance from gross impaired loans.

Bank
2010
Assets
Cash and short-term
funds
Deposits and placements
with financial
institutions
Securities purchased
under resale
agreements
Securities held-for-trading
Securities available-forsale
Securities held-tomaturity
Loans, advances and
financing
Performing
Non-performing*
Derivative assets
Other assets
Other non-interest
sensitive balances
Total Assets

Up to 1
month
RM000

>13
months
RM000

>312
months
RM000

>15
years
RM000

Over 5
years
RM000

Non-interest
sensitive
RM000

Trading
books
RM000

Total
RM000

Effective
interest
rate
%

16,299,554

3,104,062

19,403,616

1.35

736,583

5,486,942

450,177

1,331

423,165

7,098,198

1.24

371,237

2,241,928

371,237
2,241,928

2.21
2.86

3,094,311

1,919,633

3,277,430

29,155,467

37,446,841

3.46

100,254

4,663,816

2,993,839

97,413

7,855,322

4.61

80,324,502

14,651,808

17,403,803

19,000,062

21,058,968

(969,558)

3,749,648

1,281,682

152,439,143
(969,558)
1,281,682
3,749,648

5.72

17,474,209

17,474,209

97,731,876

20,138,750

17,954,234

26,759,520

25,972,440

27,156,369

32,679,077

248,392,266

FINANCIAL STATEMENTS

Maybank Annual Report 2011

373
At A Glance
Our Perspective

45. Financial risk management POLICIES (contd.)

(d)

Market risk management (contd.)

Interest rate risk (contd.)
Trading
books
RM000

Total
RM000

Effective
interest
rate
%

62,970,728

24,909,776

45,995,966

37,732,497

85,050

3,685,724

175,379,741

1.21

13,358,591

2,421,057

809,502

1,607,321

3,508,079

1,225,272

22,929,822

1.17

176,856

1,568,520

18,297

1,135,324

3,555,869

1,291,498

2,898,997
1,291,498
3,555,869

2.66

969,116

15,952

114,446
1,289,192
1,000,000

519,579

3,000,000

809,125
3,100,000
5,978,752

649,977
2,098,317
8,069,116
5,978,752

4.83
0.68
3.87
6.55

283,353

283,353

77,475,291

28,915,305

49,227,403

42,859,397

13,481,006

9,885,542

1,291,498

223,135,442

25,256,824

25,256,824

77,475,291

28,915,305

49,227,403

42,859,397

13,481,006

35,142,366

1,291,498

248,392,266

20,256,585

(8,776,555)

(31,273,169)

(16,099,877)

12,491,434

(7,985,997)

31,387,579

(2,640,977)

6,768,450

519,710

(4,440,554)

(206,629)

Total interest sensitivity

gap

17,615,608

(2,008,105)

(30,753,459)

(20,540,431)

12,284,805

(7,985,997)

31,387,579

Cumulative interest rate

sensitivity gap

17,615,608

15,607,503

(15,145,956)

(35,686,387)

(23,401,582)

(31,387,579)

Bank
2010 (contd.)
Liabilities and
Shareholders Equity
Deposits from customers
Deposits and placements
of banks and other
financial institutions
Bills and acceptances
payable
Derivative liabilities
Other liabilities
Recourse obligation on
loans sold to Cagamas
Borrowings
Subordinated obligations
Capital securities
Other non-interest
sensitive balances
Total Liabilities
Shareholders equity
Total Liabilities and
Shareholders Equity
On-balance sheet interest
sensitivity gap
Off-balance sheet interest
sensitivity gap (interest
rate swaps)

This is arrived after deducting the general allowance and specific allowance from gross non-performing loans outstanding.

Governance

Non-interest
sensitive
RM000

Leadership

Over 5
years
RM000

Responsibility

>15
years
RM000

Business Review

>312
months
RM000

Performance

>13
months
RM000

Strategy

Up to 1
month
RM000

Who We Are

4.

Financial & Others

AGM Information

374

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

45. Financial risk management POLICIES (contd.)

(d)

Market risk management (contd.)

5.

Yield/profit rate risk on IBS portfolio

The Group and Bank are exposed to the risk associated with the effects of fluctuations in the prevailing levels of yield/profit rate on the
financial position and cash flows of the IBS portfolio. The fluctuations in yield/profit rate can be influenced by changes in profit rates that
affect the value of financial instruments under the IBS portfolio. Yield/profit rate risk is monitored and managed by the Asset and Liability
Management Committee (ALCO) to protect the income from IBS operations.

The table below summarises the Groups and Banks exposure to yield/profit rate risk for the IBS operations. The table indicates effective
average yield/profit rates at the reporting date and the periods in which the financial instruments either reprice or mature, whichever is
earlier.

Group
2011
Assets
Cash and short-term
funds
Deposits and placements
with banks and other
financial institutions
Securities held-for-trading
Securities available-forsale
Securities held-tomaturity
Financing and advances
Performing
Impaired*
Collective allowance
Derivative assets
Other assets
Other non-yield/profit
sensitive balances
Total Assets
Liabilities and Islamic
Banking Fund
Deposits from customers
Deposits and placements
of banks and other
financial institutions
Bills and acceptances
payable
Derivative liabilities
Other liabilities
Other non-yield/profit
sensitive balances
Subordinated sukuk
Total Liabilities

Up to 1
month
RM000

>13
months
RM000

>312
months
RM000

>15
years
RM000

Over 5
years
RM000

Non-yield/
Profit rate
sensitive
RM000

Trading
books
RM000

Total
RM000

Effective
yield/profit
rate
%

8,159,131

1,525,038

9,684,169

3.04

366,796

27,340

513,225

394,136
513,225

3.29
0.27

275,350

354,743

373,665

2,463,437

2,671,079

6,138,274

3.79

50,543

30,000

91,350

171,893

3.83

16,146,530
573,861

2,004,103

1,044,383

5,379,513

21,676,459

(580,818)

4,737,314

14,646

46,250,988
573,861
(580,818)
14,646
4,737,314

5.33

1,076,715

1,076,715

25,154,872

2,725,642

1,468,591

7,872,950

24,438,888

6,785,589

527,871

68,974,403

24,701,773

7,486,042

8,111,720

8,436,309

2,154,426

50,890,270

2.56

3,785,981

66,373

1,598,485

2,338,657

564,515

2,938,066

11,292,077

2.79

370,242

607,467

42,147

95,494

175,494

53,504

1,115,350
53,504
175,494

2.94

1,010,637

52,931

52,931
1,010,637

4.22

28,857,996

8,159,882

9,752,352

10,774,966

1,575,152

5,416,411

53,504

64,590,263

FINANCIAL STATEMENTS

Maybank Annual Report 2011

375
At A Glance
Our Perspective

45. Financial risk management POLICIES (contd.)

(d)

Market risk management (contd.)

Yield/profit rate risk on IBS portfolio (contd.)

>312
months
RM000

>15
years
RM000

Over 5
years
RM000

Non-yield/
Profit rate
sensitive
RM000

Trading
books
RM000

Total
RM000

4,384,140

4,384,140

Total Liabilities and

Islamic Banking Fund

28,857,996

8,159,882

9,752,352

10,774,966

1,575,152

9,800,551

53,504

68,974,403

On-balance sheet yield/

profit rate sensitivity
gap

(3,703,124)

(5,434,240)

(8,283,761)

(2,902,016)

22,863,736

(3,014,962)

474,367

Cumulative yield/ profit

rate sensitivity gap

(3,703,124)

(9,137,364)

(17,421,125)

(20,323,141)

2,540,595

(474,367)

Group
2011 (contd.)
Islamic banking fund

Effective
yield/profit
rate
%

Performance

>13
months
RM000

Strategy

Up to 1
month
RM000

Who We Are

5.

This is arrived after deducting the individual allowance from gross impaired financing outstanding.

Trading
books
RM000

Total
RM000

Effective
yield/profit
rate
%

5,705,840

112,228

5,818,068

2.47

707

68,796

707
68,796

2.30

301,579

1,536,648

1,451,518

1,161,912

4,451,657

3.45

10,037

170,429

180,466

3.83

2,151,192

1,463,529

613,960

5,042,647

24,480,298

(235,240)

222,559

17,513

33,751,626
(235,240)
17,513
222,559

5.18

232,712

232,712

7,857,032

1,463,529

925,576

6,749,724

25,931,816

332,966

1,248,221

44,508,864

14,500,557

6,521,003

5,281,742

8,261,883

112,976

15,452

34,693,613

1.88

259,500

552,311

3,656

3,876,232

5,000

354,647

5,051,346

3.27

AGM Information

Non-yield/
Profit rate
sensitive
RM000

Financial & Others

Over 5
years
RM000

Governance

Liabilities and Islamic

Banking Fund
Deposits from customers
Deposits and placements
of banks and other
financial institutions

>15
years
RM000

Leadership

Total Assets

>312
months
RM000

Responsibility

Assets
Cash and short-term
funds
Deposits and placements
of banks and other
financial institutions
Securities held-for-trading
Securities available-forsale
Securities held-tomaturity
Financing and advances
Performing
Non-performing*
Derivative assets
Other assets
Other non-yield/profit
sensitive balances

>13
months
RM000

Business Review

Group
2010

Up to 1
month
RM000

376

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

45. Financial risk management POLICIES (contd.)

(d)

Market risk management (contd.)

5.

Yield/profit rate risk on IBS portfolio (contd.)

Up to 1
month
RM000

>13
months
RM000

>312
months
RM000

>15
years
RM000

Over 5
years
RM000

Non-yield/
Profit rate
sensitive
RM000

Trading
books
RM000

Total
RM000

Effective
yield/profit
rate
%

28,175

1,235,875

20,775

28,175
20,775
1,235,875

31,607

31,607

14,760,057

7,073,314

5,285,398

12,138,115

117,976

1,665,756

20,775

41,061,391

3,447,473

3,447,473

Total Liabilities and

Islamic Banking Fund

14,760,057

7,073,314

5,285,398

12,138,115

117,976

5,113,229

20,775

44,508,864

On-balance sheet yield/

profit rate sensitivity
gap

(6,903,025)

(5,609,785)

(4,359,822)

(5,388,391)

25,813,840

(4,780,263)

1,227,446

Cumulative yield/ profit

rate sensitivity gap

(6,903,025)

(12,512,810)

(16,872,632)

(22,261,023)

3,552,817

(1,227,446)

Group
2010 (contd.)
Bills and acceptances
payable
Derivative liabilities
Other liabilities
Other non-yield/profit
sensitive balances
Total Liabilities
Islamic banking fund

This is arrived after deducting the general allowance and specific allowance from gross non-performing financing outstanding.

6.

Sensitivity analysis for interest rate risk

The table below shows the sensitivity of the Groups and Banks profit and reserve to up and down 100 basis point parallel rate shock.
Group
+ 100 basis
point
Tax rate
RM000
Impact to profit before tax
Impact to profit after tax

25%

Bank

100 basis + 100 basis

point
point
RM000
RM000

67,424
50,568

(67,424)
(50,568)

100 basis
point
RM000

183,973
137,980

(183,973)
(137,980)

Impact to profit is measured using Earnings-at-Risk (EaR) methodology on Statements of Financial Position which is simulated based on a set
of standardised rate shock on the interest rate gap profile. The interest rate gap is the mismatch of rate sensitive assets and rate sensitive
liabilities taking consideration the earlier of repricing or remaining maturity, behavioural assumptions of certain indeterminate maturities
products such as current and savings deposits, to reflect the actual sensitivity behaviour of these interest bearing liabilities.

Impact to reserve is assessed by applying rate shock to the yield curve to model the impact on mark-to-market for financial assets of
Available-for-Sale (AFS) portfolio.
Group
+ 100 basis
point
RM000
Impact to reserves

2,041,772

Bank

100 basis + 100 basis

point
point
RM000
RM000

100 basis
point
RM000

(2,041,772)

(1,774,311)

1,774,311

FINANCIAL STATEMENTS

377

Maybank Annual Report 2011

At A Glance
Our Perspective

45. Financial risk management POLICIES (contd.)

(d)

Market risk management (contd.)

Foreign exchange risk is the risk to earnings and value of foreign currency assets, liabilities and derivative financial instruments caused by
fluctuations in foreign exchange rates.

The banking activities of providing financial products and services to customers expose the Group and the Bank to foreign exchange risk.
Foreign exchange risk is managed by treasury function, and monitored by Group Risk Management against delegated limits. The Groups
policy is to ensure, where appropriate and practical, that its capital is protected from foreign exchange exposures. Hedging against foreign
exchange exposures is mainly to protect the real economic value, rather than to avoid the short-term accounting impact.

The table below analyses the net foreign exchange positions of the Group and the Bank by major currencies, which are mainly in Ringgit
Malaysia, Singapore Dollar, the Great Britain Pound, Hong Kong Dollar, US Dollar, Indonesia Rupiah and Euro. The others foreign exchange
risk include mainly exposure to Japanese Yen, Renminbi, Philippines Peso, Papua New Guinea Kina and Brunei Dollars.

Euro
RM000

Others
RM000

Total
RM000

1,589,663

248,560

222,243

8,571,232

1,412,497

483,983

1,897,021

38,803,519

1,289,991

145,366

6,438,102

730,574

28,838

731,801

10,291,513

8,734,979

7,815

466,788

8,986,894

3,273,998

781,469

2,972,293

61,039,250

46,562,954
2,038,415
1,655,031

532,854
3,084
226,984

1,682,008

1,095,323

29,712,949
(6,076,457)
(1,067,212)

16,179,917
1,450
564,691

68,919
2,640
70,833

2,785,482
162,748
993,637

253,976,426
1,652,182
6,735,522
45,051

1,523,923

616,312
11,024

1,435,613

515,472
2,387,546

7,698,425
2,439,654

818,159
928,558
19,807

23,726

(16,677)

2,181
157,710
8,962

18,425
133
8,888

311,155
4,227,488
189,883

50,534
1,019,512
12,767

2,168,986
6,509,048
1,402,705

269,581

19,196,413

65,161,480

1,026,346

3,780,581

47,489,871

28,327,266

1,436,682

13,528,813

411,958,694

Financial & Others

Indonesia
Rupiah
RM000

Governance

United
States
Dollar
RM000

Leadership

251,207,655

Hong Kong
Dollar
RM000

Responsibility

Total Assets

Great
Britain
Pound
RM000

Business Review

Assets
Cash and short-term
funds
24,378,320
Deposits and placements
with banks and other
financial institutions
926,841
Securities purchased
under resale
agreements

Securities portfolio
35,815,014
Loans, advances and
financing
156,451,343
Derivative assets
5,520,302
Other assets
3,196,235
Investment properties
45,051
Statutory deposits with
Central Banks
3,607,105
Investment in associates
41,084
Property, plant and
equipment
944,806
Intangible assets
175,647
Deferred tax assets
1,179,075
Life, general takaful and
family takaful fund
assets
18,926,832

Singapore
Dollar
RM000

Performance

Group
2011

Malaysian
Ringgit
RM000

Strategy

Foreign exchange risk

Who We Are

7.

AGM Information

378

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

45. Financial risk management POLICIES (contd.)

(d)

Market risk management (contd.)

7.

Foreign exchange risk (contd.)

Singapore
Dollar
RM000

Great
Britain
Pound
RM000

Hong Kong
Dollar
RM000

United
States
Dollar
RM000

Indonesia
Rupiah
RM000

Euro
RM000

Others
RM000

Total
RM000

50,827,474

2,192,017

291,285

26,377,848

17,179,087

732,139

4,086,219

281,976,379

715,867

765,707

2,401,238

8,269,081

193,189

3,555,792

1,565,311

33,303,655

98,147

275,415

373,562

194,069
1,204,635
2,872,467

85
(4,828)
24,197

467
(21)
611,963

303,127
(1,013,629)
199,773

23,219
(2,392)
1,341,826

540
(7,507)
34,031

23,307
144,296
1,595,973

8,513,401
1,533,935
11,311,854

528,285

213,163
83,491
532,738
2,424,039
1,508,921

(27,186)

2,093

22,752

101
(2,364)
3,551,063
900,880

(47,698)
21,952
1,281,066
320,117

42,266
15,412
78,609

134,620
247,892
5,447,120
10,800,539
6,120,774

1,735

5,408,600

4,846

13,787,813

241,489,019

60,675,011

2,952,085

3,327,684

38,592,461

20,310,366

4,590,410

7,551,393

379,488,429

On-balance sheet open

position
Less: Derivative assets
Add: Derivative liabilities
Add: Net forward position

9,718,636
(5,520,302)
1,213,381
4,447,897

4,486,469
(2,038,415)
1,204,635
181,791

(1,925,739)
(3,084)
(4,828)
1,797,621

452,897

(21)
125,949

8,897,410
6,076,457
(1,013,629)
(15,535,771)

8,016,900
(1,450)
(2,392)
289,193

(3,153,728)
(2,640)
(7,507)
2,690,517

5,977,420
(162,748)
144,296
(1,217,605)

32,470,265
(1,652,182)
1,533,935
(7,220,408)

Net open position

9,859,612

3,834,480

(136,030)

578,825

(1,575,533)

8,302,251

(473,358)

4,741,363

25,131,610

4,741,076

(34,681)

685,693

639,475

6,982,262

(29)

4,415,872

17,429,668

Group
2011 (contd.)

Malaysian
Ringgit
RM000

Liabilities
Deposits from customers 180,290,310
Deposits and placements
of banks and other
financial institutions
15,837,470
Obligations on securities
sold under repurchase
agreements

Bills and acceptances

payable
7,968,587
Derivative liabilities
1,213,381
Other liabilities
4,631,624
Recourse obligation on
loans sold to Cagamas
528,285
Provision for taxation and
zakat
(68,778)
Deferred tax liabilities
129,401
Borrowings
1,551
Subordinated obligations
7,155,503
Capital securities
4,611,853
Life, general takaful and
family takaful fund
liabilities
5,406,865
Life, general takaful and
family takaful fund
policy holders funds
13,782,967
Total Liabilities

Net structural currency

exposure

FINANCIAL STATEMENTS

Maybank Annual Report 2011

379
At A Glance
Our Perspective

45. Financial risk management POLICIES (contd.)

(d)

Market risk management (contd.)

Foreign exchange risk (contd.)

Group
2010

Others
RM000

Total
RM000

13,883,040

1,523,771

268,452

18,984

9,724,451

422,882

2,154,750

711,662

28,707,992

1,790,720

2,743,989

29,141

4,152,023

11,122

98

188,282

8,915,375

36,284,010

371,237
8,416,190

810

270,325

5,758,046

3,236,547

700

203,418

371,237
54,170,046

135,002,745
991,747
4,211,271
45,324

34,902,967
125,727
194,099

192,513
6,101
210,365

1,543,395

253,205

18,695,575
180,369
(503,594)

13,040,600

546,284

65,548
279
20,539

2,111,724
2,546
179,193

205,555,067
1,306,769
5,111,362
45,324

658,205
34,983

1,351,883

1,409,102
9,664

661,735

390,457
2,426,791

4,471,382
2,471,438

964,916
163,836
1,351,611

283,199
14,847
(9,003)

5,720

1,310
582

10,448
471
12,149

268,196
4,300,459
205,543

34,249
519
4,663

1,568,038
4,480,714
1,564,963

17,931,764

28,295

17,960,059

213,314,172

49,918,906

713,102

2,087,801

39,476,999

22,693,368

2,241,914

6,253,504

336,699,766

151,037,764

43,181,680

2,095,442

189,394

23,315,016

12,533,460

723,172

3,833,860

236,909,788

10,878,706

559,966

457,022

1,505,929

4,275,015

1,185,605

2,949,372

1,446,253

23,257,868

407,056

407,056

2,751,256
792,389
4,461,326

164,436
174,304
896,439

432
6,021
12,170

106
156,948
1,088

110,285
219,571
768,379

7,444

731,154

1,344
(717)
17,277

26,283
(2,274)
63,687

3,061,586
1,346,242
6,951,520

649,977

649,977

172,975
125,761

192,791
893

10,776

3,148

75,360
11,576

11,839
12,879

466,889
151,109

AGM Information

Euro
RM000

Financial & Others

Indonesia
Rupiah
RM000

Governance

United
States
Dollar
RM000

Leadership

Hong Kong
Dollar
RM000

Responsibility

Great
Britain
Pound
RM000

Business Review

Liabilities
Deposits from customers
Deposits and placements
of banks and other
financial institutions
Obligations on securities
sold under repurchase
agreements
Bills and acceptances
payable
Derivative liabilities
Other liabilities
Recourse obligation on
loans sold to Cagamas
Provision for taxation and
zakat
Deferred tax liabilities

Singapore
Dollar
RM000

Performance

Total Assets

Malaysian
Ringgit
RM000

Strategy

Assets
Cash and short-term
funds
Deposits and placements
with banks and other
financial institutions
Securities purchased
under resale
agreements
Securities portfolio
Loans, advances and
financing
Derivative assets
Other assets
Investment properties
Statutory deposits with
Central Banks
Investment in associates
Property, plant and
equipment
Intangible assets
Deferred tax assets
Life, general takaful and
family takaful fund
assets

Who We Are

7.

380

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

45. Financial risk management POLICIES (contd.)

(d)

Market risk management (contd.)

7.

Foreign exchange risk (contd.)

Malaysian
Ringgit
RM000

Singapore
Dollar
RM000

Great
Britain
Pound
RM000

Hong Kong
Dollar
RM000

United
States
Dollar
RM000

Indonesia
Rupiah
RM000

Euro
RM000

Others
RM000

Total
RM000

7,100,000
4,589,572

1,389,180

2,098,317
969,116

726,547

2,824,864
8,069,116
5,978,752

5,020,171

1,740

5,021,911

12,932,630

5,518

12,938,148

200,512,527

46,559,689

2,571,087

1,864,241

31,766,105

15,678,202

3,690,448

5,392,527

308,034,826

On-balance sheet open

position
Less: Derivative assets
Add: Derivative liabilities
Add: Net forward position

12,801,645
(991,747)
792,389
4,354,839

3,359,217
(125,727)
174,304
979,120

(1,857,985)
(6,101)
6,021
1,653,504

223,560

156,948
(48,111)

7,710,894
(180,369)
219,571
(9,402,770)

7,015,166

(61,267)

(1,448,534)
(279)
(717)
1,421,744

860,977
(2,546)
(2,274)
1,379,762

28,664,940
(1,306,769)
1,346,242
276,821

Net open position

16,957,126

4,386,914

(204,561)

332,397

(1,652,674)

6,953,899

(27,786)

2,235,919

28,981,234

3,709,686

(37,261)

263,951

601,585

6,915,406

31

2,910,405

14,363,803

Malaysian
Ringgit
RM000

Singapore
Dollar
RM000

Great
Britain
Pound
RM000

Hong Kong
Dollar
RM000

United
States
Dollar
RM000

Indonesia
Rupiah
RM000

Euro
RM000

Others
RM000

Total
RM000

760,416

203,623

51,515

9,143,271

24,052

297,895

1,456,524

25,803,796

1,187,932
8,419,914

7,815

330,064

5,681,045
6,960,488

906,419

28,838
688,796

236,716
2,502,620

7,644,471
51,486,431

45,932,056
2,037,088
624,961

532,854
2,421
237,897

1,559,067

906,048

20,202,559
(6,091,473)
(1,458,726)

(20,205)

68,314
1,190
88,022

1,088,542
162,570
318,805

181,572,844
1,626,415
1,420,365

1,523,923
2,509,623

517,347

76,579
71,844
6,140

6,725,145

19,514
3,780,405
435,057

4,313,116
17,070,392
454,412

Group
2010 (contd.)
Borrowings
Subordinated obligations
Capital securities
Life, general takaful and
family takaful fund
liabilities
Life, general takaful and
family takaful fund
policy holders funds
Total Liabilities

Net structural currency

exposures

Bank
2011

Assets
Cash and short-term
funds
13,866,500
Deposits and placements
with banks and other
financial institutions
509,940
Securities portfolio
31,670,315
Loans, advances and
financing
112,189,452
Derivative assets
5,514,619
Other assets
723,563
Statutory deposits with
Central Banks
2,693,100
Investment in subsidiaries
3,466,028
Investment in associates
13,215

FINANCIAL STATEMENTS

Maybank Annual Report 2011

381
At A Glance
Our Perspective

45. Financial risk management POLICIES (contd.)

(d)

Market risk management (contd.)

Foreign exchange risk (contd.)

Others
RM000

Total
RM000

838,227
160,794
905,462

296,406
15,867
19,807

23,383

(16,732)

1,047
436
8,436

8,929
77
(3,261)

2,191
96
7,125

1,170,183
177,270
920,837

172,551,215

63,327,993

991,261

3,373,960

34,597,472

7,635,411

1,173,055

10,010,165

293,660,532

50,786,058

2,158,896

292,031

12,224,258

379,654

2,451,002

201,465,408

715,867

764,837

2,401,928

11,203,191

3,230,595

1,515,082

31,441,675

98,147

275,415

373,562

194,039
1,204,635
1,256,698

84
(5,360)
21,967

467
(28)
67,907

1,888
(1,080,199)
(121,493)
(2,472)

1,463
(2,461)
101

211
(7,603)
(11,312)

2,543
168,588
102,366
2,472

7,115,673
1,446,311
4,240,156

528,285

195,363

2,424,039
1,508,921

(27,283)

16,558

(584)
3,418,948
900,880

468

3,420,499
9,509,786
6,120,774

166,933,357

58,383,767

2,913,141

2,778,863

26,544,417

(897)

3,866,960

4,242,521

265,662,129

On-balance sheet open

position
Less: Derivative assets
Add: Derivative liabilities
Add: Net forward position

5,617,858
(5,514,619)
1,168,739
4,447,897

4,944,226
(2,037,088)
1,204,635
183,912

(1,921,880)
(2,421)
(5,360)
1,811,055

595,097

(28)
126,386

8,053,055
6,091,473
(1,080,199)
(15,216,381)

7,636,308

(2,461)
19,704

(2,693,905)
(1,190)
(7,603)
2,680,518

5,767,644
(162,570)
168,588
(1,205,679)

27,998,403
(1,626,415)
1,446,311
(7,152,588)

Net open position

5,719,875

4,295,685

(118,606)

721,455

(2,152,052)

7,653,551

(22,180)

4,567,983

20,665,711

4,624,181

(34,681)

797,507

98,311

6,725,145

(29)

4,378,948

16,589,382

Property, plant and

equipment
Intangible assets
Deferred tax assets
Total Assets

Liabilities
Deposits from customers 133,173,509
Deposits and placements
of banks and other
financial institutions
11,610,175
Obligations on securities
sold under repurchase
agreements

Bills and acceptances

payable
6,914,978
Derivative liabilities
1,168,739
Other liabilities
2,923,922
Deferred tax liabilities

Recourse obligation on
loans sold to Cagamas
528,285
Provision for taxation and
zakat
(184,522)
Borrowings
1,551
Subordinated obligations
6,184,867
Capital securities
4,611,853
Total Liabilities

Net structural currency

exposures

Financial & Others

Euro
RM000

Governance

Indonesia
Rupiah
RM000

Bank
2011 (contd.)

Leadership

United
States
Dollar
RM000

Responsibility

Hong Kong
Dollar
RM000

Business Review

Great
Britain
Pound
RM000

Performance

Singapore
Dollar
RM000

Strategy

Malaysian
Ringgit
RM000

Who We Are

7.

AGM Information

382

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

45. Financial risk management POLICIES (contd.)

(d)

Market risk management (contd.)

7.

Foreign exchange risk (contd.)

Bank
2010
Assets
Cash and short-term
funds
Deposits and placements
with banks and other
financial institutions
Securities purchased
under resale
agreements
Securities portfolio
Loans, advances and
financing
Derivative assets
Other assets
Statutory deposits with
Central Banks
Investment in subsidiaries
Investment in associates
Property, plant and
equipment
Intangible assets
Deferred tax assets
Total Assets
Liabilities
Deposits from customers
Deposits and placements
of banks and other
financial institutions
Bills and acceptances
payable
Derivative liabilities
Other liabilities
Recourse obligation on
loans sold to Cagamas
Provision for taxation and
zakat
Borrowings
Subordinated obligations
Capital securities
Total Liabilities

Malaysian
Ringgit
RM000

Singapore
Dollar
RM000

Great
Britain
Pound
RM000

Hong Kong
Dollar
RM000

United
States
Dollar
RM000

Indonesia
Rupiah
RM000

Euro
RM000

Others
RM000

Total
RM000

8,108,993

1,492,500

262,754

17,550

7,227,692

10,199

1,671,807

612,121

19,403,616

1,731,480

2,673,408

29,141

2,501,537

98

162,534

7,098,198

34,524,835

371,237
8,299,187

810

229,197

4,377,450

84,303

700

27,609

371,237
47,544,091

101,698,686
977,352
3,885,457

34,837,065
125,727
277,427

192,513
4,209
204,455

1,543,395

252,038

11,858,508
171,837
(989,507)

65,449
11
18,395

1,273,969
2,546
101,383

151,469,585
1,281,682
3,749,648

505,100
3,576,538
8,915

1,351,883
146

57,617
74,996
6,140

6,523,559

18,381
2,478,138
403,645

1,932,981
12,653,377
418,700

862,003
144,998
1,155,952

281,765
14,736
(9,003)

5,720

1,310
582

9,073
347

394
47
1,227

1,160,265
160,710
1,148,176

157,180,309

49,716,078

699,602

2,044,072

25,295,690

6,618,061

1,756,460

5,081,994

248,392,266

117,394,181

43,061,763

2,070,705

190,232

9,905,094

513,220

2,244,542

175,379,741

11,051,324

559,966

456,966

1,505,814

5,434,054

2,651,205

1,270,493

22,929,822

2,722,976
771,613
2,465,296

162,264
174,304
726,587

432
4,444
11,524

106
156,947
455

2,823
188,013
327,831

3,039

922
(1,022)
4,936

6,435
(2,801)
19,240

2,898,997
1,291,498
3,555,869

649,977

649,977

78,802

7,100,000
4,589,572

190,713

1,389,180

10,778

3,058
2,098,317
969,116

283,353
2,098,317
8,069,116
5,978,752

146,823,741

46,264,777

2,544,071

1,864,332

18,928,306

3,043

3,169,261

3,537,911

223,135,442

FINANCIAL STATEMENTS

Maybank Annual Report 2011

383
At A Glance
Our Perspective

45. Financial risk management POLICIES (contd.)

(d)

Market risk management (contd.)

Foreign exchange risk (contd.)
Great
Britain
Pound
RM000

Hong Kong
Dollar
RM000

United
States
Dollar
RM000

Indonesia
Rupiah
RM000

Euro
RM000

Others
RM000

Total
RM000

On-balance sheet open

position
Less: Derivative assets
Add: Derivative liabilities
Add: Net forward position

10,356,568
(977,352)
771,613
4,354,839

3,451,301
(125,727)
174,304
934,837

(1,844,469)
(4,209)
4,444
1,639,346

179,740

156,947
(46,010)

6,367,384
(171,837)
188,013
(8,816,596)

6,615,018

(517)

(1,412,801)
(11)
(1,022)
1,405,271

1,544,083
(2,546)
(2,801)
1,441,851

25,256,824
(1,281,682)
1,291,498
913,021

Net open position

14,505,668

4,434,715

(204,888)

290,677

(2,433,036)

6,614,501

(8,563)

2,980,587

26,179,661

3,709,693

(37,261)

206,751

107,861

6,523,559

31

3,060,004

13,570,638

Net structural currency

exposures

Where possible, the Group and the Bank mitigate the effect of currency exposures by funding the overseas operations with borrowings and
deposits received in the same functional currencies of the respective overseas locations. The foreign currency exposures are also hedged
using foreign exchange derivatives.

The structural currency exposures of the Group and the Bank as at the reporting dates are as follows:

Group
Currency of structural exposures

(2,539,120)

(370,557)

4,741,076
(34,681)
685,693
639,475
6,982,262
4,415,843

20,339,345

(2,909,677)

17,429,668

3,737,615
(37,261)
263,951
942,231
6,915,406
2,910,436

(27,929)

(340,646)

3,709,686
(37,261)
263,951
601,585
6,915,406
2,910,436

Financial & Others

14,732,378

(368,575)

14,363,803

AGM Information

Governance

2010
Singapore Dollar
Great Britain Pound
Hong Kong Dollar
United States Dollar
Indonesia Rupiah
Others

7,280,196
(34,681)
685,693
1,010,032
6,982,262
4,415,843

Net structural
currency exposures
RM000

Leadership

2011
Singapore Dollar
Great Britain Pound
Hong Kong Dollar
United States Dollar
Indonesia Rupiah
Others

Structural currency
exposures in overseas Hedges by funding in
operations respective currencies
RM000
RM000

Responsibility

Net structural foreign currency position represents the Groups and the Banks net investment in overseas operations. This position comprises
the net assets of the Groups and the Banks overseas branches, investments in overseas subsidiaries and long term investments in overseas
properties.

Business Review

Performance

Singapore
Dollar
RM000

Strategy

Bank
2010 (contd.)

Malaysian
Ringgit
RM000

Who We Are

7.

384

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

45. Financial risk management POLICIES (contd.)

(d)

Market risk management overview (contd.)

7.

Foreign exchange risk (contd.)

Bank
Currency of structural exposures
2011
Singapore Dollar
Great Britain Pound
Hong Kong Dollar
United States Dollar
Indonesia Rupiah
Others

2010
Singapore Dollar
Great Britain Pound
Hong Kong Dollar
United States Dollar
Indonesia Rupiah
Others

Structural currency
exposures in overseas Hedges by funding in
operations respective currencies
RM000
RM000
7,163,301
(34,681)
797,507
468,867
6,725,145
4,378,919

(2,539,120)

(370,556)

Net structural
currency exposures
RM000
4,624,181
(34,681)
797,507
98,311
6,725,145
4,378,919

19,499,058

(2,909,676)

16,589,382

3,737,622
(37,261)
206,751
448,507
6,523,559
3,060,035

(27,929)

(340,646)

3,709,693
(37,261)
206,751
107,861
6,523,559
3,060,035

13,939,213

(368,575)

13,570,638

8.

Sensitivity analysis for foreign exchange risk

Foreign currency risk

Foreign exchange risk arises from the movements in exchange rates that adversely affect the revaluation of the Group and the foreign
currency positions. Considering that other risk variables remain constant, the foreign currency revaluation sensitivity for the Group and the
Bank on their unhedged position is as follows:
Group

2011
Impact to profit after tax

1%
appreciation
RM000
(65,563)

Bank

1%
depreciation
RM000
65,563

1%
appreciation
RM000
(8,839)

1%
depreciation
RM000
8,839

Interpretation of Impact
The Group and the Bank measure the foreign exchange sensitivity based on the foreign exchange net open positions (including foreign
exchange structural position) under an adverse movement in all foreign currencies against reporting currency (MYR). The result implies that
the Group and the Bank may be subject to additional translation (loss)/gain if MYR appreciated/depreciated against other currencies and vice
versa.

FINANCIAL STATEMENTS

Maybank Annual Report 2011

385
At A Glance

(e)

Liquidity risk management

Generally, there are two types of liquidity risk which are

funding liquidity risk and market liquidity risk. Funding
liquidity risk is the risk that the firm will not be able to
meet efficiently both expected and unexpected current and
future cash flow needs without affecting either daily
operations or the financial condition of the firm. Market
liquidity risk is the risk that a firm cannot easily offset or
eliminate a position at the market price because of
inadequate market depth or market disruption.

Liquidity risk management framework

The Group employs BNMs Liquidity Framework and leading
practices as a foundation to manage and measure its
liquidity risk exposure. The Group also uses a range of tools
to monitor and limit liquidity risk exposure such as liquidity
gap, early warning signals, liquidity indicators and stress
testing. The liquidity positions of the Group are monitored
regularly against the established policies, procedures and
limits.

The Groups funding diversification is augmented with

monitoring of concentration by maturity to avoid having
many debt repayments at any one time.

Stress Testing and Contingency Funding Plan

The Group uses stress testing and scenario analysis to
evaluate the impact of sudden stress events on liquidity
position. Scenarios are based on hypothetical events that
include bank specific crisis and general market crisis
scenarios. The stress test result provides an insight of the
Groups funding requirements during different level of
stress environment and is closely linked to the Groups
Contingency Funding Plan (CFP), which provides a systemic
approach in handling any unexpected liquidity disruptions.
The plan encompasses strategies, decision-making
authorities, internal and external communication and
courses of action to be taken under different liquidity crisis
scenarios. The CFP is being tested regularly to ensure the
effectiveness and robustness of the plan.

The Group performs CFP test regularly to ensure the

effectiveness and operational feasibility of the CFP. The key
aspects of the testing are to focus on the preparedness of
key senior management and their respective alternate in
handling a simulated distress funding situation. It also
provides exposure and develops capabilities on how to
respond to a liquidity crisis situation and operate effectively
with each other under challenging circumstances.

Financial & Others

Governance

Diversification of liquidity sources

Sources of liquidity are regularly reviewed to maintain a
wide diversification by currency, provider, product and
term. The Group has a diversified liability structure to meet
its funding requirements. The primary source of funding
include customer deposits, interbank deposits, debt
securities, swap market, bank loan syndication and medium
term funds. The Group also reviews, initiates and
implements strategic fund raising programmes as well as
institutes standby lines with external parties on a need
basis.

Liquidity Buffers
Maybank Group maintains a portfolio of highly liquid
instruments on its statement of financial position that can
be drawn upon when needed. These liquid assets include
cash and government bonds and high credit quality private
securities that can be sold or funded on a secured basis as
protection against any unforeseen interruption to cash flow.

Leadership

Responsibility

Business Review

Liquidity management
Liquidity is the ability of the Group to fund increases in
assets and meet obligations as they come due, without
incurring unacceptable losses.

Performance

Strategy

Liquidity risk management overview

The stable growth in deposits is attained through

Maybanks large branch network and its reputation as one
of the leading financial institution in the domestic market.
Based on customer behavioural profiling study, the rollover
rate of traditional deposits has been consistent, hence
providing the Group with a steady source of funding. The
Groups financial strength and strong credit rating also
provide the basis for continued customer confidence and
long-term growth in the years to come. In addition, as a
member of the Malaysian Deposit Insurance Corporation or
Perbadanan Insurans Deposit Malaysia (PIDM), customer
deposits with the Bank and MIB are fully guaranteed by
PIDM until December 2010. The temporary government
deposit guarantee has lapsed as scheduled at the end of
2010, the deposit insurance limit has been raised to
RM250,000 effective 2011 from the previous RM60,000.

Who We Are

1.

Our Perspective

45. Financial risk management POLICIES (contd.)

AGM Information

386

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

45. Financial risk management POLICIES (contd.)

(e)

Liquidity risk management (contd.)

2.

Contractual maturity of total assets and liabilities

The table below analyses assets and liabilities (inclusive of non-financial instruments) of the Group and the Bank in the relevant maturity
tenures based on remaning contractual maturities.

The disclosure is made in accordance with the requirement of revised BNM GP8 Guidelines on Financial Reporting for Banking Institutions:

Group
2011
Assets
Cash and short-term
funds
Deposits and placements
with financial
institutions
Securities purchased
under resale
agreements
Securities portfolio
Loans, advances and
financing
Derivative assets
Other assets
Investment properties
Statutory deposits with
Central Banks
Interest in associates
Property, plant and
equipment
Intangible assets
Deferred tax assets
Life, general takaful and
family takaful fund
assets
Total assets

Up to 1
month
RM000

>1 to 3
months
RM000

>3 to 6
months
RM000

>6 months
to 1 year
RM000

>1 to 3
years
RM000

>3 to 5
years
RM000

Over 5
years
RM000

No-specific
maturity
RM000

Total
RM000

37,054,615

937,154

664,676

147,074

38,803,519

2,752,873

5,378,824

2,042,325

116,778

713

10,291,513

2,786,934

1,453,069

1,959,278

3,507,012

14,035,987

13,068,107

22,957,403

1,271,460

61,039,250

29,815,968
90,627
2,740,460

13,971,886
82,537
51,982

11,117,363
44,030
74,606

13,061,507
396,334
2,434,556

27,181,422
316,841
140,908

35,685,924
259,718

123,142,356
462,095

1,293,010
45,051

253,976,426
1,652,182
6,735,522
45,051

7,698,425
2,439,654

7,698,425
2,439,654

2,168,986
6,509,048
1,402,705

2,168,986
6,509,048
1,402,705

19,196,413

19,196,413

75,241,477

21,875,452

15,902,278

19,663,261

41,675,871

49,013,749

146,561,854

42,024,752

411,958,694

41,861,138

22,648,482

26,475,249

5,148,338

1,306,602

101,303

281,976,379

9,068,513

2,092,054

1,333,571

1,343,668

856,547

3,371,987

33,303,655

373,562

3,462,596
76,569
68,413

635,917
55,820
865,608

96,824
71,731
176,535

136,139
280,561

398,886
192,734

679,230

2,806,129

8,513,401
1,533,935
11,311,854

9,357

248,934

269,994

528,285

Liabilities
Deposits from customers 184,435,267
Deposits and placements
of banks and other
financial institutions
15,237,315
Obligations on securities
sold under repurchase
agreements
373,562
Bills and acceptances
payable
4,318,064
Derivative liabilities
115,560
Other liabilities
6,921,874
Recourse obligation on
loans sold to Cagamas

FINANCIAL STATEMENTS

387

Maybank Annual Report 2011

At A Glance
Our Perspective

45. Financial risk management POLICIES (contd.)

(e)

Liquidity risk management (contd.)

Contractual maturity of total assets and liabilities (contd.)
>6 months
to 1 year
RM000

>1 to 3
years
RM000

>3 to 5
years
RM000

Over 5
years
RM000

No-specific
maturity
RM000

Total
RM000

112,597

133,077

9,372

181,468

63

539,807

12,586

209,286

34,604

303,642

4,045,236
10,800,539
6,120,774

247,892

134,620
247,892
5,447,120
10,800,539
6,120,774

5,408,600

5,408,600

13,787,813

13,787,813

Total liabilities

211,647,316

54,737,426

26,837,751

28,375,782

7,192,246

3,328,405

25,119,069

22,250,434

379,488,429

Net liquidity gap

(136,405,839)

(32,861,974)

(10,935,473)

(8,712,521)

34,483,625

45,685,344

121,442,785

19,774,318

32,470,265

Provision for taxation and

zakat
Deferred tax liabilities
Borrowings
Subordinated obligations
Capital securities
Life, general takaful and
family takaful fund
liabilities
Life, general takaful and
family takaful policy
holders fund

Bank
2011

>1 to 3
years
RM000

>3 to 5
years
RM000

Over 5
years
RM000

No-specific
maturity
RM000

Total
RM000

24,054,891

937,154

664,676

147,075

25,803,796

2,676,004

3,434,411

1,426,511

107,545

7,644,471

1,859,155

888,107

1,668,987

2,852,441

12,871,901

8,585,286

22,218,555

541,999

51,486,431

24,339,786
85,880
916,048

10,734,153
73,792
11,850

9,343,833
37,196
17,774

8,672,015
396,326
35,549

17,817,419
311,408

22,244,753
259,718

88,420,885
462,095

439,144

181,572,844
1,626,415
1,420,365

4,313,116
17,070,392
454,412

4,313,116
17,070,392
454,412

AGM Information

>6 months
to 1 year
RM000

Financial & Others

>3 to 6
months
RM000

Governance

>1 to 3
months
RM000

Leadership

Assets
Cash and short-term
funds
Deposits and placements
with financial
institutions
Securities purchased
under resale
agreements
Securities portfolio
Loans, advances and
financing
Derivative assets
Other assets
Statutory deposits with
Central Banks
Investment in subsidiaries
Interest in associates

Up to 1
month
RM000

Responsibility

The table below analyses assets and liabilities (inclusive of non-financial instruments) of the Group and the Bank in the relevant maturity
tenures based on remaning contractual maturities. The disclosure is made in accordance with the requirement of revised BNM GP8
Guidelines on Financial Reporting for Banking Institutions:

Business Review

>3 to 6
months
RM000

Performance

>1 to 3
months
RM000

Strategy

Up to 1
month
RM000

Group
2011 (contd.)

Who We Are

2.

388

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

45. Financial risk management POLICIES (contd.)

(e)

Liquidity risk management (contd.)

2.

Contractual maturity of total assets and liabilities (contd.)

Bank
2011 (contd.)
Property, plant and
equipment
Intangible assets
Deferred tax assets
Total assets

Up to 1
month
RM000

>1 to 3
months
RM000

>3 to 6
months
RM000

>6 months
to 1 year
RM000

>1 to 3
years
RM000

>3 to 5
years
RM000

Over 5
years
RM000

No-specific
maturity
RM000

Total
RM000

1,170,183
177,270
920,837

1,170,183
177,270
920,837

53,931,764

16,079,467

13,158,977

12,210,951

31,000,728

31,089,757

111,101,535

25,087,353

293,660,532

27,154,741

16,765,085

23,781,801

4,975,638

938,502

101,304

201,465,408

8,997,797

1,586,637

239,011

1,201,968

815,610

3,363,491

31,441,675

373,562

2,810,320
64,024
12,522

544,435
52,690
550,067

33,304
68,014
5,130

129,372

357,952

679,231

289,492

7,115,673
1,446,311
4,240,156

9,357

120,920

248,934

269,994

3,298,028
9,509,786
6,120,774

528,285
3,420,499
9,509,786
6,120,774

Liabilities
Deposits from customers 127,748,337
Deposits and placements
of banks and other
financial institutions
15,237,161
Obligations on securities
sold under repurchase
agreements
373,562
Bills and acceptances
payable
3,727,614
Derivative liabilities
95,028
Other liabilities
3,382,945
Recourse obligation on
loans sold to Cagamas

Borrowings
1,551
Subordinated obligations

Capital securities

Total liabilities

150,566,198

39,048,761

19,619,834

24,127,260

6,555,912

2,382,058

23,072,614

289,492

265,662,129

Net liquidity gap

(96,634,434)

(22,969,294)

(6,460,857)

(11,916,309)

24,444,816

28,707,699

88,028,921

24,797,861

27,998,403

FINANCIAL STATEMENTS

389

Maybank Annual Report 2011

At A Glance
Our Perspective

45. Financial risk management POLICIES (contd.)

(e)

Liquidity risk management (contd.)

Contractual maturity of financial liabilities on an undiscounted basis

The tables below present the cash flows payable by the Group and the Bank under non-derivative financial liabilities by remaining
contractual maturities at the end of the reporting period. The amounts disclosed in the table are the contractual undiscounted cash flow.
>1 to 3
years
RM000

>3 to 5
years
RM000

Over 5
years
RM000

Total
RM000

184,657,240

42,752,183

23,630,825

28,260,661

5,163,257

1,322,278

216,159

286,002,603

32,365,605

10,090,645

2,245,936

1,450,330

3,561,292

442,716

7,013,407

57,169,931

373,729
5,872,170
3,289,476

6,404,670
144,089

2,192,330
422,471

75,080
596,311

406,513

11,282

4,142,608

373,729
14,544,250
9,012,750

695,971

305,202
21,100
34,935

11,935
967,198
116,189
118,233

322,802
199,004
154,758

20,297
569,939
796,970
618,100

577,228
2,457,896
798,326
618,947

1,799,851
11,668,680
12,160,826

609,460
7,118,859
13,600,269
13,705,799

227,254,191

59,752,824

29,705,117

31,058,946

11,136,368

6,228,673

37,001,531

402,137,650

2,994,850

1,210,726

620,113

1,363,887

1,016,806

154,790

180,952

7,542,124

1,320,976

603,131

972,100

1,667,369

3,945,342

1,948,523

1,420,116

11,877,557

586,968

405,898

537,087

197,079

129,359

712,184

2,568,575

13,195,000
8,359,527

318,204
1,213,521

110,770

76,961,407
32,938

682,679
17,429,276

682,679
108,014,657
9,605,986

26,457,321

3,751,480

2,240,070

80,222,680

23,203,462

2,815,497

1,601,068

140,291,578

Leadership

>6 months
to 1 year
RM000

Responsibility

>3 to 6
months
RM000

Business Review

Commitment and contingencies

Direct credit substitutes
Certain transaction-related contingent
items
Short-term self-liquidating trade-related
contingencies
Islamic housing and hire purchase loans
sold to Cagamas Berhad
Irrevocable commitments to extend credit
Miscellaneous

>1 to 3
months
RM000

Performance

Non-derivative liabilities
Deposits from customers
Deposits and placements of banks and
other financial institutions
Obligations on securities sold under
repurchase agreements
Bills and acceptance payables
Other liabilities
Recourse obligation on loans sold to
Cagamas
Borrowings
Subordinated obligations
Capital securities

Up to 1
month
RM000

Strategy

Group
2011

Who We Are

3.

Governance
Financial & Others
AGM Information

390

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

45. Financial risk management POLICIES (contd.)

(e)

Liquidity risk management (contd.)

3.

Contractual maturity of financial liabilities on an undiscounted basis (contd.)

The tables below present the cash flows payable by the Group and the Bank under non-derivative financial liabilities by remaining
contractual maturities at the end of the reporting period. The amounts disclosed in the table are the contractual undiscounted cash flow.

Bank
2011
Non-derivative liabilities
Deposits from customers
Deposits and placements of banks and
other financial institutions
Obligations on securities sold under
repurchase agreements
Bills and acceptances payable
Other liabilities
Recourse obligation on loans sold to
Cagamas
Borrowings
Subordinated obligations
Capital securities

Commitment and contingencies

Direct credit substitutes
Certain transaction-related contingent
items
Short-term self-liquidating trade-related
contingencies
Irrevocable commitments to extend credit
Miscellaneous

Up to 1
month
RM000

>1 to 3
months
RM000

>3 to 6
months
RM000

>6 months
to 1 year
RM000

>1 to 3
years
RM000

>3 to 5
years
RM000

Over 5
years
RM000

Total
RM000

128,015,714

27,211,576

16,800,174

23,831,576

4,986,052

940,466

101,512

201,887,070

24,668,380

10,010,809

1,626,885

317,842

913,209

399,423

3,787,645

41,724,193

373,729
5,144,058
142,817

5,797,202
81,422

2,150,184
83,892

75,080
470,855

51,361

373,729
13,166,524
830,347

492,498

154,446

34,935

11,935
144,662
116,189
118,233

24,431
177,904
154,758

20,297
122,176
712,570
618,100

577,228
2,189,992
713,926
618,947

1,246,118
10,457,680
12,160,826

609,460
4,374,323
12,178,269
13,705,799

158,837,196

43,290,390

21,052,154

25,052,446

7,423,765

5,439,982

27,753,781

288,849,714

180,794

1,155,985

620,113

1,363,887

993,042

154,779

180,952

4,649,552

602,298

603,131

972,100

1,667,369

3,713,781

1,905,714

1,079,354

10,543,747

372,527
865,532
8,329,624

460,639
318,204
1,213,521

537,087
110,770

197,079
76,961,407
32,938

129,359
15,431,264

712,184

2,408,875
93,687,177
9,576,083

10,350,775

3,751,480

2,240,070

80,222,680

20,267,446

2,772,677

1,260,306

120,865,434

FINANCIAL STATEMENTS

391

Maybank Annual Report 2011

At A Glance
Our Perspective

45. Financial risk management POLICIES (contd.)

(e)

Liquidity risk management (contd.)

Contractual maturity of financial liabilities on an undiscounted basis (contd.)

The table below analyses the Groups and the Banks derivative financial liabilities that will be settled on a net basis into relevant maturity
groupings by remaining contractual maturities at the end of the reporting period. The amounts disclosed in the table are the contractual
undiscounted cash flow.
>3 to 6
months
RM000

>6 months
to 1 year
RM000

>1 to 3
years
RM000

>3 to 5
years
RM000

Over 5
years
RM000

Total
RM000

(565)
(55,193)

(3,463)
(41,937)
(10,240)

(2,465)
(26,079)
19

(4,946)
(60,283)
18

(20)
(108,158)
2,231

(103)
(11,471)
(10,588)

(209)
(83,767)

(11,771)
(386,888)
(18,560)

(8,447)

(19,725)

(22,730)

(44,476)

(102,706)

(22,732)

1,001

(219,815)

(64,205)

(75,365)

(51,255)

(109,687)

(208,653)

(44,894)

(82,975)

(637,034)

(22,413,199)
20,947,754

(8,689,012)
6,608,649

(2,339,673)
2,984,267

(1,289,268)
2,115,372

(3,208,930)
2,030,605

(1,543,054)
3,032,414

(379,056)
587,515

(39,862,192)
38,306,576

96

(262)
1,118

(1,111)
1,158

(3,328)
4,865

(57,221)
56,896

(61,922)
64,133

(1,465,349)

(2,080,363)

645,450

826,151

(1,176,788)

1,489,035

208,459

(1,553,405)

Business Review
Responsibility

Gross settled derivatives

Derivative financial liabilities
Trading derivatives
Derivatives:
Outflow
Inflow
Hedging derivatives
Derivatives:
Outflow
Inflow

>1 to 3
months
RM000

Performance

Net settled derivatives

Derivative financial liabilities
Trading derivatives
Foreign exchange derivatives
Interest rate derivatives
Equity related derivatives
Hedging derivatives
Interest rate derivatives

Up to 1
month
RM000

Strategy

Group
2011

Who We Are

3.

Leadership
Governance
Financial & Others
AGM Information

392

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

45. Financial risk management POLICIES (contd.)

(e)

Liquidity risk management (contd.)

3.

Contractual maturity of financial liabilities on an undiscounted basis (contd.)

The table below analyses the Groups and the Banks derivative financial liabilities that will be settled on a net basis into relevant maturity
groupings by remaining contractual maturities at the end of the reporting period. The amounts disclosed in the table are the contractual
undiscounted cash flow.

Bank
2011
Net settled derivatives
Derivative financial liabilities
Trading derivatives
Foreign exchange derivatives
Interest rate derivatives
Equity related derivatives
Hedging derivatives
Interest rate derivatives

Bank
2011
Gross settled derivatives
Derivative financial liabilities
Trading derivatives
Derivatives:
Outflow
Inflow
Hedging derivatives
Derivatives:
Outflow
Inflow

Up to 1
month
RM000

>1 to 3
months
RM000

>3 to 6
months
RM000

>6 months
to 1 year
RM000

>1 to 3
years
RM000

>3 to 5
years
RM000

Over 5
years
RM000

Total
RM000

(565)
(11,523)

(3,463)
(41,937)

(1,426)
(25,997)
19

(4,946)
(60,199)
18

(20)
(108,158)
2,231

(103)
(11,471)
(10,588)

(210)
(83,767)

(10,733)
(343,052)
(8,320)

(8,447)

(18,999)

(22,355)

(43,975)

(102,859)

(23,937)

1,001

(219,571)

(20,535)

(64,399)

(49,759)

(109,102)

(208,806)

(46,099)

(82,976)

(581,676)

(20,464,241)
18,987,956

(7,897,455)
5,833,390

(1,855,706)
2,627,313

(1,289,005)
2,115,131

(3,208,930)
2,030,605

(1,543,054)
3,032,414

(379,057)
587,515

(36,637,448)
35,214,324

96

(262)
1,118

(1,111)
1,158

(3,328)
4,865

(57,221)
56,896

(61,922)
64,133

(1,476,189)

(2,064,065)

772,463

826,173

(1,176,788)

1,489,035

208,458

(1,420,913)

FINANCIAL STATEMENTS

Maybank Annual Report 2011

393
At A Glance
Our Perspective

45. Financial risk management POLICIES (contd.)

(f) Operational risk management

The Operational Risk Management team, as the second line of defence, is responsible for the formulation and implementation of operational risk
management framework within Maybank Group, which encompasses the operational risk governance structure, policies and processes. The above
also include the maintenance and analysis of operational loss database, development and implementation of various operational risk management
tools and methodologies to identify, measure, mitigate and monitor operational risks.

Strategy

Finally, Internal Audit acts as the third line of defence by overseeing compliance in respect of day-to-day management of operational risks at all
organisational levels by providing independent assurance in respect of the overall effectiveness of the operational risk management process.

Further information on the risk management practices of the Group are disclosed in the Section on Risk Management in the Annual Report.

FAIR VALUES OF FINANCIAL ASSETS AND LIABILITIES

The on-balance sheet financial assets and financial liabilities of the Group and the Bank whose fair values are required to be disclosed in accordance
with FRS132 comprise all its assets and liabilities with the exception of investments in subsidiaries, investments in associates, property, plant and
equipment, provision for current and deferred taxation, life, general takaful and family takaful fund assets, and life, general takaful and family takaful
fund liabilities. The information on the fair values of financial assets and financial liabilities of the life, general takaful and family takaful fund is
disclosed in Note 54.

The estimated fair values of those on-balance sheet financial assets and financial liabilities as at the balance sheet date approximate their carrying
amounts as shown in the balance sheets, except for the following financial assets and liabilities:

Governance

For loans, advances and financing to customers, where such market prices are not available, various methodologies have been used to estimate the
approximate fair values of such instruments. These methodologies are significantly affected by the assumptions used and judgements made
regarding risk characteristics of various financial instruments, discount rates, estimates of future cash flows, future expected loss experience and
other factors. Changes in the assumptions could significantly affect these estimates and the resulting fair value estimates. Therefore, for a significant
portion of the Groups and the Banks financial instruments, including loans, advances and financing to customers, their respective fair value
estimates do not purport to represent, nor should they be construed to represent, the amounts that the Group and the Bank could realise in a sale
transaction at the reporting date. The fair value information presented herein should also in no way be construed as representative of the
underlying value of the Group and the Bank as a going concern.

Leadership

Responsibility

Financial instruments comprise financial assets, financial liabilities and also derivatives. The fair value of a financial instrument is the amount at
which the instrument could be exchanged or settled between knowledgeable and willing parties in an arms length transaction, other than in a
forced or liquidation sale. The information presented herein represents best estimates of fair values of financial instruments at the reporting date.

Business Review

Performance

Under the Groups three lines of defence concept, risk taking units (Business/Support Sectors) constitute an integral part of the operational risk
management framework and are primarily responsible for the management of day-to-day operational risks inherent in their respective business
and functional areas. They are responsible for putting in place and maintaining their respective operational manuals and ensuring that activities
undertaken by them comply with Maybank Groups operational risk management framework.

Who We Are

46.

Financial & Others

AGM Information

394

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

46. FAIR VALUES OF FINANCIAL ASSETS AND LIABILITIES (contd.)

2011

Group

Carrying
value
RM000

2010
Fair value
RM000

Carrying
value
RM000

Fair value
RM000

Financial assets
Securities held-to-maturity
Loans, advances and financing*

9,638,714
9,809,443
8,942,708
9,118,305
258,247,634 283,556,227 209,393,607 209,411,458

Financial liabilities
Deposits from customers
Deposits and placements of banks and other financial institutions
Recourse obligation on loans sold to Cagamas
Borrowings
Subordinated obligations
Capital securities

281,976,379 282,699,577 236,909,788 236,927,836

33,303,655 38,100,861
23,257,868
23,177,261
528,285
570,332
649,977
687,193
5,447,120
5,447,120
2,824,864
2,831,215
10,800,539
9,576,819
8,069,116
7,751,326
6,120,774
7,156,337
5,978,752
6,712,227
2011

Bank

Carrying
value
RM000

2010
Fair value
RM000

Carrying
value
RM000

Fair value
RM000

Financial assets
Securities held-to-maturity
Loans, advances and financing*

8,339,494
8,508,551
7,855,322
8,029,524
184,752,617 209,580,430 154,236,342 154,111,646

Financial liabilities
Deposits from customers
Deposits and placements of banks and other financial institutions
Recourse obligation on loans sold to Cagamas
Borrowings
Subordinated obligations
Capital securities

201,465,408 200,875,634 175,379,741 175,369,226

31,441,675 30,848,183
22,929,822
22,854,214
528,285
570,332
649,977
687,193
3,420,499
3,420,499
2,098,317
2,098,317
9,509,786
9,279,515
8,069,116
7,751,326
6,120,774
7,156,337
5,978,752
6,712,227

The collective impairment/general allowance for the Group and the Bank amounting to RM4,271,208,000 (2010: RM3,838,541,000) and RM3,179,773,000
(2010: RM2,766,757,000) respectively have been added back to arrive at the carrying value of the loans, advances and financing.

The following methods and assumptions are used to estimate the fair values of the following classes of financial instruments:

FINANCIAL STATEMENTS

Maybank Annual Report 2011

395
At A Glance
Our Perspective

46. FAIR VALUES OF FINANCIAL ASSETS AND LIABILITIES (contd.)

(f)

Recourse obligation on loans sold to Cagamas

The fair values of those financial instruments with remaining

maturities of less than one year approximate their carrying values
due to their relatively short maturities. For those financial
instruments with maturities of more than one year, the fair values
are estimated based on discounted cash flows using applicable
prevailing market rates of similar remaining maturities at the
reporting date.

The fair values of recourse obligation on housing and hire

purchase loans sold to Cagamas are determined based on the
discounted cash flows of future instalment payments at
applicable prevailing Cagamas rates as at reporting date.

(g)

Subordinated obligations

The fair values of subordinated obligations are estimated by

discounting the expected future cash flows using the applicable
prevailing interest rates for borrowings with similar risks profiles.

(h)

Derivative financial instruments

Fair values of non-option derivative instruments are normally

zero or negligible at inception and the subsequent change in
value is favourable (assets) or unfavourable (liabilities) as a result
of fluctuations in market interest rates, foreign exchange rates or
other applicable reference rates relative to their terms. Fair value
of derivatives which are net purchased or written options are
equivalent to the market premiums paid or received at inception,
and the subsequent change in value would increase or reduce
the fair values of these derivative assets (for net purchased
options) or derivatives liabilities (for net written options) as a
result of fluctuation of the underlying market rates.The fair values
of the Groups and the Banks derivative instruments are
estimated by reference to quoted market prices. Internal models
are used where no market price is available. The derivatives held
by the Group and the Bank are already carried at fair values on
the statements of financing position.

(c)

Securities

Fair values of securities that are actively traded is determined by

quoted bid prices. For non-actively traded securities, independent
broker quotations are obtained. Fair values of equity securities
are estimated using a number of methods, including earnings
multiples and discounted cash flow analysis. Where discounted
cash flow technique is used, the estimated future cash flows are
discounted using applicable prevailing market or indicative rates
of similar instruments at the reporting date.

The fair values of variable rate loans are estimated to

approximate their carrying values. For fixed rate loans and Islamic
financing, the fair values are estimated based on expected future
cash flows of contractual instalment payments, discounted at
applicable and prevailing rates at reporting date offered for
similar facilities to new borrowers with similar credit profiles. In
respect of impaired or non-performing loans, the fair values are
deemed to approximate the carrying values which are net of
interest/income-in-suspense and specific allowance for bad and
doubtful debts and financing.

(e)

Deposits from customers, deposits and placements of banks

and other financial institutions

The fair values of deposits payable on demand and deposits and

placements with maturities of less than one year approximate
their carrying values due to the relatively short maturity of these
instruments. The fair values of fixed deposits and placements
with remaining maturities of more than one year are estimated
based on discounted cash flows using applicable rates currently

AGM Information

Financial & Others

Loans, advances and financing

Governance

(d)

Leadership

Deposits and placements with financial institutions, securities

purchased under resale agreement, obligations on securities
sold under repurchase agreement and bills and acceptances
payable

Responsibility

(b)

Business Review

The carrying amount approximates fair value due to the relatively

short maturity of the financial instruments.

Performance

offered for deposits and placements with similar remaining

maturities. The fair value of Islamic deposits are estimated to
approximate their carrying values as the profit rates are
determined at the end of their holding periods based on the
actual profits generated from the assets invested.

Strategy

Cash and short-term funds

Who We Are

(a)

396

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

47. CAPITAL AND OTHER COMMITMENTS

(a)

Capital expenditure approved by directors but not provided for in

the financial statements amounted to:
Group
2011
RM000

Approved and
contracted
for
Approved but
not
contracted
for

2011
RM000

2010
RM000

506,118

185,816

410,884

176,730

207,846

149,181

207,846

147,810

713,964

334,997

618,730

324,540

Group

(b)
Uncalled
capital in
shares of
subsidiaries

Bank
2010
RM000

The quality and composition of capital are key factors in the evaluation
of the Groups capital adequacy. The Group strongly emphasises the
quality of its capital and, accordingly, holds a significant amount of its
capital in the form of equity.

The Groups capital management policies are to diversify its sources of

capital; to allocate capital efficiently, guided by the need to maintain a
prudent relationship between available capital and the risks of its
underlying businesses; and to meet the expectations of key
stakeholders, including investors, regulators and rating agencies.

Capital management plans are drawn up annually covering at least a

three year horizon and are approved by the Board. The capital
management plan ensures that adequate levels of capital and an
optimum mix of the different components of capital are maintained by
the Group to support its business strategy.

In its pursuit of an efficient and healthy capital structure, the following

initiatives were undertaken by the Group:

Bank

2011
RM000

2010
RM000

2011
RM000

2010
RM000

150

150

A strong capital position is essential to the Groups business strategy

and competitive position. The Groups capital strategy focuses on
long-term stability, which enables it to build and invest in market
leading businesses. The Group considers the implications on the capital
strength prior to making any decision on future business activities. In
addition to considering the earnings outlook, the Group evaluates all
sources and uses of capital and makes decisions to vary any source or
use to preserve the Groups capital strength.
The Groups objective in managing its capital resources is to maintain
sufficient and adequate capital resources given current and future
requirements. The Group manages requirements for capital from
organic and inorganic growth which ensures that resources remain in
excess of minimum regulatory requirements and internal targets (which
provide a buffer above minimum requirements).
The Groups capital management activities seek to maximise
shareholders value by optimising the level and mix of its capital
resources.

Maintain Core Capital Ratio and Risk Weighted Capital Ratio at

levels sufficiently above the current minimum requirements of the
relevant regulatory;
Support the Groups credit rating;
Ensure regulated subsidiaries can meet their minimum capital
requirements;
Allocate capital to businesses to support the Groups strategic
objectives and optimise returns on capital;
Remain flexible to take advantage of future growth opportunities;
Build and invest in businesses, even in a reasonably stressed
environment;
Optimise returns to shareholders; and
Withstand capital demands under market shocks and stress
conditions.

48. CAPITAL MANAGEMENT

The Groups capital management objectives are to hold capital

sufficient to:

(a)

Gearing up of capital

The Group issued various capital instruments including

subordinated Bonds/certificates/Notes, equity, Non-Innovative
Tier 1 Capital Securities, and Innovative Tier 1 Capital Securities
to strengthen its capital position as disclosed in Notes 27 and 28
to the financial statements.

b)

Dividend reinvestment plan (DRP) and Basel lll

The Bank had on 25 March 2010 announced a recurrent and

optional DRP that allows shareholders of the Bank to reinvest
electable portions of their dividends into new ordinary shares of
RM1.00 each in the Bank. The DRP is part of the Banks strategy to
preserve equity capital ahead of the regulations under Basel lll as
well as to grow its businesses whilst providing healthy dividend
income to shareholders. Details of the DRP is disclosed in Note
29(b) and dividend payout is disclosed in Note 43.

FINANCIAL STATEMENTS

Maybank Annual Report 2011

397
At A Glance

Equity capital requirements are expected to increase moving

forward under Basel lll, the rules of which were published in
December 2010 by the Basel Committee on Banking Supervision
(BCBS). The Basel lll reforms increases the minimum quantity
and quality of capital which the Group is obliged to maintain and
expect systemically important banks to have higher loss
absorbing capacity beyond the minimum standards. These
proposed reforms are expected to be implemented by the
beginning of 2013. However the requirements are subject to a
series of transitional arrangements and will be phased in over a
period of time, to be fully effective by 2019. The approach and
local implementation of Basel lll in Malaysia will depend on Bank
Negara Malaysia (BNM)s pronouncement to the minimum
capital standards set by the BCBS.

Where risks may not be easily quantified due to the lack of

commonly accepted risk measurement techniques, experts
judgment is used to determine the size of risk. The focus of the
Groups ICAAP would be on the qualitative controls in managing
such risks. These qualitative measures include the following:

The Groups stress testing programme is embedded in the risk

and capital management process of the Group and it is a key
focus area during the capital planning and business planning
processes. The programme serves as a risk and capital
management tool to understand our risk profile under extreme
but plausible conditions. Such conditions may arise from
economic, political and environmental factors.

General

The Groups the overall capital adequacy in relation to its risk

profile is assessed through a process articulated in the ICAAP. The
ICAAP Framework has been formalised and approved by the
Board of Directors and has been implemented within the
organisation to ensure all material risks are identified, measured
and reported, and adequate capital levels consistent with the risk
profiles are held.

Under Maybank Group Stress Test Framework, which was

approved by the Board of Directors, we consider the potential
unfavourable effects of stress scenarios on the Groups
profitability, asset quality, risk weighted assets and capital
adequacy.

Specifically, the stress test programme is designed to:

Under the Groups ICAAP methodology, the following risk types

are identified and measured:

Stress test themes reviewed by the Stress Test Working Group in

the past include a repeat of Asian Financial Crisis, US dollar
depreciation, pandemic flu, asset price collapse, interest rate
hikes, a global double-dip recession scenario and Japan disasters
among others.

The Stress Test Working Group, which comprises of business and

risk management teams, tables the stress test reports at the
Senior Management and Board committees and discusses the
results with regulators on a regular basis.

AGM Information

Risks captured under Pillar 1 (credit risk, market risk and

operational risk).
Risks not fully captured under Pillar 1 (e.g. model risk).
Risks not taken into account by Pillar 1 (e.g. interest rate risk
in banking book, liquidity risk, business/strategic risk,
reputational risk and credit concentration risk).
External factors, including changes in economic environment,
regulations, and accounting rules.

Financial & Others

Comprehensive risk assessment under ICAAP Framework

Highlight the dynamics of stress events and their potential

implications on the Groups trading and banking book
exposures, liquidity positions and likely reputational impacts.;
Produce stress results as inputs into the Groups ICAAP in the
determination of capital adequacy and capital buffers; and
Identify proactively key strategies to mitigate the effects of
stress events.

Governance

(b)

Leadership

In line with BNMs Guideline on ICAAP, the Groups ICAAP closely

integrates the risk and capital assessment processes. The ICAAP
framework is designed to ensure that adequate levels, including
capital buffers, are held to support the Groups current and
projected demand for capital under existing and stressed
conditions. Regular ICAAP reports are submitted to the Executive
Risk Committee and the Board Risk Management Committee for
comprehensive review of all material risks faced by the Group
and assessment of the adequacy of capital to support them.

Responsibility

Regular stress testing

Business Review

(c)

49. INTERNAL CAPITAL ADEQUACY ASSESSMENT

PROCESS (ICAAP)
(a)

Adequate governance process;

Adequate systems, procedures and internal controls;
Effective risk mitigation strategies; and
Regular monitoring and reporting.

Performance

Strategy

Dividend reinvestment plan (DRP) and Basel lll (contd.)

In line with industry best practices, the Group shall quantify its
risks using methodologies that have been reasonably tested and
deemed to be accepted in the industry.

Who We Are

(b)

Our Perspective

48. CAPITAL MANAGEMENT (contd.)

398

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

50. CAPITAL ADEQUACY

(a)

Compliance and application of capital adequacy ratios

On 29 June 2010, the Bank and its subsidiary, Maybank Islamic Berhad (MIB) have received approval from Bank Negara Malaysia (BNM) to migrate
to Internal Ratings-Based (IRB) approach for credit risk under Basel II Risk Weighted Capital Adequacy Framework (RWCAF) from 1 July 2010 onwards.

With effect from 1 January 2010, for Maybank Investment Bank Berhad and 1 July 2010 for other regulated entities, the capital adequacy ratios are
computed as follows:
(a)

Group, Bank and Maybank Islamic Berhad (MIB) ratios are computed in accordance with BNMs Basel II RWCAF issued on 1 April 2010 as
follows:
(i) Credit risk under Internal-Ratings Based Approach
(ii) Market risk under Standardised Approach
(iii) Operational risk under Basic Indicator Approach

The minimum regulatory capital adequacy requirement remains at 8% for the risk-weighted capital ratios.

(b)

Maybank Investment Bank Berhad (Maybank IB) on a standalone basis is computed in accordance with BNMs Basel II RWCAF issued on 1
April 2010 under Standardised Approach for credit and market risks, whereas operational risk is under the Basic Indicator Approach. The
minimum regulatory capital adequacy requirement is 8% for the risk-weighted capital ratios.

(c)

PT Bank Internasional Indonesia Tbk (BII) on a standalone basis is computed in accordance with local requirements, which is based on the
Basel I capital accord. The minimum regulatory capital adequacy requirement is 8% for the risk-weighted capital ratios. However, for
disclosure at Maybank Group level, the computation was based on the capital adequacy rules of the overseas jurisdiction (parent company)
namely Maybank Group, using Basel II RWCAF rules, as BII is considered a significant overseas subsidiary.

The comparative capital adequacy ratios for 30 June 2010 were in compliance with Basel I Risk-Weighted Capital Adequacy Framework and have
not been restated in accordance with Para 7.2(1) of the Basel II RWCAF, which does not require disclosures in respect of previous period upon first
time adoption.

(b)

The capital adequacy ratios of the Group and the Bank

The proposed final dividend consisting of an electable portion of 28 sen (21 sen net per ordinary share) can be elected to be reinvested in new
ordinary shares in accordance with the Dividend Reinvestment Plan as disclosed in Note 29(b).

As such, there will be a range of extreme possibilities that the full electable portion is reinvested in new ordinary shares or the full electable
portion is not reinvested but paid in cash.

Based on the above, the range of capital adequacy ratios of the Group and the Bank before and after deducting the proposed dividend are as follows:

The capital adequacy ratios of the Group and the Bank as at 30 June:
Group
Basel II

Bank

2011

2010

2011

2010

(i)

Before deducting proposed dividend*:

Core capital ratio
Risk-weighted capital ratio

11.93%
15.45%

13.44%
13.44%

(ii)

After deducting proposed dividend:

Core capital ratio
full electable portion paid in cash
full electable portion reinvested

11.21%
11.84%

12.49%
13.32%

Risk-weighted capital ratio

full electable portion paid in cash
full electable portion reinvested

14.72%
15.36%

12.49%
13.32%

FINANCIAL STATEMENTS

Maybank Annual Report 2011

399
At A Glance
Our Perspective

50. CAPITAL ADEQUACY (contd.)

(b)

The capital adequacy ratios of the Group and the Bank (contd.)

Basel I

2011

2010

(iii) Before deducting proposed dividend*:

Core capital ratio

Risk-weighted capital ratio

11.06%
14.67%

15.02%
15.02%

(iv) After deducting proposed dividend:

Core capital ratio
full electable portion paid in cash
full electable portion reinvested

10.10%
10.97%

13.78%
14.91%

Risk-weighted capital ratio

full electable portion paid in cash
full electable portion reinvested

13.71%
14.58%

13.78%
14.91%

Components of Tier 1 and Tier 2 capital:

Group
2010
RM000

2011
RM000

2010
RM000

29,473,971

27,054,775

32,915,616

30,237,234

Tier 2 capital
Subordinated obligations
Collective (2010: general) allowance for bad and doubtful debts4

10,732,475
995,632

8,069,116
3,838,541

9,458,980
449,884

8,069,116
3,015,865

Total Tier 2 capital

11,728,107

11,907,657

9,908,864

11,084,981

Total capital
Less: Investment in subsidiaries and associates2
Less: Other deductions:

Liquidity reserve

Securitisation exposure held in the banking book

Excess of EL over EP3

41,202,078
(2,924,965)

38,962,432 42,824,480
41,322,215
(3,065,249) (17,457,434) (13,009,007)

Capital base

38,150,608

(1,492)
(16,796)
(108,217)

(18,060)

35,879,123

(1,492)
(16,796)
(37,149)
25,311,609

(18,051)

28,295,157

AGM Information

Total Tier 1 capital

7,077,983
5,903,497
12,506,193
5,978,752
(1,148,176)
(81,015)

Financial & Others

7,077,983
7,478,206
5,903,497
8,583,711
13,813,992 11,790,065
5,978,752
6,065,486
(1,564,963)
(920,837)
(4,154,486)
(81,015)

Governance

7,478,206
8,583,711
14,779,856
6,065,486
(1,383,388)
(6,049,900)

Leadership

Tier 1 capital
Paid-up share capital
Share premium
Other reserves
Capital securities
Less: Deferred tax assets1

Goodwill1

Responsibility

2011
RM000

Bank

Business Review

In arriving at the capital base used in the ratio calculations of the Group and the Bank, the proposed dividends for respective financial years
were not deducted.

Performance

2010

Strategy

2011

(c)

Bank

Who We Are

Group

400

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

50. CAPITAL ADEQUACY (contd.)

(c)

Components of Tier 1 and Tier 2 capital: (contd.)

Under Bank Negara Malaysia Guidelines, deferred tax and goodwill are required to be excluded from Tier I capital.

Excludes the cost of investment in subsidiary companies and associates, except for: (i) Myfin Berhad of RM18,993,759, as its business, assets and
liabilities have been transferred to the Bank; (ii) Maybank International (L) Ltd. of RM27,060,000, as its asset are included in the Banks
risk-weighted assets. For the Group, the cost of investment in insurance companies and associates are deducted from capital base.

EP is defined as eligible provision and EL is defined as expected loss.

Excluding collective allowance for certain loans, advances and financing for current financial year.

The capital adequacy ratios of the Group consist of capital base and risk-weighted assets derived from consolidated balances of the Bank and its
subsidiaries, excluding the investments in insurance entities and associates.

The capital adequacy ratios of the Bank consist of capital base and risk-weighted assets derived from the Bank and its wholly-owned offshore
banking subsidiary company, Maybank International (L) Ltd., excluding the cost of investment in subsidiary companies and associates (except for
Myfin Behad and Maybank International (L) Ltd. as disclosed above).

(d)

The capital adequacy ratios of the banking subsidiaries of Group are as follows:
Maybank
PT Bank
Maybank Investment Internasional
Islamic
Bank
Indonesia
Berhad
Berhad
Tbk
30 June 2011
Before deducting interim dividends:
Core capital ratio
Risk-weighted capital ratio

10.31%
13.02%

24.72%
24.72%

13.06%

After deducting interim dividends:

Core capital ratio
Risk-weighted capital ratio

9.46%
12.17%

24.72%
24.72%

13.06%

30 June 2010
Before deducting interim dividends:
Core capital ratio
Risk-weighted capital ratio

9.14%
10.66%

35.60%
37.37%

14.87%

After deducting interim dividends:

Core capital ratio
Risk-weighted capital ratio

8.57%
10.09%

35.60%
37.37%

14.87%

FINANCIAL STATEMENTS

Maybank Annual Report 2011

401
At A Glance
Our Perspective

50. CAPITAL ADEQUACY (contd.)

(e)

The breakdown of Assets and Credit Equivalent values (including Off-Balance Sheet items) according to Risk-Weights is as follows:

Group
RM000

Bank
RM000

3,753,922
23,571,746

1,040,223

21,381,949

Total risk-weighted assets for credit risk

Total risk-weighted assets for credit risk absorbed by Malayan Banking
Berhad*
Total risk-weighted assets for market risk
Total risk-weighted assets for operational risk
Additional risk-weighted assets due to capital floor

207,764,624 160,841,302

27,325,668

1,040,223

21,381,949

156,475
476,309

270,737
3,215,865

Total risk-weighted assets

246,979,733 188,272,244

1,673,007

24,868,551

9,692,832
17,738,110

(206,402)
149,810
2,334,044
7,154,554
36,757,674

In accordance with BNMs guideline on the recognition and measurement of Restricted Profit Sharing Investment Account (RPSIA) as Risk
Absorbent, the credit risk on the assets funded by the RPSIA are excluded from the risk weighted capital ratio (RWCR) calculation.

Group
RM000

Bank
RM000

28,000
375,211
2,640,748

31,473,796

88,944
1,446
22,658
311,157
90,718

Total risk-weighted assets for credit risk

Total risk-weighted assets for market risk
Total risk-weighted assets for operational risk

217,453,559 164,912,341
27,081,304
23,431,606

34,517,755
483,259

514,923
112,576
425,635

17,053,004
173,353
965,181

Total risk-weighted assets

244,534,863 188,343,947

35,001,014

1,053,134

18,191,538

Governance

35,853
2,668
6,812,838
7,104,318
18,129,592
14,603,632

192,475,276 143,201,723

Leadership

0%
10%
20%
50%
75%
100%
150%

Responsibility

At 30 June 2011 Basel I

Maybank
PT Bank
Maybank Investment Internasional
Islamic
Bank
Indonesia
Berhad
Berhad
Tbk
RM000
RM000
RM000

Business Review

15,991,249
23,223,860

Performance

60,236,549 31,459,666
147,528,075 129,381,636

Strategy

Standardised Approach exposure

Internal Ratings-Based Approach exposure after scaling factor

Who We Are

At 30 June 2011 Basel II

Maybank
PT Bank
Maybank Investment Internasional
Islamic
Bank
Indonesia
Berhad
Berhad
Tbk
RM000
RM000
RM000

Financial & Others

AGM Information

402

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

51. SEGMENT INFORMATION

(b)

Segment information are presented in respect of the Groups business

segments and geographical locations.
(i)

By business segments

The Group determines and presents operating segments based

on information provided to the board and senior management of
the Group.

The Group is organised into three (3) segments based on services

and products available within the group resulting from the
change in New House of Maybank commencing 1 July 2010 as
follows. Resulting from the change, the comparative segment
information has been restated to conform with the current years
presentation.
(a)

Consumer banking
Consumer banking comprises the full range of
products and services offered to individuals in
Malaysia, including savings and fixed deposits,
remittance services, current accounts, consumer loans
such as housing loans and personal loans, hire
purchases, unit trusts, bancassurance products and
credit cards.

(ii)

Small, Medium Enterprise (SME) Banking

Small, Medium Enterprise banking comprises the full
range of products and services offered to small and
medium enterprises in Malaysia. The products and
services offered include long-term loans such as
project financing, short-term credit such as overdrafts
and trade financing, and fee-based services such as
cash management and custodian services.

(iii) Business Banking

Business banking comprises the full range of products
and services offered to commercial enterprises in
Malaysia. The products and services offered include
long-term loans such as project financing, short-term
credit such as overdrafts and trade financing, and
fee-based services such as cash management and
custodian services.

(i)

Corporate Banking Malaysia

Corporate Banking comprises the full range of
products and services offered to business customers
in the region, ranging from large corporate and the
public sector. The products and services offered
include long-term loans such as project financing,
short-term credit such as overdrafts and trade
financing, and fee-based services such as cash
management and custodian services.

(ii)

Global Markets Malaysia

Global markets comprise the full range of products
and services relating to treasury activities and
services, including foreign exchange, money market,
derivatives and trading of capital market.

(iii) Investment banking (Maybank IB and Kim Eng Group)

Investment banking comprises the investment
banking and securities broking business. This
segment focuses on business needs of mainly large
corporate customers and financial institutions. The
products and services offered to customers include
corporate, advisory services, bond issuance, equity
issuance, syndicated acquisitions advisory services,
debt restructuring advisory services, and share and
futures dealings.

Community Financial Services (CFS)

(i)

Global Wholesale Banking (GWB)

(c)

Insurance, Takaful and Asset Management

Insurance, takaful and asset management comprise the

business of underwriting all classes of general and life
insurance businesses, offshore investment life insurance
business, general takaful and family takaful businesses,
asset and fund management, nominee and trustee services
and custodian services.

(d)

International banking

On the international front, the domestic CFS business is

driven in-country whilst the wholesale banking for each
country has a reporting line to the Global Wholesale
Banking (GWB). For purpose of the management
information reporting, the GWB performance is shown
separately and comprises Corporate Banking, and Global
Market in Malaysia as well as the investment banking
business and the international banking performance
comprises both the wholesale banking and CFS banking
outside of Malaysia for example, Singapore and Indonesia.

FINANCIAL STATEMENTS

Maybank Annual Report 2011

403
At A Glance
Our Perspective

51. SEGMENT INFORMATION (contd.)

(i)

By business segments (contd.)

Who We Are

Business Segments
GWB
Global
Markets
RM000

Net interest income and Islamic

banking income:
external
Inter-segment

4,659,970

852,220

702,770

85,831
3,069

2,760,233
(3,733)

70,952
19,848

(384,173)
(19,184)

8,747,803

4,659,970

852,220

702,770

88,900

2,756,500

90,800

(403,357)

8,747,803

4,659,970

852,220

702,770

88,900

2,756,500

90,800

(403,357)

8,747,803

1,564,860

427,280

865,480

393,214

1,421,300

557,306
276,682

(834,161)

557,306
4,114,655

6,224,830
(3,285,296)

1,279,500
(205,618)

1,568,250
(145,253)

Net interest income and Islamic

banking income
Net income from insurance
business
Non-interest income

482,114
4,177,800
(338,509) (2,270,962)

924,788 (1,237,518) 13,419,764

(406,546)
(6,652,184)

10,166

Operating Profit
Share of profits in associates

2,990,044

1,084,048

1,321,292

135,511

1,354,461
135,008

487,621

(1,237,518)

6,135,459
135,008

Profit before taxation and

zakat
Taxation and zakat

2,990,044

1,084,048

1,321,292

135,511

1,489,469

487,621

(1,237,518)

6,270,467
(1,650,709)

(13,382)

(544,305)

(23,825)

(502,166)

(8,072)

(6,796)

(129,955)

Profit after taxation and zakat

Non-controlling interest

4,619,758
(169,480)

Profit for the year attributable to equity holders of the Bank

4,450,278

Leadership

50,510

(101,705)

5,288

Total
RM000

Responsibility

Net income
Overhead expenses
Allowance for losses on loans,
advances and financing
Impairment losses on securities,
net

Head Office
and Others
RM000

Business Review

Corporate
Banking
RM000

Performance

Group
2011

Strategy

Insurance,
Takaful
Investment International
and Asset
Banking
Banking Management
RM000
RM000
RM000

Community
Financial
Services
RM000

Governance
Financial & Others
AGM Information

404

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

51. SEGMENT INFORMATION (contd.)

(i)

By business segments (contd.)

Business Segments
GWB

Insurance,
Takaful
Investment International
and Asset
Banking
Banking Management
RM000
RM000
RM000

Community
Financial
Services
RM000

Corporate
Banking
RM000

Global
Markets
RM000

4,631,800

693,900

827,200

25,149
3,651

2,558,828
2,172

4,631,800

693,900

827,200

28,800

4,631,800

693,900

827,200

1,497,700

361,500

Net income
Overhead expenses
Allowance for losses on loans,
advances and financing
Impairment losses on securities,
net

6,129,500
(3,122,195)

Head Office
and Others
RM000

Total
RM000

106,281
(19,001)

(637,541)
13,178

8,205,617

2,561,000

87,280

(624,363)

8,205,617

28,800

2,561,000

87,280

(624,363)

8,205,617

677,900

206,800

1,187,600

424,907
243,469

(482,289)

424,907
3,692,680

1,055,400
(140,185)

1,505,100
(98,653)

235,600
(112,709)

3,748,600
(2,038,919)

755,656
(312,873)

(1,106,652)

12,323,204
(5,825,534)

(225,363)

(422,917)

20,900

(597,474)

(1,213)

(1,226,067)

(39,830)

16,800

(23,030)

Operating Profit
Share of profits in associates

2,781,942

492,298

1,366,617

143,791

1,129,007
121,835

441,570

(1,106,652)

5,248,573
121,835

Profit before taxation and

zakat
Taxation and zakat

2,781,942

492,298

1,366,617

143,791

1,250,842

441,570

(1,106,652)

5,370,408
(1,401,958)

Group
2010
Net interest income and Islamic
banking income
external
Inter-segment

Net interest income and Islamic

banking income
Net income from insurance
business
Non-interest income

Profit after taxation and zakat

Non-controlling interest

3,968,450
(150,283)

Profit for the year attributable to equity holders of the Bank

3,818,167

(ii)

By geographical locations
The Group has operations in Malaysia, Singapore, Indonesia, Philippines, Papua New Guinea, Brunei Darussalam, Peoples Republic of China, Hong
Kong SAR, Vietnam, United Kingdom, United States of America, Cambodia and Bahrain.

With the exception of Malaysia, Singapore and Indonesia, no other individual country contributed more than 10% of the consolidated revenue
before operating expenses and of total assets.

Revenue, net interest income, profit before tax and zakat and non-current assets based on geographical locations of customers and assets
respectively are as follows:

FINANCIAL STATEMENTS

Maybank Annual Report 2011

405
At A Glance
Our Perspective

51. SEGMENT INFORMATION (contd.)

15,328,262
2,121,883
3,291,045
945,338

9,611,370
1,619,827
2,133,124
632,354

Elimination *
Group

8,012,735
312,272
326,711
71,367

21,686,528 13,996,675
(646,885)
(576,911)

6,739,512
(469,045)

8,723,085

21,039,643

13,419,764

6,270,467

8,723,085

2010
Malaysia
Singapore
Indonesia
Others

14,294,778
1,911,001
2,838,432
759,085

9,719,759
1,387,340
1,874,054
462,476

5,270,446
818,301
238,410
70,339

5,579,501
296,501
164,015
54,059

Elimination *

19,803,296
(1,243,064)

13,443,629
(1,120,425)

6,397,496
(1,027,088)

6,094,076

Group

18,560,232

12,323,204

5,370,408

6,094,076

Inter-segment revenues are eliminated on consolidation.

52. SIGNIFICANT EVENTS

Maybank has on 23 June 2010 announced the proposed conversion to Syariah Banking, and corresponding reduction of share capital of its 96.83%
owned subsidiary incorporated in Indonesia, PT Bank Maybank Indocorp (BMI), based on an earlier decision by BMIs shareholders and subject to
approval by the Indonesian central bank, Bank Indonesia (BI).

On 1 October 2010, BMI has received the approval from BI on the conversion of BMIs business activities from Conventional Banking to Syariah
Banking.

With effect from 23 September 2010, BMI has changed its name to PT Bank Maybank Syariah Indonesia (MSI) and BMIs business activities have
been converted from Conventional Banking to Syariah Banking. The performance of MSI is being reported under the Islamic Banking Scheme
(IBS) operations.

Governance

Proposed Conversion to Syariah Banking and Capital Reduction of PT Bank Maybank Indocorp (Indonesia) (Proposed Conversion)
Leadership

(a)

Responsibility

Business Review

5,251,502
888,242
289,711
310,057

Performance

Malaysia
Singapore
Indonesia
Others

2011

Strategy

Net
income
RM000

Who We Are

Operating
revenue
RM000

Profit
before
taxation Non-current
and zakat
assets
RM000
RM000

Financial & Others

AGM Information

406

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

52. SIGNIFICANT EVENTS (contd.)

(b)

(i)

Proposed Acquisition by Mayban IB Holdings Sdn Bhd

(formerly known as Aseam Credit Sdn Bhd (Mayban IB
Holdings or Offeror), a wholly-owned subsidiary of
Maybank, of an aggregate of 257,559,264 ordinary
shares in Kim Eng Holdings Ltd (Kim Eng),
representing 44.63% of the issued and paid up share
capital of Kim Eng

(ii)

Possible mandatory conditional cash offer for all the

remaining ordinary shares of Kim Eng not already
owned by Mayban IB Holdings, its related corporations
and their respective nominees (Offer Shares) subject
to completion of the Proposed Acquisition as defined
herein

On 6 January 2011, Maybank announced that Mayban IB

Holdings, a wholly-owned subsidiary of Maybank has entered
into separate conditional Share Purchase Agreements (SPAs)
with each of Mr Ronald Anthony Ooi Thean Yat (Ronald Ooi)
and Yuanta Securities Asia Financial Services Limited (Yuanta
Securities) (collectively the Vendors) (the Announcement),
pursuant to which, inter alia,:
(a)

(b)

Ronald Ooi has agreed to sell and procure the sale of, and
Mayban IB Holdings has agreed to purchase, 89,082,698
ordinary shares (RO Sale Share) in the capital of Kim Eng
Holdings Limited (Kim Eng), representing approximately
15.44% of the ordinary shares (Kim Eng Shares) in the
capital of Kim Eng in issue as at the date of the
Announcement, for an aggregate cash consideration of
Singapore Dollar (SGD) 276,156,363.80 (RO
Consideration), being SGD3.10 in cash for each RO Sale
Share; and
Yuanta Securities has agreed to sell, and Mayban IB
Holdings has agreed to purchase, 168,476,566 Kim Eng
Shares (Yuanta Sale Shares), and together with the RO
Sale Shares, (Sale Shares), representing approximately
29.19% of the Kim Eng Shares in issue as at the date of the
Announcement, for an aggregate cash consideration of
SGD522,277,354.60 (Yuanta Consideration), being SGD3.10
in cash for each Yuanta Sale Share.

The total cash consideration payable by Mayban IB Holdings for

the Sale Shares is SGD798.4 million (equivalent of approximately
RM1,899.5 million) (Aggregate Consideration).
The total cash consideration per Kim Eng Share of SGD3.10
(equivalent of approximately RM7.37) was arrived at on a willing
buyer-willing seller basis after taking into consideration the
following:
(i)

the unaudited consolidated shareholders equity of Kim Eng

for the 9-month financial period ended 30 September 2010
of SGD937.64 million (equivalent of approximately
RM2,230.65 million);

(ii)

the price-to-book multiple of 1.91 times and 1.91 times

based on the consideration price per Kim Eng of SGD3.10
(equivalent of approximately RM7.37) and the audited
consolidated shareholders equity of SGD938.98 million
(equivalent of approximately RM2,233.83 million) as of 31
December 2009 and the unaudited consolidated
shareholders equity of SGD937.64 million (equivalent of
approximately RM2,230.65 million) for the 9-month financial
period ended 30 September 2010 respectively;

(iii) a premium of 18.3% to the five (5)-day volume-weighted

average market price of Kim Eng Shares of SGD2.62 up to
and including 5 January 2011, being the last trading day of
Kim Eng Shares on the SGX-ST preceding the date of the
Announcement; and
(iv) earnings potential of Kim Eng and its subsidiaries (Kim Eng
Group) and the potential benefits to Maybank Group.

There are no liabilities including contingent liabilities and

guarantees to be assumed by Maybank under the Proposed
Acquisition, other than those arising in the ordinary course of
business of Kim Eng in the event the financial statements of Kim
Eng Group are consolidated into financial statements of Maybank
Group after completion of the Proposed Acquisition.

Upon completion of the SPAs, Maybank through Mayban IB

Holdings will emerge as the single largest shareholder of Kim
Eng. As Mayban IB Holdings shareholdings in Kim Eng exceeds
30% of the issued and paid-up share capital of Kim Eng upon
completion of the Proposed Acquisition, Mayban IB Holdings is
obliged to extend a mandatory general offer for all the Kim Eng
Shares, other than those already owned by Mayban IB Holdings,
its related corporations and their respective nominees, pursuant
to Section 139 of the Securities and Futures Act, Chapter 289 and
Rule 14.1 of the Singapore Code on Take-overs and Mergers.

On 6 January 2011, Nomura Singapore Limited (Nomura)

announced for and on behalf of Mayban IB Holdings that Mayban
IB Holdings intends to make a mandatory conditional cash offer
(Offer) for all the Kim Eng Shares, other than the Kim Eng
Shares already owned by Mayban IB Holdings, its related
corporations and their respective nominees (Offer Shares),
subject to the completion of the Proposed Acquisition, on the
following terms:
(i)

For each Offer Share : SGD3.10 in cash (Offer Price)

(ii)

The Offer Shares will be acquired (i) fully paid, (ii) free from
all claims, charges, mortgages, liens, options, equity, power
of sale, hypothecation, retention of title, rights of preemption, rights of first refusal or other third party rights or
security interests of any kind or any agreements,
arrangements or obligations to create any of the foregoing
and (iii) together with all rights, benefits and entitlements
attached thereto as at the date of the Announcement and
hereafter attaching thereto, including the right to receive
and retain all dividends, rights and other distributions (if
any) declared, paid or made by Kim Eng on or after the
date of the Announcement.

FINANCIAL STATEMENTS

Maybank Annual Report 2011

407
At A Glance

(contd.)

If any dividend, rights or other distribution is announced,

declared, paid or made by Kim Eng on or after the date of
the Announcement, the Offer Price will be reduced by the
amount of such dividend, rights or other distribution.

The Proposed Acquisition will not have any effect on the issued
and paid-up share capital, the substantial shareholders
shareholding and the consolidated net assets per share position
of Maybank as the Proposed Acquisition will be satisfied entirely
by cash.

Capital Nomura Securities Public Company Limited has

announced, on behalf of Mayban IB Holdings, the intention of
Mayban IB Holdings to make an offer to acquire all the issued
shares in Kim Eng Securities (Thailand) Public Company Limited
(KEST) (Thai Tender Offer) (form 247-3) at an offer price of
Baht16.00 for each share in KEST.

In addition to the above, Kim Eng had on 29 June 2011 entered

into a conditional sale and purchase agreement (CSPA) with ATR
Holdings, Inc. (ATRH) in relation to the sale by ATRH, and the
purchase by Kim Eng, of 344,427,134 issued common shares in
ATR Kim Eng Financial Corporation (ATRKE), representing
approximately 32.24% of the total number of issued common
shares of ATR KE (ATR KE Shares).

The execution of the CSPA will trigger an obligation by Kim Eng

to undertake a mandatory tender offer for the ATR KE Shares
other than those already owned, controlled or agreed to be
acquired by Kim Eng.

AGM Information

On 25 July 2011, Maybank announced that following the close of

the Thai Tender Offer on 18 July, Mayban IB Holdings received
valid acceptance of approximately 27.99% of KEST shares. As
such, the Mayban IB Holdings groups aggregate shareholding in
KEST is approximately 83.74%.

Financial & Others

On 10 May 2011, Maybank announced that the Proposed

Acquisition had been completed.

Governance

On 4 July 2011, pursuant to Rule 28.1 of the Singapore Code on

Take-overs and Mergers, on the Final Closing Date, Mayban IB
Holdings has received valid acceptances in respect of an
aggregate of 270,948,494 Kim Eng Shares, representing
approximately 46.95% of the Kim Eng Shares in issue as at 4 July
2011. On 29 July 2011, Maybank announce that Mayban IB
Holdings had on even date exercise the right of compulsory
acquisition under Section 215(1) of the Companies Act to acquire
all the Kim Eng share held by dissenting shareholders. Following
the compulsory acquisition Kim Eng would become a wholly
owned company of Mayban IB holdings and will be delisted from
the Official List of the SGX-ST on 4 August 2011.

Leadership

Upon completion of the Proposed Acquisition, Mayban IB

Holdings would hold approximately 50.22 per cent. of Kim Eng
and therefore, in accordance with the Notification of the
Securities and Exchange Commission No. KorChor. 53/2545,
Mayban IB Holdings would be required to make an offer for all
the issued shares in Kim Eng Securities (Thailand) Public
Company Limited (KEST) (Thai Tender Offer). Mayban IB
Holdings would, following completion, announce its intention to
make the Thai Tender Offer at an offer price of Baht 16.00 for
each share in KEST.

Responsibility

On 5 May 2011, Maybank announced that the pre-condition to

the making of the Offer (Pre-Condition), which was the
satisfaction of certain key conditions (including obtaining
approvals from Bank Negara Malaysia and the Monetary
Authority of Singapore) in accordance with the terms, and
subject to the conditions of the SPAs, had been satisfied.
Pursuant to the satisfaction of the Pre-Condition, Nomura had on
5 May 2011 announced on the SGX-ST, for and on behalf of
Mayban IB Holdings, Mayban IB Holdings firm intention to make
the Offer.

Nomura Singapore Limited (Nomura) has on 28 Jun 2011

announced on the SGX-ST, that Mayban IB Holdings has given
notice to the dissenting shareholders whereby the dissenting
shareholders may, within three (3) months (i.e. by 28 September
2011), give notice to Mayban IB Holdings requiring it to acquire
their Kim Eng Shares at the Offer Price of S$3.10 for each Kim Eng
Share and on the same terms as those offered under the Offer.
Mayban IB Holdings intends to exercise its right of compulsory
acquisition to acquire all the Kim Eng Shares held by the
dissenting shareholders on or after 29 July 2011.

Business Review

In the event the Offeror acquires 100% equity interest in Kim Eng,
the total cash consideration would be SGD1,789 million
(equivalent to approximately RM4,256 million).

Performance

As at 17 June 2011, Mayban IB Holdings had received valid

acceptances in respect of an aggregate of 260,704,264 Kim Eng
Shares, representing approximately 45.18% of the ordinary shares
(Kim Eng Shares) in the capital of Kim Eng, which, when taken
together with the Kim Eng Shares held by Mayban IB Holdings as
at the date of the offer document (Offer Document), comprise
an aggregate of 550,511,528 Kim Eng Shares representing
approximately 95.39%of the Kim Eng Shares in issue as at 17
June 2011.

Strategy

(iii) The Offer, if and when made, will be conditional upon

Mayban IB Holdings having received valid acceptances in
respect of and/or acquired such number of Offer Shares
which will result in the Offeror and parties acting in concert
with it holding such number of Shares carrying more than
50% of the voting rights attributable to the issued share
capital of Kim Eng.

Who We Are

(b)

Our Perspective

52. SIGNIFICANT EVENTS (contd.)

408

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

52. SIGNIFICANT EVENTS (contd.)

(b)

(contd.)

The acquition of ATR KE shares by Kim Eng was completed on 17

August 2011. Following the completion of the said acquition, Kim
Eng now holds approximately 74.64% of the total number of
issued common shares of ATR KE. Pursuant to the provisions of
the Implementing Rules and Regulations of the Securities
Regulation Code and any other issuance of the Securities and
Exchange Commision, the executive of the said acquition will
trigger an obligation by Kim Eng to undertake a mandatory
tender offer for the issued common shared in ATR KE other than
those already owned, controlled or agreed to be acquired by Kim
Eng.

(c)

Proposed Establishment of an Employees Share Scheme of

Up to Ten Percent (10%) of the Issued and Paid-up Ordinary
Share Capital of the Company at any Point in Time.
(Proposed ESS)

Maybank via the announcement on 19 April 2011 proposed to

establish and implement an employees share scheme (ESS) of
up to ten percent (10%) of the issued and paid-up share capital
of Maybank at any point in time for the option(s) to subscribe for
and/or award of new ordinary shares of RM1.00 each in Maybank
(Maybank Shares or Scheme Shares) to the following:
(i)

(ii)

eligible employees and executive director(s) of Maybank

and its branches and subsidiaries in Malaysia, excluding
listed subsidiaries, overseas subsidiaries and subsidiaries
which are dormant;
eligible employees of overseas branches of Maybank; and

(iii) top management and selected key eligible personnel of PT

Bank Internasional Indonesia Tbk (BII),

(collectively referred to as Participating Maybank Group)

Maybank proposes to establish and implement the Proposed ESS

which will be valid for a period of seven (7) years. The Proposed
ESS will be administered by the ESS Committee which is
established by the Board. The Proposed ESS is intended to reward
and retain Eligible Employees as well as to attract new talents in
the future.

Proposed Employee Share Option Scheme (ESOS)

Under the proposed ESOS, an Eligible Employee may,

within the period of the Proposed ESS (ESOS Option
Period), at the discretion of the ESS Committee, be offered
a certain number of options (ESOS Options) at the offer
date (ESOS Offer Date), subject to applicable terms and
conditions (ESOS Offer). If the Eligible Employee decides
to accept the ESOS Offer, he/she will be granted the ESOS
Options, which can then be exercised, within a period of up
to five (5) years, to subscribe for new Maybank Shares
(Proposed ESOS).

(ii)

Proposed Performance-Based Restricted Share Unit

(RSU)

Under the proposed RSU, Maybank may from time to time,

within the period of the Proposed ESS, at the discretion of
the ESS Committee, invite a selected senior management
personnel (Selected Senior Management) to enter into an
agreement with Maybank pursuant to the By-Laws
whereupon Maybank shall agree to grant the Selected
Senior Management an award of Scheme Shares (RSU
Grant) at future dates (RSU Grant Dates), subject to
fulfilling the relevant service objectives and performance
targets that have been set by the ESS Committee
(Proposed RSU).

The Scheme Shares under the Proposed RSU, will be

granted over a five (5)-year period and will be vested on a
three (3)-year cliff vesting schedule whereby the Selected
Senior Management will be assessed based on, among
others, the return on equity, relative total shareholders
return and individual performance, over a period of three
(3) financial years as set out by the ESS Committee.

In the event that the Selected Senior Management does

not meet the above targets over the said period set by the
ESS Committee, the Scheme Shares will not be vested to
him at the end of the three (3) financial years.

The Scheme Shares on the RSU Vesting Dates shall be

settled by way of issuance and transfer of new Maybank
Shares or by cash.

The Proposed ESS is subject to the approvals being

obtained from the following:
(i)

Bursa Securities, for the listing of and quotation for

the new Maybank Shares to be issued pursuant to the
Proposed ESS;

(ii)

Bursa Depository for the transfer of Scheme Shares

from the Trustee to the Scheme Participants;

(iii) Bank Negara Malaysia for the increase in the issued

and paid-up share capital of Maybank pursuant to the
Proposed ESS;
(iv) the shareholders of Maybank at an extraordinary
general meeting (EGM) to be convened; and
(v)

The proposed ESS is a portfolio approach with two (2) main

vehicles as follows:
(i)

any other relevant regulatory authorities, where

applicable.

On 12 May 2011, Maybank announced that Bursa Malaysia

Securities Berhad had, vide its letter dated 11 May 2011 approved
the listing of such number of additional new ordinary shares of
RM1.00 each to be issued under the Proposed ESS, representing
up to ten percent (10%) of the issued and paid-up ordinary share
capital of Maybank.

On 13 June 2011, Maybank announced that the ordinary

resolutions for the Proposed ESS as set out in the Notice of
Extraordinary General Meeting (EGM) dated 30 May 2011 and
tabled at the EGM of Maybank were duly approved by the
shareholders of Maybank.

FINANCIAL STATEMENTS

Maybank Annual Report 2011

409
At A Glance

(contd.)

On 23 June 2011, Maybank announced that Bank Negara

Malaysia had vide its letter dated 22 June 2011, approved the
increase of the issued and paid-up share capital of Maybank up
to ten percent (10%), pursuant to the ESS.

(d)

Maybank Islamic Berhads Issuance of Tier 2 Capital Islamic

Subordinated Sukuk of RM1.0 billion in Nominal Value
(Subordinated Sukuk)
On 31 March 2011, Maybank Islamic Berhad (MIB), a wholly
owned subsidiary of Maybank, had successfully completed the
issuance of RM1.0 billion Tier 2 Capital Islamic Subordinated
Sukuk.

Each issuance of subordinated notes under the Subordinated

Note Programme, save and except for subordinated notes issued
on a 10-year non-callable basis, shall have a callable option
allowing Maybank, and subject to the redemption conditions
being satisfied, redeem (in whole, but not in part) that tranche of
subordinated notes on the call date at their principal amount
together with accrued but unpaid coupon (if any) (Optional
Redemption). Further to the Optional Redemption, Maybank
may also, at its option and subject to the redemption conditions
being satisfied, redeem a tranche of Subordinated Notes (in
whole, but not in part) if a regulatory event occurs at the
principal amount together with accrued but unpaid coupon (if
any) (Regulatory Redemption). The Optional Redemption and
Regulatory Redemption of one tranche of the subordinated notes
shall not trigger the redemption of other tranches of
subordinated notes.

The Subordinated Sukuk which is based on the Islamic principle

of Musyarakah, is rated AA+ (outlook stable) by Malaysian Rating
Corporation Berhad (MARC) and carries tenure of 10 years from
the issue date on a 10 non-callable 5 basis and qualifies as Tier 2
capital for the purpose of Malaysian capital adequacy regulation.

The net proceeds from the issuance of the subordinated notes

will be utilised to fund Maybanks working capital, general
banking and other corporate purposes.

Maybank had on 15 August 2011 issued RM2.0 billion of

subordinated notes (Subordinated Notes) under the
Subordinated Notes Programme, which has been accorded a long
term rating of AA1 by RAM Rating Services Berhad. The
Subordinated Notes issued shall have tenure of 10 years on a 10
non-callable 5 basis and will mature on 16 August 2021. It is
callable on 15 August 2016 and on every interet payment date
thereafter. The Subordinated Notes offering was priced at 4.10%

(f)

Establishment of Subordinated Note Programme of up to

RM3.0 billion in Nominal Value (Subordinated Note
Programme)
On 30 May 2011, Maybank announced that it has obtained
approval from the Securities Commission vide their letter dated
25 May 2011 for the establishment of the Subordinated Note
Programme and the issue of subordinated notes (Subordinated
Notes) thereunder. In addition, the approval from Bank Negara
Malaysia (BNM) for the issuance of Subordinated Notes has also
been obtained on 14 April 2011 (upon terms and conditions
therein contained).

53. SUBSEQUENT EVENT

(a)

On 11 July 2011, the Bank announced the change in financial

year end of the Bank and its subsidiaries from 30 June to 31
December, which shall be implemented after the close of
financial year ended 30 June 2011. The next financial period will
be from 1 July 2011 to 31 December 2011, covering a period of
six (6) months. Thereafter, the financial year shall revert to twelve
(12) months ending 31 December of each subsequent year.

AGM Information

The proceeds from the issue will be used for MIBs working
capital, general banking, business expansion programme and
other corporate purposes.

Financial & Others

Governance

Approval for the issuance of the Subordinated Sukuk was

obtained from the Securities Commission on 25 February 2011.

Leadership

Responsibility

(e)

Business Review

On 23 June 2011, Maybank announced that it has decided not to

pursue with the negotiation for the possible merger at this
juncture.

The tenor of the Subordinated Note Programme is up to 20 years

from the date of first issue of subordinated notes under the
Subordinated Note Programme and each Subordinated Note
issued shall have a tenor of either the following; 10-year
non-callable basis; 15 years on a 15 non-callable 10 basis; 12
years on a 12 non-callable 7 basis or 10 years on a 10 noncallable 5 basis.

Performance

Strategy

Possible Merger of the Businesses of Malayan Banking

Berhad and RHB Capital Berhad
On 31 May 2011, Maybank announced that Bank Negara Malaysia
(BNM) has, vide its letter dated 31 May 2011, stated that it has
no objection in principle to Maybank commencing preliminary
negotiations with RHB Capital Berhad (RHB Capital) and its
major shareholders for a possible merger of the businesses of the
two banking groups. The approval from BNM to commence
negotiations is valid for 3 months from 31 May 2011.

The Subordinated Notes issued under the Subordinated Note

Programme will qualify as Tier 2 capital of Maybank subject to
compliance with the requirements as specified in the Risk
Weighted Capital Adequacy Framework and Capital Adequacy
Framework for Islamic Banks by BNM.

Who We Are

(c)

Our Perspective

52. SIGNIFICANT EVENTS (contd.)

410

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

54. LIFE, GENERAL TAKAFUL AND FAMILY TAKAFUL FUNDS STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2011
2011

Group
Assets
Property, plant and equipment
Investment properties
Intangible assets
Investments
Loans
Receivables
Cash and bank balances
Investment-linked business assets

Liabilities
Provision for outstanding claims
Other liabilities

Life, general takaful and family takaful

policy holders funds

(i)

2010

Life
Fund
RM000

Family
Takaful
Fund
RM000

General
Takaful
Fund
RM000

Total
RM000

Life
Fund
RM000

Family
Takaful
Fund
RM000

General
Takaful
Fund
RM000

Total
RM000

72,850
480,470
15
9,173,836
284,070
183,080
78,786
1,237,828

9
1,235

6,205,050
53,486
137,624
19,931
151,792

537
40

966,291
1,625
118,798
29,060

73,396
481,745
15
16,345,177
339,181
439,502
127,777
1,389,620

73,530
453,460
38
8,654,084
279,819
170,630
34,686
1,477,196

16

2,276
5,268,543
57,374
197,357
37,497
331,369

13

102
792,545
1,699
88,333
39,492

73,559
453,460
2,416
14,715,172
338,892
456,320
111,675
1,808,565

11,510,935

6,569,127

1,116,351

19,196,413

11,143,443

5,894,432

922,184

17,960,059

64,532
826,508

104,725
3,355,873

206,731
850,231

375,988
5,032,612

47,037
800,279

87,272
3,228,785

254,947
603,591

389,256
4,632,655

891,040

3,460,598

1,056,962

5,408,600

847,316

3,316,057

858,538

5,021,911

10,619,895

3,108,529

59,389

13,787,813

10,296,127

2,578,375

63,646

12,938,148

11,510,935

6,569,127

1,116,351

19,196,413

11,143,443

5,894,432

922,184

17,960,059

The operating revenue generated from the life insurance, general takaful and family takaful businesses of the Group for the financial year
amounted to approximately RM5,156,058,000 (2010: RM5,407,765,000).

55. CHANGES IN ACCOUNTING POLICIES AND COMPARATIVES

(a)

Changes in Accounting Policies

As disclosed in Note 3(ii)(a), the adoption of new FRSs, amendments to FRSs, IC Interpretations and TR during the financial year have resulted in the
following key changes in accounting policies:
(i) FRS 139 Financial Instruments: Recognition and Measurement
(ii) IC Interpretation 9 Reassessment of Embedded Derivatives
(iii) Amendments to FRS 139 Financial Instruments: Recognition and Measurement, FRS 7 Financial Instruments: Disclosures and IC Interpretation
9 Reassessment of Embedded Derivatives
(iv) Amendments to FRS 139 Financial Instruments: Recognition and Measurement
(v) FRS 4 Insurance Contracts

FRS 139 establishes the principles for the recognition, derecognition and measurement of an entitys financial instruments and for hedge
accounting. Some of these principles and accounting policies have been adopted by the Group and the Bank since the application of BNMs revised
BNM/GP8 - Guidelines of Financial Reporting for Licensed Institutions (BNM GP8 Guidelines) on 1 July 2005 due to the similarities between BNM
GP8 Guidelines and FRS 139.

The changes in accounting policy above have been accounted for prospectively, in line with the transitional arrangements under para 103AA of
FRS 139, with adjustments to the carrying values of financial assets and liabilities at the beginning of the current financial year being adjusted to
opening retained profits and/ or unrealised holding reserves/ (deficit) as appropriate. Details of the adjustments are disclosed in Note 55(b).

FINANCIAL STATEMENTS

Maybank Annual Report 2011

411
At A Glance

Changes in Accounting Policies (contd.)

Upon the full adoption of FRS 139 on 1 July 2010, the Group and
the Bank have implemented additional requirements as follows:

If there is objective evidence that an impairment loss has

been incurred, the amount of the loss is measured as the
difference between the loans carrying amount and the
present value of the estimated future cash flows. The
carrying amount of the loan is reduced through the use of
an allowance account and the amount of the loss is
recognised in the income statement.

Classification of loans, advances and financing as

impaired
Prior to the adoption of FRS 139, loans were classified as
non-performing when principal or interest/profit or both
are past due for three (3) months or more. Upon the
adoption of FRS 139, loans are classified as impaired when
principal or interest/profit or both are past due for three (3)
months or more or where loans in arrears for less than
three (3) months exhibit indications of credit weaknesses,
whether or not impairment loss has been provided for.

Impairment of insurance receivables

The adoption of FRS 4 requires retrospective adjustment to
be applied. The Group has adopted FRS 4 as an adjustment
to retained earnings as at 1 July 2010 as the application of
this standard did not have a material impact on the
financial results of the Group. The adjustment to retained
earnings as at 1 July 2010 arising from the adoption of FRS
4 is in relation to impairment of insurance receivables. If
there is objective evidence that the insurance receivable is
impaired, the Group reduces the carrying amount of the
insurance receivable accordingly and recognises that
impairment loss in profit or loss. The Group gathers the
objective evidence that an insurance receivable is impaired
using the same process adopted for financial assets carried
at amortised cost. The impairment loss is calculated under
the same method used for these financial assets.

(6)

Fair value measurement of investment securities

The adoption of FRS 139 has resulted to a change in the
reference used in determining the fair value of the Groups
and the Banks investment securities from the previous
bases used to bid-prices.

Financial & Others

(2)

(5)

Governance

Loans which are not individually significant and loans that

have been individually assessed with no evidence of
impairment loss are grouped together for portfolio
impairment assessment. These loans are grouped within
similar credit and characteristics for collective assessment,
whereby data from the loan portfolio (such as credit
quality, levels of arrears, credit utilisation, loan to collateral
ratios etc.), concentrations of risks and economic data
(including levels of unemployment, real estate prices
indices, country risk and the performance of different
individual groups) are taken into consideration.

Embedded derivatives
Upon the adoption of FRS 139 and IC Interpretation 9,
embedded derivatives are to be separated from the host
contract and accounted for as a derivative if the economic
characteristics and risks of the embedded derivative are not
closely related to that of the host contract and the fair
value of the resulting derivative can be reliably measured.
The assessment is made when the entity first becomes a
party for the contract.

Leadership

(4)

Responsibility

The Group and the Bank assess if objective evidence of

impairment exist for loans, advances and financing which
are deemed to be individually significant.

Business Review

Performance

Impairment of loans, advances and financing

The Group and the Bank assess at the end of each
reporting period whether there is any objective evidence
that a loan or group of loans is impaired. The loan or group
of loans is deemed to be impaired if, and only if, there is
objective evidence of impairment as a result of one or more
events that has occurred after the initial recognition of the
loan (an incurred loss event) and that the loss event has an
impact on future estimated cash flows of the loan or group
of loans that can be reliably estimated.

Strategy

(1)

Interest and profit income recognition

For all financial instruments measured at amortised cost,
interest bearing and other financial assets classified as
financial investments available-for-sale and financial
instruments designated at fair value through profit or loss,
interest or profit income or expense is recorded using the
effective interest rate (EIR) or effective profit rate (EPR),
which is the rate that exactly discounts estimated future
cash payments or receipts through the expected life of the
financial instrument or a shorter period, where appropriate,
to the net carrying amount of the financial asset or
financial liability. The calculation takes into account all
contractual terms of the financial instrument and includes
any fees or incremental costs that are directly attributable
to the instrument and are an integral part of the EIR or the
EPR, but not future credit losses.

Who We Are

(a)

(3)

Our Perspective

55. CHANGES IN ACCOUNTING POLICIES AND

COMPARATIVES (contd.)

AGM Information

412

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

55. CHANGES IN ACCOUNTING POLICIES AND

COMPARATIVES (contd.)
(b)

Since these changes only affect the presentation of

disclosure items, there is no impact on the financial
position as at 30 June 2010 or the financial results of the
Group and the Bank for the comparative period.

Adjustments due to Change in Accounting Policies

Group
RM000

(iii) FRS 117 Leases

The adoption of amendments FRS 117 during the financial
year had resulted in the reclassification of leasehold land
which are in substance finance leases to property, plant
and equipment from pre-paid lease payments in other
assets

Bank
RM000

Effects on retained profits attributable to equity holders of the

Bank:
At 1 July, as previously stated
9,925,888
6,646,053
Effects of adopting FRS 139
(172,088)
(150,753)
Effects of adopting FRS 4
1,800

At 1 July 2010, as restated

9,755,600

30 June 2010

6,495,300

Effects on other reserves attributable to equity holders of the

Bank:
At 1 July, as previously stated
340,936
269,016
Effects of adopting FRS 139
(47,921)
(40,368)
At 1 July 2010, as restated
Effects on non-controlling interests:
At 1 July, as previously stated
Effects of adopting FRS 139
Effects of adopting FRS 4
At 1 July 2010, as restated

(c)

293,015

228,648

787,764
(5,786)
807

782,785

Restatement of comparatives
The adoption of specific FRSs resulted in restatements of
comparative figures as follows:
(i)

(ii)

FRS 101 Presentation of Financial Statements

As a result of the adoption of the revised FRS 101, income
statements of the Group and the Bank for the comparative
financial period ended 30 June 2010 have been represented as two separate statements, ie. an income
statement displaying components of profit or loss and a
statement of comprehensive income. All non-owner
changes in equity which were previously presented in the
statement of changes in equity are now included in the
statement of other comprehensive income. Consequently,
components of other comprehensive income are not
presented in the statement of changes in equity. Since
these changes only affect presentation aspects, there is no
impact on earnings per ordinary share.
FRS 7 Financial Instruments: Disclosures
The adoption of FRS 7 during the financial period has
resulted in some changes to the disclosure of financial
instruments, whereby the disclosure are now made by
categories of financial assets and liabilities. The disclosure
of comparative figures in the statement of financial
positions as at 30 June 2010 and the income statement for
the financial period ended 30 June 2010 have been
restated to conform with the current periods presentation.

Statements of
financial position
Group
Other assets
Property, plant and
equipment
Bank
Other assets
Property, plant and
equipment

(d)

As
previously
stated Adjustments
RM000
RM000

As
restated
RM000

5,319,548

(208,186)

5,111,362

1,359,852

208,186

1,568,038

3,832,316

(82,668)

3,749,648

1,077,597

82,668

1,160,265

Reclassification/restatement to conform to current years

presentation
30 June 2010

Income statement
Group
Other operating
income
Overhead expenses
Allowance for losses
on loans, advances
and financing
Net income from
Insurance business
Bank
Other operating
income
Overhead expenses
Allowance for losses
on loans, advances
and financing

As
previously
stated Adjustments
RM000
RM000

As
restated
RM000

4,666,035
(6,412,072)

(973,355)
586,538

3,692,680
(5,825,534)

(1,187,977)

(38,090)

(1,226,067)

424,907

424,907

2,843,624
(4,004,773)

(251,875)
289,964

2,591,749
(3,714,809)

(309,867)

(38,089)

(347,956)

FINANCIAL STATEMENTS

Maybank Annual Report 2011

413
At A Glance
Our Perspective

56. THE OPERATIONS OF ISLAMIC BANKING SCHEME (IBS)

(a)

Statements of financial position as at 30 June 2011

Note

(p)
(q)

50,890,270
11,292,077
1,115,350
53,504
175,494
52,931
1,010,637
64,590,263

34,693,613
5,051,346
28,175
20,775
1,235,875
31,607

41,061,391

459,287
3,924,853
4,384,140
68,974,403

207,410
3,240,063
3,447,473
44,508,864

18,643,612

13,627,916

(k)
(r)
(t)
(u)

Islamic banking capital funds

Islamic banking funds
Reserves

Commitments and contingencies

(bb)

Leadership

5,818,068
707
4,700,919
33,516,386
79,712
17,513
222,559
153,000

44,508,864

Responsibility

9,684,169
394,136
6,823,392
46,244,031
161,550
14,646
4,737,314
913,900
918
347
68,974,403

Business Review

(f )
(g)
(h)
(i)
(j)
(k)
(l)
(m)
(n)
(o)

Performance

Liabilities
Deposits from customers
Deposits and placements of banks and other financial institutions
Bills and acceptances payable
Derivative liabilities
Other liabilities
Provision for taxation and zakat
Subordinated sukuk

2010
RM000

Strategy

Assets
Cash and short-term funds
Deposits and placements with banks and other financial institutions
Securities portfolio
Financing and advances
Deferred tax assets
Derivative assets
Other assets
Statutory deposits with Bank Negara Malaysia
Intangible asset
Property, plant and equipment

2011
RM000

Who We Are

Group

The accompanying notes form an integral part of the financial statements.

Governance
Financial & Others
AGM Information

414

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

56.

THE OPERATIONS OF ISLAMIC BANKING SCHEME (IBS) (contd.)

(b)

Income statement for the year ended 30 June 2011

Group
Note
Income derived from investment of depositors funds
Expenses directly attributable to depositors and Islamic Banking Funds
Transfer from profit equalisation reserve
Gross attributable income
Allowances for losses on financing and advances
Total attributable income
Income attributable to the depositors
Income attributable to the Group
Income derived from investment of Islamic Banking Funds:
Gross investment income
Net income from investment of Islamic Banking Funds
Finance cost
Overhead expenses
Profit before taxation and zakat
Taxation
Zakat
Profit for the year

(v)

(w)
(x)

(y)

(z)
(aa)

2011
RM000

2010
RM000

2,538,614
(24,842)
(91,317)
2,422,455
(10,720)
2,411,735
(1,054,681)
1,357,054

1,822,872
(15,493)
41,642
1,849,021
(350,363)
1,498,658
(671,956)
826,702

131,257
131,257
1,488,311
(10,637)
(573,471)
904,203
(217,239)
(9,435)
677,529

137,157
137,157
963,859

(428,821)
535,038
(121,005)
(7,091)
406,942

For consolidation and amalgamation with the conventional operations, net income from Islamic Banking Scheme comprises the following items:
Gross attributable income
2,422,455
1,849,021
Net income from investment Islamic Banking Funds
131,257
137,157
Total income before allowances for financing and advances and overhead expenses
2,553,712
1,986,178
Income attributable to the depositors
(1,054,681)
(671,956)
1,499,031
1,314,222

Finance cost
(10,637)
Net of intercompany income and expenses
73,479
120,522
Income from Islamic Banking Scheme operations reported in the Group-wide income statement
1,561,873
1,434,744
(c)

Statement of comprehensive income for the year ended 30 June 2011

Group

Profit for the year

Other comprehensive income/(loss):
Currency translation differences in respect of foreign operations
Net gain on revaluation of financial investments available-for-sale
Income tax relating to components of other comprehensive income
Other comprehensive income for the year, net of tax
Total comprehensive income for the year

The accompanying notes form an integral part of the financial statements.

2011
RM000

2010
RM000

677,529

406,942

(2,665)
9,237
379

23
49,881
(11,042)

6,951

38,862

684,480

445,804

FINANCIAL STATEMENTS

Maybank Annual Report 2011

415
At A Glance
Our Perspective

56.

THE OPERATIONS OF ISLAMIC BANKING SCHEME (IBS) (contd.)

(d)

Statements of changes in Islamic Banking Fund

Non-distributable

At 1 July 2010
as previously stated
effect of adopting FRS 139

207,410

2,488,400

15,148
(5,882)

21

147,338

(2,536)

591,692
45,627

3,447,473
39,745

At 1 July 2010 (restated)

207,410

2,488,400

9,266

21

147,338

(2,536)

637,319

3,487,218

677,529

677,529

Total
RM000

(2,665)

6,951

9,616

(2,665)

677,529

684,480

Transfer to Retained Profits

Transfer from Head Office
Transfer from MSI (Note 52(a))

251,877

4,233

(4,233)

(39,435)

251,877
(39,435)

At 30 June 2011

459,287

2,488,400

18,882

(2,644)

147,338

1,697

1,271,180

4,384,140

At 1 July 2009
Profit for the year
Other comprehensive income

197,476

1,988,500

(23,691)

38,839

(2)

23

147,338

(2,536)

389,270
406,942

2,696,355
406,942
38,862

Total comprehensive income

for the year

38,839

23

406,942

445,804

Issue of ordinary shares during

the year
Transfer from/(to) Head Office
Dividend payable

100
9,834

499,900

(4,334)
(200,186)

500,000
5,500
(200,186)

207,410

2,488,400

15,148

21

147,338

(2,536)

591,692

3,447,473

At 30 June 2010

Arose from waiver of intercompany balance between respective subsidiaries on the instruction of the holding company.

Governance

Leadership

9,616

Responsibility

Business Review

Total comprehensive income

for the year

Performance

Share
Premium
RM000

Strategy

Islamic
Banking
Fund
RM000

Profit for the year

Other comprehensive
(income/loss)

Unrealised
Exchange
Holding Fluctuation
Reserve
Reserve
RM000
RM000

Equity
contribution
from Distributable
Statutory the holding
Retained
Reserve
company
Profits
RM000
RM000
RM000

Who We Are

Group

Financial & Others

AGM Information

416

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

56. THE OPERATIONS OF ISLAMIC BANKING SCHEME (IBS) (contd.)

(e)

Statement of cash flows for the year ended 30 June 2011

Group
2011
RM000

2010
RM000

904,203

535,038

75,264
599
(91,317)

389,460
(3,981)
(41,642)

888,749
(393,429)
(12,786,605)
2,867
(4,514,756)
(760,900)
45,058
16,196,657
6,240,731
1,087,175
(2,122,397)
32,729
(958,427)

878,875
48,952
(8,473,289)
6,128
(13,314)
53,000

9,914,895
(1,101,820)
25,244
(333,550)
(6,363)
56,494

Cash generated from operations

Taxes and zakat paid

2,957,452
(302,528)

1,055,252
(146,401)

Net cash generated from operating activities

2,654,924

908,851

Cash flows from financing activities

Proceeds from issuance of Tier 2 Capital Subordinated Sukuk
Retained profits transferred from MSI from conventional book (Note 52(a))
Funds transferred from Head Office
Proceeds from issuance of ordinary shares

1,000,000
(39,435)
251,877

5,500
500,000

Net cash generated from financing activities

1,212,442

505,500

Cash flows from operating activities

Profit before taxation and zakat
Adjustments for:
Allowances for losses on financing and advances
Accretion of discounts less amortisation of premiums of investment securities, net
Profit equalisation reserves
Operating profit before working capital changes
Change in deposits and placements with banks and other financial institutions
Change in financing and advances
Change in derivative assets
Change in other assets
Change in statutory deposit with Central Banks
Change in deferred tax asset
Change in deposits from customers
Change in deposits and placements of banks and other financial institutions
Change in bills and acceptances payable
Net purchase of securities portfolio
Change in derivative liabilities
Change in other liabilities

Cash flows from investing activities

Purchase of property, plant and equipment
Purchase of intangible asset
Net cash used in financing activities

(918)
(347)

(1,265)

Net increase in cash and cash equivalents

Cash and cash equivalents at beginning of year

3,866,101
5,818,068

1,414,351
4,403,717

Cash and cash equivalents at end of year

9,684,169

5,818,068

Cash and cash equivalents comprise:

Cash and short-term funds

9,684,169

5,818,068

The accompanying notes form an integral part of the financial statements.

FINANCIAL STATEMENTS

Maybank Annual Report 2011

417
At A Glance
Our Perspective

56. THE OPERATIONS OF ISLAMIC BANKING SCHEME

(IBS) (contd.)
Cash and short-term funds
(i)

Who We Are

(f)

Securities held-for-trading

Group

1,517,079

5,705,919

8,167,090

112,149

9,684,169

5,818,068

Deposits and placements with banks and other financial

institutions

(ii)
2010
RM000

393,799
337

707

394,136

707

Securities portfolio

Note
(i)
(ii)
(iii)

2010
RM000

513,225
6,138,274
171,893

68,796
4,451,657
180,466

6,823,392

4,700,919

25,365
19,972

242,352

23,459

513,225

68,796

Securities available-for-sale
Group

At fair value
Money market instruments:Cagamas bonds
Bank Negara Malaysia Sukuk
Ijarah bonds
Malaysian Government
Investment Issues
Foreign Government Treasury
Bills
Negotiable instruments of
deposits
Bankers acceptances and
Islamic accepted bills
Khazanah bonds

183,997

231,996

11,104

3,696,550

2,446,888

49,414

249,219

429,386

220,933
236,252

78,499
186,560

4,647,469

3,373,329

1,322,519
50,986
117,300

849,217
54,390
174,721

1,490,805

1,078,328

6,138,274

4,451,657

AGM Information

Total securities available-forsale

2010
RM000

Financial & Others

Unquoted securities:Private and Islamic debt

securities in Malaysia
Foreign Islamic debt securities
Malaysia Global Sukuk

2011
RM000

Governance

Securities held-for-trading
Securities available-for-sale
Securities held-to-maturity

2011
RM000

30,281

240,592

Leadership

Group

2010
RM000

Responsibility

2011
RM000

2011
RM000

Business Review

(h)

At fair value
Money market instruments:Malaysian Government Investment
Issues
Sukuk Ijarah bonds
Foreign Certificates of Deposits
Bank Negara Malaysia Monetary
Notes
Total securities held-for-trading

Group

Licensed banks
Bank Negara Malaysia

Group

Performance

(g)

2010
RM000

Strategy

Cash, balances and deposits with

banks and other financial
institutions
Money at call and interbank
placements with remaining
maturity not exceeding one month

2011
RM000

418

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

56. THE OPERATIONS OF ISLAMIC BANKING SCHEME

(IBS) (contd.)
(h)

Securities portfolio (contd.)

(i)

Financing and advances

Group

(iii) Securities held-to-maturity

Group
2011
RM000
At amortised
Money market instruments:Malaysian Government
Investment Issues

2010
RM000

141,893

150,466

Unquoted securities:Private and Islamic debt

securities in Malaysia

30,000

30,000

Total securities held-tomaturity

171,893

180,466

The maturity structure of money market instruments, securities

available-for-sale and securities held-to-maturity are as follows:

Unearned income
Gross financing and advances*

Group

Maturing within one year

One year to three years
Three years to five years
After five years

Cashline
Term financing
House financing
Syndicated financing
Hire purchase receivables
Other term financing
Bills receivables
Trust receipts
Claims on customers under
acceptance credit
Staff financing
Credit/charge cards
Revolving credit

2011
RM000

2010
RM000

941,973
454,051
1,138,278
2,255,060

668,611
740,697
559,389
1,555,098

4,789,362

3,523,795

Allowances for bad and doubtful

debts and financing
Individual
Collective
Specific
General
Net financing and advances
*

2011
RM000

2010
RM000

2,027,371

2,092,616

6,237,944
235,582
18,198,072
37,591,734
2,201
170,724

5,465,917
177,389
15,028,210
23,512,351
5,004
126,423

3,648,182
782,675
307,454
3,319,247

2,881,944
455,891
193,113
1,540,800

72,521,186
51,479,658
(25,341,649) (16,796,539)
47,179,537

(354,688)
(580,818)

46,244,031

34,683,119

(633,025)
(533,708)
33,516,386

Included in financing and advances are exposures to

Restricted Profit Sharing Investment Accounts (RPSIA) as
part of an arrangement between Maybank Islamic Berhad
(MIB) and the bank. The Group conventional operations are
exposed to risks and rewards on RPSIA financing and will
account for all the collective and individual allowances for
impaired financing arising thereon.

FINANCIAL STATEMENTS

419

Maybank Annual Report 2011

At A Glance

Group
2011
RM000

2010
RM000

Variable rate
Housing financing
Other financing

2,682,324
20,901,555

1,719,045
12,610,461

Gross financing and advances

47,179,537

34,683,119

Financing and advances (contd.)

(i)

Financing and advances analysed by concepts are as

follows:
Group

Bai Bithaman Ajil

Ijarah
Murabahah
Al-Ijarah Muntahiyah Bi
Tamleek
Musharakah Mutanaqisah
Other concepts

17,932,184
15,179,894
11,859,082

13,712,133
12,399,343
6,938,773

235,581
1,625,386
347,410

177,389
1,255,688
199,793

Gross financing and advances

47,179,537

34,683,119

(iv) Financing and advances analysed by their economic

purposes are as follows:
Group

Group
2010
RM000

4,428,924

2,921,405

2,418,673
6,705,571

295,958
29,991,373
9,454
880,228

21,439
22,386,011
7,986
222,034

Gross financing and advances

47,179,537

34,683,119

Group
2010
RM000

2,669,618
15,188,904
5,737,136

3,094,989
12,399,743
4,858,881

5,566,632
750,607
702,426
1,113
769,318
10,117,332
193,113
113,206

Gross financing and advances

47,179,537

34,683,119

(1,137,321)

The maturity structure of financing and advances is as

follows:
Group
2011
RM000

2010
RM000

Maturing within one year

One year to three years
Three years to five years
After five years

7,297,630
1,555,742
7,738,631
30,587,534

5,911,689
1,657,436
5,250,190
21,863,804

Gross financing and advances

47,179,537

34,683,119

AGM Information

Fixed rate
Housing financing
Hire purchase receivables
Other financing

2011
RM000

6,386,760
901,487
864,989
13
1,714,608
13,215,089
307,454
598,241

(682,679)

Financial & Others

(iii) Financing and advances analysed by profit rate sensitivity

are as follows:

(v)

4,020,840
13,585,853

Governance

4,364,401
7,209,199

7,970,308
15,903,267

Leadership

Domestic non-banking
institutions
Domestic business enterprises
Small and medium
enterprises
Others
Government and statutory
bodies
Individuals
Other domestic entities
Foreign entities

Purchase of securities
Purchase of transport vehicles
Less: Islamic hire purchase
receivables sold to
Cagamas
Purchase of landed properties
Residential
Non-residential
Personal use
Consumer durables
Construction
Working capital
Credit cards
Other purpose

Responsibility

2011
RM000

2010
RM000

Business Review

Financing and advances analysed by type of customers are

as follows:

2011
RM000

Performance

2010
RM000

Strategy

(ii)

2011
RM000

Who We Are

(i)

Our Perspective

56. THE OPERATIONS OF ISLAMIC BANKING SCHEME

(IBS) (contd.)

420

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

56. THE OPERATIONS OF ISLAMIC BANKING SCHEME

(IBS) (contd.)
(i)

(vii) Impaired (2010: non-performing) financing and advances

analysed by their economic purposes are as follows:

Financing and advances (contd.)

Group

(vi) Movements in the impaired (2010: non-performing)

financing and advances are as follows:

Movements in impaired financing and advances

Group

At 1 July
as previously stated
effect of adopting FRS 139
At 1 July, as restated
Classified during the year
Recovered/regularised during
the year
Expenses debited to customers
accounts
Amount written off
Gross balance at end of year
Less:
Individual allowance
Specific allowance
on non-performing financing
on performing financing
Net balance
Net financing and advances
Gross financing and advances
(excluding RPSIA financing)
Less:
Individual allowance
Specific allowance
Net financing and advances

2011
RM000

2010
RM000

931,493
224,146

1,045,712

1,155,639
770,551

1,045,712
639,433

(700,306)

(547,871)

29,545
(326,880)
928,549

14,498
(220,279)
931,493

(354,688)

(633,025)

(628,424)
(4,601)

573,861

298,468

Purchase of securities
Purchase of transport vehicles
Purchase of landed properties:
Residential
Non-residential
Personal use
Consumer durables
Construction
Working capital
Credit cards

2011
RM000

2010
RM000

4,514
50,791

6,739
40,757

201,824
22,981
12,101
3
73,657
557,794
4,884

342,569
27,656
26,574
3
86,167
398,194
2,834

928,549

931,493

(viii) Movements in the allowances for bad and doubtful

financing accounts are as follows:
Group

46,529,537

34,683,119

(354,688)

46,174,849

(633,025)
34,050,094

Individual allowance
At 1 July
as previously stated
effect of adopting FRS 139
At 1 July, as restated
Allowance made during the
year
Amount written back
Amount written off
Amount transfer to collective
allowance

2011
RM000

2010
RM000

473,823

473,823

94,775
(41,822)
(165,650)

(6,438)

At 30 June

354,688

Collective allowance
At 1 July
as previously stated
effect of adopting FRS 139

713,938

713,938

3,925

17,668

Group
2011
Ratio of net impaired (2010:
non-performing) financing
Post FRS 139

1.24%

2010

Pre FRS 139

Including specific allowance
on performing financing

0.88%

Excluding specific allowance

on performing financing

0.89%

At 1 July, as restated
At 1 Oct (Amount transfer from
MSI from conventional
banking (Note 52(a)))
Allowance made during the
year*

FINANCIAL STATEMENTS

Maybank Annual Report 2011

421
At A Glance

Group
2011
RM000

2010
RM000

Allowance made during the year

Amount written back
Amount written off

351,462
(59,678)
(220,279)

At 30 June

633,025

Financing and advances (contd.)

(viii) Movements in the allowances for bad and doubtful
financing accounts are as follows: (contd.)
Group

At 30 June

(161,230)

General allowance
At 1 July
as previously stated
effect of adopting FRS 139

6,438
79

580,818

Group

As a percentage of total
financing and advances (less
individual allowance)

At 1 July, as restated
Allowance made during the year
Amount written back

436,446
230,930
(133,668)

At 30 June

533,708

Group

2010

As at 30 June 2011, the gross exposures to RPSIA financing is

RM650.0 million (2010: RM Nil) is excluded from gross
financing and advances for the individual and collective
allowance computation. The collective allowance relating to
this RPSIA amounting RM1.8 million (2010: RM Nil) is
recognised in the Groups conventional operations. There was
no individual allowance provided on this RPSIA financing.

(j)

2011

2010

As a percentage of total financing

and advances (less specific
allowance)

1.57%

As a percentage of total riskweighted assets for credit risk,

excluding deferred tax assets

1.55%

Deferred tax assets

At 1 July, as restated

633,025
(633,025)

561,520

561,520

At 30 June

2010
RM000

(79,712)
(47,019)
(126,731)

(58,397)

(58,397)

(33,734)

(32,357)

(1,085)

11,042

(161,550)

(79,712)

Financial & Others

At 1 July
as previously stated
effect of adopting FRS139
At 1 July, as restated
Recognised in profit or loss (Note
56(aa))
Recognised in other comprehensive
income

2011
RM000

Governance

Specific allowance
At 1 July
as previously stated
effect of adopting FRS 139

2010
RM000

Leadership

Group

Group
2011
RM000

Responsibility

1.26%

436,446

Business Review

2011

533,708
(533,708)

Performance

Collective allowance
Amount written off
Amount transfer from
individual allowance
Exchange difference

2010
RM000

Strategy

2011
RM000

Who We Are

(i)

Our Perspective

56. THE OPERATIONS OF ISLAMIC BANKING SCHEME

(IBS) (contd.)

AGM Information

422

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

56. THE OPERATIONS OF ISLAMIC BANKING SCHEME (IBS) (contd.)

(k)

Deferred tax assets (contd.)

Allowances for losses

on financing
and advances
RM000

Unrealised holding reserve,

impairment loss on
securities and
amortisation of premium
RM000

At 1 July 2010
- as previously stated
- effect of adopting FRS139

(84,780)
(47,019)

6,074

(1,006)

(79,712)
(47,019)

At 1 July 2010, as restated

Recognised in profit or loss

(131,799)
(10,646)

6,074
(22,585)

(1,006)
(503)

(126,731)
(33,734)

(113)

(379)

(593)

(1,085)

(142,558)

(16,890)

(2,102)

(161,550)

At 1 July 2009
Recognised in profit or loss
Recognised in other comprehensive income

(51,283)
(33,497)

(4,968)

11,042

(2,146)
1,140

(58,397)
(32,357)
11,042

At 30 June 2010

(84,780)

6,074

(1,006)

(79,712)

Group

Recognised in other comprehensive income

At 30 June 2011

(k)

Other
temporary
difference
RM000

Total
RM000

Derivative financial instruments

2011

2010

Fair value

Group

Principal
Amount
RM000

Assets
Amount
RM000

926,730

8,902

926,730

Fair value

Liabilities
Amount
RM000

Principal
Amount
RM000

Assets
Amount
RM000

Liabilities
Amount
RM000

(8,792)

685,223

3,119

2,743

8,902

(8,792)

685,223

3,119

2,743

102,634

30

(70)

102,634

30

(70)

Trading derivatives
Foreign exchange related contracts:
Currency forward
- Less than one year
- One year year to three years
- More than three years

Currency spots
- Less than one year
- One year year to three years
- More than three years

FINANCIAL STATEMENTS

Maybank Annual Report 2011

423
At A Glance
Our Perspective

56. THE OPERATIONS OF ISLAMIC BANKING SCHEME (IBS) (contd.)

(k)

Derivative financial instruments (contd.)

2010

Fair value

Group

Assets
Amount
RM000

573,300

2,462

573,300

Principal
Amount
RM000

Assets
Amount
RM000

Liabilities
Amount
RM000

(44,206)

465,050

13,749

15,391

2,462

(44,206)

465,050

13,749

15,391

1,600,000

3,252

(436)

898,800

645

2,641

1,600,000

3,252

(436)

898,800

645

2,641

Total derivatives assets / (liabilities)

3,202,664

14,646

(53,504)

2,049,073

17,513

20,775

Intangible asset
Group

Other assets

2011
RM000

2010
RM000

3,770,088
51,286
915,940

90,500
20
2,072
129,967

Additions
Exchange differences

1,549
1,145
(22)

4,737,314

222,559

At 30 June

2,672

(m) Statutory deposits with Bank Negara Malaysia

The non-interest bearing statutory deposits maintained with
Bank Negara Malaysia are in compliance with Section 37(1)(c) of
the Central Bank of Malaysia Act, 1958 (revised 1994), the
amounts of which are determined as set percentages of total
eligible liabilities.

Accumulated amortisation:
At 1 July
Transfer from MSI (Note 52(a))

1,497

Amortisation charged
Exchange differences

1,497
278
(21)

At 30 June

1,754

918

Net carrying amount

AGM Information

1,549

Financial & Others

Computer Software
Cost:
At 1 July
Transfer from MSI (Note 52(a))

Governance

2010
RM000

Leadership

2011
RM000

Group

Profit receivable
Amount due from holding company
Prepayment and deposit
Other debtors

Responsibility

(n)

Business Review

Credit-related contract
Profit rate swaps
- Less than one year
- One year to three years
- More than three years

Performance

Profit rate derivatives

Profit rate options
- Less than one year
- One year to three years
- More than three years

(l)

Liabilities
Amount
RM000

Strategy

Principal
Amount
RM000

Fair value

Who We Are

2011

424

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

56. THE OPERATIONS OF ISLAMIC BANKING SCHEME (IBS) (contd.)

(o)

Property, plant and equipment

Office
Furniture,
Fittings,
Equipment and
Renovations
RM000

Computers
and
Peripherals
RM000

Motor
Vehicles
RM000

Total
RM000

Group
As at 30 June 2011
Cost
Balance at 1 July 2010
Transfer from MSI (Note 52(a))

1,194

1,449

992

3,635

Additions

1,194
185

1,449
32

992

3,635
217

Balance at 30 June 2011

1,379

1,481

992

3,852

Accumulated depreciation and impairment losses

Balance at 1 July 2010
Transfer from MSI (Note 52(a))

1,123

1,287

811

3,221

Charge for the year

1,123
140

1,287
83

811
61

3,221
284

Balance at 30 June 2011

1,263

1,370

872

3,505

Analysed as:
Accumulated depreciation

1,263

1,370

872

3,505

1,263

1,370

872

3,505

116

111

120

347

Net carrying amount

(p)

Deposits from customers

(i)
Group
2011
RM000

Mudharabah Fund
Demand deposits
Savings deposits
General Investment deposits
Negotiable instruments of deposits

Non-Mudharabah Fund
Demand deposits
Savings deposits
Fixed return investment deposits
Structured deposits

The maturity structure of general investment deposits,

negotiable instruments of deposits and fixed return
investment deposits are as follows:

2010
RM000

3,777,414
423,091
17,146,396
242,829

2,870,838
258,018
13,895,924
656,815

21,589,730

17,681,595

5,734,190
6,178,284
16,845,483
542,583

4,447,704
5,029,645
7,084,380
450,289

29,300,540

17,012,018

50,890,270

34,693,613

Group

Due within six months

Six months to one year
One year to three years
Three years to five years
After five years

2011
RM000

2010
RM000

31,271,526
2,662,796
139,286
161,100

19,218,013
1,540,761
649,292
116,076
112,977

34,234,708

21,637,119

FINANCIAL STATEMENTS

Maybank Annual Report 2011

425
At A Glance

Group

Deposits from customers (contd.)

(ii)

The deposits are sourced from the following customers:

Business enterprises
Individuals
Government and statutory bodies
Others

2010
RM000

20,062,432
13,884,343
6,775,033
10,168,462

12,825,607
9,544,610
6,649,935
5,673,461

50,890,270

34,693,613

(s)

28,326

1,044,510

51,921

73,018

175,494

1,235,875

2011
RM000

6,119,038
2,781,429

4,507,758
232,289

8,900,467

4,740,047

2,202,728
188,882

122,358
188,941

2,391,610

311,299

11,292,077

5,051,346

4,228
91,708
(410)
(279)

46,477
31,544
(73,541)
(252)

At 30 June

95,247

4,228

Provision for taxation and zakat

Group

Taxation
Zakat

(u)

2011
RM000

2010
RM000

33,024
19,907

24,182
7,425

52,931

31,607
Governance

Subordinated sukuk
Group

RM1,000 million subordinated sukuk

due in 2021

2011
RM000

2010
RM000

1,010,637

Financial & Others

Included in the deposits and placements of licensed banks is the

Restricted Profit Sharing Investment Account (RPSIA) placed by the
Groups Conventional operations amounting to RM650 million (2010:
RM Nil). These deposits are used to fund certain specific financing. The
RPSIA is a contract based on the Mudharabah principle between two
parties to finance a financing where the investor solely provides capital
and the business venture is managed solely by the entrepreneur. The
profit of the business venture is shared between both parties based on
pre-agreed ratios. Losses shall be borne by the depositors.

(t)

At 1 July
Provision made
Amount written back
Exchange difference

Leadership

2010
RM000

Responsibility

2011
RM000

2010
RM000

Business Review

114,119
4,228

Group

Group

Non-Mudharabah Fund
Licensed banks
Other financial institutions

95,247

Profit equalisation reserves (PER)

Deposits and placements of banks and other financial

institutions

Mudharabah Fund
Licensed banks
Other financial institutions

2010
RM000

Performance

2011
RM000

2011
RM000

Strategy

Profit payable
Profit equalisation reserves
(Note 56(s))
Due to Head Office
Other creditors, provisions and
accruals

Group

(q)

Other liabilities

Who We Are

(p)

(r)

Our Perspective

56. THE OPERATIONS OF ISLAMIC BANKING SCHEME

(IBS) (contd.)

AGM Information

426

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

56. THE OPERATIONS OF ISLAMIC BANKING SCHEME

(IBS) (contd.)

Group

(u)

Subordinated sukuk (contd.)

On 31 March 2011, Maybank Islamic Berhad, a wholly owned

subsidiary of the Bank, issued RM1.0 billion nominal value Tier 2
Islamic subordinated sukuk under the Shariah Principle of
Musyarakah. The sukuk carries a tenure of 10 years from issue
date on 10 non-callable 5 basis, with a profit rate of 4.22% per
annum payable semi-annually in arrears in March and September
each year, and is due in March 2021. The subsidiary has the
option to redeem the sukuk on any semi-annual distribution date
on or after the 5th anniversary from the issue date. Should the
subsidiary decide not to exercise its option to redeem the sukuk,
the sukuk shall continue to be outstanding until the final
maturity date.

(v)

Other operating income:

(a) Fees income
(b) Gain on sale on securities
held-for-trading
(c) Gain on sale on securities
available-for-sale
(d) Unrealised loss on revaluation of
derivatives
(e) Unrealised gain on foreign
exchange translation
(f ) Unrealised loss on securities
held-for-trading
(g) Impairment losses on securities

Income derived from investment of depositors funds

2011
RM000

2010
RM000

131,838
548

55,547
802

29,748

2,195

1,626

(155)

7,001

534

735

(634)

(2,914)

1,689,763

1,099,999

Group

Income from investment of:

(i) General investment deposits
(ii) Other deposits

(i)

2011
RM000

2010
RM000

1,689,763
848,851

1,099,999
722,873

2,538,614

1,822,872

Income derived from investment of general investment

deposits
Group

Finance income and hibah

Financing and advances
Securities available-for-sale
Securities held-to-maturity
Securities held-for-trading
Money at call and deposits with
financial institutions
Amortisation of premium less
accretion of discount
Total finance income and hibah

2011
RM000

2010
RM000

1,308,076
115,588
4,286
1,199

913,560
82,083
3,600
1,436

88,741

41,761

1,517,890

1,042,440

377

2,184

1,518,267

1,044,624

(ii)

Income derived from investment of other deposits:

Group

Finance income and hibah

Financing and advances
Securities available-for-sale
Securities held-to-maturity
Securities held-for-trading
Money at call and deposits with
financial institutions
Amortisation of premium less
accretion of discount
Total finance income and hibah

2011
RM000

2010
RM000

681,333
56,393
2,285
639

600,511
52,641
2,106
946

47,313

27,266

787,963

683,470

192

1,510

788,155

684,980

FINANCIAL STATEMENTS

Maybank Annual Report 2011

427
At A Glance

Income attributable to depositors

Group

Income derived from investment of depositors funds (contd.)

(ii)

Income derived from investment of other deposits: (contd.)

Group

36,550
528

6,770

1,021

867

(102)

3,624

313

391

(417)

848,851

722,873

(w) Allowances for losses on financing and advances

Group

265,117
3,008

209,999
3,690

1,054,681

671,956

Gross investment income

Group

Financing and advances

Securities held-for-trading
Securities available-for-sale
Securities held-to-maturity
Money at call and deposits with
financial institutions

2011
RM000

2010
RM000

105,354

113,940

99
8,720
353

179
9,988
400

less accretion of discount

287

94,775
(41,822)
17,668

351,462
(59,678)
97,262

4,643
(64,544)

414
(39,097)

10,720

350,363

Total finance income and hibah

121,872

129,967

Other operating income:

(a) Fees income
- Commissions
- Service charges and fees
- Other fee income
(b) Gain on sale of securities
held-for-trading
(c) Gain on sale of securities
available-for-sale
(d) Unrealised gain/(loss) on
revaluation of
derivatives
(e) Unrealised gain on foreign
exchange translation
(f ) Unrealised gain/(loss) on
securities
held-for-trading

4,305
3,159
74

3,642
3,125
168

45

100

1,047

194

134

(19)

560

59

61

(79)

131,257

137,157

AGM Information

30

Amortisation of premium

Financial & Others

5,173
129,680

Governance

7,316
121,842

Leadership

Allowance for bad and doubtful

financing:
Individual allowance
- Made
- Written back
Collective allowance made
Specific allowance
- Made
- Written back
General allowance made
Bad and doubtful financing:
- Written off
- Recovered

2010
RM000

312,541
145,726

Responsibility

2011
RM000

(y)

434,269
352,287

Business Review

48,752
292

Deposits from customers

- Mudharabah Fund
- Non-Mudharabah Fund
Deposits and placements of banks
and other financial institutions
- Mudharabah Fund
- Non-Mudharabah Fund

Performance

2010
RM000

2010
RM000

Strategy

Other operating income:

(a) Fees income
(b) Gain on sale on securities
held-for-trading
(c) Gain on sale of securities
available-for-sale
(d) Unrealised loss on revaluation of
derivatives
(e) Unrealised gain on foreign
exchange translation
(f ) Unrealised loss on securities
held-for-trading

2011
RM000

2011
RM000

Who We Are

(v)

(x)

Our Perspective

56. THE OPERATIONS OF ISLAMIC BANKING SCHEME

(IBS) (contd.)

428

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

56. THE OPERATIONS OF ISLAMIC BANKING SCHEME

(IBS) (contd.)
(z)

(aa) Taxation
Group

Overhead expenses
Group
2011
RM000

2010
RM000

15,570
42

6,560
28

1,798
3,166

1,069
1,490

20,576

9,147

587
20,531
1,416

571
1,263
11

22,534

1,845

9,832
88

13,739
14

9,920

13,753

12,938
7,354
22,003

12,871
5,792
8,322

42,295

26,985

Shared service cost paid/payable to

Head Office

478,146

377,091

Total

573,471

428,821

280

260

Personnel expenses
- Salaries and wages
- Social security cost
- Pension cost
- defined contribution plan
- Other staff related expenses
Sub-total
Establishment costs
- Depreciation
- Information technology expenses
- Others
Sub-total
Marketing costs
- Advertisement and publicity
- Others
Sub-total
Administration and general expenses
- Fees and brokerage
- Administrative expenses
- General expenses
Sub-total

Included in overhead expenses are:

Shariah Committee Members fee
and remuneration

Tax expense for the year

Deferred tax in relation to
originating and reversal of
temporary differences (Note 56(j))

2011
RM000

2010
RM000

250,973

153,362

(33,734)

(32,357)

217,239

121,005

FINANCIAL STATEMENTS

429

Maybank Annual Report 2011

At A Glance
Our Perspective

56. THE OPERATIONS OF ISLAMIC BANKING SCHEME (IBS) (contd.)

Who We Are

(bb) Commitments and contingencies

In the normal course of business, the Group make various commitments and incur certain contingent liabilities with legal recourse to their
customers. No material losses are anticipated as a result of these transactions.
The risk-weighted exposures of the Group as at 30 June, are as follows:
2011

2010
Risk
Weighted
Amount*
RM000

258,825

258,825

153,932

231,467

231,467

197,308

Certain transaction-related contingent items

955,563

475,622

Short-term self-liquidating trade-related contingencies

104,555

20,869

425,774

578,250

289,125

261,531

14,814

141,549

28,310

Islamic hire purchase financing sold to Cagamas Berhad

682,679

25,121

682,679

226,105

1,137,321

1,137,321

1,137,321

11,852,846

173,764

58,462

8,490,457

1,573,404

345,905

208,332

993,810

496,905

465,488

1,029,364

18,174

3,635

685,223

22,572

4,711

2,173,300

51,059

10,212

1,363,850

33,532

6,706

Irrevocable commitments to extend credit:

- maturity within one year
- maturity exceeding one year
Foreign exchange related contract:
- less than one year
Profit rate related contracts:
- one year to less than five years
Miscellaneous

5,989

2,026,897

1,101,266

13,627,916

2,239,232

2,098,186
Responsibility

13,076
18,643,612

The credit equivalent amount and risk-weighted amount are arrived at using the credit conversion factors and risk weights, respectively as
specified by Bank Negara Malaysia

(cc) Capital adequacy

The capital adequacy ratios of the Group as at 30 June

Group

Basel II
Core capital ratio
Risk-weighted capital ratio

2011

2010

11.04%
13.71%

9.53%

Risk-weighted capital ratio

11.05%

Total Tier 2 capital

Group
2011
RM000

2010
RM000

448,264
2,488,400
1,366,209
(161,550)

207,410
2,488,400
736,494
(79,712)

Total Tier 1 capital

4,141,323

3,352,592

101,480

533,708

1,101,480

533,708

(101,883)
5,140,920

(9)

3,886,291

EL is defined as expected loss and EP is defined as eligible

provision.
2
Excluding collective allowance for certain financing and
advances.
1

AGM Information

Tier 1 capital
Islamic banking fund
Share premium
Other reserves
Less: Deferred tax assets

Capital base

1,000,000

Financial & Others

Less: Other deduction

Less: Excess of total EL over total EP1

2010
RM000

Governance

Basel II
Core capital ratio

Tier 2 capital
Subordinated sukuk
Collective allowance on financing
and advances2
General allowance for bad and
doubtful financing

2011
RM000

Leadership

Group

Business Review

Credit
Equivalent
Amount*
RM000

Performance

Direct credit substitutes

Group

Risk
Weighted
Full
Amount* Commitment
RM000
RM000

Strategy

Full
commitment
RM000

Credit
Equivalent
Amount*
RM000

430

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

56. THE OPERATIONS OF ISLAMIC BANKING SCHEME

(IBS) (contd.)

Basel I

(cc) Capital adequacy (contd.)

The breakdown of Assets and Credit Equivalent values (including
off-balance sheet items) according to Risk-Weights is as follows:
Basel II
2011
RM000
Standardised Approach exposure
Internal Ratings-Based Approach exposure
after scaling factor

4,269,621
23,571,746

Total risk-weighted asset for credit risk

Total risk-weighted asset for credit risk
absorbed by Malayan Banking Berhad*
Total risk-weighted asset for market risk
Total risk-weighted asset for operational risk
Additional risk-weighted asset due to capital
floor

27,841,367

Total risk-weighted asset

37,501,738

(206,402)
294,658
2,426,561
7,145,554

2010
RM000
0%
10%
20%
50%
100%

28,000
375,211
2,640,748
31,642,561

Total risk-weighted assets for

credit risk
Total risk-weighted assets for
market risk

34,686,520
483,259

Total risk-weighted assets for

credit and market risk

35,169,779

(dd) Fair values of financial assets and liabilities

The estimated fair values of financial assets and financial liabilities
as at the reporting date approximate their carrying amounts as
shown in the statements of financial position, except for the
following financial assets and liabilities:

In accordance with Bank Negara Malaysias guideline on the

recognition and measurement of Restricted Profit Sharing
Investment Account (RPSIA) as Risk Absorbent, the credit
risk on the assets funded by the RPSIA are excluded from
the risk weighted capital ratio (RWCR) calculation of the
IBS operations.

2011

Group
Financial assets
Securities held-tomaturity
Financing and
advances*
Financial liabilities
Deposits from
customers
Deposits and placements
of banks and other
financial institutions

2010

Carrying
value
RM000

Fair value
RM000

Carrying
value
RM000

Fair value
RM000

171,893

172,053

180,466

181,861

46,824,849

48,202,346

34,050,094

34,381,095

50,890,270

50,911,773

34,693,613

34,724,770

11,292,077

11,348,363

5,051,346

5,243,769

The collective allowance for the Group amounting to RM580,818,421 (2010: general allowance of RM533,707,714) has been added back to
arrive at the carrying value of the financing and advances.

The methods and assumptions used to estimate the fair values of the financial assets and financial liabilities of IBS operations are as stated in
Note 46.

FINANCIAL STATEMENTS

Maybank Annual Report 2011

431
At A Glance
Our Perspective

56. THE OPERATIONS OF ISLAMIC BANKING SCHEME

(IBS) (contd.)

(e)
(f )
(g)

The Shariah Committee at the Group level has four members. All
of them are also members of Shariah Committee of Etiqa Takaful
Berhad.

57. DETAILS OF SUBSIDIARIES AND ASSOCIATES

Details of the subsidiaries are as follows:
Name of Company

Islamic
banking

Malaysia

PT Bank Maybank Syariah Indonesia

(formerly known as PT Bank Maybank
Indocorp)11

Banking

Indonesia

Maybank International (L) Ltd.

Offshore
banking

Malaysia

Maybank (PNG) Limited12

Banking

Maybank Philippines, Incorporated11

PT Bank Internasional Indonesia Tbk

Effective Interest

2011
RM

2010
RM

2011
%

2010
%

110,600,000

110,600,000

100.00

100.00

945,069,000,0001

945,069,000,0001

96.80

96.80

10,000,0002

10,000,0002

100.00

100.00

Papua New
Guinea

5,000,0003

5,000,0003

100.00

100.00

Banking

Philippines

4,046,065,7494

4,046,065,7494

99.97

99.97

Banking

Indonesia

3,407,411,000,000 3,407,411,000,000

97.40

97.50

Banking

11

Financial & Others

Maybank Islamic Berhad

Issued and Paidup Share Capital

Governance

Country of
Incorporation

Leadership

Principal
Activities

Responsibility

(a)

Business Review

(ff) Allocation of income

The policy of allocation of income to the various types of
deposits and investments is subject to The Framework on Rate
of Return issued by Bank Negara Malaysia in October 2001. The
objective is to set the minimum standard and terms of reference
for the Islamic banking institutions in calculating and deriving the
rate of return for the depositors.

Performance

Based on the above, the duties and responsibilities of the Groups

Shariah Committee are to advise on the overall Islamic Banking
operations of the Groups business in order to ensure compliance
with the Shariah requirements.

(b)
(c)
(d)

To advise the Board on Shariah matters in its business

operations.
To endorse Shariah Compliance Manuals.
To endorse and validate relevant documentations.
To assist related parties on Shariah matters for advice upon
request.
To advise on matters to be referred to the SAC.
To provide written Shariah opinion.
To assist the SCC on reference for advice.

Strategy

(a)

Who We Are

(ee) Shariah committee

The operation of IBS is governed by Section 124(3) of the
Banking and Financial Institutions Act, 1989 (the Act), which
stipulates that any licence institution carrying on Islamic financial
business, in addition to its existing licensed business may, from
time to time seek the advise of the Shariah Advisory Council
(SAC) established under subsection (7) of the Act, on the
operations of its business in order to ensure that it does not
involve any element which is not approved by the Religion of
Islam and Part B of BNMs Guidelines on the Governance of
Shariah Committee for The Islamic Financial Institutions known
as the Shariah Governance Framework (SGF) (which supersedes
the BNM/GPS 1), which, stipulates that Every Islamic institution is
required to establish a Shariah Committee.

The roles of Shariah Committee in monitoring the Groups

activities include:

AGM Information

432

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

57. DETAILS OF SUBSIDIARIES AND ASSOCIATES (contd.)

(a)

Details of the subsidiaries are as follows: (contd.)

Name of Company

Principal
Activities

Country of
Incorporation

Myfin Berhad

Ceased
operations

Aseamlease Berhad

Issued and Paidup Share Capital

Effective Interest

2011
RM

2010
RM

2011
%

2010
%

Malaysia

551,250,000

551,250,000

100.00

100.00

Leasing

Malaysia

20,000,000

20,000,000

100.00

100.00

Mayban Allied Credit & Leasing Sdn. Bhd.

Financing

Malaysia

10,000,000

10,000,000

100.00

100.00

PT BII Finance Centre11

Multifinancing

Indonesia

15,000,000,0001

15,000,000,0001

97.50

97.50

PT Wahana Ottomitra Multiartha Tbk 1

Multifinancing

Indonesia

200,000,000,0001

200,000,000,0001

48.80

48.80

Kim Eng Finance (Singapore) Pte. Ltd.12

Money
lending

Singapore

25

96.87

Mayban Ageas Holdings Berhad

(formerly known as Mayban Fortis
Holdings Berhad )

Investment
holding

Malaysia

239,430,446

239,430,446

69.05

69.05

Mayban Life Assurance Bhd.

Life
insurance

Malaysia

100,000,000

100,000,000

69.05

69.05

Etiqa Life International (L) Ltd.

Offshore
investmentlinked
insurance

Malaysia

3,500,0002

3,500,0002

69.05

69.05

Sri MGAB Berhad

Under
members
voluntary
liquidation

Malaysia

69.05

69.05

Etiqa Insurance Berhad

Composite
insurance

Malaysia

152,151,399

152,151,399

69.05

69.05

Etiqa Takaful Berhad

Family &
general
takaful

Malaysia

100,000,000

100,000,000

69.05

69.05

Etiqa Offshore Insurance (L) Ltd.

Offshore
general
reinsurance

Malaysia

2,500,0002

2,500,0002

69.05

69.05

Etiqa International Holdings Sdn. Bhd.

Investment
holding

Malaysia

359,340,914

359,340,914

100.00

100.00

Finance

Insurance

FINANCIAL STATEMENTS

Maybank Annual Report 2011

433
At A Glance
Our Perspective

57. DETAILS OF SUBSIDIARIES AND ASSOCIATES (contd.)

(a)

Details of the subsidiaries are as follows: (contd.)

Principal
Activities

Country of
Incorporation

Maybank Investment Bank Berhad

Investment
banking

Maysec Sdn. Bhd.

Issued and Paidup Share Capital

Effective Interest

2011
RM

2010
RM

2011
%

2010
%

Malaysia

50,116,000

50,116,000

100.00

100.00

Investment
holding

Malaysia

162,000,000

162,000,000

100.00

100.00

Maysec (KL) Sdn. Bhd.

Dormant

Malaysia

124,000,000

124,000,000

100.00

100.00

Maydis Berhad

Dormant

Malaysia

45,000,000

45,000,000

100.00

100.00

Mayban Futures Sdn. Bhd.

Dormant

Malaysia

10,000,000

10,000,000

100.00

100.00

Mayban Securities (HK) Limited11

Dormant

Hong Kong

30,000,0006

30,000,0006

100.00

100.00

Mayban Securities (Jersey) Limited12

Investment
holding

United
Kingdom

27

27

100.00

100.00

PhileoAllied Securities (Philippines) Inc.12

Dormant

Philippines

21,875,0004

21,875,0004

100.00

100.00

Budaya Tegas Sdn. Bhd.

Investment
holding

Malaysia

100.00

100.00

BinaFikir Sdn. Bhd.

Business/
Malaysia
Economic
consultancy
and advisory

650,000

650,000

100.00

100.00

Mayban IB Holdings Sdn. Bhd. (formerly

known as Aseam Credit Sdn. Bhd.)

Investment
holding

Malaysia

25,000,000

25,000,000

100.00

100.00

Kim Eng Holdings Limited12

Investment
holding

Singapore

244,451,1765

96.87

Kim Eng Securities Pte. Ltd.12

Dealing in
securities

Singapore

75,000,0005

96.87

Kim Eng Corporate Finance Pte. Ltd.12

Provision of
corporate
finance &
advisory
services

Singapore

1,000,0005

96.87

PT Kim Eng Securities12

Dealing in
securities

Indonesia

50,000,000,0001

77.50

Kim Eng Research Sdn. Bhd.12

Provision of
research
services

Malaysia

500,000

67.81

Kim Eng Securities (Thailand) Public

Company Ltd.12

Dealing in
securities

Thailand

2,854,072,5008

54.25

Who We Are

Name of Company

Investment Banking
Strategy
Performance
Business Review
Responsibility
Leadership
Governance
Financial & Others
AGM Information

434

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

57. DETAILS OF SUBSIDIARIES AND ASSOCIATES (contd.)

(a)

Details of the subsidiaries are as follows: (contd.)

Name of Company

Principal
Activities

Country of
Incorporation

Kim Eng Securities (London) Ltd.12

Dealing in
securities

United
Kingdom

Kim Eng Securities USA Inc.12

Dealing in
securities

United States
of America

Kim Eng Securities India Pte. Ltd.12

Dealing in
securities

India

Kim Eng Equities Malaysia Sdn. Bhd.12

Dormant

Malaysia

Ong Asia Limited12

Investment
holding

ATR KimEng Fixed Income, Inc.12

Issued and Paidup Share Capital

Effective Interest

2011
RM

2010
RM

2011
%

2010
%

600,0007

96.87

9,500,0002

96.87

290,000,0009

72.65

100

67.81

Singapore

63,578,0725

96.87

Fund raising
advisers

Philippines

190,064,4004

77.50

Ong Asia Securities (H.K.) Ltd.12

Securities
Trading

Hong Kong

30,000,0006

96.87

Kim Eng Research Pte. Ltd.12

Provision of
research
services

Singapore

300,0005

96.87

Investment Banking (contd.)

Kim Eng Securities (Hong Kong) Limited12 Dealing in

securities

Hong Kong

55,000,0006

96.87

Kim Eng Futures (Hong Kong) Limited12

Futures
contracts
broker

Hong Kong

6,000,0006

96.87

KE India Securities Private Limited12

Dormant

India

78,800,0009

72.65

Mayban Indonesia Berhad

Dormant

Malaysia

5,000,000

5,000,000

100.00

100.00

Cekap Mentari Berhad

Securities
issuer

Malaysia

100.00

100.00

Mayban International Trust (Labuan)

Berhad

Investment
holding

Malaysia

156,030

156,030

100.00

100.00

Mayban Offshore Corporate Services

(Labuan) Sdn. Bhd.

Investment
holding

Malaysia

30,006

30,006

100.00

100.00

Mayban Trustees Berhad

Trustee
services

Malaysia

500,000

500,000

100.00

100.00

Mayban Ventures Sdn. Bhd.

Venture
capital

Malaysia

14,000,000

14,000,000

100.00

100.00

Asset Management/Trustees/Custody

FINANCIAL STATEMENTS

Maybank Annual Report 2011

435
At A Glance
Our Perspective

57. DETAILS OF SUBSIDIARIES AND ASSOCIATES (contd.)

(a)

Details of the subsidiaries are as follows: (contd.)

Principal
Activities

Country of
Incorporation

Issued and Paidup Share Capital

Effective Interest

2011
RM

2010
RM

2011
%

2010
%

Who We Are

Name of Company

Asset Management/Trustees/Custody
(contd.)
51.00

51.00

Mayban Investment Management Sdn.

Bhd.

Fund
Malaysia
management

5,000,000

5,000,000

69.05

69.05

Philmay Property, Inc.11

Property
leasing and
trading

Philippines

100,000,0004

100,000,0004

60.00

60.00

Mayban (Nominees) Sendirian Berhad

Nominee
services

Malaysia

31,000

31,000

100.00

100.00

Mayban Nominees (Tempatan) Sdn. Bhd.

Nominee
services

Malaysia

10,000

10,000

100.00

100.00

Mayban Nominees (Asing) Sdn. Bhd.

Nominee
services

Malaysia

10,000

10,000

100.00

100.00

Mayban Nominees (Singapore) Private

Limited11

Nominee
services

Singapore

60,0005

60,0005

100.00

100.00

36

36

100.00

100.00

Malaysia

10,000

10,000

100.00

100.00

Aseam Malaysia Nominees (Asing) Sdn.

Bhd.

Nominee
services

Malaysia

10,000

10,000

100.00

100.00

Mayfin Nominees (Tempatan) Sdn. Bhd.

Under
members
voluntary
liquidation

Malaysia

10,000

10,000

100.00

100.00

Mayban Securities Nominees (Tempatan)

Sdn. Bhd.

Nominee
services

Malaysia

10,000

10,000

100.00

100.00

Mayban Securities Nominees (Asing) Sdn. Nominee

Bhd.
services

Malaysia

10,000

10,000

100.00

100.00

AFMB Nominees (Tempatan) Sdn. Bhd.

Under
members
voluntary
liquidation

Malaysia

10,000

10,000

100.00

100.00

Mayban Allied Berhad

Investment
holding

Malaysia

753,908,638

753,908,638

100.00

100.00

AGM Information

Nominee
services

Financial & Others

Aseam Malaysia Nominees (Tempatan)

Sdn. Bhd.

Governance

Hong Kong

Leadership

Mayban Nominees (Hong Kong) Limited11 Nominee

services

Responsibility

2,000,000

Business Review

2,000,000

Performance

Investment
Malaysia
advisory and
administration
services

Strategy

MaybanJAIC Capital Management Sdn.

Bhd.

436

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

57. DETAILS OF SUBSIDIARIES AND ASSOCIATES (contd.)

(a)

Details of the subsidiaries are as follows: (contd.)

Name of Company

Principal
Activities

Country of
Incorporation

Anfin Berhad

Under
members
voluntary
liquidation

Dourado Tora Holdings Sdn. Bhd.

(formerly known as Mayban Allied
Property Holdings Sdn. Bhd.)

Issued and Paidup Share Capital

Effective Interest

2011
RM

2010
RM

2011
%

2010
%

Malaysia

106,000,000

106,000,000

100.00

100.00

Dormant

Malaysia

2,000,000

2,000,000

100.00

100.00

Maysec (Ipoh) Sdn. Bhd.

Dormant

Malaysia

100,000,000

100,000,000

100.00

100.00

Aurea Lakra Holdings Sdn. Bhd. (formerly

known as Mayban P.B. Holdings Sdn.
Bhd.)

Property
investment

Malaysia

1,000,000

1,000,000

100.00

100.00

Mayban Property (PNG) Limited 12

Property
investment

Papua New
Guinea

2,125,0003

2,125,0003

100.00

100.00

Mayban International Trust (Labuan) Ltd.

Trustee
services

Malaysia

40,0002

40,0002

100.00

100.00

MNI Holdings Berhad

Under
members
voluntary
liquidation

Malaysia

69.05

69.05

KBB Nominees (Tempatan) Sdn. Bhd.

Nominee
services

Malaysia

10,000

10,000

100.00

100.00

KBB Properties Sdn. Bhd.

Ceased
operations

Malaysia

410,000

410,000

100.00

100.00

Sri MTB Berhad

Under
members
voluntary
liquidation

Malaysia

12,000,000

12,000,000

69.05

69.05

Etiqa Overseas Investment Pte. Ltd.

Investment
holding

Malaysia

12

12

69.05

69.05

Peram Ranum Berhad

Dormant

Malaysia

60,000,000

60,000,000

69.05

69.05

Double Care Sdn. Bhd.

Under
members
voluntary
liquidation

Malaysia

35,000,000

35,000,000

69.05

69.05

Sorak Financial Holdings Pte. Ltd.12

Investment
holding

Singapore

5,928,5565

5,928,5565

100.00

100.00

Asset Management/Trustees/Custody
(contd.)

FINANCIAL STATEMENTS

Maybank Annual Report 2011

437
At A Glance
Our Perspective

57. DETAILS OF SUBSIDIARIES AND ASSOCIATES (contd.)

(a)

Details of the subsidiaries are as follows (contd.):

Principal
Activities

Country of
Incorporation

Rezan Pte. Ltd.12

Investment
holding

KE Strategic Pte. Ltd.12

Issued and Paidup Share Capital

Effective Interest

2011
RM

2010
RM

2011
%

2010
%

Singapore

25

96.87

Investment
holding

Singapore

25

96.87

Pinnakell Asset Management Pte. Ltd.12

Under
members
voluntary
liquidation

Singapore

688,1805

96.87

Kim Eng Properties Pte. Ltd.12

Property
investment

Singapore

8,000,0005

96.87

Heritage Fiduciary Services Pte. Ltd.12

Provision of
secretarial
and
consultancy
services

Singapore

500,0005

58.12

Strategic Acquisitions Pte. Ltd.12

Investment
holding

Singapore

15

96.87

Kim Eng Investment Limited12

Investment
holding

Hong Kong

160,000,0006

96.87

KE Sovereign Limited 12

Investment
holding

British Virgin
Islands

5,000,0002

96.87

FDXS Learning Group Pte. Ltd.12

Financial
education

Singapore

200,0005

96.87

Ong & Company Private Limited12

Dormant

Singapore

53,441,1735

96.87

Ong Nominees Private Limited12

Under
members
voluntary
liquidation

Singapore

3,0035

96.87

Kim Eng Securities Nominees Pte. Ltd.12

Acting as
Singapore
nominee
for beneficiary
shareholders

10,0005

96.87

St. Michaels Development Pte. Ltd.12

Real estate
Singapore
development

5,000,0005

96.87

KE Capital Partners Pte. Ltd.12

Fund
Singapore
Management

5,000,0005

77.50

PT Kim Eng Asset Management12

Dormant

25,800,000,0001

82.34

Who We Are

Name of Company

Asset Management/Trustees/Custody
(contd.)
Strategy
Performance
Business Review
Responsibility
Leadership
Governance
Financial & Others
AGM Information

Indonesia

438

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

57. DETAILS OF SUBSIDIARIES AND ASSOCIATES (contd.)

(a)

Details of the subsidiaries are as follows (contd.):

Name of Company

Principal
Activities

Country of
Incorporation

Under
members
voluntary
liquidation

China

Issued and Paidup Share Capital

Effective Interest

2011
RM

2010
RM

2011
%

2010
%

828,74810

96.87

26

96.87

3,000,0002

96.87

100,000,0008

54.25

48,8602

58.12

1,3152

58.12

188,5162

58.12

Asset Management/Trustees/Custody
(contd.)
Kim Eng Consultant Limited (China)12

Kim Eng Nominees (Hong Kong) Limited12 Nominee

services

Hong Kong

Kim Eng Properties USA Inc.12

Property
investment

United States
of America

Kim Eng Asset Management (Thailand)

Co., Ltd.12

Asset
Thailand
management

Heritage Trust Company Limited12

Provision of
fiduciary
services

Heritage Corporate Services (HK) Limited12 Provision of

fiduciary
services

Brunei

Hong Kong

Heritage Trust Services Pte. Ltd.12

Provision of Singapore
trust services

Heritage Singapore (Switzerland) S.A.12

Dormant

Switzerland

12

58.12

Heritage Trust Services (NZ) Limited

Dormant

New Zealand

58.12

PT Prosperindo12

Investment
holding

Indonesia

20,160,000,0001

100.00

12

FINANCIAL STATEMENTS

Maybank Annual Report 2011

439
At A Glance
Our Perspective

57. DETAILS OF SUBSIDIARIES AND ASSOCIATES (CONTD.)

(b)

Details of the associates are as follows:

Principal
Activities

Country of
Incorporation

2011
%

2010
%

UzbekLeasing International A. O.

Leasing

Uzbekistan

35

35

Philmay Holding, Inc.

Investment
holding

Philippines

33

33

Pelaburan Hartanah Nasional Berhad

Property trust

Malaysia

30

30

Mayban Agro Fund Sdn. Bhd.

Fund specific
purpose vehicle

Malaysia

33

33

Mayban Venture Capital Company Sdn. Bhd.

Venture Capital

Malaysia

33

33

An Binh Commercial Joint Stock Bank

Banking

Vietnam

20

20

Baiduri Securities Sdn. Bhd.

Dormant

Brunei

39

39

Pak-Kuwait Takaful Company Limited

Investment
holding

Pakistan

22

22

MCB Bank Limited

Banking

Pakistan

20

20

Maybank JAIC Management Ltd.

Fund
management

Malaysia

50

50

Asian Forum Inc.

Offshore captive Malaysia

insurance

23

23

Maybank MEACP Pte. Ltd.

Fund
management

Singapore

50

50

ATR KimEng Financial Corporation

Investment
holding

Philippines

41

Kim Eng Vietnam Securities Joint Stock Company

Dealing in
securities

Vietnam

46

Name of Company

Who We Are

Effective Interest

Held by the Bank

Strategy
Performance
Business Review

Held through subsidiaries

Responsibility
Leadership
Governance
Financial & Others
AGM Information

440

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Notes to the
Financial Statements
30 June 2011

57. DETAILS OF SUBSIDIARIES AND ASSOCIATES (CONTD.)

(b)

Details of the associates are as follows:

Effective Interest

Name of Company

Principal
Activities

Country of
Incorporation

2011
%

2010
%

Held through subsidiaries (contd.)

ATR KimEng Capital Partners, Inc.

Corporate finance Philippines

&
financial
and
investment
advisory

41

ATR KimEng Land, Inc.

Real estate
investment

Philippines

15

AsianLife & General Assurance Corporation

Insurance
provider

Philippines

41

ATR KimEng Securities, Inc.

Dealing in
securities

Philippines

41

ATR KimEng AMG Holdings Inc.

Stock trading

Philippines

34

ATR KimEng Fixed Income, Inc.

Fund raising
advisers

Philippines

AsianLife Financial Assurance Corporation

Insurance
provider

Philippines

29

ATR KimEng Asset Management, Inc.

Investment
management

Philippines

39

ATR KimEng Insurance Brokers, Inc.

Insurance
brokers

Singapore

41

Note:
(1) Indonesia Rupiah (IDR)
(2) United States Dollars (USD)
(3) Papua New Guinea Kina (Kina)
(4) Philippines Peso (Peso)
(5) Singapore Dollars (SGD)
(6) Hong Kong Dollars (HKD)
(7) Great Britain Pound (GBP)
(8) Thailand Bahts (THB)
(9) Indian Rupee (INR)
(10) Chinese Renminbi (CNY)
(11) Audited by other member firms of Ernst & Young Global
(12) Audited by firms of auditors other than Ernst & Young

FINANCIAL STATEMENTS

Maybank Annual Report 2011

441
At A Glance
Our Perspective

58. CURRENCY
All amounts are in Ringgit Malaysia unless otherwise stated.

Who We Are

59. DISCLOSURE OF REALISED AND UNREALISED RETAINED EARNINGS

Pursuant to the Paragraphs 2.06 and 2.23 of Bursa Malaysia Securities Berhads Main Market Listing Requirements with the guidance notes from
Malaysian Institute of Accountants (MIA) issued on 20 December 2010, the key items contributing to the realised and unrealised retained earnings of
the Group and the Bank are disclosed as follows:
Bank
2011
RM000

8,213,749
925,779

4,447,882
693,023

351,737

351,737

9,491,265

5,140,905

Strategy

Group
2011
RM000
Retained profits:

Total retained profits:

Business Review

Share of retained profits from associates

- Realised
- Unrealised

Performance

- Realised
- Unrealised

Responsibility
Leadership
Governance
Financial & Others
AGM Information

Basel II
Pillar 3 Disclosure

443

Overview

446

Scope of Application

447
455

Capital Management
Risk Management

459

Credit Risk
Credit Risk Definition
Regulatory Capital Requirements
Management of Credit Risk
Credit Impairment Policy Classification And Impairment Provisions For
Loans/Financing
Non-Retail Portfolios
Retail Portfolios
Independent Model Validation
Credit Risk Mitigation
Credit Exposures Subject to Standardised Approach (SA)
Counterparty Risk Management

522

Market Risk
- Liquidity Risk

527

Operational Risk

530

Shariah Governance

531

Forward Looking Statements

FINANCIAL STATEMENTS

Maybank Annual Report 2011

443
At A Glance

Overview

Our Perspective
Who We Are

The Pillar 3 Disclosure for financial year ending 30th June 2011 for Maybank Group (the Group) complies with the Bank Negara Malaysias (BNM) Risk Weighted
Capital Adequacy Framework (RWCAF) Disclosure Requirements (Pillar 3), which is the equivalent of that issued by the Basel Committee on Banking
Supervision (BCBS) entitled International Convergence of Capital Measurement and Capital Standards (commonly referred to as Basel II). In December 2009,
BNM had issued the final requirements and guidance on the adoption of the Internal Ratings-Based (IRB) Approach for credit risk under the RWCAF for banking
institutions and the Capital Adequacy Framework for Islamic Banks (CAFIB). BNM has approved Maybank and Maybank Islamic Berhad to migrate fully to the
Basel II IRB Approach for credit risk from 1 July 2010.
The Group also made reference to other regulators guidelines on Pillar 3, namely, from Monetary Authority of Singapore (MAS), Hong Kong Monetary
Authority (HKMA), Committee of European Banking Supervisors (CEBS) and Financial Services Authority, UK (FSA) when preparing this document.

Strategy

Basel II is structured and developed around three pillars as illustrated in the following diagram:

Performance

BASEL II
Pillar II
Supervisory review process
Supervisory review of Banks overall
assessment of risk and capital requirements
covering:
Risks not adequately covered in Pillar I
e.g. concentration risk

Dierent levels of sophistication in the

requirements both for credit and
operational risk

Risks not in Pillar I e.g. interest rate risk

in the banking book
Stress testing of all risks

Establishes minimum capital requirement

for Credit, Market and Operational Risk

Specic qualitative and quantitative

disclosures
Scope of application
Composition of capital
Risk exposure assessment
Risk proles
Capital adequacy

Leadership

Assessment of capital needed to

cover the risks

Stress testing of IRB portfolios

Resulting in Individual Capital Guidance

MANAGE

DISCLOSE

Governance

MEASURE

Responsibility

Better align regulatory capital with

economic risk

Pillar III
Market Disclosure
Disclosure requirements around risk
management to the market
place covering:

Business Review

Pillar I
Minimum capital requirements
Risk based capital
requirements:

Financial & Others

AGM Information

444

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Overview

Pillar 1 sets out the minimum regulatory capital requirements the

minimum amount of regulatory capital banks must hold against the
risks that they assume. It focuses on the measurement methodologies
and their respective qualifying criteria to use various specified
approaches available to calculate the risk weighted assets (RWA) for
credit, market and operational risks.

The Group has adopted the FIRB Approach and supervisory slotting criteria
to calculate credit risk weighted assets for major non-retail portfolios, and the
AIRB Approach for major retail portfolios. Other credit portfolios, especially
those in the Banks subsidiaries and some overseas units, are on the
Standardised Approach and will be progressively migrated to the internal
ratings-based approaches.

Pillar 2 provides the key principles for supervisory review of a banks

risk management framework and its capital adequacy. It sets out the
requirements for banks to make their own internal assessments of
capital adequacy vis--vis their risk profile, and to have a
comprehensive strategy in place for maintaining their appropriate
capital levels. It further sets out specific oversight responsibilities for
the Board of Directors (Board) and senior management, thus
reinforcing principles of internal control and other corporate
governance practices.

For market risk, the Group has adopted the Standardised Approach (SA)
whereas for operational risk, the Basic Indicator Approach (BIA) is currently
being adopted pending migration to The Standardised Approach (TSA) once
approval has been obtain from BNM.

Pillar 3, as covered in this document, aims to bolster market discipline

by developing a set of disclosure requirements, which allows market
participants to assess certain specified information on the scope of
application of Basel II, capital, particular risk exposures and risk
assessment processes and hence, the capital adequacy of the
institution. Disclosures consist of both quantitative and qualitative
information and are provided at the consolidated level.

Basel II provides three approaches of increasing sophistication to the

calculation of credit risk capital, namely, the Standardised Approach, the
Foundation IRB Approach (FIRB) and the Advanced IRB Approach (AIRB).
Basel II also introduced capital requirements for operational risk for the first
time.
The IRB Approach for credit risk allows banks to use internal estimates of risk
parameters, namely, the probability of default (PD), loss given default (LGD)
and exposure at default (EAD) to determine regulatory capital requirements
under Basel II.
The table below illustrates the various approaches that are available to be
adopted for capital requirements calculation under Basel II in relation to the
various risk types under Pillar 1:

Types of Approaches
Credit Risk

Market Risk

Operational Risk

1. Standardised
Approach (SA)
2. Foundation
Internal RatingsBased Approach
(FIRB)

Standardised Approach
(SA)
Internal Models
Approach (IMA)

Basic Indicator Approach

(BIA)
The Standardised
Approach (TSA)

3. Advanced Internal
Ratings-Based
Approach (AIRB)

Advanced Measurement
Approach (AMA)

The Groups Pillar 3 Disclosure is governed by the Policy on Basel II RiskWeighted Capital Adequacy Framework Pillar 3, which sets out the
minimum disclosure standards, the approach in determining the
appropriateness of information disclosed and the internal controls over the
disclosure process, which cover the verification and review of the accuracy of
information disclosed.
The information provided herein has been verified and approved internally
by the Group. At the present, there is no requirement for independent
external audit of this disclosure under BNMs Pillar 3 Disclosure guidelines.
The qualitative disclosures in this document are updated and published on
an annual basis and will be updated more frequently in the event of
significant changes to policies and regulatory requirements. The capital
structure and capital adequacy disclosures are published on a quarterly basis.
All other quantitative disclosures are published semi-annually (limited
specific requirements), whilst the full quantitative disclosure requirements
will be published annually.

Medium and Location of Disclosure

The Groups Pillar 3 disclosure will be made available under the Investor
Relations section of the Groups website at www.maybank2u.com.my and as
a separate report in the annual and half-yearly financial reports, after the
notes to the financial statements. Where the disclosure requirements of the
BNMs Pillar 3 guidelines are reported in the financial reports or notes to the
financial statements as required under Financial Reporting Standard (FRS) 7,
such disclosures are deemed to have met the Pillar 3 requirements.

FINANCIAL STATEMENTS

Maybank Annual Report 2011

445
At A Glance
Performance
Business Review

This differs from similar terms applied in the financial year ending 30th June
2011 financial statements as the definition of credit exposures within the
ambit of accounting standards represents the balance outstanding as per the
balance sheet date and does not take into account the expected undrawn
contractual commitments. This is one of the main reasons why exposure
values in the Pillar 3 Disclosure document may differ from asset values in the
published financial statements.

Strategy

This is most apparent for credit risk disclosures, where the risk arising from
credit exposures are estimated by using parameters specified under Basel II.
The term credit exposure used in this document is a prescribed definition
by BNM based on the RWCAF Disclosure Requirements (Pillar 3) and CAFIB
Disclosure Requirements (Pillar 3). Credit exposure is defined as the
maximum amount a banking institution may be exposed to a counterparty in
the event of a default.

Who We Are

This Pillar 3 disclosure document has been designed to be in compliance

with the BNMs Pillar 3 Guidelines, and is to be read in conjunction with the
Groups and Banks Financial Statements for financial year ending 30th June
2011. Whilst this document discloses the Groups assets both in terms of
exposures and capital requirements, the information disclosed herein may
not be directly comparable with the information in the Financial Statements
2011 published by the Group.

Our Perspective

Basis of Disclosure

Comparative Information

i.
ii.

Leadership

For first time adoption and disclosure of RWCAF where there are no
corresponding disclosures in the previous reporting periods; and
For banking institutions that adopt a different approach (subject to
approval obtained from BNM) to compute its regulatory capital for
credit, market or operational risks from that used in the preceding
reporting period.

Responsibility

Although BNM requires that comparative information regarding quantitative

disclosures must be reported, the following exceptions are permitted:

Since this is the first year of disclosure by the Group, there is no

corresponding disclosure in the preceding reporting period.
Governance
Financial & Others
AGM Information

446

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Scope of Application

In this Pillar 3 document, Malayan Banking Berhads (Maybank) information is

presented on a consolidated basis, namely Maybank Group covering
Maybank, its subsidiaries and overseas branches.
For regulatory reporting purposes, Maybank establishes two main levels of
reporting namely at Maybank Group (the Group) level, covering Maybank
Malaysia, Maybank International Labuan Limited (MILL), overseas units and
subsidiaries, and at Maybank Global (the Bank) level covering Maybank
Malaysia, overseas units and MILL.
This Pillar 3 disclosure is at the former level. In this Pillar 3 document,
Malayan Banking Berhad, its subsidiaries and overseas branches are referred
to as Maybank Group or the Group. The Group offers Islamic banking
financial services via its wholly-owned subsidiary company, Maybank Islamic
Berhad (MIB).
Information on subsidiary and associated companies of the Group is available
in the notes to the financial statements. The basis of consolidation for
financial accounting purposes is described in the notes segment of the
financial statements, and differs from that used for regulatory capital
reporting purposes.
The Group manages its capital resources to ensure that those Group entities
that are subject to local capital adequacy regulation in individual jurisdictions
meet their minimum capital requirements. The Bank is the primary provider
of equity capital to its subsidiaries. Each subsidiary manages its own capital
to support its planned business growth and meet its local regulatory
requirements. Injections of capital resources into Group entities are approved
by the Board. The Groups policy is for capital held in Group entities in excess
of local regulatory requirements to be repatriated to the Bank in the form of
dividends and/or capital repatriation, subject to local regulatory
requirements, exchange controls and tax implications.

Capital in branches and subsidiaries is maintained on the basis of the host

regulators regulatory requirements. Suitable processes and controls are in
place to monitor and manage capital adequacy and ensure compliance with
local regulatory ratios in all our legal entities. These processes are designed
to ensure that the Group has sufficient capital available to meet local
regulatory requirements at all times.
The Group is not aware of any material, practical impediments to the prompt
transfer of capital resources in excess of those required for regulatory
purposes or repayment of intra-group liabilities when due.
Regulators have set a range of minimum levels for regulatory capital ratios.
There are also limits relating to the structure and quality of capital resources.
The Group ensures that it maintains sufficient buffers above these regulatory
minimums at all times.

FINANCIAL STATEMENTS

Maybank Annual Report 2011

447
At A Glance

Capital Management

Maintain Core Capital Ratio and Risk Weighted Capital Ratio at levels
sufficiently above the current minimum requirements of BNM;

Regulatory capital requirements;

Future demand for capital to support the credit ratings;

Increases in demand for capital due to business growth, market shocks

or stresses;

Available supply of capital and capital raising options;

Continuous enhancement of the efficient usage of capital;

Ensure regulated subsidiaries can meet their minimum capital

requirements;

Measure the performance of business sectors based on return on

capital and return on equity;

Allocate capital to businesses to support the Groups strategic

objectives and optimise returns on capital;

Growing non-interest income sources which are less capital intensive;

Remain flexible to take advantage of future opportunities;

Significant focus on measuring risk adjusted return on capital in

evaluating business proposals; and

Build and invest in businesses, even in a reasonably stressed

environment; and

Continuous monitoring of the robustness of its capital position and an

efficient mix of capital through a 3-year capital management plan.

Optimise returns to shareholders.

Support the underlying risks of the Groups business;

Optimise growth; and

Be able to withstand capital demands under market shocks and stress

condition.

Financial & Others

Governance

The Group also seeks to maintain adequate levels of capital and an optimum
mix of the different components of capital are important in order to:

In its pursuit of an efficient and healthy capital structure, the following

initiatives were undertaken by the Group:

Leadership

Support the Groups credit rating;

Responsibility

Business Review

The Groups capital management objectives are to hold capital sufficient to:

Performance

The Groups capital management activities seek to maximise shareholders

value by optimising the level and mix of its capital resources.

Strategic, business and capital plans are drawn up annually covering a three
year horizon and approved by the Board. The capital plan ensures that
adequate levels of capital and an optimum mix of the different components
of capital are maintained by the Group to support its strategy. The capital
plan takes the following into account:

Strategy

The Groups objective in managing its capital is to maintain sufficient and

adequate capital resources given current and future requirements. The Group
manages its requirements for capital from organic and inorganic growth, and
ensures that resources remain in excess of minimum regulatory requirements
and internal targets (which provide a buffer above minimum requirements).

The Groups capital management policies are to diversify its sources of

capital; to allocate capital efficiently, guided by the need to maintain a
prudent relationship between available capital and the risks of its underlying
businesses; and to meet the expectations of key stakeholders, including
investors, regulators and rating agencies.

Who We Are

A strong capital position is essential to the Groups business strategy and

competitive position. The Groups capital strategy focuses on long-term
stability, which enables it to build and invest in market leading businesses.
Senior management considers the implications on the Groups capital
strength prior to making any decisions on future business activities. In
addition to considering the Groups earnings outlook, senior management
evaluates all sources and uses of capital and makes strategic decisions to
regulate the supply and demand of its capital to preserve the Groups overall
capital strength and position.

The quality and composition of capital are key factors in senior

managements evaluation of the Groups capital adequacy. The Group
strongly emphasises the quality of its capital and, accordingly, holds a
significant amount of its capital in the form of equity.

Our Perspective

Introduction

AGM Information

448

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Capital Management

Gearing up of capital

On 31 March 2011, MIB issued RM1.0 billion nominal value Tier 2

Capital Islamic Subordinated Sukuk under the Shariah principle of
Musyarakah. The Sukuk are under a 10 non-callable 5 basis
feature, payable semi-annually in arrears in September and March
each year, and are due in March 2021. Under the 10 non-callable
5 basis feature, MIB has the option to redeem the Subordinated
Sukuk on the 5th anniversary.

ii.

SGD1.0 billion Subordinated Notes issued by Maybank due in

2021.

On 28 April 2011, Maybank issued SGD1.0 billion nominal value

Tier 2 Subordinated Notes under the USD2 billion Multicurrency
Medium Term Notes Programme. The Subordinated Notes are
under a 10 non-callable 5 basis feature, payable semi-annually in
arrears in April and October each year, and are due in April 2021.
Under the 10 non-callable 5 basis feature, Maybank has the
option to redeem the subordinated notes on the 5th anniversary
or any semi-annual interest payment date thereafter.

iii.

IDR1.5 trillion Subordinated Debt issued by PT Bank Internasional

Indonesia Tbk (BII) due in 2018.

On 19 May 2011, BII issued IDR1.5 trillion nominal value

Subordinated Debt. The Subordinated Debt is for a tenure of 7
years, payable quarterly, and will mature on 19 May 2018.

The Group has issued various capital instruments including equity,

Non-Innovative Tier 1 Capital Securities, Innovative Tier 1 Capital
Securities and Subordinated Bonds/Certificates/Notes to strengthen its
capital position. Details of the said various capital instruments are as
follows:

Tier I capital

The Group has RM3.5 billion Non-Innovative Tier 1 Capital Securities as

well as Innovative Tier 1 Capital Securities of RM1.1 billion and SGD600
million outstanding as at 30 June 2011.
During the financial year, the share capital of the Group increased by
RM400,223,299 arising from issuance of new ordinary shares of
Maybank pursuant to the Dividend Reinvestment Plan (DRP).

Tier II capital

In November 2010, the Group redeemed the RM1.0 billion Islamic

Subordinated Bonds, which was issued in November 2005 on a 10
non-callable 5 basis feature. The following Subordinated Bonds/
Certificates/Notes are outstanding as at 30 June 2011, including 2 new
issuances during the financial year:
No

Name

Issue Date

RM1.5 billion subordinated Islamic bonds due

in 2018

15 May 2006

RM1.5 billion subordinated bonds due in 2017

11 April 2007

USD300 million subordinated certificates due

in 2017

25 April 2007

RM3.1 billion Subordinated Term Loan due in

2019

28 November 2008

RM1.0 billion subordinated sukuk due in 2021

31 March 2010

SGD1.0 billion subordinated notes due in

2021

28 April 2011

IDR1.5 trillion subordinated debt due in 2018

19 May 2011

Brief terms and conditions of the Tier II capital instruments issued
during the current financial year are as follows:
i.

RM1.0 billion Subordinated Sukuk issued by MIB due in 2021.

Dividend payout
The Bank had on 25 March 2010 announced a recurrent and optional
DRP that allows shareholders of the Bank to reinvest their dividends
into new ordinary shares of RM1.00 each in the Bank. The DRP is part of
Groups strategy to preserve equity capital ahead of the regulations
under Basel III as well as to grow its business whilst providing healthy
dividend income to its shareholders.
DRP for the final dividend in respect of financial year ended 30 June
2010 was a success with 89% reinvestment rate.
For the current financial year, the Bank paid an interim cash dividend of
28 sen per share less 25% taxation on 12 May 2011, amounting to net
dividend paid of RM1,537,670,482. The DRP applies to this interim cash
dividend in which the electable portion of 24 sen (18 sen net) per
ordinary share amounting to RM1,318,003,270 can be elected to be
reinvested into new Maybank shares and the remaining portion of 4
sen (3 sen net) per ordinary share amounting to RM219,667,212 will be
paid in cash. The reinvestment rate achieved on the electable portion
was 91.13%.

FINANCIAL STATEMENTS

Maybank Annual Report 2011

449
At A Glance
Who We Are
Strategy

Capital requirements are expected to increase moving forward under Basel III, the rules of which were published in December 2010 by the Basel
Committee on Banking Supervision (BCBS). The Basel III reforms increases the minimum quantity and quality of capital that the Group is obliged to
maintain and expects systemically important banks to have higher loss absorbing capacity beyond the minimum standards. These proposed reforms are
expected to be implemented by the beginning of 2013, however the requirements are subject to a series of transitional arrangements and will be
phased in over a period of time, to be fully effective by 2019. The approach and local implementation of Basel III in Malaysia will depend on BNMs
response to the minimum capital standards set by the BCBS.

Our Perspective

The Board has proposed the payment of final dividend in respect of the financial year ended 30 June 2011 of 32 sen per share less 25% tax, out of which
4 sen (3 sen net) per ordinary share will be paid in cash while the balance 28 sen (21 sen net) per ordinary share will be the portion which can be elected
to be reinvested in new Maybank shares in accordance with the DRP, subject to the relevant regulatory approvals, as well as, shareholders approval at
the forthcoming Annual General Meeting.

Internal Capital Adequacy Assessment Process (ICAAP)

ICAAP framework
Dialogue
Supervisory Review
Process

Internal Capital
Adequacy Assessment
Assess all risks and identify
controls to mitigate risks

Propose
ICAAP

Identify amount of internal

capital in relation to risk
profile, strategies and
business plan

Supervisory risk assessment

under the Risk-based
Supervisory Framework
(RBSF)

Review
assumptions

ICAAP review: assess, review

and evaluate ICAAP

Supervisory
evaluation of
on-going
compliance
with minimum
standards and
requirements

ICAAP considered as
fully satisfactory

ICAAP considered as
not fully satisfactory

Minimum Regulatory Capital Ratio

Regulatory capital
allocated for Pillar 1 risks

Regulatory capital
allocated for Pillar 2 risks

Supervisory
Add-on

including

Broad range of
supervisory measures

AGM Information

Supplementing the ICAAP reports is the Group Capital Plan, which is updated on annual basis where the internal capital targets are set and reviewed, among
others as part of sound capital.

Financial & Others

Internal capital targets

Governance

Overall assessment and

conclusion

Produce ICAAP number

and assessment

Leadership

G
O
V
E
R
N
A
N
C
E

RESPONSIBILITY OF BANKS

Responsibility

I
N
T
E
R
N
A
L

Business Review

In line with BNMs Guideline on ICAAP issued in December 2010, the Groups ICAAP closely integrates the risk and capital assessment processes. The ICAAP
framework is designed to ensure that adequate levels, including capital buffers, are held to support the Groups current and projected demand for capital
under existing and stressed conditions. Regular ICAAP reports are submitted on half yearly basis to the Executive Risk Committee (ERC), the Board Risk
Management Committee (RMC) and the Board for comprehensive review of all material risks faced by the Group and assessment of the adequacy of capital to
support them.

Performance

At the Group, the overall capital adequacy in relation to its risk profile is assessed through a process articulated in the ICAAP. The ICAAP Framework has been
formalised and approved by the Board in April 2008, and has been implemented within the organisation to ensure all material risks are identified, measured
and reported, and adequate capital levels consistent with the risk profiles are held.

450

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Capital Management

Comprehensive Risk Assessment under ICAAP Framework

Regular Stress Testing

Under the Groups ICAAP methodology, the following risk types are identified
and measured:

Risks captured under Pillar 1 (credit risk, market risk and operational risk);

The Groups stress testing programme is embedded in the risk and capital
management process of the Group and is a key function of capital planning
and business planning processes. The programme serves as a forwardlooking risk and capital management tool to understand our risk profile
under extreme but plausible conditions. Such conditions may arise from
economic, political and environmental factors.

Risks not fully captured under Pillar 1 (e.g. model risk);

Risks not taken into account by Pillar 1 (e.g. interest rate risk in banking
book, liquidity risk, business/strategic risk, reputational risk and credit
concentration risk); and

External factors, including changes in economic environment,

regulations, and accounting rules.

A key process emplaced within the Group sets to identify material risks that
may arise through introduction of new products and services. Material risks
are defined as risks which would materially impact the financial performance
of the bank should the risk occur. In the Groups ICAAP Framework, the
Material Risk Assessment Process (MRAP) is designed to create an ability to
estimate the impact of risk drivers on earnings and capital. New material
risks, if any, are reviewed on a quarterly basis and incorporated in the regular
ICAAP reports tabled to the ERC and the RMC.

Under Maybank Group Stress Test Framework, which was approved by the
Board in December 2006, it considers the potential unfavourable effects of
stress scenarios on the Groups profitability, asset quality, risk weighted assets
and capital adequacy.
Specifically, the stress test programme is designed to:

Highlight the dynamics of stress events and their potential implications

on the Groups trading and banking book exposures, liquidity positions
and likely reputational impacts;

Identify proactively key strategies to mitigate the effects of stress

events; and

Produce stress results as inputs into the Groups ICAAP in the

determination of capital adequacy and capital buffers.

Assessment of Pillar 1 and Pillar 2 Risks

In line with industry best practices, the Group quantifies its risks using
methodologies that have been reasonably tested and deemed to be
accepted in the industry.
Where risks may not be easily quantified due to the lack of commonly
accepted risk measurement techniques, expert judgment is used to
determine the size and materiality of risk. The Groups ICAAP would then
focus on the qualitative controls in managing such material non-quantifiable
risks. These qualitative measures include the following:

Adequate governance process;

Adequate systems, procedures and internal controls;

Effective risk mitigation strategies; and

Regular monitoring and reporting.

Stress test themes reviewed by the Stress Test Working Group in the past
include a repeat of Asian Financial Crisis, US dollar depreciation, pandemic
flu, asset price collapse, interest rate hikes, a global double-dip recession
scenario, Japan disasters, the Eurozone and US debt crises, amongst others.
The Stress Test Working Group, which comprises of business and risk
management teams, tables the stress test reports at the Senior Management and
Board committees and discusses the results with regulators on a regular basis.

Capital Adequacy Ratios

On 29 June 2010, the Bank and its subsidiary, MIB received approval from
BNM to migrate to IRB Approach for credit risk under Basel II RWCAF from 1
July 2010 onwards.
With effect from 1 July 2010, the capital adequacy ratios are computed as
follows:
(a)

Group, Bank and MIB ratios are computed in accordance with BNMs
Basel II RWCAF issued on 1 April 2010 as follows:
(i) Credit risk under IRB Approach;
(ii) Market risk under Standardised Approach; and
(iii) Operational risk under Basic Indicator Approach.

The minimum regulatory capital adequacy requirement remains at 8%

for the risk-weighted capital ratios.

FINANCIAL STATEMENTS

Maybank Annual Report 2011

451
At A Glance

(c)

BII on a standalone basis is computed in accordance with its local requirements, which is based on the Basel I capital accord. The minimum regulatory
capital adequacy requirement is 8% for the risk-weighted capital ratios. However, for disclosure at the Group level, the computation was based on the
capital adequacy rules of BNM, using Basel II RWCAF rules, as BII is considered a significant overseas subsidiary.

Who We Are

Maybank Investment Bank Berhad (Maybank IB) on a standalone basis is computed in accordance with BNMs Basel II RWCAF issued on 1 April 2010
under Standardised Approach for credit and market risks, whereas operational risk is under the Basic Indicator Approach. The minimum regulatory capital
adequacy requirement is 8% for the risk-weighted capital ratios.

Our Perspective

(b)

Table 1: Capital Adequacy Ratios for Maybank Group, Maybank and Maybank Islamic Berhad as at 30th June 2011 (RM000)
Maybank

Maybank Islamic

Before deducting electable portion

dividend to be re-invested :
Core capital ratio
Risk-weighted capital ratio

11.93%

13.44%

10.31%

15.45%

13.44%

13.02%

Expressed in RM (000)
Capital Base

38,150,608

25,311,609

4,784,522

Credit RWA

207,764,624

160,841,302

27,119,266

15,991,249

9,692,832

149,810

23,223,860

17,738,110

2,334,044

7,154,554

246,979,733

188,272,244

36,757,674

Additional risk-weighted assets due

to capital floor
Total RWA

The risk-weighted capital ratio of the Group as at 30th June 2011, stood at 15.45%, which is an increase from the previous financial years ratio of 14.67% that
was computed under Basel I regime.

Leadership

The Capital Structures of the Group, the Bank and MIB are shown in Tables 2 through 4 respectively. The risk-weighted capital ratio at 15.45% against the
Groups total RWA is testament of the Groups resilience and strength in meeting its obligations. Similarly, at entity level, the Banks RWCR remain strong at
13.44% and MIB registered a healthy ratio of 13.02%.

Responsibility

Note: * RWCR is computed by dividing capital base over total RWA.

Business Review

Market RWA
Operational RWA

Performance

Group

Strategy

Capital Adequacy Ratios

Governance
Financial & Others
AGM Information

452

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Capital Management

Table 2: Disclosure on Capital Structure for Maybank Group as at 30th June 2011 (RM000)
Eligible Tier 1 Capital
Paid-up ordinary share capital/ Islamic banking fund
Share premium
Retained profit/loss brought forward from the previous financial year
Statutory reserve fund
Capital redemption reserve
Total non-innovative Tier 1 (non-IT1) and innovative Tier 1 (IT1) capital
Non-innovative Tier 1 capital
Total innovative Tier 1 capital
RM innovative Tier 1 capital
RM Approved innovative debt capital instruments issued
FX Approved innovative debt capital instruments issued
Minority interest in shares of non-wholly owned subsidiaries
Total Tier 1 capital
Less:
Goodwill
ELIGIBLE TIER 1 CAPITAL
Eligible Tier 2 Capital
Maximum allowable subordinated debt capital
RM subordinated debt capital
FX subordinated debt capital
Collective Allowance for SA approach
Total Tier 2 capital
Total Tier 2 capital (subject to limits)
Less:
Investment in subsidiaries companies
Securitisation exposures subject to deductions
Securitisation exposures held in the banking book
Excess of total EL over total EP under the IRB approach
Liquidity reserve
Total deductions
Total deductions from Tier 2 Capital
ELIGIBLE TIER 2 CAPITAL
CAPITAL BASE

7 ,478,206
8 ,583,711
6 ,767,469
6 ,409,922

6,065,486
3,497,945
2,567,541
1,099,171
1,099,171
1,468,370
2 19,077
35,523,871
(6,049,900)
29,473,971
10,732,475
7,373,495
3,358,980
9 95,632
11,728,107
11,728,107
2,924,965
16,796
16,796
108,217
1,492
3,051,470
3,051,470
8,676,637
38,150,608

FINANCIAL STATEMENTS

Maybank Annual Report 2011

453
At A Glance
Our Perspective

Table 3: Disclosure on Capital Structure for Maybank as at 30th June 2011 (RM000)

FX subordinated debt capital

Collective Allowance for SA Approach

9,458,980
6,100,000
3,358,980
449,884
9,908,864
9,908,864
17,457,434
16,796
16,796
37,149
1,492
17,512,871
9,908,864

25,311,609

Leadership

ELIGIBLE TIER 2 CAPITAL

CAPITAL BASE

25,311,609

Responsibility

Total Tier 2 capital

Total Tier 2 capital (subject to limits)
Less:
Investment in subsidiaries companies
Securitisation exposures subject to deductions
Securitisation exposures held in the banking book
Excess of total EL over total EP under the IRB approach
Liquidity reserve
Total deductions
Total deductions from Tier 2 Capital

81,015
7,604,007

Business Review

Eligible Tier 2 Capital

Maximum allowable subordinated debt capital
RM subordinated debt capital

32,996,631
Performance

Deductions in excess of Tier 2 capital

ELIGIBLE TIER 1 CAPITAL

3,497,945
2,567,541
1,099,171
1,099,171
1,468,370

Strategy

Less:
Goodwill

7 ,478,206
8 ,583,711
4 ,656,768
6 ,212,460
6,065,486

Who We Are

Eligible Tier 1 Capital

Paid-up ordinary share capital/Islamic banking fund
Share premium
Retained profit/loss brought forward from the previous financial year
Statutory reserve fund
Total non-innovative Tier 1 (non-IT1) and innovative Tier 1 (IT1) capital
Non-innovative Tier 1 capital
Total innovative Tier 1 capital
RM innovative Tier 1 capital
RM Approved innovative debt capital instruments issued
FX Approved innovative debt capital instruments issued
Total Tier 1 capital

Governance
Financial & Others
AGM Information

454

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Capital Management

Table 4: Disclosure on Capital Structure for Maybank Islamic as at 30th June 2011 (RM000)
Eligible Tier 1 Capital
Paid-up ordinary share capital/ Islamic banking fund
Share premium
Retained profit/loss brought forward from the previous financial year
Statutory reserve fund
General reserve fund
Total Tier 1 capital
Less:
Goodwill
Deductions in excess of Tier 2 capital
ELIGIBLE TIER 1 CAPITAL
Eligible Tier 2 Capital
Maximum allowable subordinated debt capital
RM subordinated debt capital
Collective Allowance for SA Approach
Total Tier 2 capital
Total Tier 2 capital (subject to limits)
Less:
Excess of total EL over total EP under the IRB approach
Total deductions
Total deductions from Tier 2 Capital
ELIGIBLE TIER 2 CAPITAL
CAPITAL BASE

110,600
2,488,400
1,041,814
1 47,338
1,696
3,789,848

3,789,848
1,096,557
1,000,000
96,557
1,096,557
1,096,557
101,883
101,883
101,883
994,674
4,784,522

FINANCIAL STATEMENTS

Maybank Annual Report 2011

455
At A Glance

Risk Management

Strategy
Performance

The risk environment in which the Group operates in, changes continuously,
caused by a range of factors, from the transactional level to macro
geopolitical events. The risk environment requires continuous monitoring
and assessment in an integrated manner in order to understand and manage
the complex risk interactions across the Group. Initiatives under the Groups
Basel II programme have also been a major catalyst and contributor to the
enhancement of risk management practices within the Group, further
embedding the risk culture and best practice methodologies in the Groups
operations. The risk management framework that the Group has put in place
is designed to meet these challenges. Various aspects are described below.

The Risk function is also responsible for implementing and maintaining the
Groups Risk Management Framework, ensuring that it remains relevant and
appropriate to the Groups activities. Other functions include administering
risk-related governance and reporting processes.

Who We Are

The management of risk lies at the heart of the Groups business. All of the
Groups activities involve, to varying degrees, the measurement, evaluation,
acceptance and management of risks or combination of risk types. The Group
takes proactive measures to manage the various risks posed by the rapidly
changing business environment in which it operates. These risks, which
include credit risk, market risk, liquidity risk and operational risk, are
comprehensively dealt with and systematically managed within established
limits and controls.

The Risk function is independent of the origination and sales functions to

ensure that the necessary balance in risk/return decisions is not in any way
compromised by business pressures to generate revenues. This clear
delineation of the second-line of defense is crucial to the way the Group
governs itself and is particularly crucial given that revenues are recognised
immediately while losses arising from risk positions only manifest themselves
over time.

Our Perspective

Introduction

Business Review

Risk Governance Structure

The following chart illustrates the risk governance structures of the Group:

Board Level Committee

Risk Management Committee (RMC)

Leadership

The Board of Directors is Maybank Groups ultimate governing body who has overall risk oversight responsibility. It approves the Groups
risk management framework, risk appetite, plans and performance targets for the Group and its principal operating subsidiaries, the
appointment of senior officers, the delegation of authorities for credit and other risks and the establishment of effective control
procedures.

Responsibility

Board Of Directors

The RMC is a dedicated Board Committee responsible for the risk oversight function within the Bank. It is principally responsible to review
and approve key risk frameworks and policies for the various categories of risks.
The Credit Review Committee (CRC) is tasked by the Board to review fresh or additional loan applications subject to pre-determined
authority limits and credit risk ratings as may be recommended by the GMCC.

Asset & Liability Mgt. Committee (ALCO)

Group Mgt. Credit Committee (GMCC)

The ERC, ALCO, GMCC are Management Level committees responsible for the management of all material risks within The Bank. The scope
of the ERC encompasses all risk types except market and liquidity risks, which are within the purview of the ALCO. GMCC is empowered as
the centralised loans approval committee for the Group.

Financial & Others

Management Level Committee

Executive Risk Committee (ERC)

Governance

Credit Review Committee (CRC)

AGM Information

456

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Risk Management

Risk Strategy

Holistic Enterprise Risk Management Approach

The Groups risk management strategy is targeted at ensuring:

In light of the Groups operating structure and geographic expansion, the

Group continuously enhances its integrated risk management approach
towards the effective management of enterprise-wide risks in the Group. Key
components of the Enterprise Risk Management (ERM) framework include:

a)

Pre-emptive Risk Planning

Economic and Industry Research
Close monitoring of major and relevant economies including Malaysia
through selective economic indicators are used as early warning signals
to manage the Groups exposures. These indicators are also taken into
account to develop the Groups long term lending strategy and asset
growth planning. At the tactical level, medium term industry trend
information is used by the relationship managers to develop
appropriate actions in making risk informed business decisions.
New Supervisory Requirements
The Group also assesses the impact of various regulatory changes in
Malaysia and markets which the Group has presence. The thematic
assessments deliberated include the impact of new liquidity
requirements issued by the BCBS and Financial Services Authority,
United Kingdom to strengthen liquidity management as well as the
impact on capital requirements based on Basel III.

b)

Risk Discovery and Preventive Measures

The Group continues to drive a robust enhancement of control
measures to manage people, products and processes through granular
risk discovery and root cause analysis. This enables the Group to tailor a
differentiated risk policy as well as business action plan that is relevant
and competitive. Enhancements to preventive and deterrence
measures and controls on fraud are amongst the thematic initiatives
undertaken for this financial year.

c)

Capital Management
The impact of the overall net risk earnings and adequacy of the Groups
capital to support the risk taking activities is assessed through group
wide and business level stress testing as well as periodic review and
update of the stress events library. Relevant business units are alerted
on possible defensive actions.

Structured risk governance model incorporating Board and Senior

Management oversight across the Group;

Sound capital management processes of all operating entities;

Comprehensive assessment of material risks;

Rigorous and regular controls, reviews, monitoring and reporting; and

Independent reviews by internal auditors, external auditors and the

relevant supervisory authorities.

The Group views the ERM process as a structured and disciplined approach
to align strategies, policies, processes, people and technology with the
specific purpose of evaluating all risks in line with enhancing shareholder
value.
In line with the ERM, the Group has adopted and consistently practised the
Seven Broad Principles of Risk Management to ensure integration in purpose,
policy, methodology and risk culture.

FINANCIAL STATEMENTS

Maybank Annual Report 2011

457
At A Glance

No
1
2

The 2nd Line of Defence provides the specialised resources for

developing risk frameworks, policies, methodologies and tools for the
management of material risks taken by the Group as a whole; and

The 3rd Line of Defence involves internal audit, whose task would be to
independently review on the adequacy and effectiveness of the risk
management process.

To strengthen the risk culture within the Group, the Group has
established the following:

i.

Embedded Risk Management Units

Principles
The risk management approach is premised on three lines of
defence risk taking units, risk control units and internal audit.
The risk taking units are responsible for the day-to-day management
of risks inherent in their business activities while the risk control
units are responsible for setting the risk management frameworks
and developing tools and methodologies for the identification,
measurement, monitoring, control and pricing of risk.
Complementing this is internal audit which provides independent
assurance of the effectiveness of the risk management approach.

Risk management ensures that the core risk policies of the Group are
consistent, sets the risk tolerance level and facilitates the
implementation of an integrated risk-adjusted measurement
framework.

Risk management is functionally and organisationally independent

of the business sectors and other risk taking units within the
Maybank Group.

The Maybank Board, through the Board Risk Management

Committee, maintains overall responsibility for risk oversight within
the Group.

Risk management is responsible for the execution of various risk

policies and related business decisions empowered by the Board.

For effective risk governance, the Group adopts a three-line of defence

concept.

Organisational Units

1 Line of Defence

Business and Support Units

2nd Line of Defence

Risk Management and Compliance

3rd Line of Defence

Internal Audit

st

ii. Specialist Islamic Finance Risk Management

To enhance the management of Islamic finance risk, the Group
established a Risk Management department within MIB since financial
year 2008/09. MIB adopts the same principles and standards as the
Group in setting its risk management framework while ensuring the
framework is consistent with Shariah requirements set out by the
Islamic Financial Services Board (IFSB) and BNM.

Financial & Others

Approach to Managing Risk

The ERU have an indirect reporting line to the Group Chief Risk Officer
and collaborates with independent risk management function to
review the impact of risk on capital adequacy, profitability, asset quality
and other risk indicators, including stress testing exercises on a periodic
basis.

Governance

Three Lines of Defence Concept in Managing Risks across the Group

Entities

In line with deepening risk ownership and visibility, the ERU plays a
pivotal role towards effective risk management within the Business
Sector by strengthening the first line of defense.

Leadership

The Group Risk Governance Structure

The RMC had approved the establishment of embedded risk

management units (ERU) within the selected key business sectors. The
approved terms of reference of the ERU include assessment and review
of material risks faced by the business sector as guided by the overall
risk management approach of the Bank.

Responsibility

Risk management provides risk oversight for the major risk

categories including credit risk, market risk, liquidity risk, operational
risk and other industry-specific risks.

Business Review

Performance

Strategy

The 1st Line of Defence is primarily responsible for managing specific

risks assumed by them in their day-to-day activities;

Who We Are

The Seven Broad Principles define the key principles on accountability,

independence, structure and scope.

Our Perspective

The Groups Seven Broad Principles of Risk Management

AGM Information

458

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Risk Management

iii. Risk Appetite

The formulation of risk appetite takes into consideration the Groups
risk taking-capacity, its financial position, the strength of its core
earnings and the resilience of its reputation and brand. The risk
appetite is cascaded down further to the key risks of the Group.

Operational Risk Management

The Groups operational risk appetite is defined and expressed through
the following measures and limits:
a)

Impact and Materiality Table in terms of limits;

b)

Tolerance and thresholds that reflects Maybank Groups risk

appetite/tolerance; and

c)

Profile for the purpose of identifying material operational risks

and losses.

Credit Risk Management

Risk appetite for credit risk is an expression of the amount of risk that
the Group is willing to take in pursuing its strategic objectives. It
reflects the Groups capacity to sustain potential losses arising from a
range of potential consequences under different stress scenarios. This is
defined in terms of both impact to earnings and maintenance of
minimum regulatory capital requirements.
These are used as a basis for establishing the risk parameters within
which businesses must operate, including policies, concentration limits
and business mix. Credit concentration risk of the Group is managed
within the concentration limits set by counterparties, industry sector
and country segments. Additional monitoring of concentration by
credit rating, credit exposures and external trends are also conducted
regularly for proactive management of our credit portfolio.

Market Risk Management

The Groups willingness to accept risk is influenced by various factors
including market volatility, business direction, macro-economic and
subjective factors. The Group adopts both quantitative and qualitative
models to measure the risk and potential losses over a given period.
This is managed and contained through relevant market risk limits and
policies governed under the approved risk management framework
and regulatory compliance.

To support the Groups risk tolerance, each business / support sector is

required to set their respective risk appetite within the limits and loss
tolerances established by the Group, and facilitated by the operational
risk management tools.

FINANCIAL STATEMENTS

Maybank Annual Report 2011

459

Credit Risk

At A Glance

Credit Risk Definition

Our Perspective
Who We Are
Strategy

Credit risk arises as a result of customers or counter-parties failure or

unwillingness to fulfill their financial and contractual obligations as and when
they arise. These obligations arise from the Groups direct lending operations,
trade finance and its funding, investment and trading activities undertaken
by the Group. As the Groups primary business is in commercial banking, the
Groups exposure to credit risk is primarily from its lending activities and
financing to consumer retail, small and medium-sized enterprises (SMEs)
and corporate customers. Other activities such as trading or holding of debt
securities, settlement of transactions, also expose the Group to credit risk and
counterparty credit risk.

Regulatory Capital Requirements

Business Review

Tables 5 through 7 present the minimum regulatory capital requirement for

credit risk under the IRB approach for the Group, the Bank and MIB,
respectively. These tables tabulate the total RWA under the various exposure
classes under the IRB approach and apply the minimum capital requirement
at 8% as set by BNM to ascertain the minimum capital required for each of
the portfolios assessed.

Performance

Of the various types of risks which the Group engage in, credit risk generates
the largest regulatory capital requirement.

Responsibility
Leadership
Governance
Financial & Others
AGM Information

460

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Credit Risk

Table 5: Disclosure on Capital Adequacy under IRB Approach for Maybank Group as at 30th June 2011 (RM000)

Item

Exposure Class

1.0
1.1

Credit Risk
Exempted Exposures (Standardised Approach)
OnBalanceSheet Exposures
Sovereigns/Central Banks
Public Sector Entities
Banks, Development Financial Institutions & MDBs
Insurance cos, Securities Firms & Fund Managers
Corporates
Regulatory Retail
Residential Mortgage
Higher Risk Assets
Other Assets
Specialised Financing/Investment
Securitisation Exposures
Equity Exposure
Defaulted Exposures
Total OnBalance Sheet Exposures
OffBalanceSheet Exposures
OTC Derivatives
Credit Derivatives
Off balance sheet exposures other than OTC derivatives
or credit derivatives
Defaulted Exposures
Total OffBalance Sheet Exposures
Total On and OffBalance Sheet Exposures
Exposures under the IRB Approach
On-Balance-Sheet Exposures
Sovereigns/Central Banks
Public Sector Entities
Banks, Development Financial Institutions & MDBs
Insurance cos, Securities Firms & Fund Managers
Corporate Exposures
a) Corporates (excluding Specialised Lending and firm-size
adjustments)
b) Corporates (with firm-size adjustment)
c) Qualifying Purchased Corporate Receivables
d) Specialised Lending (Own PD Approach)
i) Project Finance
ii) Object Finance
iii) Commodity Finance
iv) Income Producing Real Estate
v) High Volatility Commercial Real Estate

1.2

Gross Exposures /
EAD before CRM

Net
Exposures /
EAD after CRM

Risk Weighted
Assets

Risk Weighted Total Risk Weighted

Assets
Assets after effects Minimum Capital
Absorbed by
of
Requirement
PSIA
PSIA
at 8%

54,705,562
1,151,834
4,488,478
824,292
40,029,502
23,403,352
4,484,692
668,565
21,407,711

608,477
118,047
419,670
152,310,181

54,705,562
1,145,602
4 ,270,772
8 23,651
29,525,046
20,473,769
4 ,402,458
6 68,565
21,407,711

6 08,477
118,046
4 13,021
138,562,680

5,127,947
1,020,937
2,094,216
808,454
26,563,283
15,342,043
2,036,140
1,002,848
2,781,176

446,441
147,889
523,349
57,894,724

5,127,947
1,020,937
2,094,216
808,454
26,563,283
15,342,043
2,036,140
1,002,848
2,781,176

446,441
147,889
523,349
57,894,724

410,236
81,675
167,537
64,676
2,125,063
1,227,363
162,891
80,228
222,494

35,715
11,831
41,868
4,631,578

276,090

3,458,709

2 76,090

3 ,210,262

115,932

2,225,751

115,932

2,225,751

9,275

178,060

112
3,734,911
156,045,093

1 12
3 ,486,464
142,049,144

144
2,341,826
60,236,549

144
2,341,826
60,236,549

11
187,346
4,818,924

39,066,005

110,094,051
61,517,760

39,066,005

110,094,051
61,517,760

12,226,840

77,807,688
43,828,077

12,226,840

77,807,688
43,828,077

978,147

6,224,615
3,506,246

47,851,331

47,851,330

33,452,822

33,452,822

2,676,226

FINANCIAL STATEMENTS

Maybank Annual Report 2011

461
At A Glance
Our Perspective

Table 5: Disclosure on Capital Adequacy under IRB Approach for Maybank Group as at 30th June 2011 (RM000) (contd.)

Risk Weighted
Assets
526,788
526,788

34,370,929
14,510,668
2,428,234

11,497,228
5,934,799

942,682
125,348,140

526,788
526,788

34,370,929
14,510,668
2,428,234

11,497,228
5,934,799

942,682
125,348,140

75,415
10,027,851

5,163,650

19,067,868

5,163,650

19,067,868

2,541,719

11,287,492

2,541,719

11,287,492

203,338

902,999

94,911
24,326,429
268,476,001

94,911
24,326,429
268,476,001

424,521,094

410,525,145

79
13,829,290
139,177,430
147,528,075
207,764,624

79
13,829,290
139,177,430
147,528,075
207,764,624

6
1,106,343
11,134,194
11,802,246
16,621,170

6,738,977
9,094,481
9,964
52,163
95,664

23,223,860
246,979,733

6,738,977
9,094,481
9,964
52,163
95,664

539,118
727,558
797
4,173
7,653

1,857,909
19,758,379

42,143
42,143

2,749,674
1,160,853
194,259

919,778
474,784

Responsibility

724,961
724,961

90,908,875
32,090,708
4,233,154

30,356,492
24,228,521

4,080,641
244,149,572

Business Review

724,961
724,961

90,908,875
32,090,708
4,233,154

30,356,492
24,228,521

4,080,641
244,149,572

Performance
Leadership

23,223,860
246,979,733

Financial & Others

Governance

4.0
5.0

Corporate Exposures (contd.)

e) Specialised Lending (Slotting Approach)
i) Project Finance
ii) Object Finance
iii) Commodity Finance
iv) Income Producing Real Estate
v) High Volatility Commercial Real Estate
Retail Exposures
a) Residential Mortgages
b) Qualifying Revolving Retail Exposures
c) Qualifying Purchased Retail Receivables
d) Hire Purchase Exposures
e) Other Retail Exposures
Securitisation Exposures
Equity Exposure
Defaulted Exposures
Total OnBalance Sheet Exposures
OffBalanceSheet Exposures
OTC Derivatives
Credit Derivatives
Off balance sheet exposures other than OTC derivatives or
credit derivatives
Defaulted Exposures
Total OffBalance Sheet Exposures
Total On and OffBalance Sheet Exposures
Total IRB Approach after Scaling Factor of 1.06
Total (Exposures under Standardised Approach & IRB
Approach)
Large Exposures Risk Requirement
Market Risk
Interest Rate Risk
Foreign Currency Risk
Equity Risk
Commodity Risk
Option Risk
Inventory Risk
Operational Risk
Total RWA and Capital Requirements

Gross Exposures /
EAD before CRM

Strategy

2.0
3.0

Exposure Class

Risk Weighted Total Risk Weighted

Assets
Assets after effects Minimum Capital
Absorbed by
of
Requirement
PSIA
PSIA
at 8%

Who We Are

Item

Net
Exposures /
EAD after CRM

AGM Information

462

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Credit Risk

Table 6: Disclosure on Capital Adequacy under IRB Approach for Maybank as at 30th June 2011 (RM000)

item

Exposure Class

1.0
1.1

Credit Risk
Exempted Exposures (Standardised Approach)
OnBalanceSheet Exposures
Sovereigns/Central Banks
Public Sector Entities
Banks, Development Financial Institutions & MDBs
Insurance cos, Securities Firms & Fund Managers
Corporates
Regulatory Retail
Residential Mortgage
Higher Risk Assets
Other Assets
Specialised Financing/Investment
Securitisation Exposures
Equity Exposure
Defaulted Exposures
Total OnBalance Sheet Exposures
OffBalanceSheet Exposures
OTC Derivatives
Credit Derivatives
Off balance sheet exposures other than OTC derivatives
or credit derivatives
Defaulted Exposures
Total OffBalance Sheet Exposures
Total On and OffBalance Sheet Exposures
Exposures under the IRB Approach
On-Balance-Sheet Exposures
Sovereigns/Central Banks
Public Sector Entities
Banks, Development Financial Institutions & MDBs
Insurance cos, Securities Firms & Fund Managers
Corporate Exposures
a) Corporates (excluding Specialised Lending and firm-size
adjustments)
b) Corporates (with firm-size adjustment)
c) Qualifying Purchased Corporate Receivables
d) Specialised Lending (Own PD Approach)
i) Project Finance
ii) Object Finance
iii) Commodity Finance
iv) Income Producing Real Estate
v) High Volatility Commercial Real Estate

1.2

Gross Exposures /
EAD before CRM

Net
Exposures /
EAD after CRM

Risk Weighted
Assets

Risk Weighted Total Risk Weighted

Assets
Assets after effects Minimum Capital
Absorbed by
of
Requirement
PSIA
PSIA
at 8%

34,024,308
1,021,772

64,000
13,699,173
9,317,368
2,118,081
481,634
23,114,178

608,477
60,071
225,090
84,734,152

34,024,308
1,019,474

63,359
13,349,450
8,925,846
2,117,874
481,634
23,114,178

608,477
60,071
219,887
83,984,559

595,281
907,635

48,163
12,586,774
6,691,423
1,179,060
722,451
5,762,690

446,441
60,071
251,096
29,251,086

595,281
907,635

48,163
12,586,774
6 ,691,423
1,179,060
722,451
5,762,690

446,441
60,071
251,096
29,251,086

47,622
72,611

3,853
1,006,942
535,314
94,325
57,796
461,015

35,715
4,806
20,088
2,340,087

276,090

2,629,745

276,090

2,438,450

115,925

2,092,512

115,925

2,092,512

9,274

167,401

112
2,905,947
87,640,099

112
2,714,653
86,699,211

144
2,208,580
31,459,666

144
2,208,580
31,459,666

11
176,686
2,516,773

42,667,209

96,600,425
54,262,574

42,667,209

96,600,425
54,262,574

15,609,873

68,153,331
38,860,907

15,609,873

68,153,331
38,860,907

1,248,790

5,452,266
3,108,873

41,631,135

41,631,135

28,778,407

28,778,407

2,302,273

FINANCIAL STATEMENTS

Maybank Annual Report 2011

463
At A Glance
Our Perspective

Table 6: Disclosure on Capital Adequacy under IRB Approach for Maybank as at 30th June 2011 (RM000) (contd.)

Risk Weighted
Assets

514,017
514,017

24,805,445
11,940,513
2 ,253,379

6,696,465
3,915,087

749,438
109,318,087

41,121
41,121

1,984,436
955,241
180,270

535,717
313,207

59,955
8,745,447

5,094,597

17,326,367

5,094,597

17,326,367

2,508,837

10,231,145

2,508,837

10,231,145

200,707

818,492

94,911
22,515,875
227,705,011

94,911
22,515,875
227,705,010

315,345,110

314,404,222

79
12,740,061
122,058,147
129,381,636
160,841,302

79
12,740,061
122,058,147
129,381,636
160,841,302

6
1,019,205
9,764,652
10,350,531
12,867,304

503,710
266,012
797
4,173
735

1,419,049
15,061,779

Financial & Others

6,296,375
3,325,150
9,963
52,163
9,182

17,738,110
188,272,244

Governance

6,296,375
3,325,150
9,963
52,163
9,182

17,738,110
188,272,244

Leadership

514,017
514,017

24,805,445
11,940,513
2,253,379

6,696,465
3,915,087

749,438
109,318,087

Responsibility

706,716
706,716

62,465,358
27,597,061
3,944,010

16,099,325
14,824,961

3,456,143
205,189,135

Business Review

706,716
706,716

62,465,358
27,597,061
3,944,010

16,099,325
14,824,961

3,456,143
205,189,136

Performance

4.0
5.0

Corporate Exposures (contd.)

e) Specialised Lending (Slotting Approach)
i) Project Finance
ii) Object Finance
iii) Commodity Finance
iv) Income Producing Real Estate
v) High Volatility Commercial Real Estate
Retail Exposures
a) Residential Mortgages
b) Qualifying Revolving Retail Exposures
c) Qualifying Purchased Retail Receivables
d) Hire Purchase Exposures
e) Other Retail Exposures
Securitisation Exposures
Equity Exposure
Defaulted Exposures
Total OnBalance Sheet Exposures
OffBalanceSheet Exposures
OTC Derivatives
Credit Derivatives
Off balance sheet exposures other than OTC derivatives or
credit derivatives
Defaulted Exposures
Total OffBalance Sheet Exposures
Total On and OffBalance Sheet Exposures
Total IRB Approach after Scaling Factor of 1.06
Total (Exposures under Standardised Approach & IRB
Approach)
Large Exposures Risk Requirement
Market Risk
Interest Rate Risk
Foreign Currency Risk
Equity Risk
Commodity Risk
Option Risk
Inventory Risk
Operational Risk
Total RWA and Capital Requirements

Gross Exposures /
EAD before CRM

Strategy

2.0
3.0

Exposure Class

Risk Weighted Total Risk Weighted

Assets
Assets after effects Minimum Capital
Absorbed by
of
Requirement
PSIA
PSIA
at 8%

Who We Are

Item

Net
Exposures /
EAD after CRM

AGM Information

464

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Credit Risk

Table 7: Disclosure on Capital Adequacy under IRB Approach for Maybank Islamic as at 30th June 2011 (RM000)

item

Exposure Class

1.0
1.1

Credit Risk
Exempted Exposures (Standardised Approach)
OnBalanceSheet Exposures
Sovereigns/Central Banks
Public Sector Entities
Banks, Development Financial Institutions & MDBs
Insurance cos, Securities Firms & Fund Managers
Corporates
Regulatory Retail
Residential Mortgage
Higher Risk Assets
Other Assets
Specialised Financing/Investment
Securitisation Exposures
Equity Exposure
Defaulted Exposures
Total OnBalance Sheet Exposures
OffBalanceSheet Exposures
OTC Derivatives
Credit Derivatives
Off balance sheet exposures other than OTC derivatives
or credit derivatives
Defaulted Exposures
Total OffBalance Sheet Exposures
Total On and OffBalance Sheet Exposures
Exposures under the IRB Approach
On-Balance-Sheet Exposures
Sovereigns/Central Banks
Public Sector Entities
Banks, Development Financial Institutions & MDBs
Insurance cos, Securities Firms & Fund Managers
Corporate Exposures
a) Corporates (excluding Specialised Lending and firm-size
adjustments)
b) Corporates (with firm-size adjustment)
c) Qualifying Purchased Corporate Receivables
d) Specialised Lending (Own PD Approach)
i) Project Finance
ii) Object Finance
iii) Commodity Finance
iv) Income Producing Real Estate
v) High Volatility Commercial Real Estate

1.2

Gross Exposures /
EAD before CRM

Net
Exposures /
EAD after CRM

Risk Weighted
Assets

Risk Weighted Total Risk Weighted

Assets
Assets after effects Minimum Capital
Absorbed by
of
Requirement
PSIA
PSIA
at 8%

14,148,422
92,791

377
1,847,808
1,266,916
193,166
22,781
1,631,593

10,949
19,214,803

14,148,422
88,857

377
1,843,838
1,252,018
193,166
22,781
1,631,593

9,905
19,190,956

12,092
76,031

377
1,966,718
939,013
113,807
34,171
569,738

10,911
3,722,857

12,092
76,031

377
1,966,718
939,013
113,807
34,171
569,738

10,911
3,722,857

967
6,082

30
157,337
75,121
9,105
2,734
45,579

873
297,829

155,588

1 53,945

31,065

31,065

2,485

155,588
19,370,391

153,945
19,344,901

31,065
3,753,922

31,065
3 ,753,922

2,485
300,314

4,204,353
13,442,575
7,204,135

4,204,353
13,442,575
7,204,135

1,735,181
9,654,357
4,967,171

194,718
194,718

1,735,181
9,459,639
4,772,453

138,815
756,771
381,796

6,220,196
-

6,220,196
-

4,674,415
-

4,674,415
-

373,953
-

FINANCIAL STATEMENTS

Maybank Annual Report 2011

465
At A Glance
Our Perspective

Table 7: Disclosure on Capital Adequacy under IRB Approach for Maybank Islamic as at 30th June 2011 (RM000) (contd.)

Risk Weighted
Assets

1 ,022
1 ,022

765,238
205,612
13,988

384,060
161,577

15,460
1,676,283

69,053

1,741,501

1,810,554
48,576,548

69,053

1,741,501

1,810,554
48,576,548

32,882

1,056,354

1,089,236
22,237,497
23,571,746

194,718
206,402

32,882

1,056,354

1,089,236
22,042,779
23,365,344

2,631

84,508

87,139
1,763,422
1,869,228

67,946,939

67,921,449

27,325,669

40,325

109,485

2,334,044
7,154,554
36,964,076

206,402

27,119,266

206,402

40,325

109,485

2,334,044
7,154,554
36,757,674

2,169,541

3,226

8,759

186,724
572,364
2,940,614

Financial & Others

12,772
12,772

9,565,477
2,570,155
174,855

4 ,800,756
2,019,713

193,244
20,953,542

Governance

194,718

Leadership

12,772
12,772

9,565,477
2,570,155
174,855

4,800,756
2,019,713

193,244
21,148,260

Responsibility

18,245
18,245

28,443,517
4,493,647
289,144

14,257,167
9,403,559

675,550
46,765,995

Business Review

18,245
18,245

28,443,517
4,493,647
289,144

14,257,167
9,403,559

675,550
46,765,995

Performance

4.0
5.0
6.0

Corporate Exposures (contd.)

e) Specialised Lending (Slotting Approach)
i) Project Finance
ii) Object Finance
iii) Commodity Finance
iv) Income Producing Real Estate
v) High Volatility Commercial Real Estate
Retail Exposures
a) Residential Mortgages
b) Qualifying Revolving Retail Exposures
c) Qualifying Purchased Retail Receivables
d) Hire Purchase Exposures
e) Other Retail Exposures
Securitisation Exposures
Equity Exposure
Defaulted Exposures
Total OnBalance Sheet Exposures
OffBalanceSheet Exposures
OTC Derivatives
Credit Derivatives
Off balance sheet exposures other than OTC derivatives
Defaulted Exposures
Total OffBalance Sheet Exposures
Total On and OffBalance Sheet Exposures
Total IRB Approach after Scaling Factor of 1.06
Total (Exposures under Standardised Approach & IRB
Approach)
Large Exposures Risk Requirement
Market Risk
Bench Mark Rate Risk
Equity Risk
Foreign Exchange Risk
Option Risk
Inventory Risk
Operational Risk
Total RWA and Capital Requirements
Total RWA and Capital Requirements

Gross Exposures /
EAD before CRM

Strategy

2.0
3.0

Exposure Class

Risk Weighted Total Risk Weighted

Assets
Assets after effects Minimum Capital
Absorbed by
of
Requirement
PSIA
PSIA
at 8%

Who We Are

item

Net
Exposures /
EAD after CRM

AGM Information

466

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Credit Risk

Management of Credit Risk

Corporate and institutional credit risks are assessed by business units and
evaluated by an independent party (Group Credit Management) where each
customer is assigned a credit rating based on the assessment of relevant
factors including customers financial position, types of facilities and
securities offered before the credits are approved by the relevant approving
parties.
Credit reviews are conducted at least once a year with updated information
on customers financial position, market position, industry and economic
condition and account conduct. Corrective actions are taken when the
accounts show signs of credit deterioration.
A two-pronged approach is adopted:

Managing the Credit Risk; and

Managing the Credit Portfolio

The Credit Risk Management within Risk Management designs strategies to

achieve a desired ideal portfolio risk tolerance level. The team also prepares
regular credit risk reports which are submitted to the various risk committees
as part of on-going monitoring and review of borrowers and loan portfolios.
Periodic credit stress testing exercises under selected scenarios are also
performed and the results reported.

Credit Risk Management (CRM) Framework

The Credit Risk Management framework includes comprehensive credit risk
policies, frameworks, tools and methodologies for identification,
measurement, monitoring and control of credit risk on a consistent basis.
Components of the CRM framework constitute:

Strong emphasis in creating and enhancing credit risk awareness;

To manage large exposures, the Group has in place, amongst others, the
following limits and related lending guidelines to avoid undue concentration
of credit risk in its loan portfolio:

Comprehensive selection and training of lending personnel in the

management of credit risk; and

Leveraging on knowledge sharing tools including e-learning courses to

enhance credit skills within the Group.

The Groups credit approving process encompasses pre-approval evaluation,

approval and post-approval evaluation. Credit Risk Management is
responsible for developing, enhancing and communicating an effective and
consistent credit risk management framework across the Group to ensure
appropriate credit policies are in place to identify, measure, control and
monitor such risks.

Countries
Business Segments
Economic Sectors
Single Customer Groups
Banks & Non-Bank Financial Institutions
Counterparties; and
Collaterals

To effectively manage vulnerable corporate and institutional credits of the

Group, there are dedicated teams comprising of Corporate Remedial
Management at Head Office and SME Loan Management Centres at Regional
Offices. Vulnerable consumer credits are managed by the Recovery
Management Unit at Head Office and Asset Quality Management Centres at
Regional Offices. Special attention is given to these vulnerable credits where
more frequent and intensive reviews are performed in order to accelerate
remedial action.
A post-approval evaluation of credit facilities is emplaced and performed by
the Credit Review team, with checks to ensure that credit facilities are
properly appraised and approved. The team also reviews credit applications
with overrides and/or policy breaches to assess the adequacy of justification
and mitigation when approving such overrides/breaches. This is to ensure
that the Groups credit evaluation process is properly benchmarked against
best practices and that credit policies and product guidelines are
continuously enhanced to ensure that they remain relevant in managing
credit risks. Findings of the Credit Review team are tabled at the risk
committees for review and remedial actions.

In view that authority limits are directly related to the risk levels of the
borrower and transaction, a Risk-Based Authority Limit structure was
implemented based on the Expected Loss framework and internally
developed Credit Risk Rating System (CRRS).
Tables 8 through 10 present the geographic analysis and distribution of
exposures under both the SA and IRB approaches for the Group, the Bank
and MIB respectively. These tables show the geographic distribution and the
proportion of credit exposures assessed under the SA and IRB approaches.
Tables 11 through 13 present the disclosure on credit risk exposures by the
various industries for the Group, the Bank and MIB, respectively.
In Tables 14 through 16, the credit risk exposures are presented by maturity
periods of one year or less, one to five years and over five years for the
Group, the Bank and MIB, respectively.

FINANCIAL STATEMENTS

Maybank Annual Report 2011

467
At A Glance
Our Perspective

Table 8: Disclosure on Credit Risk Exposure Geographic Analysis for Maybank Group as at 30th June 2011 (RM000)

Singapore
(2)

Others
i.e. Oversea Units
(4)

Indonesia
(3)

Total
(5)
55,012,015
1,169,021
4,581,048
1,021,292
42,572,580
24,135,773
4,560,839
749,219
21,516,781

608,477
118,047
156,045,093

20,850,630

91,075,510
51,045,726
39,277,752

9,292,608

28,781,820
11,616,771
17,165,049

14,775,639

7,785,863
7,785,863

44,918,878

127,643,193
70,448,361
56,442,800

Leadership

1,572,868
50,475
316,311
236,142
9,665,127
698,754
17,819
1,556
596,900

13,155,953

Responsibility

5,648,671

1,393,786

23,192,621
10,141,183
2,172,788

1,449,841

44,606
44,043,496

Business Review

8,394,130
292,051
2,423,175
759,915
3,126,717
3,269,086
148,357
56,145
8,217,131

60,071
26,746,779

Performance

39,396,346
826,495
447,776
25,235
6,588,115
10,026,750
2,221,875
691,518
11,252,908

608,477
13,369
72,098,865

Strategy

Exposures under Standardised Approach

Sovereigns/Central Banks
Public Sector Entities
Banks, Development Financial Institutions & MDBs
Insurance cos, Securities Firms & Fund Managers
Corporates
Regulatory Retail
Residential Mortgage
Higher Risk Assets
Other Assets
Specialised Financing/Investment
Securitisation Exposures
Equity Exposure
Total Standardised Approach
Exposures under IRB Approach
Sovereigns/Central Banks
Public Sector Entities
Banks, Development Financial Institutions & MDBs
Insurance cos, Securities Firms & Fund Managers
Corporate Exposures
a) Corporates (excluding Specialised Lending and firm-size adjustments)
b) Corporates (with firm-size adjustment)
c) Qualifying Purchased Corporate Receivables
d) Specialised Lending (Own PD Approach)
i) Project Finance
ii) Object Finance
iii) Commodity Finance
iv) Income Producing Real Estate
v) High Volatility Commercial Real Estate

Malaysia
(1)

Who We Are

Exposure Class

Governance
Financial & Others
AGM Information

468

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Credit Risk

Table 8: Disclosure on Credit Risk Exposure Geographic Analysis for Maybank Group as at 30th June 2011 (RM000) (contd.)
Exposure Class

e) Specialised Lending (Slotting Approach)

i) Project Finance
ii) Object Finance
iii) Commodity Finance
iv) Income Producing Real Estate
v) High Volatility Commercial Real Estate
Retail Exposures
a) Residential Mortgages
b) Qualifying Revolving Retail Exposures
c) Qualifying Purchased Retail Receivables
d) Hire Purchase Exposures
e) Other Retail Exposures
Securitisation Exposures
Equity Exposure
Total IRB Approach
Total Standardised and IRB Approaches

Malaysia

Singapore

Indonesia

(1)

(2)

(3)

22,854,287
10,773,487
2,375,977

8,233,312
1,471,511

60,928,714
87,675,494

44,043,496

752,032
752,032

73,059,644
22,060,912
5,173,940

22,700,232
23,124,560

184,985,784
257,084,649

Others
i.e. Oversea Units
(4)

22,561,502
35,717,456

Total
(5)
752,032
752,032

95,913,931
32,834,399
7,549,916

30,933,544
24,596,071

268,476,001
424,521,094

FINANCIAL STATEMENTS

469

Maybank Annual Report 2011

At A Glance
Our Perspective

Table 9: Disclosure on Credit Risk Exposure Geographic Analysis for Maybank as at 30th June 2011 (RM000)
Exposure Class

Indonesia

Others
i.e. Oversea Units

Total

(1)

(2)

(3)

(4)

(5)

8,366,479
292,051

746,304

34,330,762
1,024,815

24,282
4,538,082
7,763,508
2,024,197
557,758
16,164,172

608,477

57,631,221

2,913,689
1,470,174
148,357
867
6,765,696

60,071
20,017,384

236,142
8,411,090
292,435
17,819

287,704

9,991,495

260,424
15,862,861
9,526,117
2,190,374
558,625
23,217,572

608,477
60,071
87,640,099

24,380,782

75,983,080
43,381,778
31,892,956

9,292,608

28,781,820
11,616,771
17,165,049

14,775,639

7,785,863
7,785,863

48,449,029

112,550,763
62,784,412
49,058,004

Business Review

Performance

25,217,979
732,764

Strategy
Responsibility
Leadership

Insurance cos, Securities Firms & Fund Managers

Corporates
Regulatory Retail
Residential Mortgage
Higher Risk Assets
Other Assets
Specialised Financing/Investment
Securitisation Exposures
Equity Exposure
Total Standardised Approach
Exposures under IRB Approach
Sovereigns/Central Banks
Public Sector Entities
Banks, Development Financial Institutions & MDBs
Insurance cos, Securities Firms & Fund Managers
Corporate Exposures
a) Corporates (excluding Specialised Lending and firm-size adjustments)
b) Corporates (with firm-size adjustment)
c) Qualifying Purchased Corporate Receivables
d) Specialised Lending (Own PD Approach)
i) Project Finance
ii) Object Finance
iii) Commodity Finance
iv) Income Producing Real Estate
v) High Volatility Commercial Real Estate

Singapore

Who We Are

Exposures under Standardised Approach

Sovereigns/Central Banks
Public Sector Entities
Banks, Development Financial Institutions & MDBs

Malaysia

Governance
Financial & Others
AGM Information

470

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Credit Risk

Table 9: Disclosure on Credit Risk Exposure Geographic Analysis for Maybank as at 30th June 2011 (RM000) (contd.)

Exposure Class

e) Specialised Lending (Slotting Approach)

i) Project Finance
ii) Object Finance
iii) Commodity Finance
iv) Income Producing Real Estate
v) High Volatility Commercial Real Estate
Retail Exposures
a) Residential Mortgages
b) Qualifying Revolving Retail Exposures
c) Qualifying Purchased Retail Receivables
d) Hire Purchase Exposures
e) Other Retail Exposures
Securitisation Exposures
Equity Exposure
Total IRB Approach
Total Standardised and IRB Approaches

Malaysia

Singapore

Indonesia

(1)

(2)

(3)

708,346
708,346

43,850,932
17,453,453
4,818,183

7,962,824
13,616,472

144,214,794
201,846,014

22,854,287
10,773,487
2,375,977

8,233,312
1,471,511

60,928,714
80,946,098

Others
i.e. Oversea Units
(4)

22,561,502
32,552,997

Total
(5)
708,346
708,346

66,705,219
28,226,939
7,194,160

16,196,137
15,087,983

227,705,011
315,345,110

FINANCIAL STATEMENTS

471

Maybank Annual Report 2011

At A Glance
Our Perspective

Table 10: Disclosure on Credit Risk Exposure Geographic Analysis for Maybank Islamic as at 30th June 2011 (RM000)
Indonesia

(1)

(2)

(3)

Others
i.e. Oversea Units
(4)

Total
(5)

14,148,422
93,730

953
2,002,864
1,269,365
197,020
26,444
1,631,593

19,370,391

953
2,002,864
1,269,365
197,020
26,444
1,631,593

19,370,391

4,275,405

15,092,431
7,663,949
7,384,796

4,275,405

15,092,431
7,663,949
7,384,796

Leadership

Responsibility

Business Review

14,148,422
93,730

Performance

Insurance cos, Securities Firms & Fund Managers

Corporates
Regulatory Retail
Residential Mortgage
Higher Risk Assets
Other Assets
Specialised Financing/Investment
Securitisation Exposures
Equity Exposure
Total Standardised Approach
Exposures under IRB Approach
Sovereigns/Central Banks
Public Sector Entities
Banks, Development Financial Institutions & MDBs
Insurance cos, Securities Firms & Fund Managers
Corporate Exposures
a) Corporates (excluding Specialised Lending and firm-size adjustments)
b) Corporates (with firm-size adjustment)
c) Qualifying Purchased Corporate Receivables
d) Specialised Lending (Own PD Approach)
i) Project Finance
ii) Object Finance
iii) Commodity Finance
iv) Income Producing Real Estate
v) High Volatility Commercial Real Estate

Singapore

Strategy

Exposures under Standardised Approach

Sovereigns/Central Banks
Public Sector Entities
Banks, Development Financial Institutions & MDBs

Malaysia

Who We Are

Exposure Class

Governance
Financial & Others
AGM Information

472

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Credit Risk

Table 10: Disclosure on Credit Risk Exposure Geographic Analysis for Maybank Islamic as at 30th June 2011 (RM000) (contd.)
Exposure Class

e) Specialised Lending (Slotting Approach)

i) Project Finance
ii) Object Finance
iii) Commodity Finance
iv) Income Producing Real Estate
v) High Volatility Commercial Real Estate
Retail Exposures
a) Residential Mortgages
b) Qualifying Revolving Retail Exposures
c) Qualifying Purchased Retail Receivables
d) Hire Purchase Exposures
e) Other Retail Exposures
Securitisation Exposures
Equity Exposure
Total IRB Approach
Total Standardised and IRB Approaches

Malaysia

Singapore

Indonesia

(1)

(2)

(3)

43,686
43,686

29,208,712
4,607,460
355,756

14,737,407
9,508,088

48,576,548
67,946,938

Others
i.e. Oversea Units
(4)

Total
(5)

43,686
43,686

29,208,712
4,607,460
355,756

14,737,407
9,508,088

48,576,548
67,946,938

5,308,442
1,142,274
866
1,263
1,263,840

28,525
7,745,226

25,350,299
15,158,096

10,192,203

1,531,752
43,913

534,204

2,126,910

1,033,960
810,532

223,428

1,686,635
345,485

163,305

2,195,425

3,716,770
1,239,423

2,477,347

Governance

14

2,051

Leadership

555

6,821,250
2,416,164
212

4,120,703

96
13,358,980

16,507,534
5,557,699

10,949,835

440

1,953,346
8,893

2,735

1,965,414

10,949,903

5,547,775
4,727,693

820,081

2,259,976
434,005

49,389

24,209
2,768,195

14,491,891
6,682,745

7,809,146

616

Responsibility

14,990

10,474

22,465
6,511,988
250,940
137

9,401

6,805,406

9,323,665
5,269,433

4,054,232

46,804,150
932,844
4,581,048
236,846
5,213,328
713,113
591
224,266
1,343,329

7,300
60,056,815

31,810,942

44,317,789
26,184,103

18,133,685

Business Review

Performance

Financial & Others

AGM Information

Exposures under Standardised

Approach
Sovereigns/Central Banks
Public Sector Entities
Banks, Development Financial
Institutions & MDBs
Insurance Cos, Securities Firms &
Fund Managers
Corporates
Regulatory Retail
Residential Mortgage
Higher Risk Assets
Other Assets
Specialised Financing/Investment
Securitisation Exposures
Equity Exposure
Total Standardised Approach
Exposures under IRB Approach
Sovereigns/Central Banks
Public Sector Entities
Banks, Development Financial
Institutions & MDBs
Insurance Cos, Securities Firms &
Fund Managers
Corporate Exposures
a) Corporates (excluding
Specialised Lending and
firmsize adjustments)
b) Corporates (with firmsize
adjustment)
c) Qualifying Purchased Corporate
Receivables
759,915
4,829,715
668,597
753
163,969
13,918,275

653,083
13,311
26,383,590

2,158,033

5,592,353
4,156,647

683,673

5,702,589
14,333,242
4,558,279
359,721

24,953,832

753,558
3,779,147

11,600

7,685,300

1,099,170

1,761,159
661,988

5,338,201
37,771

NEC
(11)

2,854,119
186,875

Strategy

Mining &
ManuAgriculture Quarrying facturing
(1)
(2)
(3)
Total
(12)

56,442,800

127,643,193
70,448,361

44,918,878

42,572,580
24,135,773
4,560,839
749,219
21,516,782

653,083
73,441
156,045,093

1,021,292

55,012,015
1,169,021
4,581,048

Who We Are

Exposure Class

Maybank Annual Report 2011

Our Perspective

Wholesale, Finance, Transport,

Electricity,
Retail
Insurance, Storage
Gas
trade,
Real
&
Education,
Construc- & Water restaurants Estate & Communi- health &
tion
Supply
& hotels
Business
cation
others Household
(4)
(5)
(6)
(7)
(8)
(9)
(10)

At A Glance

Table 11: Disclosure on Credit Risk Exposure Industry Analysis for Maybank Group as at 30th June 2011 (RM000)

FINANCIAL STATEMENTS
473

d) Specialised Lending (Own PD

Approach)
i) Project Finance
ii) Object Finance
iii) Commodity Finance
iv) Income Producing Real Estate
v) High Volatility Commercial Real
Estate
e) Specialised Lending (Slotting
Approach)
i) Project Finance
ii) Object Finance
iii) Commodity Finance
iv) Income Producing Real Estate
v) High Volatility Commercial Real
Estate
Retail Exposures
a) Residential Mortgages
b) Qualifying Revolving Retail
Exposures
c) Qualifying Purchased Retail
Receivables
d) Hire Purchase Exposures
e) Other Retail Exposures
Securitisation Exposures
Equity Exposure
Total IRB Approach
Total Standardised and IRB
Approaches

Exposure Class

1,033,960
3,160,870

3,716,770
5,912,195

25,350,299
33,095,525

14,491,891
17,260,086

16,497,678
18,463,092

16,507,534
76,128,730
29,866,513 136,185,546

9,323,665
16,129,071

95,913,931
32,834,399
7,549,916

30,933,544

24,596,071

1,761,159
95,913,931
9,446,459 120,867,763

95,913,931
32,834,399
7,549,916

752,032

752,032

Total
(12)

30,933,544

24,596,071

7,750,386 268,476,001
34,133,976 424,521,094

752,032

752,032

NEC
(11)

Maybank Annual Report 2011

Mining &
ManuAgriculture Quarrying facturing
(1)
(2)
(3)

Wholesale, Finance, Transport,

Electricity,
Retail
Insurance, Storage
Gas
trade,
Real
&
Education,
Construc- & Water restaurants Estate & Communi- health &
tion
Supply
& hotels
Business
cation
others Household
(4)
(5)
(6)
(7)
(8)
(9)
(10)

Table 11: Disclosure on Credit Risk Exposure Industry Analysis for Maybank Group as at 30th June 2011 (RM000) (contd.)

474
FINANCIAL STATEMENTS

Credit Risk

1,751,468

866
1,263
1,008,529

28,525
2,790,665

21,101,580
12,745,346

8,356,234

139,536

529,707

686,285

1,010,609
809,331

201,278

564,477
434

155,160

720,072

3,132,965
832,248

2,300,717

Governance

14

2,051

Leadership

555

1,434,951
2,407
212

3,619,563

96
5,057,783

14,756,133
4,815,264

9,940,869

440

1,273,221
325

2,735

1,276,722

10,949,902

5,136,501
4,676,377

460,124

882,663
462

28,673

24,209
936,008

12,419,678
5,393,029

7,026,650

Responsibility

14,990

10,474

21,513
2,237,324
370
137

2,396

2,272,214

8,056,571
5,055,746

3,000,825

30,575,261
812,391

236,846
1,439,008
150,674
591
115,394
1,271,562

7,242
34,608,968

35,425,721

40,127,668
23,711,523

16,416,145

Business Review

Performance

Financial & Others

AGM Information

Exposures under Standardised

Approach
Sovereigns/Central Banks
Public Sector Entities
Banks, Development Financial
Institutions & MDBs
Insurance Cos, Securities Firms &
Fund Managers
Corporates
Regulatory Retail
Residential Mortgage
Higher Risk Assets
Other Assets
Specialised Financing/Investment
Securitisation Exposures
Equity Exposure
Total Standardised Approach
Exposures under IRB Approach
Sovereigns/Central Banks
Public Sector Entities
Banks, Development Financial
Institutions & MDBs
Insurance Cos, Securities Firms &
Fund Managers
Corporate Exposures
a) Corporates (excluding Specialised
Lending and firmsize
adjustments)
b) Corporates (with firmsize
adjustment)
c) Qualifying Purchased Corporate
Receivables

3,893,312
92,224
753
108,690
16,558,245

608,477

22,190,658

2,073,405

5,382,176
4,086,878

586,952

1,961,782
9,278,672
2,187,814
333,277

13,761,545

285,119
547

41,002

3,339,178

768,210

1,426,881
658,670

892,940
36,016

NEC
(11)

2,847,016
165,494

Strategy

Mining &
ManuAgriculture Quarrying facturing
(1)
(2)
(3)

48,449,029

15,862,861
9,526,117
2,190,374
558,625
23,217,572

608,477
60,071
87,640,099

260,424

34,330,762
1,024,815

Total
(12)

49,058,004

112,550,763
62,784,412

Who We Are

Exposure Class

Maybank Annual Report 2011

Our Perspective

Wholesale, Finance, Transport,

Electricity,
Retail
Insurance, Storage
Gas
trade,
Real
&
Education,
Construc- & Water restaurants Estate & Communi- health &
tion
Supply
& hotels
Business
cation
others Household
(4)
(5)
(6)
(7)
(8)
(9)
(10)

At A Glance

Table 12: Disclosure on Credit Risk Exposure Industry Analysis for Maybank as at 30th June 2011 (RM000)

FINANCIAL STATEMENTS
475

d) Specialised Lending (Own PD

Approach)
i) Project Finance
ii) Object Finance
iii) Commodity Finance
iv) Income Producing Real Estate
v) High Volatility Commercial Real
Estate
e) Specialised Lending (Slotting
Approach)
i) Project Finance
ii) Object Finance
iii) Commodity Finance
iv) Income Producing Real Estate
v) High Volatility Commercial Real
Estate
Retail Exposures
a) Residential Mortgages
b) Qualifying Revolving Retail
Exposures
c) Qualifying Purchased Retail
Receivables
d) Hire Purchase Exposures
e) Other Retail Exposures
Securitisation Exposures
Equity Exposure
Total IRB Approach
Total Standardised and IRB
Approaches

Exposure Class

1,010,609
1,696,894

3,132,965

3,853,037

Agriculture
(1)

Mining &
Quarrying
(2)

23,892,246

13,355,686

12,419,678

17,363,125

16,086,403

75,553,390

19,813,917 110,162,358

14,756,133

Finance,
Insurance,
Real
Estate &
Business
(7)

10,328,785

8,056,571

Transport,
Storage
&
Communication
(8)

4,766,059

1,426,881

Education,
health &
others
(9)

80,466,764

16,196,137
15,087,983

66,705,219

7,194,160

66,705,219
28,226,939

Household
(10)

16,196,137
15,087,983

227,705,011

7,194,160

66,705,219
28,226,939

708,346
708,346

Total
(12)

29,646,239 315,345,110

7,455,581

708,346
708,346

NEC
(11)

Maybank Annual Report 2011

21,101,580

Manufacturing
(3)

Wholesale,
Retail
Electricity, Gas
trade,
Construc& Water
restaurants
tion
Supply
& hotels
(4)
(5)
(6)

Table 12: Disclosure on Credit Risk Exposure Industry Analysis for Maybank as at 30th June 2011 (RM000) (contd.)

476
FINANCIAL STATEMENTS

Credit Risk

79,814

6,618

86,431

4,248,719
2,412,750

1,835,968

2,887

2,887

23,351
1,201

22,151

74,362

74,362

583,805
407,176

176,629

Governance

Leadership

101,709

101,709

411,274
51,316

359,958

616

279,325

279,941

2,072,212
1,289,716

782,496

Responsibility

953
682,738

683,691

1,267,094
213,687

1,053,406

11,837,962
84,753

67,520

11,990,235

4,190,777

4,190,120
2,472,580

1,717,540

89,263

4,534

93,797

1,751,401
742,434

1,008,966

Business Review

Performance

Financial & Others

AGM Information

Exposures under Standardised

Approach
Sovereigns/Central Banks
Public Sector Entities
Banks, Development Financial
Institutions & MDBs
Insurance Cos, Securities Firms &
Fund Managers
Corporates
Regulatory Retail
Residential Mortgage
Higher Risk Assets
Other Assets
Specialised Financing/Investment
Securitisation Exposures
Equity Exposure
Total Standardised Approach
Exposures under IRB Approach
Sovereigns/Central Banks
Public Sector Entities
Banks, Development Financial
Institutions & MDBs
Insurance Cos, Securities Firms &
Fund Managers
Corporate Exposures
a) Corporates (excluding Specialised
Lending and firmsize
adjustments)
b) Corporates (with firmsize
adjustment)
c) Qualifying Purchased Corporate
Receivables

415,896

1,619,699

4,347,810

84,628

210,177
69,770

96,721

142,462
1,269,365
197,020
26,444

1,635,291

66,885

743

74,234

330,960

334,278
3,318

2,310,460
1,754

NEC
(11)

6,606

Strategy

Mining &
ManuAgriculture Quarrying facturing
(1)
(2)
(3)
Total
(12)

7,384,796

15,092,431
7,663,949

4,275,405

2,002,864
1,269,365
197,020
26,444
1,631,593

19,370,391

953

14,148,422
93,730

Who We Are

Exposure Class

Maybank Annual Report 2011

Our Perspective

Wholesale, Finance, Transport,

Electricity,
Retail
Insurance, Storage
Gas
trade,
Real
&
Education,
Construc- & Water restaurants Estate & Communi- health &
tion
Supply
& hotels
Business
cation
others Household
(4)
(5)
(6)
(7)
(8)
(9)
(10)

At A Glance

Table 13: Disclosure on Credit Risk Exposure Industry Analysis for Maybank Islamic as at 30th June 2011 (RM000)

FINANCIAL STATEMENTS
477

d) Specialised Lending (Own PD

Approach)
i) Project Finance
ii) Object Finance
iii) Commodity Finance
iv) Income Producing Real Estate
v) High Volatility Commercial Real
Estate
e) Specialised Lending (Slotting
Approach)
i) Project Finance
ii) Object Finance
iii) Commodity Finance
iv) Income Producing Real Estate
v) High Volatility Commercial Real
Estate
Retail Exposures
a) Residential Mortgages
b) Qualifying Revolving Retail
Exposures
c) Qualifying Purchased Retail
Receivables
d) Hire Purchase Exposures
e) Other Retail Exposures
Securitisation Exposures
Equity Exposure
Total IRB Approach
Total Standardised and IRB
Approaches

Exposure Class

23,351
26,238

583,805
658,167

4,248,719
4,335,150

2,072,212
2,352,154

411,274
512,984

1,751,401
1,845,198

8,380,898
20,371,133

1,267,094
1,950,785

334,278
408,512

14,737,407
9,508,088

29,208,712
30,844,002

29,208,712
4,607,460
355,756

294,805
4,642,615

43,686

43,686

NEC
(11)

14,737,407
9,508,088

48,576,548
67,946,938

29,208,712
4,607,460
355,756

43,686

43,686

Total
(12)

Maybank Annual Report 2011

Wholesale, Finance, Transport,

Electricity,
Retail
Insurance, Storage
Gas
trade,
Real
&
Education,
Mining &
ManuConstruc- & Water restaurants Estate & Communi- health &
Agriculture Quarrying facturing
tion
Supply
& hotels
Business
cation
others Household
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)

Table 13: Disclosure on Credit Risk Exposure Industry Analysis for Maybank Islamic as at 30th June 2011 (RM000) (contd.)

478
FINANCIAL STATEMENTS

Credit Risk

FINANCIAL STATEMENTS

Maybank Annual Report 2011

479
At A Glance
Our Perspective

Table 14: Disclosure on Credit Risk Exposure Maturity Analysis for Maybank Group as at 30th June 2011 (RM000)
Exposure Class

One to five years

(2)

Over five years

(3)

Total
(4)

AGM Information

44,918,878

127,643,193
70,448,361
56,442,800

752,032
752,032

95,913,931
32,834,399
7,549,916

30,933,544
24,596,071

268,476,001
424,521,094

Financial & Others

4,260,022

30,348,360
14,854,224
14,769,175

724,961
724,961

76,078,263
31,536,694
872,768

20,812,693
22,856,109

110,686,645
163,761,419

Governance

19,348,685

40,121,859
24,452,754
15,669,105

18,770,104
1,267,761
6,117,896

9,813,681
1,570,765

78,240,648
136,463,884

Leadership

21,310,171

57,172,974
31,141,383
26,004,520

27,071
27,071

1,065,564
29,944
559,253

307,170
169,197

79,548,709
124,295,792

Responsibility

55,012,015
1,169,021
4,581,048
1,021,292
42,572,581
24,135,773
4,560,839
749,219
21,516,781

608,477
118,047
156,045,093

Business Review

36,585,068
216,893

1,763
4,579,255
7,477,201
3,194,065
212,542
199,510

608,477

53,074,774

Performance

13,126,394
810,108
2,372,656
1,004,516
24,728,588
6,895,038
790,123
405,916
7,971,849

118,047
58,223,236

Strategy

5,300,553
142,020
2,208,392
15,013
13,264,737
9,763,533
576,652
130,761
13,345,422

44,747,082

Who We Are

Standardised Approach
Sovereigns/Central Banks
Public Sector Entities
Banks, Development Financial Institutions & MDBs
Insurance Cos, Securities Firms & Fund Managers
Corporates
Regulatory Retail
Residential Mortgage
Higher Risk Assets
Other Assets
Specialised Financing/Investment
Securitisation Exposures
Equity Exposure
Total Standardised Approach
IRB Approach
Sovereigns/Central Banks
Public Sector Entities
Banks, Development Financial Institutions & MDBs
Insurance Cos, Securities Firms & Fund Managers
Corporate Exposures
a) Corporates (excluding Specialised Lending and firmsize adjustments)
b) Corporates (with firmsize adjustment)
c) Qualifying Purchased Corporate Receivables
d) Specialised Lending (Own PD Approach)
i) Project Finance
ii) Object Finance
iii) Commodity Finance
iv) Income Producing Real Estate
v) High Volatility Commercial Real Estate
e) Specialised Lending (Slotting Approach)
i) Project Finance
ii) Object Finance
iii) Commodity Finance
iv) Income Producing Real Estate
v) High Volatility Commercial Real Estate
Retail Exposures
a) Residential Mortgages
b) Qualifying Revolving Retail Exposures
c) Qualifying Purchased Retail Receivables
d) Hire Purchase Exposures
e) Other Retail Exposures
Securitisation Exposures
Equity Exposure
Total IRB Approach
Total Standardised and IRB Approaches

One year or less

(1)

480

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Credit Risk

Table 15: Disclosure on Credit Risk Exposure Maturity Analysis for Maybank as at 30th June 2011 (RM000)
Exposure Class
Standardised Approach
Sovereigns/Central Banks
Public Sector Entities
Banks, Development Financial Institutions & MDBs
Insurance Cos, Securities Firms & Fund Managers
Corporates
Regulatory Retail
Residential Mortgage
Higher Risk Assets
Other Assets
Specialised Financing/Investment
Securitisation Exposures
Equity Exposure
Total Standardised Approach
IRB Approach
Sovereigns/Central Banks
Public Sector Entities
Banks, Development Financial Institutions & MDBs
Insurance Cos, Securities Firms & Fund Managers
Corporate Exposures
a) Corporates (excluding Specialised Lending and firmsize adjustments)
b) Corporates (with firmsize adjustment)
c) Qualifying Purchased Corporate Receivables
d) Specialised Lending (Own PD Approach)
i) Project Finance
ii) Object Finance
iii) Commodity Finance
iv) Income Producing Real Estate
v) High Volatility Commercial Real Estate
e) Specialised Lending (Slotting Approach)
i) Project Finance
ii) Object Finance
iii) Commodity Finance
iv) Income Producing Real Estate
v) High Volatility Commercial Real Estate
Retail Exposures
a) Residential Mortgages
b) Qualifying Revolving Retail Exposures
c) Qualifying Purchased Retail Receivables
d) Hire Purchase Exposures
e) Other Retail Exposures
Securitisation Exposures
Equity Exposure
Total IRB Approach
Total Standardised and IRB Approaches

One year or less

(1)

One to five years

(2)

Over five years

(3)

Total
(4)

1,489,000
68,710

15,003
3,923,763
2,039,379
506,948
123,824
22,252,685

30,419,313

8,039,577
757,267

243,658
10,105,082
1,530,596
159,787
240,381
792,208

60,071
21,928,627

24,802,184
198,838

1,763
1,834,017
5,956,142
1,523,639
194,420
172,679

608,477

35,292,160

34,330,762
1,024,815

260,424
15,862,861
9,526,117
2,190,374
558,625
23,217,572

608,477
60,071
87,640,099

24,990,513

49,571,728
26,591,872
22,978,226

1,630
1,630

979,372
25,319
555,807

234,575
163,671

75,541,613
105,960,925

19,203,506

37,446,222
23,216,891
14,229,331

14,398,945
1,051,912
5,769,200

6,419,229
1,158,604

71,048,672
92,977,299

4,255,011

25,532,813
12,975,649
11,850,448

706,716
706,716

51,326,902
27,149,709
869,153

9,542,333
13,765,708

81,114,726
116,406,886

48,449,030

112,550,763
62,784,412
49,058,004

708,346
708,346

66,705,219
28,226,939
7,194,160

16,196,137
15,087,983

227,705,011
315,345,110

FINANCIAL STATEMENTS

481

Maybank Annual Report 2011

At A Glance
Our Perspective

Table 16: Disclosure on Credit Risk Exposure Maturity Analysis for Maybank Islamic as at 30th June 2011 (RM000)
Exposure Class

One to five years

(2)

Over five years

(3)

Total
(4)

4,275,405

15,092,431
7,663,949
7,384,796

43,686
43,686

29,208,712
4,607,460
355,756

14,737,407
9,508,088

48,576,548
67,946,938

Financial & Others

5,011

4,815,547
1,878,575
2,918,727

18,245
18,245

24,751,360
4,386,984
3,615

11,270,360
9,090,401

29,571,918
41,636,975

Governance

145,179

2,675,637
1,235,863
1,439,774

4,371,159
215,850
348,696

3,394,453
412,162

7,191,976
11,806,434

Leadership

4,125,215

7,601,246
4,549,511
3,026,295

25,441
25,441

86,192
4,625
3,446

72,595
5,526

11,812,654
14,503,529

Responsibility

14,148,422
93,730

953
2,002,864
1,269,365
197,020
26,444
1,631,593

19,370,391

Business Review

10,043,669
18,055

705,446
1,099,327
180,438
18,122

12,065,057

Performance

3,735,753
2,366

944
771,733
90,674
11,604
1,384

4,614,458

Strategy

368,999
73,310

9
525,685
79,364
4,977
6,937
1,631,593

2,690,875

Who We Are

Standardised Approach
Sovereigns/Central Banks
Public Sector Entities
Banks, Development Financial Institutions & MDBs
Insurance Cos, Securities Firms & Fund Managers
Corporates
Regulatory Retail
Residential Mortgage
Higher Risk Assets
Other Assets
Specialised Financing/Investment
Securitisation Exposures
Equity Exposure
Total Standardised Approach
IRB Approach
Sovereigns/Central Banks
Public Sector Entities
Banks, Development Financial Institutions & MDBs
Insurance Cos, Securities Firms & Fund Managers
Corporate Exposures
a) Corporates (excluding Specialised Lending and firmsize adjustments)
b) Corporates (with firmsize adjustment)
c) Qualifying Purchased Corporate Receivables
d) Specialised Lending (Own PD Approach)
i) Project Finance
ii) Object Finance
iii) Commodity Finance
iv) Income Producing Real Estate
v) High Volatility Commercial Real Estate
e) Specialised Lending (Slotting Approach)
i) Project Finance
ii) Object Finance
iii) Commodity Finance
iv) Income Producing Real Estate
v) High Volatility Commercial Real Estate
Retail Exposures
a) Residential Mortgages
b) Qualifying Revolving Retail Exposures
c) Qualifying Purchased Retail Receivables
d) Hire Purchase Exposures
e) Other Retail Exposures
Securitisation Exposures
Equity Exposure
Total IRB Approach
Total Standardised and IRB Approaches

One year or less

(1)

AGM Information

482

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Credit Risk

Credit Impairment Policy Classification and Impairment

Provisions for Loans/Financing
BNM has issued its new guidelines Classification and Impairment Provisions
for Loans/Financing (hereafter referred to as Impairment Guidelines).
The Impairment Guidelines set out the minimum requirement on the
classification of impaired loans/financing and provision for loan/financing
impairment with the adoption of the FRS 139-Financial Instruments:
Recognition and Measurement issued by Malaysian Accounting Standards
Board, which requires the new impairment provision reporting to take effect
on 1 July, 2010.
The Impairment Guidelines supersede the BNM GP3 on classification of
non-performing loans and provisions for substandard, doubtful and bad
debts and is to take effect from the financial years beginning on and after 1
January 2010 (Note: The Banks Impairment Guidelines is to take effect for the
financial year beginning on 1 July, 2010).
The Group has implemented a Credit Impairment Policy consistent with
these guidelines.
Methods of assessment under FRS 139 comprising Individual Assessment (IA)
and Collective Assessment (CA)
a)

b)

Individual Assessment (IA)

Individual assessment is more accurate and commonly used for
significant loans like Corporate Loans. For individually significant
borrowers/loans that meet the threshold limit of above RM5.0 million,
each loan is subject to the impairment process on quarterly basis. The
need for impairment is triggered by certain/pre-determined events
(Triggering Events).
Collective Assessment (CA)
Due to the nature and size of the consumer loan portfolio, it is
considered appropriate and practical to assess them collectively. The
impairment loss process shall be on a portfolio basis whereby the loans

are grouped among loans that share similar credit risk characteristics.
This impairment model shall also apply to:

Non-significant loans that do not meet the threshold limit of
above RM5.0 million; and

Individually significant loan with no objective evidence of

impairment.

For this assessment, the loans shall be grouped (segmentation) and impaired
collectively using statistical techniques. Each segment will be assigned with
one PD and loss rate.

Trigger Events under the Two Assessments

Under FRS 139, a loan can be impaired only if it has objective evidence for
impairment. The Group has to assess at balance sheet date whether a loan or
group of loans has any of the objective evidence. For both assessments, early
detection of impairment is based on objective evidences known as trigger
events:
i. For IA A comprehensive list of trigger events have been developed by
the Focus Group of the Group as warning signals and for early
impairment detection.
ii. For CA portfolio trigger needs to be linked to a certain delinquency
bucket as well as to clearly defined, non-judgmental impairment
assessment.
The criterion of 3 months in arrears is mandatory event for non-consumer
and consumer loans where the loans need to be impaired. The trigger events
will be reviewed by the Group as and when required to ensure the listing of
events for impairment remain appropriate to the Groups business
environment.
Tables 17 through 18(b) below show the impaired loans, advances and
financing by economic purpose for Group, the Bank, and MIB, respectively.

Table 17: Impaired loans, advances and financing by industry for Maybank Group as at 30th June 2011 (RM000)
Impaired loans,
advances and
financing
Past
Agriculture
Mining & quarrying

Past Due Loans

154,061

Individual
Allowance

Collective
Impairment

56,304

Charges /Write
Back

Write-Offs

Total

4,754

2,627

210,365

210,375

45,267

36,061

1,372

255,642

2,526,157

923,647

208,008

578,362

3,449,804

Construction

852,027

275,659

1,689

124,996

1,127,686

Electricity, gas & water supply

434,290

291,849

18,412

118,334

726,139

Wholesale, retail trade, restaurants & hotels

877,377

290,717

36,945

245,040

1,168,094

Manufacturing

Finance, insurance, real estate & business

501,392

720,222

49,262

65,039

1,221,614

Transport, storage & communication

904,040

200,752

54,331

30,421

1,104,792

Education, health & others

124,549

40,934

38,888

35

165,483

1,303,994

33,092

152

6,405

1,337,086

Household
Others
Total

868,600
8,756,862

53,686
29,405,553

2,932,129

4,271,208

21,102

13,273

922,286

360,658

1,185,904

11,688,991

FINANCIAL STATEMENTS

483

Maybank Annual Report 2011

At A Glance
Our Perspective

Table 18(a): Impaired loans, advances and financing by industry for Maybank as at 30th June 2011 (RM000)

20,371,793

39,164

623,805
199,543
282,560
257,041
571,721
88,559
5,040
202
48,262
2,115,897

Collective
Impairment

3,179,773

Charges/Write
Back
13,513

157,477
5,036
18,483
29,697
31,041
22,460
2,994
114
20,997
264,618

Write-Offs
451

468,575
77,173
118,334
209,953
43,919

35
4,955
13,070
936,465

Total
179,929
5,940
2,594,871
919,848
694,093
950,319
887,404
666,780
46,277
1,267,171
280,761
8,493,393

Performance

140,765
5,940
1,971,066
720,305
411,533
693,278
315,683
578,221
41,237
1,266,969
232,499
6,377,496

Individual
Allowance

Strategy

Agriculture
Mining & quarrying
Manufacturing
Construction
Electricity, gas & water supply
Wholesale, retail trade, restaurants & hotels
Finance, insurance, real estate & business
Transport, storage & communication
Education, health & others
Household
Others
Total

Past Due Loans

Who We Are

Impaired loans,
advances and
financing
Past

Business Review

Table 18(b): Impaired loans, advances and financing by industry for Maybank Islamic as at 30th June 2011 (RM000)

575,895

Charges/Write
Back
8,750

4,716
9,395

3,159
668,811
9,160
35,894

52,953

Write-Offs

72,421
47,823

22,987

22,419

165,650

Total
26,970

186,426
125,375
1,310
59,291
174,388
152,877
116,484
798
439,317
1,283,236

Financial & Others

2,638,136

16,930

105,477
55,556

3,315
111,4
26,049
35,894

354,687

Collective
Impairment

Governance

10,040

80,949
69,819
1,310
55,976
62,922
126,828
80,590
798
439,317
928,549

Individual
Allowance

Leadership

Agriculture
Mining & quarrying
Manufacturing
Construction
Electricity, gas & water supply
Wholesale, retail trade, restaurants & hotels
Finance, insurance, real estate & business
Transport, storage & communication
Education, health & others
Household
Others
Total

Past Due Loans

Responsibility

Impaired loans,
advances and
financing
Past

AGM Information

484

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Credit Risk

Table 19 below presents the reconciliation of changes to loan impairment provisions for the Group, the Bank and Maybank Islamic.
Table 19: Reconciliation of changes to loan impairment provisions as at 30th June 2011 (RM000)

Individual Allowance
At 1 July
- as previously stated
- effect of adopting FRS 139
At 1 July, as restated
Allowance made during the year
Amount written back
Amount written off
Transferred to impairment losses in securities
Transferred to collective allowance
Acquisition of subsidiaries
Exchange differences
Balance at end of year
Collective Allowance
At 1 July
- as previously stated
- effect of adopting FRS 139
At 1 July, as restated
Allowance made during the year
Amount written back
Amount written off
Transferred from impairment losses in securities
Transferred from individual allowance
Exchange differences
Balance at end of year

Group

Maybank

3,981,073
3,981,073
651,725
(291,066)
(1,185,904)
(51,475)
(173,038)
50,315
(49,501)
2,932,129

2,909,013
2,909,013
471,883
(207,265)
(936,464)
(51,475)
(57,227)

(12,568)
2,115,897

4,741,229
4,741,229
774,955
(42)
(1,424,744)
13,612
173,038
(6,840)
4,271,208

3,665,506
3,665,506
117,091

(687,814)
13,612
57,227
14,151
3,179,773

Maybank Islamic

473,823
473,823
94,775
(41,822)
(165,650)

(6,438)

354,688

713,938
713,938
16,749

(161,230)

6,438

575,895

FINANCIAL STATEMENTS

Maybank Annual Report 2011

485
At A Glance

In line with Basel II requirements for capital adequacy purposes, the

parameters are calibrated to a full economic cycle experience to reflect
long-run, cycle-neutral estimations:

ii. Loss Given Default (LGD)

EAD is linked to facility risk; namely the expected gross exposure of a facility
should a borrower default. The race-to-default is captured by Credit
Conversion Factor (CCF), which should reflect the expected increase in
exposure amount due to additional drawdown by borrower facing financial
difficulties leading to default.

The CRRS comprises two components, namely, the Borrower Risk Rating
(BRR) and Facility Risk Rating (FRR). The BRR is a borrower-specific rating
component that provides an estimate on the likelihood of the borrower
going into default over the next twelve months. The BRR estimates the
borrower risk and is independent of the type/nature of facilities and
collaterals offered.
The BRR is generated from a structured rating process which consists of
quantitative and qualitative factors. From raw rating, the rating is then
capped at policy rating if any. Then the group support matrix is used to
objectively measure the impact of the group relationship on the raw rating
of a borrower (where relevant). In view that the risk rating is based on
historical financial data, judgmental override is allowed on the BRR by the
relevant parties. Rating judgmental override is permissible but subject to
maximum 3 notches upgrade to be decided by rating approval party and
unlimited downgrade (subject to the worst performing grade of grade 21)
that can be performed by the business units.

AGM Information

The Group employs a variety of techniques in developing its PD models. In

each case, the appropriate approach is dictated by the availability and
appropriateness of the Groups internal data.

To account for differences in risk due to industry and size, CRRS is designed
to rate all corporate and commercial borrowers by their respective industry
segments (i.e. manufacturing, services, trading, contractors, property
developers (single project) and property investors (single property).

Financial & Others

Corporate exposures comprised corporate, commercial, small business, Real

Estate, Non-Bank Financial Institutions (NBFIs) and Specialised Lending
portfolios, while, for bank exposures, they include other commercial banks
and Development Financial Institutions (DFIs) portfolios.

CRRS is a statistical default prediction model. The models were developed

and recalibrated to suit the Groups banking environment using internal data.
The model development process was conducted and documented in line
with specific criteria for model development in accordance to Basel II. The EL
framework employed in the Group enables the calculation of expected loss
using PD estimate facilitated by the CRRS, LGD and EAD.

Governance

Internal experience during crisis period is being taken into consideration for
EAD estimations and where there is a material difference in EAD during
downturn period as compared to normal period, Downturn EAD would be
used in RWA computation.

The development of CRRS for the Bank (including Singapore Operations) and
Maybank IB allows the Group to identify, assess and measure corporate,
commercial and small business borrowers credit risk.

Leadership

iii. Exposure at Default (EAD)

Credit Risk Rating System (CRRS)

Responsibility

For Basel II purposes, LGD is calibrated to loss experiences during period of

economic crisis whereby for most portfolios, the estimated loss during crisis
years is expected to be higher than that during normal economy period. The
crisis period LGD, known as Downturn LGD, is used as input for RWA
calculations.

Credit Risk Models and Tools

Business Review

LGD measures the economic loss the bank would incur in the event of
borrower defaulting. Among others, it takes into account post default
pathways, cure probability, direct and indirect costs associated with the
workout and recoveries from borrower and collateral liquidation.

Performance

PD represents the probability of a borrower defaulting within the next 12

months time horizon. The first level estimation is based on portfolios
Observed Default Rate of the more recent years data. The average long run
default experience covering crisis periods including the major Asian crisis in
1997 is reflected through Central Tendency calibration for the Basel
estimated PD.

Strategy

i. Probability of Default (PD)

Default History Based (Good-Bad analysis) This approach is

adopted when the Group has sufficient default data. Under this
approach, statistical method is employed to determine the likelihood of
default on existing exposures. The Groups Credit Risk Rating System
(CRRS) models were developed using this approach;
Shadow Rating Approach This approach is usually applied when
there are few or no defaults data available or also known as low
default portfolio category. The objective of this methodology is to
replicate the risk ranking applied by external rating agency. The Groups
Bank Risk Rating Scorecards (BRRS) were developed using this
approach; and
Experts Judgment Approach The default experience for some
exposures, for example Holding Companies and Specialised Lending is
insufficient for the Group to perform the required analyses to develop
a robust statistical model. Another approach known as experts
judgment approach is therefore opted to develop the scorecard. Under
this approach, the qualitative, quantitative and factor weights were
determined by the Groups credit experts.

Who We Are

The Group has obtained BNMs approval to use internal credit models for
evaluating the majority of its credit risk exposures. For Corporate and Bank
portfolios, the Group has adopted the FIRB Approach, which allows the
Group to use its internal PD estimates to determine an asset risk weighting.

The general approach adopted by the Group can be categorised into the
following three categories:

Our Perspective

Non-Retail Portfolios

486

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Credit Risk

In line with the Groups application for FIRB Approach under Basel II, the existing CRRS Scorecard was enhanced and recalibrated in June 2009. The BRR in the
New Corporate Rating Masterscale now comprises of 21 performing grades compared to 10 performing grades in the previous masterscale.
For reference, each grade can be mapped to external agency ratings, like Standard & Poors (S&P), as per Table A below:

Table A
Risk Category

Very Low

Low

Moderate

High

Non Retail
CRRS Grade
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21

S & P Equivalent
AA TO AAA
AA
A+
A
A
BBB+ TO A
BBB TO BBB+
BBB
BBB TO BBB
BB+ TO BBB
BB+
BB
BB TO BB
BB
B+ TO BB
B TO B+
B
B TO B
B
CCC TO B
CCC

Rating Coverage for Corporate Exposures

The CRRS has been implemented by the Group since 2005. Subsequently,
more scorecards were developed to rate corporate exposures. With the
implementation of these scorecards, the Group was able to rate about 95%
of its corporate exposures at Maybank Malaysia, 93% at Maybank Singapore
and 87% at MIB, respectively as at 30 June 2011.
Bank Risk Rating Scorecard (BRRS)
In addition to quantifying the risk of corporate borrowers, the Group has
developed BRRS to risk grade the Groups counterparties and banks as
borrowers based on the FIRB Approach. The BRRS is able to rate commercial
banks, investment, savings and cooperative banks except central banks.
As the Groups portfolio falls under low default portfolio category, normal
statistical modelling such as good-bad analysis could not be applied. Instead,
a shadow-bond rating technique was used in developing the scorecards.

Generally, the objective of such methodology is to replicate the risk ranking

implied by external rating agency. In this technique, a set of input/
independent variables are regressed against an output/dependent variable
to produce estimates to predict the output variable. The input variables are
the financial ratios and qualitative factors while the output variable is the
external rating.
A different masterscale known as Global Masterscale is used to map the PD
generated from BRRS to the scale. There are altogether 17 performing grades
in the BRRS masterscale with Grade 1 being the best performing grade and
Grade 17 being the worst performing grade. For defaulted borrowers, the
applicable grade is Grade 18. The BRRS Global Masterscale and its mapping
to S&Ps and RAM rating is shown in Table B below.

FINANCIAL STATEMENTS

Maybank Annual Report 2011

487
At A Glance
Our Perspective

Table B
RAM Equivalent

Project Finance Scorecard (Specialised Lending)

Financial & Others

Governance

Project Finance is one of the five sub-classes (other sub-classes are object
finance, commodities finance, income-producing real estate and high
volatility commercial real estate) of Specialised Lending and forms part of the
corporate asset class under the IRB Approach. The Group has developed
Project Finance scorecard to enable it to rate its borrowers. The scorecard
was developed based on the supervisory slotting criteria approach. The
scorecard has been designed to output eight internal grades which will then
be mapped to the four BNM slotting grades to derive the respective risk
weights for RWA computation.

The banking institution looks primarily to the revenues generated by a

single project, both as the source of repayment and as security for the
exposure. In contrast, if repayment of the exposure depends primarily
on a well established, diversified, credit-worthy, contractually obligated
end user for repayment, it is considered a collateralised claim on the
corporate;
Is usually for large, complex and expensive installations that might
include, for example, power plants, chemical processing plants, mines,
transportation infrastructure, environment, telecommunications
infrastructure (mainly immovable assets);
May also take the form of financing of the construction of a new capital
installation, or refinancing of an existing installation, with or without
improvements; and
The lender is usually paid solely or almost exclusively from the proceeds
generated by the project being financed.

Leadership

There are two separate scorecards available in BRRS namely Developed

Countries Model and Emerging Countries Model, which distinguishes the
model to be applied for banks in developed countries and that of banks in
emerging countries.

Responsibility

Project Finance, as defined by Basel II and BNM, is a method of funding in

which:

Business Review

Similar to CRRS, business users are allowed to perform judgmental override

in BRRS.

Performance

AAA
AAA
AAA
AA TO AAA
AA
AA
AA
A TO AA
A
A
BBB TO A
BBB
BBB
BB TO BBB
BB
BB
BB
BB TO B
B
C TO B

Strategy

S&P Equivalent
AA TO AAA
AAA+
A
A
BBB+
BBB+
BBB
BBB
BBB
BB+
BB
BB
BB
B+
B
B
B
B
B
CCC

Who We Are

BRRS GRADE
1,2,3
4
5
6
7
8
8
9
10
10
11
12
12
13
14
15
15
15
16
16
17

AGM Information

488

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Credit Risk

The objectives of developing this scorecard are:

To develop and implement a Project Finance rating template based on

and mapped to Basel II/BNM Supervisory Slotting Approach to achieve
an IRB compliance;
To enhance credit risk management processes to achieve:
i.
Consistency in credit risk assessment and business management
for project finance portfolios; and
ii.
Improvement in turnaround time; and
To facilitate better pricing of borrowers based on risk class.

The rating tool for Project Finance lending is applicable at both Maybank IB
and the Banks Project Finance Portfolios (bonds and loans).

Application of internal ratings (use test)

Since the development and implementation of the Groups internal rating
models, the Group has been using internal ratings in the following essential
areas:

Credit approval the determination on the level of approval for a loan

application is determined based on the internal rating of the borrower;
Policy Policy has been formulated to allow low risk borrowers rated
grade 1 to grade 9 in the Corporate Masterscale be put under the fast
track process flow for loan application;
Reporting regular reporting on the risk rating portfolio distribution
and sectoral outlook vs borrower risk profile within sector are being
produced and monitored by the Group;
Capital Management the Group has put in place risk-based capital
management ICAAP programme. The use of RWA and regulatory capital
charge for decision making and capital charge information for budget
process are currently being practised by the Group;
Risk Governance Internal ratings are also being used for various risk
governance activities such as the setting of group exposure under the
Maybank Group Exposure Limit (MGEL), threshold limit for CRC review,
sectoral limit framework, sampling methodology for credit review and
policy breach framework; and
Pricing Decision authority is given for credit approver to vary pricing
based on the riskiness of the borrower as reflected by the borrowers
ratings.

Tables 20 through 22 show the exposures by PD bands for Non-Retail

Portfolios of the Group, the Bank and MIB, respectively as at 30th June 2011.
A summary of the PD distribution of these exposures are also provided.

FINANCIAL STATEMENTS

489

Maybank Annual Report 2011

At A Glance
Our Perspective

Table 20: Disclosure on Exposures by PD Band (IRB Approach) for Non-Retail for Maybank Group as at 30th June 2011 (RM000)

Undrawn
commitments

RWA

18,428,983
20,070,889
21,377,969
8,117,376
2,453,143
70,448,361

45.00
44.75
45.14
49.34
36.62

26.24
52.83
96.14
159.22
0.13

776,972
672,217
425,841
92,177
9,996
1,977,204

4,834,888
10,604,444
20,552,848
12,924,834
3,104
48,920,118

3,010,216
18,218,133
22,070,414
10,942,001
2,202,037
56,442,800
171,810,038

44.43
41.31
42.93
42.42
42.60

20.50
43.83
75.57
118.13

423,058
939,857
704,909
166,326
9,577
2,243,726
4,230,357

617,058
7,985,117
16,678,494
12,925,324

38,205,993
101,988,705

Governance

2,582,372
8,413,508
3,696,875
169,839

14,862,594

Leadership

12
5,634
3,781

9,427

Responsibility

20.59
31.22
71.46
251.27

Business Review

45.32
45.07
45.31
49.12
37.50

Performance

12,542,464
26,946,971
5,173,465
67,592
188,385
44,918,877

Strategy

Non-Retail Exposures
Bank
0.0000 - 0.0715
0.0715 - 0.3335
0.3335 - 4.8305
4.8305 - 24.0203
100
Total for Bank Exposures
Insurance Cos, Securities Firms & Fund Managers
0.0000 - 0.1200
0.1200 - 0.6440
0.6440 - 2.4750
2.4750 - 100
100
Total for Insurance Cos, Securities Firms & Fund Managers
Exposures
Corporate (excluding Specialised Lending and firm-size
adjustments)
0.0000 - 0.1200
0.1200 - 0.6440
0.6440 - 2.4750
2.4750 - 100
100
Total for Corporate (excluding Specialised Lending and firm-size
adjustments)
Corporate (with firm-size adjustment)
0.0000 - 0.1200
0.1200 - 0.6440
0.6440 - 2.4750
2.4750 - 100
100
Total for Corporate (with firm-size adjustment)
Total Non-Retail Exposures

EAD Post CRM

Exposure
Weighted
Average Risk
Weight (%)

Who We Are

PD Range (%)

Exposure
Weighted
Average LGD
(%)

Financial & Others

AGM Information

490

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Credit Risk

Table 21: Disclosure on Exposures by PD Band (IRB Approach) for Non-Retail for Maybank as at 30th June 2011 (RM000)

PD Range (%)
NonRetail Exposures
Bank
0.0000 0.0715
0.0715 - 0.3335
0.3335 - 4.8305
4.8305 - 24.0203
100
Total for Bank Exposures
Insurance Cos, Securities Firms & Fund Managers
0.0000 - 0.1200
0.1200 - 0.6440
0.6440 - 2.4750
2.4750 - 100
100
Total for Insurance Cos, Securities Firms & Fund Managers
Exposures
Corporate (excluding Specialised Lending and firm-size
adjustments)
0.0000 - 0.1200
0.1200 - 0.6440
0.6440 - 2.4750
2.4750 - 100
100
Total for Corporate (excluding Specialised Lending and firm-size
adjustments)
Corporate (with firm-size adjustment)
0.0000 - 0.1200
0.1200 - 0.6440
0.6440 - 2.4750
2.4750 - 100
100
Total for Corporate (with firm-size adjustment)
Total Non-Retail Exposures

Exposure
Weighted
Average LGD
(%)

EAD Post CRM

Exposure
Weighted
Average Risk
Weight (%)

Undrawn
commitments

RWA

11,125,669
30,603,386
6,443,325
88,264
188,385
48,449,029

45.63
45.14
45.61
53.24
30.00

20.55
34.10
81.78
247.27

12
5,634
2,500

8,146

2,286,506
10,437,229
5,269,137
218,247

18,211,119

15,990,254
18,135,057
19,241,884
7,115,872
2,301,345
62,784,412

45.00
44.41
44.90
53.83
29.30

26.02
52.76
96.73
159.61
0.13

645,871
603,402
337,312
89,081
9,996
1,685,662

4,160,873
9,567,411
18,613,170
11,357,331
2,974
43,701,759

2,570,553
15,372,746
19,799,374
9,476,973
1,838,358
49,058,004
160,291,445

44.00
42.27
42.08
41.36
41.69

20.62
44.43
74.91
113.98

396,356
870,343
653,123
156,720
9,203
2,085,746
3,779,553

530,066
6,829,603
14,832,079
10,801,547

32,993,296
94,906,174

FINANCIAL STATEMENTS

491

Maybank Annual Report 2011

At A Glance
Our Perspective

Table 22: Disclosure on Exposures by PD Band (IRB Approach) for Non-Retail for Maybank Islamic as at 30th June 2011 (RM000)

Undrawn
commitments

RWA

2,438,729
1,935,832
2,136,086
1,001,504
151,798
7,663,949

45.00
45.09
45.38
44.85
43.94

27.64
53.57
90.81
156.51
0.09

131,102
68,816
88,529
3,096

291,543

674,015
1,037,033
1,939,677
1,567,503
130
5,218,359

439,663
2,845,387
2,271,039
1,465,027
363,679
7,384,796
19,324,150

44.85
40.35
43.77
43.49
43.50

19.79
40.61
81.30
144.97

26,702
69,514
51,785
9,605
374
157,981
450,804

86,992
1,155,514
1,846,415
2,123,777

5,212,698
12,200,746

Governance

295,866
666,675
805,003
2,146

1,769,690

Leadership

1,281

1,281

Responsibility

20.88
36.30
78.87
190.40

Business Review

45.00
45.00
45.00
45.00
45.00

Performance

1,416,795
1,836,785
1,020,698
1,127

4,275,405

Strategy

NonRetail Exposures
Bank
0.0000 0.0715
0.0715 - 0.3335
0.3335 - 4.8305
4.8305 - 24.0203
100
Total for Bank Exposures
Insurance Cos, Securities Firms & Fund Managers
0.0000 - 0.1200
0.1200 - 0.6440
0.6440 - 2.4750
2.4750 - 100
100
Total for Insurance Cos, Securities Firms & Fund Managers
Exposures
Corporate (excluding Specialised Lending and firm-size
adjustments)
0.0000 - 0.1200
0.1200 - 0.6440
0.6440 - 2.4750
2.4750 - 100
100
Total for Corporate (excluding Specialised Lending and firm-size
adjustments)
Corporate (with firm-size adjustment)
0.0000 - 0.1200
0.1200 - 0.6440
0.6440 - 2.4750
2.4750 - 100
100
Total for Corporate (with firm-size adjustment)
Total Non-Retail Exposures

EAD Post CRM

Exposure
Weighted
Average Risk
Weight (%)

Who We Are

PD Range (%)

Exposure
Weighted
Average LGD
(%)

Financial & Others

AGM Information

492

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Credit Risk

Corporate Exposures by PD Bands for Maybank

1 to 5
18,561

16 to 21

96.67%

4,655

46.73%

22-23

46.64%
0.13%

97.18%

273.58%

171.64%
16 to 21

22-23

4,140

33,508

43,448

171.71%

19,059

21,439

38,289

6 to 10

1 to 5

6 to 10

39,041

11 to 15

277.35%
11 to 15

16,593

Corporate Exposures by PD Bands for Maybank Group

0.13%

EAD Post CRM (RM mil)

Exposure Weighted Average Risk Weight (%)

EAD Post CRM (RM mil)

Exposure Weighted Average Risk Weight (%)

Most of the Groups corporate exposures, amounting to 47.07% are

concentrated on the better PD ranges of 0.00% to 0.64%, and another
47.79% of the exposures are from PD ranges of >0.64% to 18.64%, whilst a
mere 1.43% are in the worst performing grade of 21. Grades 22 and 23 are
bad grades.

Similarly at Bank level, about 46.55% of the corporate exposures are

concentrated on the better PD ranges of 0.00% to 0.64%, and another
48.53% of the exposures are from PD ranges of >0.64% to 18.64%, whilst a
mere 1.16% are in the worst performing grade of 21.

Corporate Exposures by PD Bands for Maybank Islamic

47.42%

172.11% 16 to 21

22-23

515

94.18%

301.48%

2,467

2,878

1 to 5

11 to 15
4,407

4,781

6 to 10

0.09%

EAD Post CRM (RM mil)

Exposure Weighted Average Risk Weight (%)

For MIB, about 50.90% of the corporate exposures are concentrated on the
better PD ranges of 0.00% to 0.64%, and another 42.28% of the exposures
are from PD ranges of >0.64% to 18.64%, whilst 3.40% are in the worst
performing grade of 21.

FINANCIAL STATEMENTS

Maybank Annual Report 2011

493
At A Glance

Retail Portfolios

Other Risk Measurement for Retail Portfolios

Our Perspective

The Groups Retail portfolios are under Basel II AIRB Approach. This approach
calls for more extensive reliance on the Banks own internal experience
whereby estimations for all the three components of RWA calculation namely
PD, EAD and LGD are based on its own historical data.

Besides having the Basel II Retail IRB models, application and behaviour
scorecards are widely used for business management purposes. Scorecards
assess the probability that the customer will fail to make full and timely
repayment of credit obligations. Business decisions and strategies are then
built around the scores.

Who We Are

Application Scorecard

Currently the following material retail portfolios are under Retail IRB:

Maybank Retail Portfolios

With application scorecards, at the point of time when an applicant applies

for the credit facility, each applicant is assigned a score that corresponds to
the odds of future repayment. Scores are designed to rank-order the riskiness
of the applicants, whereby higher score represents lower risk.

Residential Mortgage
Qualifying Revolving Retail
Exposure (QRRE)

Housing Loan (Malaysia & Singapore)

Credit Card (Malaysia & Singapore)

With proper utilisation, the application scorecards benefit both risk

management and business acquisition process through:

Other Retail

Auto Loan (Malaysia & Singapore)

Unit Trust Loan (Malaysia)

Basel II Retail sub-portfolio

category

Behavioral Scorecard
The product nature of credit card is subject to variable utilisation and
payment pattern. A customer is able to utilise any portion of the granted
limit and pay any amount of the outstanding balance. Due to the volatile
nature of the product, a more robust risk measurement tool is required to
manage the portfolio.

Leadership

Currently, application scorecards are deployed for all the major retail
portfolios in Malaysia and Singapore.

Responsibility

The above portfolios represent about 85% of total Banks retail exposures.
Whilst currently the rest of Groups retail portfolios are under Standardised
Approach (SA), efforts are under way to bring the other material retail
portfolios under the AIRB Approach.

Consistency in credit risk assessment

Improved turnaround time
Better management control of the portfolios; and
Improved revenue and profit through the identification and acceptance
of additional business

Retail Masterscale
A retail masterscale with mapping to PD and external ratings like S&Ps and
Rating Agency Malaysia (RAM) is used to promote a common risk language
across the Groups retail portfolios as per Table C below:

Table C
Risk Category

Low

High

Excellent
Very Strong
Strong
Very Strong
Good
Moderate
Satisfactory
Weak
Risky
Very Risky
Extremely Risky

Likely S&P
rating
Equivalent
BBB to AAA
BBBBB+
BB- to BB
BBB to B+
B- to B
CCC to BCCC

Likely RAM
rating
Equivalent
A to AAA
A

BBB
BB
B
C to B

Behavioural Scorecards were therefore developed for Credit Card portfolios

both in Malaysia and Singapore. Behaviour score measures the borrower
riskiness based on transaction information and behavioural pattern of
customers utilisation and payment of the credit card. The scores are
generated on monthly basis and among others, are being used for the
following purposes:

Collection Strategies
Limit Management
Transaction Authorisation

Tables 23 through 25 show the exposures by PD bands for Retail Portfolios of

the Group, the Bank and MIB, respectively as at 30th June 2011. A summary
of the PD distribution of these exposures are also provided.

AGM Information

With the use of Behaviour score, credit card portfolio is able to closely
manage the accounts to reduce defaulters, increase collection and ultimately
increase the profitability.

Financial & Others

Moderate

R1
R2
R3
R4
R5
R6
R7
R8
R9
R10
R11

Rating Definition

Governance

Very Low

PD Grade

Business Review

AIRB coverage for Retail portfolios

Performance

Where relevant, both application and behavioural scorecards are used as

input into Retail IRB PD models.
Strategy

Separate PD, EAD and LGD statistical models were developed at portfolio
level; each model covering borrowers with fundamentally similar risk profiles
in a portfolio. The estimations derived from the models are used as input for
RWA calculations.

494

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Credit Risk

Table 23: Disclosure on Exposures by PD Band (IRB Approach) for Retail for Maybank Group as at 30th June 2011 (RM000)

PD Range (%)
Retail Exposures
Residential Mortgages
0.0000 - 0.5900
0.5900 - 3.3330
3.3330 - 18.750
18.750 - 100
100
Total for Residential Mortgages Exposures
Qualifying Revolving Retail Exposure
0.0000 - 0.5900
0.5900 - 3.3330
3.3330 - 18.750
18.750 - 100
100
Total for Qualifying Revolving Retail Exposures
Hire Purchase Exposure
0.0000 - 0.5900
0.5900 - 3.3330
3.3330 - 18.750
18.750 - 100
100
Total Hire Purchase Exposures
Other Retail Exposure
0.0000 - 0.5900
0.5900 - 3.3330
3.3330 - 18.750
18.750 - 100
100
Total Other Retail Exposures
Total Retail Exposures

EAD Post CRM

Exposure
Weighted
Average LGD
(%)

Exposure
Weighted
Average Risk
Weight (%)

Undrawn
commitments

RWA

7,497,184
20,014,843
3,631,548
947,134
743,691
32,834,399

21.93
27.70
27.02
21.39
74.34

15.85
43.42
96.82
117.90
68.16

1,188,356
8,689,470
3,516,184
1,116,659
506,910
15,017,578

2,983,507
3,239,662
1,010,330
311,262
5,155
7,549,916

77.73
77.14
75.79
76.46
74.74

13.03
40.05
114.24
226.06
48.89

1,766,357
1,261,666
158,679
62,332
63
3,249,097

388,846
1,297,442
1,154,202
703,647
2,520
3,546,658

17,910,058
9,534,102
2,961,143
384,943
143,298
30,933,544

50.78
52.52
47.34
47.84
95.86

21.94
54.04
74.05
116.63
60.23

3,929,234
5,152,356
2,192,795
448,940
86,307
11,809,632

896,370
8,945,042
12,124,957
2,268,597
361,104
24,596,071
95,913,931

28.48
22.29
12.20
15.73
71.67

19.63
28.32
20.36
33.76
90.30

3,917
2,683
744
1,620

8,964
3,258,061

175,949
2,532,876
2,468,225
765,974
326,091
6,269,116
36,642,984

FINANCIAL STATEMENTS

495

Maybank Annual Report 2011

At A Glance
Our Perspective

Table 24: Disclosure on Exposures by PD Band (IRB Approach) for Retail for Maybank as at 30th June 2011 (RM000)

Undrawn
commitments

RWA

1,136,477
7,168,595
2,762,839
872,603
429,220
12,369,734

2,889,165
3,067,332
940,210
292,923
4,530
7,194,160

80.82
79.66
76.95
78.28
74.85

13.08
40.09
114.38
226.65
45.34

1,766,357
1,261,666
158,679
62,332
63
3,249,097

378,001
1,229,679
1,075,410
663,915
2,054
3,349,059

7,396,531
6,529,513
1,961,856
211,426
96,811
16,196,137

49.01
49.18
45.20
44.81
95.25

22.29
52.19
71.61
111.15
59.32

1,648,797
3,407,801
1,404,868
234,999
57,429
6,753,894

831,636
7,020,807
6,149,544
829,333
256,663
15,087,983
66,705,219

29.74
23.23
13.31
20.57
73.94

19.73
28.91
21.60
48.32
93.91

3,917
2,683
744
1,620

8,964
3,258,061

164,062
2,029,931
1,328,338
400,754
241,044
4,164,129
26,636,815

Leadership

Responsibility

15.82
42.71
95.94
116.52
68.14

Business Review

22.70
27.78
26.60
20.82
75.09

Performance

7,185,217
16,783,188
2,879,773
748,884
629,878
28,226,939

Strategy

Retail Exposures
Residential Mortgages
0.0000 - 0.5900
0.5900 - 3.3330
3.3330 - 18.750
18.750 - 100
100
Total for Residential Mortgages Exposures
Qualifying Revolving Retail Exposure
0.0000 - 0.5900
0.5900 - 3.3330
3.3330 - 18.750
18.750 - 100
100
Total for Qualifying Revolving Retail Exposures
Hire Purchase Exposure
0.0000 - 0.5900
0.5900 - 3.3330
3.3330 - 18.750
18.750 - 100
100
Total Hire Purchase Exposures
Other Retail Exposure
0.0000 - 0.5900
0.5900 - 3.3330
3.3330 - 18.750
18.750 - 100
100
Total Other Retail Exposures
Total Retail Exposures

EAD Post CRM

Exposure
Weighted
Average Risk
Weight (%)

Who We Are

PD Range (%)

Exposure
Weighted
Average LGD
(%)

Governance
Financial & Others
AGM Information

496

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Credit Risk

Table 25: Disclosure on Exposures by PD Band (IRB Approach) for Retail for Maybank Islamic as at 30th June 2011 (RM000)

PD Range (%)
Retail Exposures
Residential Mortgages
0.0000 - 0.5900
0.5900 - 3.3330
3.3330 - 18.750
18.750 - 100
100
Total for Residential Mortgages Exposures
Qualifying Revolving Retail Exposure
0.0000 - 0.5900
0.5900 - 3.3330
3.3330 - 18.750
18.750 - 100
100
Total for Qualifying Revolving Retail Exposures
Hire Purchase Exposure
0.0000 - 0.5900
0.5900 - 3.3330
3.3330 - 18.750
18.750 - 100
100
Total Hire Purchase Exposures
Other Retail Exposure
0.0000 - 0.5900
0.5900 - 3.3330
3.3330 - 18.750w
18.750 - 100
100
Total Other Retail Exposures
Total Retail Exposures

EAD Post CRM

Exposure
Weighted
Average LGD
(%)

Exposure
Weighted
Average Risk
Weight (%)

Undrawn
commitments

RWA

311,967
3,231,654
751,775
198,250
113,813
4,607,460

21.16
27.62
27.44
21.96
73.60

16.63
47.06
100.21
123.10
68.26

51,879
1,520,875
753,345
244,055
77,690
2,647,844

94,343
172,330
70,120
18,339
625
355,756

74.63
74.63
74.63
74.63
74.63

11.50
39.32
112.37
216.65
74.64

10,845
67,764
78,792
39,732
467
197,600

10,513,527
3,004,589
999,287
173,518
46,487
14,737,407

52.55
55.87
49.49
50.88
96.46

21.69
58.06
78.85
123.30
62.12

2,280,437
1,744,555
787,926
213,941
28,878
5,055,738

64,734
1,924,236
5,975,414
1,439,264
104,441
9,508,088
29,208,712

27.22
21.35
11.09
10.89
69.40

18.36
26.14
19.08
25.38
81.43

11,888
502,946
1,139,887
365,220
85,047
2,104,987
10,006,169

FINANCIAL STATEMENTS

Maybank Annual Report 2011

497
At A Glance

1 to 2

94.73%

17,910
3 to 5

9 to 11

12

Performance

EAD Post CRM (RM mil)

Exposure Weighted Average Risk Weight (%)

143

21.94%

385

6 to 8

2,961

12

60.23%

744

9 to 11

947

3,631

7,497

54.04%

EAD Post CRM (RM mil)

Exposure Weighted Average Risk Weight (%)

For Hire Purchase portfolio, the majority of the exposure are concentrated in
the better grades of 1 to 2, with PD range of 0.00 0.59%.

Qualifying Revolving Retail Exposures (Credit Cards) by

PD Bands for Maybank Group

Other Retail Exposures by PD Bands for Maybank Group

3,240

6 to 8
12,125
8,945

For Qualifying Revolving Retail Exposures (Credit Cards), again the Groups
profile are concentrated in the better grades of 1 to 5, with PD ranges of 0.00
3.33%.

20.36%
9 to 11

12

EAD Post CRM (RM mil)

Exposure Weighted Average Risk Weight (%)

Governance

EAD Post CRM (RM mil)

Exposure Weighted Average Risk Weight (%)

896

12

19.63%
1 to 2

9 to 11

311

1,010

13.03%

48.89%

Leadership

40.05%

33.76%

361

28.32%

6 to 8

2,269

3 to 5
114.24%

Responsibility

2,984

90.30%

226.06%

3 to 5

Business Review

Maybank Groups residential mortgages profile are concentrated in the better

grades of 1 to 5, with PD ranges of 0.00 3.33%.

1 to 2

Strategy

15.85% 1 to 2

74.05%

6 to 8

9,534

20,015

116.63%

117.90%

68.16%
43.42%

Who We Are

3 to 5

Hire Purchase Exposures by PD Bands for Maybank Group

Our Perspective

Residential Mortgages by PD Bands for Maybank Group

Financial & Others

AGM Information

498

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Credit Risk

Independent Model Validation

At the Group, credit IRB models are validated at the initial development, and
at least annually thereafter, by an independent validation team which is
separate from the model development teams.

Model validation findings are presented to the Model Validation and

Acceptance Committee (MVAC) for deliberation and subsequently to the ERC
for endorsement and RMC for approval.

Validation techniques include both quantitative and qualitative analyses to

test the appropriateness and effectiveness of the IRB models used.

Scope and Frequency of Model Validation

Validation of credit risk models refers to a range of processes and activities
that evaluates and examines the rating system and the estimation process
and methods for deriving the risk components, namely PD, LGD and EAD.
This involves validating that the risk models are capable of discriminating
(discriminatory or rank ordering power) and deriving consistent and
predictive estimates (calibration) of the relevant risk parameters.

The validation of models would be conducted at two stages. Preimplementation model validation is to be conducted prior to launch of the
model. Post-implementation validation must be done at least annually from
the model implementation date or from the previous validation date.
However, more frequent validation may be done, where required.

The validation processes are also subject to an independent review by the

Internal Auditors, which is performed on a regular basis.

Credit Risk Mitigation

The Group takes a holistic approach when granting credit facilities and do so
very much based on the repayment capacity of the borrower, rather than
place primary dependency on credit risk mitigation. As a fundamental credit
principle, the Group generally does not grant facilities solely on the basis of
collateral provided. Credit facilities are granted based on the credit standing
of the borrower, source of repayment and debt servicing ability.

Depending on a customers standing and the type of product, facilities may

be provided unsecured. Nevertheless, collateral is taken whenever possible to
mitigate the credit risk assumed. The Groups general policy is to promote the
use of credit risk mitigation, justified by commercial prudence and good
practice as well as capital efficiency. The value of collateral taken is also
monitored periodically. The frequency of valuation depends on the type,
liquidity and volatility of the collateral value. The main types of collateral
taken by the Group include cash, marketable securities, real estate,
equipment, inventory and receivables. For IRB purposes, personal guarantees
are not recognised as an eligible credit risk protection.

Corporate guarantees are often obtained when the borrowers credit

worthiness is not sufficient to accommodate an extension of credit. To
recognise the effects of guarantees under the FIRB Approach, the Group
adopts the PD substitution approach whereby an exposure guaranteed by an
eligible guarantor will utilise the PD of the guarantor in the computation of
its capital requirement.

As a general rule-of-thumb, the following eligibility criteria must be met

before collateral can be accepted for IRB purposes:

Legal certainty - The documentation must be legally binding and

enforceable in all relevant jurisdictions;

Material positive correlation - The value of the collateral must not be

significantly affected by the deterioration of the borrowers credit
worthiness; and

Third-party custodian - The collateral that is held by a third-party

custodian must be segregated from the custodians own assets.

Tables 26 through 28 show the credit risk mitigation analysis under SA

approach for the Group, the Bank and MIB, respectively, whilst Tables 29
through 31 show the credit risk mitigation analysis under the IRB approach.

FINANCIAL STATEMENTS

Maybank Annual Report 2011

499
At A Glance
Our Perspective

Table 26: Disclosure on Credit Risk Mitigation Analysis (SA Approach) for Maybank Group as at 30th June 2011 (RM000)
Exposures Covered
by Eligible Financial
Collateral

Exposures Covered by
Other Eligible
Collateral

(1)

(2)

(3)

(4)

5,407,598

1,020,903

8,623,194
2,172,086

420,454

17,644,234

276,090

3,458,709

69

166,899

114,421

112
3,734,911
156,045,093

69
1,968,052

166,899
5,957,995

114,421
17,758,655

Responsibility

6,233
4,622
641
3,539,262
1,845,737
909

387,043

6,650
5,791,095

Business Review

1,907,750

60,232
1,967,982

Performance

54,705,562
1,151,834
4,488,478
824,292
40,029,502
23,403,352
4,484,692
668,565
21,407,711

608,477
118,047
419,670
152,310,182

Strategy

Credit Risk
On-Balance Sheet Exposures
Sovereigns/Central Banks
Public Sector Entities
Banks, Development Financial Institutions & MDBs
Insurance Cos, Securities Firms & Fund Managers
Corporates
Regulatory Retail
Residential Mortgage
Higher Risk Assets
Other Assets
Specialised Financing/Investment
Securitisation Exposures
Equity Exposure
Defaulted Exposures
Total On-Balance Sheet Exposures
Off-Balance-Sheet Exposures
OTC Derivatives
Credit Derivatives
Off balance sheet exposures other than OTC derivatives or credit
derivatives
Defaulted Exposures
Total for Off-Balance Sheet Exposures
Total On and Off-Balance Sheet Exposures

Exposures Covered by
Guarantees/Credit
Derivatives

Who We Are

Exposure Class

Exposures before
CRM

Leadership
Governance
Financial & Others
AGM Information

500

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Credit Risk

Table 27: Disclosure on Credit Risk Mitigation Analysis (SA Approach) for Maybank as at 30th June 2011 (RM000)

Exposure Class
Credit Risk
On-Balance Sheet Exposures
Sovereigns/Central Banks
Public Sector Entities
Banks, Development Financial Institutions & MDBs
Insurance Cos, Securities Firms & Fund Managers
Corporates
Regulatory Retail
Residential Mortgage
Higher Risk Assets
Other Assets
Specialised Financing/Investment
Securitisation Exposures
Equity Exposure
Defaulted Exposures
Total On-Balance Sheet Exposures
Off-Balance-Sheet Exposures
OTC Derivatives
Credit Derivatives
Off balance sheet exposures other than OTC derivatives or credit
derivatives
Defaulted Exposures
Total for Off-Balance Sheet Exposures
Total On and Off-Balance Sheet Exposures

Exposures before
CRM
(1)

Exposures Covered by
Guarantees/Credit
Derivatives
(2)

Exposures Covered
by Eligible Financial
Collateral
(3)

Exposures Covered by
Other Eligible
Collateral
(4)

34,024,308
1,021,772

64,000
13,699,173
9,317,368
2,118,081
481,634
23,114,178

608,477
60,071
225,090
84,734,152

215,594

56,887
272,481

2,298

641
370,705
396,578
207

5,203
775,631

276,090

2,629,745

69

165,256

112
2,905,947
87,640,099

69
272,550

165,256
940,888

FINANCIAL STATEMENTS

Maybank Annual Report 2011

501
At A Glance
Our Perspective

Table 28: Disclosure on Credit Risk Mitigation Analysis (SA Approach) for Maybank Islamic as at 30th June 2011 (RM000)

Exposures Covered
by Eligible Financial
Collateral
(3)

Exposures Covered by
Other Eligible
Collateral
(4)

Strategy

3,935

3,970
14,898

1,044
23,847

155,588

1,643

155,588
19,370,391

6,210

1,643
25,490

Responsibility

2,865

3,345
6,210

Business Review

14,148,422
92,791

377
1,847,808
1,266,916
193,166
22,781
1,631,593

10,949
19,214,803

Performance

Credit Risk
On-Balance Sheet Exposures
Sovereigns/Central Banks
Public Sector Entities
Banks, Development Financial Institutions & MDBs
Insurance Cos, Securities Firms & Fund Managers
Corporates
Regulatory Retail
Residential Mortgage
Higher Risk Assets
Other Assets
Specialised Financing/Investment
Securitisation Exposures
Equity Exposure
Defaulted Exposures
Total On-Balance Sheet Exposures
Off-Balance-Sheet Exposures
OTC Derivatives
Credit Derivatives
Off balance sheet exposures other than OTC derivatives or credit
derivatives
Defaulted Exposures
Total for Off-Balance Sheet Exposures
Total On and Off-Balance Sheet Exposures

Exposures Covered by
Guarantees/Credit
Derivatives
(2)

Who We Are

Exposure Class

Exposures before
CRM
(1)

Leadership
Governance
Financial & Others
AGM Information

502

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Credit Risk

Table 29: Disclosure on Credit Risk Mitigation Analysis (IRB Approach) for Maybank Group as at 30th June 2011 (RM000)

Exposure Class
Credit Risk
On-Balance Sheet Exposures
Sovereigns/Central Banks
Public Sector Entities
Banks, Development Financial Institutions & MDBs
Insurance Cos, Securities Firms & Fund Managers
Corporate Exposures
a) Corporates (excluding Specialised Lending and firm-size
adjustments)
b) Corporates (with firm-size adjustment)
c) Qualifying Purchased Corporate Receivables
d) Specialised Lending (Own PD Approach)
i) Project Finance
ii) Object Finance
iii) Commodity Finance
iv) Income Producing Real Estate
v) High Volatility Commercial Real Estate
e) Specialised Lending (Slotting Approach)
i) Project Finance
ii) Object Finance
iii) Commodity Finance
iv) Income Producing Real Estate
v) High Volatility Commercial Real Estate
Retail Exposures
a) Residential Mortgages
b) Qualifying Revolving Retail Exposures
c) Qualifying Purchased Retail Receivables
d) Hire Purchase Exposures
e) Other Retail Exposures
Securitisation Exposures
Equity Exposure
Defaulted Exposures
Total On-Balance Sheet Exposures
Off-Balance-Sheet Exposures
OTC Derivatives
Credit Derivatives
Off balance sheet exposures other than OTC derivatives or credit
derivatives
Defaulted Exposures
Total for Off-Balance Sheet Exposures
Total On and Off-Balance Sheet Exposures

Exposures before CRM

(1)

Exposures Covered by Exposures Covered by Exposures Covered by

Guarantees / Credit
Eligible Financial
Other Eligible
Derivatives
Collateral
Collateral
(2)
(3)
(4)

39,066,005

110,094,051
61,517,760

641,778
626,613

1,987,753
190,552

12,387,953
4,716,568

47,851,331

724,961
724,961

90,908,875
32,090,708
4,233,154

30,356,492
24,228,521

4,080,641
244,149,572

15,166

4,715
646,494

1,797,201

3,756
1,991,509

7,671,385

31,542
12,419,495

5,163,650

19,067,868

13,027

275,058

289,893

94,911
24,326,429
268,476,001

13,027
659,520

275,058
2,266,568

583
290,475
12,709,970

FINANCIAL STATEMENTS

Maybank Annual Report 2011

503
At A Glance
Our Perspective

Table 30: Disclosure on Credit Risk Mitigation Analysis (IRB Approach) for Maybank as at 30th June 2011 (RM000)

Exposures Covered by Exposures Covered by Exposures Covered by

Guarantees / Credit
Eligible Financial
Other Eligible
Derivatives
Collateral
Collateral
(2)
(3)
(4)

1,472,069

1,649,393

7,028,310

11,716,186

5,013,674

16,094,912

11,142

261,645

284,611

94,911
21,203,496
227,705,011

11,142
621,297

261,645
1,911,038

583
285,194
12,001,379

Financial & Others

15,166

610,155

Governance

41,631,135

706,716
706,716

62,465,358
27,597,061
3,944,010

16,099,325
14,824,961

3,408,119
206,501,515

Leadership

11,716,186
4,687,875

Responsibility

1,649,393
177,324

Business Review

610,155
594,990

Performance

42,715,334

97,912,704
55,574,853

Strategy

Credit Risk
OnBalance Sheet Exposures
Sovereigns/Central Banks
Public Sector Entities
Banks, Development Financial Institutions & MDBs
Insurance Cos, Securities Firms & Fund Managers
Corporate Exposures
a) Corporates (excluding Specialised Lending and firm-size
adjustments)
b) Corporates (with firm-size adjustment)
c) Qualifying Purchased Corporate Receivables
d) Specialised Lending (Own PD Approach)
i) Project Finance
ii) Object Finance
iii) Commodity Finance
iv) Income Producing Real Estate
v) High Volatility Commercial Real Estate
e) Specialised Lending (Slotting Approach)
i) Project Finance
ii) Object Finance
iii) Commodity Finance
iv) Income Producing Real Estate
v) High Volatility Commercial Real Estate
Retail Exposures
a) Residential Mortgages
b) Qualifying Revolving Retail Exposures
c) Qualifying Purchased Retail Receivables
d) Hire Purchase Exposures
e) Other Retail Exposures
Securitisation Exposures
Equity Exposure
Defaulted Exposures
Total On-Balance Sheet Exposures
Off-Balance-Sheet Exposures
OTC Derivatives
Credit Derivatives
Off balance sheet exposures other than OTC derivatives or credit
derivatives
Defaulted Exposures
Total for Off-Balance Sheet Exposures
Total On and Off-Balance Sheet Exposures

Exposures before CRM

(1)

Who We Are

Exposure Class

AGM Information

504

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Credit Risk

Table 31: Disclosure on Credit Risk Mitigation Analysis (IRB Approach) for Maybank Islamic as at 30th June 2011 (RM000)

Exposure Class
Credit Risk
OnBalance Sheet Exposures
Sovereigns/Central Banks
Public Sector Entities
Banks, Development Financial Institutions & MDBs
Insurance Cos, Securities Firms & Fund Managers
Corporate Exposures
a) Corporates (excluding Specialised Lending and firm-size
adjustments)
b) Corporates (with firm-size adjustment)
c) Qualifying Purchased Corporate Receivables
d) Specialised Lending (Own PD Approach)
i) Project Finance
ii) Object Finance
iii) Commodity Finance
iv) Income Producing Real Estate
v) High Volatility Commercial Real Estate
e) Specialised Lending (Slotting Approach)
i) Project Finance
ii) Object Finance
iii) Commodity Finance
iv) Income Producing Real Estate
v) High Volatility Commercial Real Estate
Retail Exposures
a) Residential Mortgages
b) Qualifying Revolving Retail Exposures
c) Qualifying Purchased Retail Receivables
d) Hire Purchase Exposures
e) Other Retail Exposures
Securitisation Exposures
Equity Exposure
Defaulted Exposures
Total On-Balance Sheet Exposures
Off-Balance-Sheet Exposures
OTC Derivatives
Credit Derivatives
Off balance sheet exposures other than OTC derivatives or credit
derivatives
Defaulted Exposures
Total for Off-Balance Sheet Exposures
Total On and Off-Balance Sheet Exposures

Exposures before CRM

(1)

Exposures Covered by Exposures Covered by Exposures Covered by

Guarantees / Credit
Eligible Financial
Other Eligible
Derivatives
Collateral
Collateral
(2)
(3)
(4)

4,204,353

13,489,062
7,036,720

31,623
31,623

338,360
13,228

671,767
28,692

6,434,097

18,245
18,245

28,877,270
4,493,647
289,144

14,690,920
9,403,559

675,550
47,246,235

4,715
36,338

325,132

3,756
342,116

643,075

31,542
703,309

69,053

1,261,260

1,885

13,414

5,282

1,330,313
48,576,548

1,885
38,223

13,414
355,530

5,282
708,591

FINANCIAL STATEMENTS

Maybank Annual Report 2011

505
At A Glance

Tables 35 through 37 further show the rated exposures by ECAIs for the
Group, the Bank and MIB, respectively as at 30th June 2011.

Business Review

Tables 32 through 34 show the disclosure on risk weights under SA for the
Group, the Bank and MIB, respectively as at 30th June 2011.

Performance

The ECAI used by the Group include Fitch Ratings, Moodys Investor Services,
S&P, RAM and Malaysia Rating Corporation (MARC). Assessments provided by
approved ECAIs are mapped to credit quality grades prescribed by the
regulator.

Strategy

The SA approach to credit risk measures credit risk pursuant to fixed risk
weights and is the least sophisticated of the capital calculation
methodologies. The risk weights applied under SA is prescribed by BNM and
is based on the asset class to which the exposure is assigned. For exposures
subject to SA, approved External Credit Assessment Agencies (ECAI) ratings
and the prescribed risk weights based on asset classes are used in the
computation of regulatory capital.

Who We Are

The Standardised Approach (SA) is applied to portfolios that are classified as

permanently exempt from the IRB approach, and those portfolios that are
currently in transition to the IRB approach in accordance to the Groups Basel
II Master Plan.

Our Perspective

Credit Exposures Subject to Standardised Approach (SA)

Responsibility
Leadership
Governance
Financial & Others
AGM Information

(2)

(1)

49,616,495

317,184

27,651

5,050,685

55,012,015

Risk Weight

0%
10%
20%
35%
50%
75%
90%
100%
110%
125%
135%
150%
270%
350%
400%
625%
937.5%
1250.0%
Total
Deduction
from
Capital
Base

156,740

992,689

13,204

1,162,633

PSEs

Sovereigns &
Central Banks

1,627,801

1,887,727

815,978

30,414

4,361,919

30,393

990,244

1,020,637

2,767,694

356,417

1,320,412

27,298,010

531,783

32,274,315

247,794

10,093

23,440
19,812,252

580,295
479

27,537

20,701,890

1,601

151
3,085,595
151,489
1,158,197

81,572

4,478,605

749,219

749,219

16,998,439

2,234,020

2,313,823

14,220

21,560,502

Exposures after Netting and Credit Risk Mitigation

Insurance
Cos,
Specialised
Banks, MDBs
Regulatory Residental Higher Risk
Securities Corporates
Other Assets Financing/
& FDIs
Retail
Mortgages
Assets
Firms & Fund
Investment
Managers
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)

608,477
16,797

(12)

Equity

61,013

57,917

118,930

(11)

Securitisation

69,632,022

4,702,407
3,085,595
3,441,113
20,970,449

38,184,308
479

1,424,293

142,049,144

(13)

940,481
1,079,958
1,720,556
15,727,837

38,184,308
527

2,136,440

60,236,549

(14)

Total Exposures Total Risk

after Netting & Weighted
Credit Risk
Assets
Mitigation

Table 32: Disclosure on Credit Risk: Disclosures on Risk Weights under the Standardised Approach for Maybank Group as at 30th June 2011 (RM000)

506
Maybank Annual Report 2011

FINANCIAL STATEMENTS

Credit Risk

140,708

881,654

1,022,362

33,530,102

256,724

543,936

34,330,762

Financial & Others

AGM Information

0%
10%
20%
35%
50%
75%
90%
100%
110%
125%
135%
150%
270%
350%
400%
625%
937.5%
1250.0%
Total
Deduction
from
Capital
Base

(3)

30,393

229,376

259,770

33,380

223,956

1,254,755

13,774,396

56,471

15,342,959

Leadership

(2)

21,890
9,085,760

796

9,108,446

953,952
123,474
1,052,864

59,877

2,190,167

Responsibility

(1)

558,625

558,625

15,810,736

2,063,843

5,329,136

13,857

23,217,572

Business Review

Risk Weight

Performance

Governance

Exposures after Netting and Credit Risk Mitigation

Insurance Corporates Regulatory Residental Higher Risk Other Assets Specialised
Cos,
Retail
Mortgages
Assets
Financing/
Securities
Investment
Firms & Fund
Managers
(4)
(5)
(6)
(7)
(8)
(9)
(10)

608,477
16,797

(12)

(11)

60,071

60,071

Equity

Securitisation

49,374,218

2,685,231
953,952
1,430,513
10,138,624

20,878,448

629,749

86,699,212

(13)

537,046
333,883
715,256
7,603,968

20,878,448

944,623

31,459,666

(14)

Total Exposures Total Risk

after Netting & Weighted
Credit Risk
Assets
Mitigation

Maybank Annual Report 2011

Strategy

Banks, MDBs
& FDIs

Who We Are

PSEs

Our Perspective

Sovereigns &
Central Banks

At A Glance

Table 33: Disclosure on Credit Risk: Disclosures on Risk Weights under the Standardised Approach for Maybank as at 30th June 2011 (RM000)

FINANCIAL STATEMENTS
507

(2)

(1)

14,087,962

60,460

14,148,422

Risk Weight

0%
10%
20%
35%
50%
75%
90%
100%
110%
125%
135%
150%
270%
350%
400%
625%
937.5%
1250.0%
Total
Deduction
from
Capital
Base

16,033

73,763

89,796

PSEs

Sovereigns &
Central Banks

953

953

1,997,258

1,997,258

1,398
1,252,018

1,253,416

60,730
27,357
105,333

3,600

197,020

26,444

26,444

926,458

169,247

535,888

1,631,593

Exposures after Netting and Credit Risk Mitigation

Insurance
Cos,
Specialised
Banks, MDBs
Regulatory Residental Higher Risk
Securities Corporates
Other Assets Financing/
& FDIs
Retail
Mortgages
Assets
Firms & Fund
Investment
Managers
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)

Securitisation

(12)

Equity

15,014,419

245,740
60,730
28,755
1,357,351

2,611,462

26,444

19,344,901

(13)

49,148
21,255
14,377
1,018,013

2,611,462

39,666

3,753,922

(14)

Total Exposures Total Risk

after Netting & Weighted
Credit Risk
Assets
Mitigation

Table 34: Disclosure on Credit Risk: Disclosures on Risk Weights under the Standardised Approach for Maybank Islamic as at 30th June 2011 (RM000)

508
Maybank Annual Report 2011

FINANCIAL STATEMENTS

Credit Risk

FINANCIAL STATEMENTS

509

Maybank Annual Report 2011

At A Glance
Our Perspective

Table 35: Disclosures on Rated Exposures according to Ratings by ECAIs for Maybank Group as at 30th June 2011 (RM000)

(6)

156,740

1,005,892

356,417
513,158

30,393
1,320,412
1,350,805

94,755
94,755

204,319
204,319

990,244
27,530,528
29,526,665

Short term Ratings of Banking Institutions and Corporate by Approved ECAIs

P-1
P-2
P-3
Others
A-1
A-2
A-3
Others
F1+,F1
F2
F3
B to D
P-1
P-2
P-3
NP
MARC-1
MARC-2
MARC-3MARC-4
a-1+,a-1
a-2
a-3
b,c
(2)

(3)

(4)

Unrated
Unrated
Unrated
Unrated
Unrated
Unrated

(5)

Responsibility

(6)

1,677

30,414

411,685

1,677

30,414

Governance

411,685

Leadership

Rated Credit Exposures (using Corporate Risk

Weights)
Public Sector Entities (applicable for entities risk
weighted based on their external ratings as
corporates)
Insurance Cos, Securities Firms & Fund Managers
Corporates
Total Exposures

(5)

Business Review

On and Off BalanceSheet Exposures

Banks, MDBs and FDIs

(4)

Unrated
Unrated
Unrated
Unrated
Unrated
Unrated

Performance

Exposure Class

(3)

B1 to C
B+ to D
B+ to D
B to D
B+ to D
B+ to D

Strategy

(2)

On and Off Balance-Sheet Exposures

Credit Exposures (using Corporate Risk Weights)
Public Sector Entities (applicable for entities risk
weighted based on their external ratings as
corporates)
Insurance Cos, Securities Firms & Fund Managers
Corporates
Total Exposures

Moodys
S&P
Fitch
RAM
MARC
Rating & Investment
Inc
(1)

Ratings of Corporate by Approved ECAIs

A1 to A3
Baa1 to Ba3
A+ to ABBB+ to BBA+ to ABBB+ to BBA1 to A3
BBB1 to BB3
A+ to ABBB+ to BBA+ to ABBB+ to BB-

Aaa to Aa3
AAA to AAAAA to AAAAA to AA3
AAA to AAAAA to AA-

Who We Are

Exposure Class

Moodys
S&P
Fitch
RAM
MARC
Rating & Investment
Inc
(1)

Financial & Others

AGM Information

510

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Credit Risk

Table 35: Disclosures on Rated Exposures according to Ratings by ECAIs for Maybank Group as at 30th June 2011 (RM000) (contd.)

Exposure Class

Moodys
S&P
Fitch
Rating &
Investment Inc
(1)

On and Off BalanceSheet Exposures

Sovereigns and Central Banks
Total Exposures

Exposure Class

Aaa to Aa3
AAA to AAAAA to AAAAA to AA-

Ratings of Sovereigns and Central Banks by Approved ECAIs

A1 to A3
Baa1 to Baa3
Ba1 to B3
A+ to ABBB+ to BBBBB+ to BA+ to ABBB+ to BBBBB+ to BA+ to ABBB+ to BBBBB+ to B-

(2)

(3)

47,618,064
47,618,064

Moodys
S&P
Fitch
RAM
MARC
Rating &
Investment Inc
(1)

(4)
317,185
317,185

(5)
27,651
27,651

(3)

(4)

Unrated
Unrated
Unrated
Unrated

(6)

(7)

3,154,768
3,154,768

Ratings of Banking Institutions by Approved ECAIs

Aaa to Aa3
A1 to A3
Baa1 to Baa3
Ba1 to B3
AAA to AAA+ to ABBB+ to BBBBB+ to BAAA to AAA+ to ABBB+ to BBBBB+ to BAAA to AA3
A1 to A3
BBB1 to BBB3
BB1 to B3
AAA to AAA+ to ABBB+ to BBBBB+ to BAAA to AAA+ to ABBB+ to BBBBB+ to B(2)

Caa1 to C
CCC+ to D
CCC+ to D
CCC+ to D

(5)

3,894,348
3,894,348

Caa1 to C
CCC+ to D
CCC+ to D
C1 to D
C+ to D
CCC+ to C

Unrated
Unrated
Unrated
Unrated
Unrated
Unrated

(6)

(7)

On and Off BalanceSheet Exposures

Banks, MDBs and FDIs
Total Exposures

1,246,530
1,246,530

211,026
211,026

21,743
21,743

785,563
785,563

1,653,281
1,653,281

FINANCIAL STATEMENTS

511

Maybank Annual Report 2011

At A Glance
Our Perspective

Table 36: Disclosures on Rated Exposures according to Ratings by ECAIs for Maybank as at 30th June 2011 (RM000)

(6)

140,708

881,654

223,956
364,664

30,393
1,254,755
1,285,149

56,471
56,471

229,376
13,774,396
14,885,427

Short term Ratings of Banking Institutions and Corporate by Approved ECAIs

P-1
P-2
P-3
Others
A-1
A-2
A-3
Others
F1+,F1
F2
F3
B to D
P-1
P-2
P-3
NP
MARC-1
MARC-2
MARC-3MARC-4
a-1+,a-1
a-2
a-3
b,c
(2)

(3)

(4)

Unrated
Unrated
Unrated
Unrated
Unrated
Unrated

(5)

Responsibility

(6)

Governance

Leadership

Rated Credit Exposures (using Corporate Risk

Weights)
Public Sector Entities (applicable for entities risk
weighted based on their external ratings as
corporates)
Insurance Cos, Securities Firms & Fund Managers
Corporates
Total Exposures

(5)

Business Review

On and Off BalanceSheet Exposures

Banks, MDBs and FDIs

(4)

Unrated
Unrated
Unrated
Unrated
Unrated
Unrated

Performance

Exposure Class

(3)

B1 to C
B+ to D
B+ to D
B to D
B+ to D
B+ to D

Strategy

(2)

On and Off Balance-Sheet Exposures

Credit Exposures (using Corporate Risk Weights)
Public Sector Entities (applicable for entities risk
weighted based on their external ratings as
corporates)
Insurance Cos, Securities Firms & Fund Managers
Corporates
Total Exposures

Moodys
S&P
Fitch
RAM
MARC
Rating & Investment
Inc
(1)

Ratings of Corporate by Approved ECAIs

A1 to A3
Baa1 to Ba3
A+ to ABBB+ to BBA+ to ABBB+ to BBA1 to A3
BBB1 to BB3
A+ to ABBB+ to BBA+ to ABBB+ to BB-

Aaa to Aa3
AAA to AAAAA to AAAAA to AA3
AAA to AAAAA to AA-

Who We Are

Exposure Class

Moodys
S&P
Fitch
RAM
MARC
Rating & Investment
Inc
(1)

Financial & Others

AGM Information

512

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Credit Risk

Table 36: Disclosures on Rated Exposures according to Ratings by ECAIs for Maybank as at 30th June 2011 (RM000) (contd.)

Exposure Class

Moodys
S&P
Fitch
Rating &
Investment Inc
(1)

On and Off Balance-Sheet Exposures

Sovereigns and Central Banks
Total Exposures

Exposure Class

On and Off BalanceSheet Exposures

Banks, MDBs and FDIs
Total Exposures

Ratings of Sovereigns and Central Banks by Approved ECAIs

A1 to A3
Baa1 to Baa3
Ba1 to B3
A+ to ABBB+ to BBBBB+ to BA+ to ABBB+ to BBBBB+ to BA+ to ABBB+ to BBBBB+ to B-

Aaa to Aa3
AAA to AAAAA to AAAAA to AA(2)

(3)

33,530,102
33,530,102

Moodys
S&P
Fitch
RAM
MARC
Rating &
Investment Inc
(1)

(4)
256,725
256,725

(5)

(3)

(4)

(5)

Unrated
Unrated
Unrated
Unrated

(6)

(7)

Ratings of Banking Institutions by Approval ECAIs

Aaa to Aa3
A1 to A3
Baa1 to Baa3
Ba1 to B3
AAA to AAA+ to ABBB+ to BBBBB+ to BAAA to AAA+ to ABBB+ to BBBBB+ to BAAA to AA3
A1 to A3
BBB1 to BBB3
BB1 to B3
AAA to AAA+ to ABBB+ to BBBBB+ to BAAA to AAA+ to ABBB+ to BBBBB+ to B(2)

Caa1 to C
CCC+ to D
CCC+ to D
CCC+ to D

543,936
543,936

Caa1 to C
CCC+ to D
CCC+ to D
C1 to D
C+ to D
CCC+ to C

Unrated
Unrated
Unrated
Unrated
Unrated
Unrated

(6)

(7)

FINANCIAL STATEMENTS

513

Maybank Annual Report 2011

At A Glance
Our Perspective

Table 37: Disclosures on Rated Exposures according to Ratings by ECAIs for Maybank Islamic as at 30th June 2011 (RM000)

(6)

16,033

73,763

16,033

953
1,997,258
2,071,974

Short term Ratings of Banking Institutions and Corporate by Approved ECAIs

P-1
P-2
P-3
Others
A-1
A-2
A-3
Others
F1+,F1
F2
F3
B to D
P-1
P-2
P-3
NP
MARC-1
MARC-2
MARC-3MARC-4
a-1+,a-1
a-2
a-3
b,c
(2)

(3)

(4)

Unrated
Unrated
Unrated
Unrated
Unrated
Unrated

(5)

Responsibility

(6)

Governance

Leadership

Rated Credit Exposures (using Corporate Risk

Weights)
Public Sector Entities (applicable for entities risk
weighted based on their external ratings as
corporates)
Insurance Cos, Securities Firms & Fund Managers
Corporates
Total Exposures

(5)

Business Review

On and Off BalanceSheet Exposures

Banks, MDBs and FDIs

(4)

Unrated
Unrated
Unrated
Unrated
Unrated
Unrated

Performance

Exposure Class

(3)

B1 to C
B+ to D
B+ to D
B to D
B+ to D
B+ to D

Strategy

(2)

On and Off Balance-Sheet Exposures

Credit Exposures (using Corporate Risk Weights)
Public Sector Entities (applicable for entities risk
weighted based on their external ratings as
corporates)
Insurance Cos, Securities Firms & Fund Managers
Corporates
Total Exposures

Moodys
S&P
Fitch
RAM
MARC
Rating & Investment
Inc
(1)

Ratings of Corporate by Approved ECAIs

A1 to A3
Baa1 to Ba3
A+ to ABBB+ to BBA+ to ABBB+ to BBA1 to A3
BBB1 to BB3
A+ to ABBB+ to BBA+ to ABBB+ to BB-

Aaa to Aa3
AAA to AAAAA to AAAAA to AA3
AAA to AAAAA to AA-

Who We Are

Exposure Class

Moodys
S&P
Fitch
RAM
MARC
Rating & Investment
Inc
(1)

Financial & Others

AGM Information

514

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Credit Risk

Table 37: Disclosures on Rated Exposures according to Ratings by ECAIs for Maybank Islamic as at 30th June 2011 (RM000) (contd.)

Exposure Class

Moodys
S&P
Fitch
Rating &
Investment Inc
(1)

On and Off Balance-Sheet Exposures

Sovereigns and Central Banks
Total Exposures

Exposure Class

On and Off BalanceSheet Exposures

Banks, MDBs and FDIs
Total Exposures

Ratings of Sovereigns and Central Banks by Approved ECAIs

A1 to A3
Baa1 to Baa3
Ba1 to B3
A+ to ABBB+ to BBBBB+ to BA+ to ABBB+ to BBBBB+ to BA+ to ABBB+ to BBBBB+ to B-

Aaa to Aa3
AAA to AAAAA to AAAAA to AA(2)

(3)

14,087,962
14,087,962

Moodys
S&P
Fitch
RAM
MARC
Rating &
Investment Inc
(1)

(4)
60,460
60,460

(5)

(3)

(4)

(5)

Unrated
Unrated
Unrated
Unrated

(6)

(7)

Ratings of Banking Institutions by Approval ECAIs

Aaa to Aa3
A1 to A3
Baa1 to Baa3
Ba1 to B3
AAA to AAA+ to ABBB+ to BBBBB+ to BAAA to AAA+ to ABBB+ to BBBBB+ to BAAA to AA3
A1 to A3
BBB1 to BBB3
BB1 to B3
AAA to AAA+ to ABBB+ to BBBBB+ to BAAA to AAA+ to ABBB+ to BBBBB+ to B(2)

Caa1 to C
CCC+ to D
CCC+ to D
CCC+ to D

Caa1 to C
CCC+ to D
CCC+ to D
C1 to D
C+ to D
CCC+ to C

Unrated
Unrated
Unrated
Unrated
Unrated
Unrated

(6)

(7)

FINANCIAL STATEMENTS

Maybank Annual Report 2011

515
At A Glance

Tables 38 through 40 show the off-balance sheet and counter-party credit risk
exposures for the Group, the Bank and MIB, respectively as at 30th June 2011.

Performance
Business Review

Exposure Calculation Method

The current exposure method is used to calculate the Groups exposure
applying the mark-to-market exposures with the appropriate add-on factor
for potential future exposures. The add-on factors are as prescribed by BNM
in line with Basel II requirements.

Credit Support Annexes (CSA) which are the collateral documents, are
negotiated with counterparties on a case to case basis to provide flexibility to
meet the parties requirements. The terms are vetted, reviewed and negotiated
and where applicable, feedback from units in charge of credit policy,
operational, market and legal risk are sought. The collateral held by the Bank is
mainly in cash or government securities.

Strategy

Limits
Counterparty credit risk exposures are managed via limits that are set up as
counterparty limits on a counterparty group basis in line with BNMs
guidelines. These exposures are actively monitored to protect the Banks
balance sheet in the event of counterparty default. The Group monitors and
manages its exposures to counterparties in OTC derivatives on a day-to-day
basis.

Who We Are

Counterparty credit risk is the risk of the Groups counterparty defaulting in

transactions involving financial instruments transactions such as foreign
exchange, interest rate, commodity, equity and derivatives prior to the
successful completion of the said transaction. Counterparty credit risk occurs
both in the trading and banking books and arises for Over-the-Counter (OTC)
derivatives.

Risk Mitigation
Counterparty credit risk exposures are further mitigated via master netting
arrangements, for example, ISDA Master Agreement with counterparties where
appropriate. In the event of a default, all amounts with the counterparty
(derivative assets and liabilities) are settled on a net basis or offset. The ISDA
Master Agreement is used for documenting OTC derivatives. It provides the
contractual framework within which trade activities across a full range of OTC
products are conducted and contractually binds both parties to apply
close-out netting across all outstanding transactions covered by an agreement
if either party defaults or other predetermined events occur.

Our Perspective

Counterparty Risk Management

Responsibility
Leadership
Governance
Financial & Others
AGM Information

516

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Credit Risk

Table 38: Disclosure on Off Balance Sheet and Counterparty Credit Risk Exposure for Maybank Group as at 30th June 2011 (RM000)
Nature of Item
Direct credit substitutes
Transaction related contingent items
Short term self liquidating trade related contingencies
Assets sold with recourse
Forward asset purchases, forward deposits, partly paid shares and securities which
represent commitments with certain drawdowns
NIFs and obligations under an ongoing underwriting agreement
Lending of banks securities or the posting of securities as collateral by banks,
including instances where these arise out of repo-style transactions (i.e.
repurchase/reverse repurchase and securities lending/borrowing transactions),
and commitment to buy-back Islamic securities under Sell and Buy Back
Foreign exchange related contracts
One year or less
Over one year to five years
Over five years
Interest/profit rate related contracts
One year or less
Over one year to five years
Over five years
Equity related contracts
One year or less
Over one year to five years
Over five years
Precious metal contracts
One year or less
Over one year to five years
Over five years
Commodity contracts
One year or less
Over one year to five years
Over five years
Credit derivative contracts
One year or less
Over one year to five years
Over five years

Principal/ Notional Amount

(1)
6,228,691
10,865,076
4,132,780
623,085

Credit Equivalent Amount

(2)
6,227,511
5,432,538
823,220
623,085

RWA
(3)
4,099,984
4,249,138
466,841
226,105

86,594,085
73,596,336
12,391,864
605,885
65,140,980
42,098,665
17,922,122
5,120,193
964,258
808,651
155,607

1,152,267
999,219
98,952
54,096
4,302,465
625,318
2,944,133
733,014

459,821
341,316
65,569
52,937
2,201,983
389,499
1,495,547
316,936

FINANCIAL STATEMENTS

Maybank Annual Report 2011

517
At A Glance
Our Perspective

Table 38: Disclosure on Off Balance Sheet and Counterparty Credit Risk Exposure for Maybank Group as at 30th June 2011 (RM000) (contd.)

RWA
(3)

30,229,097

6,027,366

2,818,245

16,888,745

3,377,523

1,577,558

9,679,934

476,824

95,365

71,442

231,823,555

28,061,340

16,171,116

Performance

Credit Equivalent Amount

(2)

Strategy

OTC derivative transactions and credit derivative contracts subject to valid bilateral
netting agreements
Other commitments, such as formal standby facilities and credit lines, with an
original maturity of over one year
Other commitments, such as formal standby facilities and credit lines, with an
original maturity of up to one year
Any commitments that are unconditionally cancellable at any time by the bank
without prior notice or that effectively provide for automatic cancellation due to
deterioration in a borrowers creditworthiness
Unutilised credit card lines (for portfolios under the standardised approach subject
to 20% CCF)
Off-balance sheet securitisation exposures (adjusted for maximum capital
requirement due to early amortisation provision)
Total

Principal/ Notional Amount

(1)

Who We Are

Nature of Item

Business Review
Responsibility
Leadership
Governance
Financial & Others
AGM Information

518

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Credit Risk

Table 39: Disclosure on Off Balance Sheet and Counterparty Credit Risk Exposure for Maybank as at 30th June 2011 (RM000)
Nature of Item
Direct credit substitutes
Transaction related contingent items
Short term self liquidating trade related contingencies
Assets sold with recourse
Forward asset purchases, forward deposits, partly paid shares and securities which
represent commitments with certain drawdowns
NIFs and obligations under an ongoing underwriting agreement
Lending of banks securities or the posting of securities as collateral by banks,
including instances where these arise out of repo-style transactions (i.e.
repurchase/reverse repurchase and securities lending/borrowing transactions),
and commitment to buy-back Islamic securities under Sell and Buy Back
Foreign exchange related contracts
One year or less
Over one year to five years
Over five years
Interest/profit rate related contracts
One year or less
Over one year to five years
Over five years
Equity related contracts
One year or less
Over one year to five years
Over five years
Precious metal contracts
One year or less
Over one year to five years
Over five years
Commodity contracts
One year or less
Over one year to five years
Over five years
Credit derivative contracts
One year or less
Over one year to five years
Over five years

Principal/ Notional Amount

(1)
5,900,949
9,871,258
3,880,483

Credit Equivalent Amount

(2)
5,899,769
4,935,629
772,760

RWA
(3)
3,915,147
3,801,327
443,172

81,551,568
69,241,688
11,703,995
605,885
62,464,765
39,794,395
17,674,164
4,996,206
964,258
808,651
155,607

1,127,556
974,508
98,952
54,096
4,251,097
618,202
2,899,881
733,014

449,353
330,847
65,569
52,937
2,176,864
386,088
1,473,840
316,936

FINANCIAL STATEMENTS

Maybank Annual Report 2011

519
At A Glance
Our Perspective

Table 39: Disclosure on Off Balance Sheet and Counterparty Credit Risk Exposure for Maybank as at 30th June 2011 (RM000) (contd.)

RWA
(3)

28,619,320

5,723,864

2,722,111

13,078,910

2,615,782

1,369,225

8,033,577

476,824

95,365

71,442

214,841,912

25,421,822

14,948,641

Performance

Credit Equivalent Amount

(2)

Strategy

OTC derivative transactions and credit derivative contracts subject to valid bilateral
netting agreements
Other commitments, such as formal standby facilities and credit lines, with an
original maturity of over one year
Other commitments, such as formal standby facilities and credit lines, with an
original maturity of up to one year
Any commitments that are unconditionally cancellable at any time by the bank
without prior notice or that effectively provide for automatic cancellation due to
deterioration in a borrowers creditworthiness
Unutilised credit card lines (for portfolios under the standardised approach subject
to 20% CCF)
Off-balance sheet securitisation exposures (adjusted for maximum capital
requirement due to early amortisation provision)
Total

Principal/ Notional Amount

(1)

Who We Are

Nature of Item

Business Review
Responsibility
Leadership
Governance
Financial & Others
AGM Information

520

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Credit Risk

Table 40: Disclosure on Off Balance Sheet and Counterparty Credit Risk Exposure for Maybank Islamic as at 30th June 2011 (RM000)
Nature of Item
Direct credit substitutes
Transaction related contingent items
Short term self liquidating trade related contingencies
Assets sold with recourse
Forward asset purchases, forward deposits, partly paid shares and securities which
represent commitments with certain drawdowns
NIFs and obligations under an ongoing underwriting agreement
Lending of banks securities or the posting of securities as collateral by banks,
including instances where these arise out of repo-style transactions (i.e.
repurchase/reverse repurchase and securities lending/borrowing transactions),
and commitment to buy-back Islamic securities under Sell and Buy Back
Foreign exchange related contracts
One year or less
Over one year to five years
Over five years
Interest/profit rate related contracts
One year or less
Over one year to five years
Over five years
Equity related contracts
One year or less
Over one year to five years
Over five years
Precious metal contracts
One year or less
Over one year to five years
Over five years
Commodity contracts
One year or less
Over one year to five years
Over five years
Credit derivative contracts
One year or less
Over one year to five years
Over five years

Principal/ Notional Amount

(1)
258,825
949,627
103,480
623,084

Credit Equivalent Amount

(2)
258,825
474,813
20,696
623,085

RWA
(3)
153,932
425,774
14,814
226,105

1,009,539
1,009,539

2,173,300
323,300
1,850,000

17,994
17,994

51,059
6,806
44,252

7,837
7,837

25,046
3,339
21,707

FINANCIAL STATEMENTS

Maybank Annual Report 2011

521
At A Glance
Our Perspective

Table 40: Disclosure on Off Balance Sheet and Counterparty Credit Risk Exposure for Maybank Islamic as at 30th June 2011 (RM000) (contd.)

RWA
(3)

961,089

173,764

58,462

1,730,655

345,905

208,332

1,646,357

9,455,956

1,966,142

1,120,301

Performance

Credit Equivalent Amount

(2)

Strategy

OTC derivative transactions and credit derivative contracts subject to valid bilateral
netting agreements
Other commitments, such as formal standby facilities and credit lines, with an
original maturity of over one year
Other commitments, such as formal standby facilities and credit lines, with an
original maturity of up to one year
Any commitments that are unconditionally cancellable at any time by the bank
without prior notice or that effectively provide for automatic cancellation due to
deterioration in a borrowers creditworthiness
Unutilised credit card lines (for portfolios under the standardised approach subject
to 20% CCF)
Off-balance sheet securitisation exposures (adjusted for maximum capital
requirement due to early amortisation provision)
Total

Principal/ Notional Amount

(1)

Who We Are

Nature of Item

Business Review
Responsibility
Leadership
Governance
Financial & Others
AGM Information

522

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Market Risk

Introduction

Measurement and Monitoring

The Group recognises market risk as the risk of losses in earnings and capital
resulting from changes in market prices and interest rates. The Groups
market risk exposures are primarily from the proprietary trading and
customer driven activities. The primary categories of market risk for the
Group are:

The risk measurement techniques employed by the Group comprise of both

quantitative and qualitative measures.

Interest rate risk - arising from changes in yield curves, credit spreads
and implied volatilities on interest rate options;
Foreign exchange rate risk - arising from changes in exchange rates and
implied volatilities on foreign exchange options;
Commodity price risk - arising from changes in commodity prices and
commodity option implied volatilities; and
Equity price risk - arising from changes in the prices of equities, equity
indices, equity baskets and implied volatilities on related options.

Management of Market Risk

The RMC approves the Groups market risk management framework and
market risk appetite taking into account of business volumes, targeted
returns, market volatility and range of products and services.
The ALCO is responsible, under the authority delegated by the RMC, for
setting market risk limits by entity, business level, geographical location and
portfolio level. ALCO is also responsible for policies, limits and control
standards for managing market risk and overseeing their effective
implementation. The Group has an approved Trading Book Policy Statement
that clearly defines policies and procedures to determine exposures arising
from trading and non-trading activities.
Market Risk Management (MRM) is the independent risk control unit that is
responsible for ensuring efficient implementation of market risk management
frameworks and risk controls to support business growth. Its primary
objective is to facilitate risk/return decisions, reduce volatility in earnings,
highlight transparent market risk and liquidity risk profile to senior
management, ALCO, RMC, Board and regulators.

Market Risk Management Framework

The MRM Framework serves as the base for overall and consistent
management of market risk. The Market Risk Management Framework covers
key risk management activities such as identification, measurement,
monitoring, control and reporting of the market risk exposures, which are
benchmarked against industry leading practices and regulatory requirements.
This framework facilitates the Group to manage its market risk exposures in a
systematic and consistent manner. The principles mentioned under the
framework are intended for trading and non-trading activities. Major market
risk classes are Price Risk (Traded), Interest Rate Risk/ Rate of Return in the
Banking Book and Liquidity Risk.

Value at Risk
Value at Risk (VaR) measures the potential loss of future value resulting
from adverse movement in market factors over a specified period of time
within a specified confidence level, under a normal business situation. The
Groups regulatory VaR is computed based on the Historical Simulation
approach on a ten-days holding period at 99% confidence for one-year
observation period as per Regulatory/Basel requirement. The Groups
Proprietary Trading VaR is computed daily using a one-day holding period
with other parameters remain unchanged. To ensure the relevancy and
accuracy of the VaR computation, VaR is back-tested on a daily basis. The VaR
is also subject to periodic independent validation.
Risk Sensitivities
Besides VaR, the Group utilises other nonstatistical risk measures, such as
interest rate sensitivity, e.g., exposure to a one basis point increase in yields
(PV01), net open position limit for managing foreign currency exposure and
Greek limits for controlling options risk. These measures provide granular
information on the Groups market risk exposures and are used for control
and monitoring limits purposes.
Valuation
All trading positions are marked to market on a consistent and daily basis
using quoted prices within active markets. Where this is not possible,
positions are marked to model using models, which have been
independently validated. The valuations are reviewed on a regular basis and
there are valuation adjustments to incorporate counterparty risk, bid/ask
spreads and market liquidity, which is in line with FRS 139 standards.
Stress Testing
The Group performs Stress Test to further augment and measure the losses
arising beyond the VaR confidence interval. By evaluating the size of the
unexpected losses, the Group is able to understand the risk profiles and
potential exposures to unlikely but plausible events in abnormal markets
using multiple scenarios and undertake the appropriate measures. Scenarios
are updated dynamically and may be redefined on an ongoing basis to
reflect current market conditions. The Stress Test results, trends and
explanations are reported to Senior Management to facilitate and manage
risk with more transparency.

FINANCIAL STATEMENTS

Maybank Annual Report 2011

523
At A Glance

The Group emplaces risk management controls such as stop-loss limits, VaR
limits, sensitivities limits, Greek limits and FX NOP limits to cap the size of
potential and actual loss arising from the trading activities.

The vulnerability under stressed market conditions like abrupt changes in the
level of the term structure of interest rate is also measured by performing
stress testing on the Banks current position on a regular basis.
Proactive IRR/RoR In The Banking Book Management

Governance

The Bank also proactively manage the IRR/RoR by applying Funds Transfer
Pricing (FTP) to transfer interest rate risk to books managed by Central
Funding Unit (CFU) with supervision of the ALCO. IRR/RoR in the banking
book is proactively managed where hedging strategies and mitigating
actions are regularly reviewed to achieve a balance between risks, earnings
and capital against tolerance limits. Various strategies adopted include
adjusting the maturity tenor or repricing tenor of assets and liabilities,
re-strategising new business growth, securing long term fixed rate funding
and entering into interest rate derivative contracts.

Leadership

IRR/RoR in the banking book encompasses of repricing risk, yield curve risk,
basis risk arising from different interest rate benchmarks and embedded
optionality. The objective of the Groups IRR/RoR in the banking book
framework is to ensure that all IRR/RoR in the banking book is managed
within its risk appetite. IRR/RoR in the banking book is measured and
monitored proactively, using the following principal measurement
techniques:

Stress Testing
Responsibility

Interest rate risk (IRR) (or rate of return risk (RoR) in the case of MIB) in the
banking book arises from the changes in market interest rates that adversely
impact the Groups financial condition in terms of economic value or
earnings, based on the risk profile of the balance sheet. The Group
emphasizes on the importance of managing interest rate risk / rate of return
risk in the banking book as most of the balance sheet items of the Group
generate interest income and interest expense, which are indexed to interest
rates. Volatility of earnings can pose a threat to the Groups profitability while
economic value provides a more comprehensive view of the potential long
term effects on the Groups overall capital adequacy.

By taking a more holistic view to the potential long term effects for the
Groups overall exposure, the impact on economic value is also measured
under 200 basis points rate shock. This measurement focuses on how the
economic value of assets, liabilities and off balance sheet instruments
changes with movement in interest rate. It requires all futures cash flows
associated with the Groups assets, liabilities and off balance sheet positions
to be discounted at relevant market rates and then summed to determine an
overall net present value figure for the Group. The impact on economic value
for the Bank is well below the internal limit and way below the Basels
recommended 20% of total Tier 1 and Tier 2 capital.

Business Review

Management of Interest Rate / Rate of Return Risk in the

Banking Book (the IRR/RoR)

Economic Value at Risk

Performance

Where the above risk management tools and controls tend to be preemptive,
the Group enforces business continuity plan (BCP) to deal with the
consequences of realised residual risks. BCP test that involves the full
involvement from the front office, middle office and back office is conducted
periodically to ensure that business continuity is sustainable.

Strategy

The strategies to manage risk include transferring the risk to another party
such as entering into a back-to-back deal with external counterparty,
avoiding the risk, reducing the negative effect or probability of the risk
through offsetting positions, or even accepting some or all of the
consequences of a particular risk.

Another critical element of the IRR/RoR in the banking book management is

the monitoring of the sensitivity of projected net interest income/net fund
base income under varying interest rate scenarios (including the
standardised rate shock of 200 basis points per Basel II requirements) from
the Banks pro-forma balance sheet. The analysis incorporates business
assumptions obtained from various lines of business and behavioral
assumptions established based on statistical and non-statistical methods for
the Bank. The impact on earnings is measured against the approved
Earnings-at-Risk (EaR) limit where new business and hedging strategies are
carried out to mitigate the increasing IRR/ROR.

Who We Are

The Groups policies, processes and controls are designed to achieve a

balance between exploiting trading opportunities and managing earnings
volatility within a framework of sound and prudent practices.

Dynamic Simulation

Our Perspective

Management of Trading Activities

Repricing Gap Analysis

Financial & Others
AGM Information

The Group quantifies IRR/RoR in the banking book by analysing the repricing
mismatch between rate sensitive assets and rate sensitive liabilities. One of
the challenges in this analysis is about the quality and validity of the
underlying assumptions with embedded optionality of certain products such
as prepayment of housing loans and hire purchase loans and effective
duration of liabilities which are contractually repayable on demand such as
current accounts and saving accounts.

524

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Market Risk

Tables 41 (a) (c) show the impact of changes in interest rate/ rate of return to net earnings and economic value for the Group, the Bank and MIB, respectively
for positions as at 30th June 2011.
Table 41 (a): Interest Rate Risk in the Banking Book for Maybank Group as at 30th June 2011 (RM000)

Currency

Impact on Global Position

+ 200 bps parellel shock
Potential Earning Volatility (PEV)

Impact on Economic Value (IEV)

MYR

157,132

1,798,896

USD

122,655

167,645

SGD

143,795

242,157

IDR

23,072

-7,269

Others *

-89,176

135,691

Total

357,479

2,337,120

Table 41 (b): Interest Rate Risk in the Banking Book for Maybank as at 30th June 2011 (RM000)

Currency

Impact on Global Position

+ 200 bps parellel shock
Potential Earning Volatility (PEV)

Impact on Economic Value (IEV)

MYR

227,759

1,545,387

USD

95,061

413

SGD

143,795

242,157

Others *

-98,049

76,985

Total

368,567

1,864,943

Table 41 (c): Rate of Return Risk in the Banking Book for Maybank Islamic as at 30th June 2011 (RM000)

Currency

Total

Impact on Global Position

+ 200 bps parellel shock
Potential Earning Volatility (PEV)

Impact on Economic Value (IEV)

167,098

975,118

FINANCIAL STATEMENTS

525

Maybank Annual Report 2011

At A Glance
Our Perspective

Capital Treatment for Market Risk

The objective of Equity Exposure is to determine the nature and extent of

the Groups exposure to investment risk arising from equity positions and
instruments held in its banking book.

At the Group and Global consolidated level, Maybank also computes the
minimum capital requirements against market risk in the trading portfolio
per BNMs RWCAF under Standardised Approach. This is imperative as the
capital serves as a financial buffer to withstand from any adverse market risk
movements. Interest rate risk, foreign currency risk and options risk are the
primary risk factor experienced in the Groups trading and non-trading
activities. Other risk factors such as commodity and equity are generally
attributed to structured products which are on a back to back basis.

The Group holds investments in equity securities with the purpose of gaining
strategic advantage as well as capital appreciation on sale thereof.

Maybank Group (RM000)

Maybank (RM000)

Capital

RWA

Capital

6,738,977

539,118

6,296,375

503,710

Foreign Currency Risk

9,094,481

727,558

3,325,150

266,012

Equity Risk

9,964

797

9,963

797

Commodity Risk

52,163

4,173

52,163

4,173

Options Risk

95,664

7,653

9,182

735

Maybank Islamic (RM000)

Capital

Benchmark Rate Risk

40,325

3,226

Foreign Currency Risk

109,488

8,759

Equity Risk

Options Risk

Governance

RWA

Leadership

Market Risk Categories

Responsibility

RWA
Interest Rate Risk

Business Review

Market Risk Categories

Performance

Publicly Traded Holding of equity investments comprises of quoted

shares which are traded actively in the stock exchange. All publicly
traded equity exposures are stated at fair value.
Privately Held Privately held equity are unquoted investments whose
fair value cannot be reliably measured which are carried at cost less
impairment losses, if any.

Table 42 shows the Market Risk RWA and Minimum Capital Charge for the
Group, the Bank and MIB, respectively for positions as at 30th June 2011.

Strategy

Equity Risk is the risk of decline in the particular investments arising from
unfavourable movements in the stock market dynamics or other specific
factors.

Who We Are

Equity Exposures in Banking Book

Financial & Others

AGM Information

526

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Market Risk

Liquidity Risk Management

Liquidity is the ability of the bank to fund increases in assets and meet
obligations as they come due, without incurring unacceptable losses.
Generally, there are two types of liquidity risk which are funding liquidity risk
and market liquidity risk. Funding liquidity risk is the risk that the firm will
not be able to meet efficiently both expected and unexpected current and
future cash flow needs without affecting either daily operations or the
financial condition of the firm. Market liquidity risk is the risk that a firm
cannot easily offset or eliminate a position at the market price because of
inadequate market depth or market disruption.

Besides that, the process of managing liquidity risk also includes:

Maintaining a sufficient amount of unencumbered high quality
liquidity buffer as a protection against any unforeseen interruption to
cash flow;

Managing short- and long-term cash flow via maturity mismatch

report and various indicators;

Monitoring depositor concentration at entity and Group level to avoid

undue reliance on large depositors;

Managing liquidity exposure by domestic and significant foreign

currencies;

Diversifying funding sources to ensure proper funding mix;

Conducting liquidity stress testing under various scenarios as part of

prudent liquidity control;

Maintaining a robust contingency funding plan that includes strategies,

decision-making authorities, internal and external communication and
courses of action to be taken under different liquidity crisis scenarios;
and

Conducting CFP testing to examine the effectiveness and robustness of

the plans.

Liquidity Risk Governance

Liquidity policies and frameworks are reviewed annually and endorsed by
ALCO and approved by RMC prior to implementation. The Group liquidity risk
position is actively discussed and managed at the ALCO and RMC on a
monthly basis in line with the approved guidelines and policies.
Liquidity Risk Management Approach
The Group has taken BNMs Liquidity Framework and leading practices as a
foundation to manage and measure its liquidity risk exposure. The Group
also uses a range of tools to monitor and control liquidity risk exposure such
as liquidity gap, early warning signals, liquidity indicators and stress testing.
The liquidity positions of the Group are monitored regularly against the
established policies, procedures and limits.
Generally, the Group has a diversified liability structure to meet its funding
requirements. The primary source of funding include customer deposits,
interbank deposits, debt securities, swap market, bank loan syndication and
medium term funds. The Group also initiates and implements strategic fund
raising programmes as well as institutes standby lines with external parties
on a need basis. Sources of liquidity are regularly reviewed to maintain a
wide diversification by currency, provider, product and term.
In terms of day-to-day liquidity management, the treasury operations will
ensure sufficient funding to meet its intraday payment and settlement
obligations on a timely basis.

The recent global financial crisis has resulted in a significant change in the
regulation and supervision of liquidity risk in financial institutions. Arising
from the Basel III liquidity risk management requirements, two ratios have
been recommended to manage liquidity risks, which are Liquidity Coverage
Ratio (LCR) and Net Stable Funding Ratio (NSFR). These measures will be
phased in from 1 January 2015 and 1 January 2018 respectively. Even
though, the formal observation period commences on 1 January 2012, the
preliminary ratios are already been computed and presented to the ALCO
and the RMC on a monthly basis.

FINANCIAL STATEMENTS

Maybank Annual Report 2011

527
At A Glance

Operational Risk

Management of Operational Risk

Business Mission,
Objective and
Strategies

Operational Risk
Strategy & Appetite

Validation /
Reassessment

Risk Assessment
&
Measurement

Risk Control
Framework

Risk
Reporting

Risk
Monitoring

Strategy
&
Policy

Governance
&
Organisation

OR Tools-RCSA
KRI & Incident
Management

MeasurementCapital Charge

Disclosure

Responsibility

Risk
Identification

Business Review

Operational Risk Management Process

Performance

Continuous
Improvement

Risk Officers and Risk Representatives have been appointed within the
various Business and Support Sectors (BSSs) of the Group and are responsible
for implementing and executing the operational risk management processes
and tools. They are also responsible for the investigation of operational
losses, monitoring and analysis of risk trends and staff training on operational
risk management practices and governance.

Strategy

The Operational Risk Management Unit (ORM) is responsible for the

formulation and implementation of the operational risk framework within the
Group, which encompasses the operational risk management strategy and
governance structure. Another key function is the development and
implementation of operational risk management tools and methodologies to
identify, measure, monitor and control operational risks.

Who We Are

Operational risk is defined as the risk of loss resulting from inadequate or

failed internal processes, people and systems or from external events. This
definition includes legal risk, but excludes strategic and reputational risk.

Risk taking units (Business/Support Sectors) constitute an integral part of the

operational risk management framework and are primarily responsible for
the day-to-day management of operational risk. These units are responsible
for establishing and maintaining their respective operational manuals and
ensuring that activities undertaken comply with the Groups operational risk
management framework.

Our Perspective

Operational Risk

Risk Management Infrastructure

Leadership
Governance
Financial & Others
AGM Information

528

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Operational Risk

Operational Risk Management Framework

The Groups Operational Risk Management Framework focuses on the five

causal factors of operational risk, i.e., internal processes, people, systems,
external events and legal. It provides a transparent and formalised framework
aligned to business objectives within which the Board, management teams,
staff and contractors can discharge their operational risk management
responsibilities.

KRIs are tracked at Group, Business and Operating levels. The main
sources of KRIs are from the periodic RCSA process, Incident
Management & Data Collection (IMDC) database, BSS experiences,
internal/external audit findings and BNM examination findings.

Operational Risk Management Methodology and Tools

A variety of methodologies and tools have been implemented to effectively
identify, assess, measure and report operational risk exposures on a timely
basis, thereby serving as tools to facilitate decision-making and enhance the
operational risk management process.
Operational Risk Identification and Assessment

Risk identification is the recognition of operational risk scenarios that

may give rise to operational losses. For example, under the Groups
product approval programme, all risks inherent in new/enhanced
products/services and financing packages are identified prior to the
launch of the product/services and financing package, with risk
mitigation measures emplaced.
Risk-profiling and self-assessment exercises are also conducted as part
of the operational risk management process.

The above exercises enable risk taking units to identify inherent operational
risks specific to their environment and assist them in assessing the
effectiveness of controls in place.
Operational Risk Measurement and Monitoring
The key methods and tools used to measure and monitor operational risks
are as follows:

Risk & Control Self Assessment (RCSA)

RCSA is a process of continual assessment of inherent operational risks
and controls to identify control gaps and to develop action plans to
close the gaps. It is a risk profiling tool which facilitates effective
operational risk management for the Group.
BSSs undertake the RCSA exercise to give due focus in the review of
business processes to enhance critical operations and controls,
especially those assessed to be in the Caution and Alert categories.
The sector level risk profiling exercises are compiled to establish the
Group Risk Profile on a half-yearly basis. The consolidated Risk Profile is
presented to the ERC and RMC.
Key Risk Indicators (KRIs)
KRIs are embedded into critical processes to provide early warning
signals of increasing risk and/or control failures by flagging up given
frequencies of events as a mechanism for continuous risk assessment/
monitoring.

BSSs monitor their risk exposures via KRIs and are required to develop
specific and concrete action plans for those indicators that fall under
Caution and Alert. ORM assists the BSSs to develop and validate the
KRIs to ensure appropriate thresholds are set.

Incident Management & Data Collection (IMDC)

IMDC provides a structured process and system to identify and focus
attention on operational hotspots and facilitates the minimisation of
risk impact.
With the implementation of the IMDC and the availability of a
centralised operational risk loss database, ORM and BSSs are able to
analyse operational incidents based on causal factors as well as Basel II
loss event types and identify operational hotspots for appropriate
action plans to address the critical areas.

Operational Risk Mitigation and Control

Risk Mitigation tools and techniques are used to minimise risk to an
acceptable level and are focused on:

Faster resumption of business in the event of a disaster / incident; and

Decreasing the impact on the business, should it occur.
The control tools and techniques to mitigate operational risk are as follows:
i.

Business Continuity Management (BCM)

The Group had developed Business Continuity Management (BCM)

Framework based on the BNMa BCM Guidelines and internationally best
BCM practices. The BCM includes integrated processes and responsibilities
which covers the following:

Emergency Response Plan (ERP);

Business Continuity Plan (BCP) and Pandemic Plan;
Crisis Management; and
Disaster Recovery Plan (DRP)

The Group BCM Programme aims in ensuring business continuity and people
safety in event of disruptions and disaster. The programme covers the
implementation of various BCM initiatives that have been developed in line
with BNMs requirements and BCM best practices.
Under BCM implementation, Business Continuity Plans (BCPs) have been
developed for all critical sectors, including subsidiaries and overseas
operations. The BCP documents and exercises are reviewed on a yearly basis.
The Board also provides attestation on the BCM readiness for Malaysia and
Singapore operations.

FINANCIAL STATEMENTS

Maybank Annual Report 2011

529
At A Glance

The Group aims to ensure that the risks arising from fraud are reduced to the
lowest possible level and develop effective fraud management approach to
deal with fraud incidences in a decisive, timely and systematic manner.

By having a proper BCM Programme in place, we are able to respond

effectively and in a structured manner in the event of disruptions/disaster,
hence ensuring the Groups business continuity.

Treatment for Operational Risk (OR) Capital Charge

Outsourcing is a technique used by the Group mainly for the purposes of

reducing fixed and/or current expenditure and to concentrate on the Groups
core business with a view to enhance operational efficiency.

Financial & Others

Continuous review, monitoring and reporting to the ERC and RMC are also
carried out by Risk Management to ensure integrity and service quality of
service providers are not compromised.

The Group has also automated the operational risk capital charge calculation
process to produce accurate and reliable Operational Risk capital charge
figures across the Group under both the BIA and TSA.

Governance

For effective operational risk management, the Groups Outsourcing Policy

which is designed in accordance with local regulatory requirements and
international leading practices has been put in place. All new outsource
services introduced is subject to rigorous risk review by the risk taking unit
proposing the outsourcing service and independent risk review by ORM.

The Group is aiming to move towards The Standardised Approach (TSA) for
Operational Risk Capital Charge Calculation in due course. For this purpose,
the Group has mapped its business activities into the eight business lines as
prescribed by Basel II and the BNM RWCAF TSA requirements.

Leadership

Several key functions outsourced by the Group include IT infrastructure

services, ATM cash replenishment, cash management processes as well as
processing of outward clearing cheques.

Responsibility

ii. Outsourcing

Operational Risk capital charge is calculated using the BIA as per BNM
RWCAF. The BIA for operational risk capital charge calculation applies an
alpha (15%) to the average of positive gross income that was achieved over
the previous three years by the Group. The RWA amount is computed by
multiplying the minimum capital required with a multiplier of 12.5 (reciprocal
of 8%).

Business Review

The Fraud Reporting Policy provides all employees of the Group a framework
and avenue to report actual or suspected misconduct or violations of the
Groups policies and regulations in a safe and protected manner. The purpose
of implementing a fraud reporting hotline is to promote a culture where it is
safe and acceptable for all employees to raise concerns regarding fraud,
criminal activities, dishonesty and malpractice committed by another
employee via dedicated reporting mechanism.

Performance

Key Benefits of the BCM Programme include:

Ensuring continuity of critical business functions and essential services
within a specified timeframe in the event of disruptions/disaster;

Mitigating and minimising impact of the incident to the Group;

Inculcating an effective BCM culture;

Instilling customer confidence in the Groups processes; and

Complying with BNM requirements.

Strategy

Apart from BCM documentation, BCM channels such as BCM Wallet Card,
e-Learning and BCM articles were introduced to complement the BCM
programme in the Group.

The Group has established an Anti-Fraud Framework that provides robust

and comprehensive anti-fraud programmes and controls for the Group. It
serves as the broad principle, strategy and policy for the Group to adopt in
relation to fraud in order to promote high standard of integrity. It also
highlights the roles and responsibilities at every level for preventing and
responding to fraud. Following this, several initiatives have been undertaken
by the Group such as Anti-Fraud Roadshow and Awareness Programme,
Introduction of Anti-Fraud Rules and enhancement of fraud management
system.

Who We Are

Apart from regular Crisis Simulation Exercise (CSE) for each sector, there were
2 successful CSEs conducted at enterprise level in the Group since 2005,
involving all critical business functions with participants close to 400 staff
mobilised to various alternate sites within Klang Valley. The exercises
demonstrated the readiness of people and also the workability of business
processes and system infrastructure.

iii. Anti-Fraud Management

Our Perspective

To coordinate the crisis escalation procedures and recovery efforts, we have

established the BCM Command Centre and Recovery Centres that are able to
provide minimum service level for business units in the event of disaster or
operational disruption.

AGM Information

530

Maybank Annual Report 2011

FINANCIAL STATEMENTS

Shariah Governance

Shariah Governance
The Shariah Compliance Framework (SCF) was formulated to enable MIB to
communicate its strategies towards the effective and efficient Shariah
compliance risk management throughout the organisation in line with the
Shariah principles, a requirement under the Islamic Banking Act 1983, and
rules and regulations of BNM and Securities Commission (SC).
SCF is the enterprise-wide Shariah Management plan consisting of Shariah
Governance Structure, systems processes and control to be undertaken by
relevant business entities across the group. The implementation of SCF is
effected through the following functions:

Shariah Review;
Shariah Advisory & Research;
Shariah Audit; and
Shariah Secretariat.

Shariah Committee
The operation of the Islamic Subsidiaries is governed by Section 3 subsection
5(b) of Islamic Banking Act, 1983, which stipulates that any licensed Islamic
bank is required to provide for the establishment of Shariah advisory body to
advise the bank on the operations of its business in order to ensure that it
does not involve any element which is not approved by the Religion of Islam,
and Part B of BNM Guidelines on the Governance of Shariah Committee for
the Islamic Institutions known as BNM/GPS 1, stipulates that every Islamic
Financial Institution is required to establish a Shariah Committee.

Amongst other roles of the Shariah Committee in monitoring the Groups

activities include:

To advise the Board on Shariah matters in its business operations;

To endorse Shariah Compliance Manual and Framework;
To endorse and validate relevant documentations;
To advise the MIB on the computation and distribution of Zakat;
To assist related parties on Shariah matters for advise upon request;
To advise on the matters to be referred to the Shariah Advisory Council
(SAC) of BNM; and
To provide written Shariah opinion.

Rectification Process of Shariah Non-Compliance Income

The control structure for handling and reporting of the Shariah noncompliance and Potential Shariah Non-compliance has already been put in
place.
Key measures undertaken by the bank for managing Shariah Compliance risk
include having in place the following processes:

Awareness and Communication;

Identification and assessment;
Mitigation and control; and
Monitoring and reporting.

FINANCIAL STATEMENTS

Maybank Annual Report 2011

531

Forward Looking Statements

At A Glance

Forward Looking Statements

Our Perspective
Performance
Business Review

The Group undertakes no obligation to revise or update any forward looking

statements contained in this document, regardless of whether those
statements are affected as a result of new information, future events or
otherwise.

Strategy

Forward looking statements speak only as of the date they are made, and it
should not be assumed that they have been revised or updated in the light
of changes in the global, political, economic, business, competitive, market
and regulatory forces, future exchange and interest rates, changes in tax rates
and future business combinations and dispositions.

Who We Are

This document could or may contain certain forward looking statements that
are based on current expectations or beliefs, as well as assumptions or
anticipation of future events. These forward-looking statements can be
identified by the fact that they do not relate only to historical or current
facts. Forward-looking statements often use words such as anticipate, target,
expects, estimate, plan, goal, believe, will, may, would, could, potentially,
intends or other words of similar expressions. Undue reliance should not be
placed solely on any of such statements because, by their very nature, they
are subject to known and unknown risks and uncertainties and can be
affected by other factors that could cause actual results, and the Maybank
Groups plans and objectives, to differ materially from those expressed or
implied in the forward looking statements.

Responsibility
Leadership
Governance
Financial & Others
AGM Information

532

Maybank Annual Report 2011

OTHER INFORMATION

Awards &
Recognition

Refer to page 76 for Awards & Recognition for 2009-2011.

2008
Alpha Southeast Asia

Best Merger & Acquisition (M&A) Deal in South-East

Asia
Best Trade Finance in Malaysia
Best Cash Management in Malaysia
Best Financial Supply Chain Bank in Malaysia

Global Finance

Best Bank in Malaysia

Best Trade Finance Bank in Malaysia
Best Foreign Exchange Bank in Malaysia
Best Sub-Custodian Bank in Malaysia

2008 Asiamoney Polls

Best Local Currency Cash Management Services

Finance Asia Country Awards for

Achievement

Best Cash Management Bank

Best Trade Finance Bank
Best Foreign Exchange Bank

Trade Finance Magazine

Best Local Trade Bank in Malaysia

The Asset Triple A Transactional

Banking Awards

Excellence in Automobile Lending in the Asia Pacific,

Gulf Region and Central Asia Asiamoney

Asiamoney

Best Domestic Provider for Structured Currency

Products, Malaysia
Best Local Currency Cash Management Services,
Malaysian Ringgit
Best Local Cash Management Bank, Malaysia as
voted by small and medium corporates

Readers Digest Trusted Brands

Bank Gold Award

Credit Card Issuing Bank Gold Award

CGC Top SMI Supporter Award

Asia Pacific Brands Foundation
The BrandLaureate Awards

Best Brands in Premium Payment Cards (American

Express)
Best Brands in Services. Insurance and Takaful (Etiqa)

Lafferty Asia Bank Corporate

Reporting Awards

Malaysias Most Valuable Brands 2008 (Top placing)

Asia Pacific Brands Foundation

The BrandLaureate Awards

Best Brands Banking Online (Maybank2u.com)

Contact Centre Association

Malaysia National Gold Award
(Maybank2u.com)

Best In-House Contact Centre (Over 50 seats)

Best Mystery Call Shopper Excellence Award

Euromoney Islamic Bank Award

Best Sukuk Deal (Maybank Investment Bank)

KLIFF Islamic Finance Awards

Most Outstanding Islamic Retail Banking (Maybank

Islamic Berhad)
Most Outstanding Takaful Company (Etiqa Takaful)

International Takaful Award 2008

Best Takaful Marketing (Etiqa Takaful)

Islamic Finance News Awards 2008

Best Cash Management Bank for Malaysia

Best Trade Finance Bank for Malaysia

Asian Banker Excellence in Retail

Financial Services Award

Association of Accredited
Advertising Agents Malaysia /
Interbrand

Most Innovative Deal of the Year WCT Berhad

RM300.0 million Islamic Serial Redeemable Sukuk
with Detachable Warrants

2007
Alpha Southeast Asia

Best Trade Finance Bank in Malaysia

Asia Pacific Brands Foundation

THE Brand Laureate awardS

SMEs Best Supporters Award 2007

Association of Accredited
Advertising Agents Malaysia/
Interbrand

Malaysias Most Valuable Brands 2007 (Top placing)

Prime Ministers CSR Awards 2007

Outstanding Work in Best Workplace Practices

(Honourable Mention)

Asiamoney Cash Management Poll

2007

Best Local Currency Cash Management Services (By

Currency) Malaysia: MYR
Best Local Cash Management Bank in Malaysia as
voted by Small-Sized and Medium-Sized Corporates

Malaysian Business

Best Annual Report Malaysia

Corporate Governance Award 2006 CSR Award

Winner
Corporate Governance Award Merit Award

The Asset Triple A Award

Best Cash Management Bank in Malaysia

OTHER INFORMATION

Maybank Annual Report 2011

533
At A Glance

Best Trade Finance in Malaysia

The Asset Triple A

Top Rated Cross Border and Commended

Domestic under the Emerging Markets Agent Bank
Review

CGC Top SMI Supporter Award

Finance, Real Estate & Insurance Sector Award

OSH Excellence Award

Readers Digest Trusted Brand Gold

Award

Best e-Banking Leader & Best e-Payment Channel

(Maybank2u.com)

Islamic Bonds Issue Count 1st Place

Islamic Bonds Issue Value 3rd Place

RAM Lead Manager Awards Islamic

(Maybank Investment Bank)
Number of Deals 2nd Place
Issue Value 3rd Place

RAM Lead Manager Awards Lead

Manager (Aseambankers Malaysia
Berhad)

Number of Deals 2nd Place

Issue Value 3rd Place

Industry Recognition Award

Blue Print Awards New Structured Finance
Benchmark Deal

Number of Deals 2nd Place

Issue Value 3rd Place

Islamic Finance News Awards: Deals

of the Year

Best Country Deals Malaysia (Aseambankers Malaysia

Berhad)

IRD Awards

Asian Deal of the Year Award (Aseambankers

Malaysia Berhad)

Malaysia Capital Markets Deal of the Year Award

(Aseambankers Malaysia Berhad)

Best Cash Management Bank

Malaysian Institute of Human

Resource Management & Kelly
Services Malaysia

Outstanding HR Achievement Award

Sheikh Mohammed bin Rashid Al

Maktoum Islamic Finance Award

Global Continuing Contribution to Islamic Retail

Development

Readers Digest Trusted Brand Gold

Award
Malaysian Business Awards

Best Corporate Social Responsibility Award

Best Corporate Governance Award (Second placing)

CGC Top SMI Supporter Award

Euromoney Award for Excellence

Best M&A House in Malaysia (Aseambankers

Malaysia Berhad)

Islamic Finance News Award. Deal of

the Year

Mudharabah Deal of the Year (Aseambankers

Malaysia Berhad)

Sheikh Mohammed bin Rashid Al

Maktoum Islamic Finance Award

Regional Continuing Contribution to Islamic Finance

R&D (Asia) (Aseambankers Malaysia Berhad)

RAM League Award (Aseambankers

Malaysia Berhad)

Islamic 1st Place (Issue Value) 3rd (Number of

Deals)
3rd Place (Number of Deals)
3rd Place (Issue Value)

IR Magazine

Best IR in Singapore market by a Malaysian company

(Maybank Singapore)

AGM Information

IFR Asia Awards

The Asset Asian Award

Financial & Others

Best Foreign Exchange Bank in Malaysia

Governance

RAM Lead Manager Awards Islamic

(Aseambankers Malaysia Berhad)

Leadership

RAM Awards of Distinction

(Aseambankers Malaysia Berhad)

Global Finance Award

Responsibility

Corporate Governance Asia Annual

Recognition Award 2006

Business Review

Malaysian Rating Corporation

Berhad

Dewan Bahasa dan Pustaka

Anugerah Citra Laporan Tahunan
2006

Performance

Best @ Show Awards Malaysian

e-Banking Awards 07

2006

Strategy

National Council for Occupational

Safety and Health Award

Best Domestic Securitisation Deal of the Year Award

(Aseambankers Malaysia Berhad)
Who We Are

Global Custodian Magazine

Our Perspective

Global Finance

534

Maybank Annual Report 2011

OTHER INFORMATION

Analysis of
Shareholdings

Refer to pages 49 and 53 for more on Analysis of Shareholdings.

As at 9 August 2011

Substantial Shareholders as per the Register of Substantial Shareholders

No. of
Shares Held

% of
Shares

3,423,138,825

45.77

Citigroup Nominees (Tempatan) Sdn Bhd

(Employees Provident Fund Board)

751,259,946

10.05

Permodalan Nasional Berhad

417,233,201

5.58

No. of
Shares Held

% of
Shares

3,423,138,825

45.77

751,259,946

10.05

417,233,201
224,500,974
168,638,313
158,407,837
130,469,127

5.58
3.00
2.26
2.12
1.74

109,363,591

1.46

80,298,693

1.07

68,745,701

0.92

67,601,740

0.90

53,994,353

0.72

49,945,890

0.67

45,010,296

0.60

35,206,083

0.47

32,133,266
31,705,057

0.43
0.42

27,671,171

0.37

27,101,573

0.36

23,107,916
18,258,695

0.31
0.24

No.

Name of Shareholders

1.

AmanahRaya Trustees Berhad

(Skim Amanah Saham Bumiputera)

2.
3.

Top Thirty Shareholders as per the Record of Depositors

No.

Name of Shareholders

1.

AmanahRaya Trustees Berhad

(Skim Amanah Saham Bumiputera)
Citigroup Nominees (Tempatan) Sdn Bhd
(Employees Provident Fund Board)
Permodalan Nasional Berhad
Kumpulan Wang Persaraan (Diperbadankan)
Lembaga Kemajuan Tanah Persekutuan (FELDA)
Valuecap Sdn Bhd
AmanahRaya Trustees Berhad
(Amanah Saham Malaysia)
AmanahRaya Trustees Berhad
(Amanah Saham Wawasan 2020)
Cartaban Nominees (Asing) Sdn Bhd
(Exempt AN for State Street Bank & Trust Company (West Clt OD67))
AmanahRaya Trustees Berhad
(AS 1Malaysia)
Malaysia Nominees (Tempatan) Sendirian Berhad
(Great Eastern Life Assurance (Malaysia) Berhad (Par 1))
HSBC Nominees (Asing) Sdn Bhd
(BBH and Co Boston for Vanguard Emerging Markets Stock Index Fund)
Citigroup Nominees (Tempatan) Sdn Bhd
(Exempt AN for Prudential Fund Management Berhad)
HSBC Nominees (Asing) Sdn Bhd
(Exempt AN for JPMorgan Chase Bank, National Association (Norges BK Lend))
Cartaban Nominees (Asing) Sdn Bhd
(Government of Singapore Investment Corporation Pte Ltd for Government of Singapore (C))
Lembaga Tabung Angkatan Tentera
Citigroup Nominees (Tempatan) Sdn Bhd
(Exempt AN for American International Assurance Berhad)
HSBC Nominees (Asing) Sdn Bhd
(Exempt AN for The Bank of New York Mellon (Mellon Acct))
HSBC Nominees (Asing) Sdn Bhd
(Exempt AN for JPMorgan Chase Bank, National Association (U.A.E))
Pertubuhan Keselamatan Sosial
Citigroup Nominees (Tempatan) Sdn Bhd
(Employees Provident Fund Board (NOMURA))

2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.

OTHER INFORMATION

535

Maybank Annual Report 2011

At A Glance
Our Perspective

Top Thirty Shareholders as per the Record of Depositors

23.
24.
25.
26.
27.
28.
29.
30.
TOTAL

17,264,187

0.23

17,062,758

0.23

15,457,452

0.21

15,118,060
14,770,186

0.20
0.20

13,907,700

0.19

13,086,169

0.18

12,822,883

0.17

12,594,026

0.17

6,075,875,669

81.24

Responsibility

Classification of
Shareholders
As at 9 August 2011

TOTAL

49,145,825

736,287

0.34
4.09
0.14
0.02

0.66

51

4,620,670,003
1,048,847
755,995
104,185,613

20,172,767

61.79
0.01
0.01
1.39

0.01

14
8,022

3,305

206,973,577
1,195,072,736

936,582,752

2.77
15.98

12.52

56,063

5,490

6,471,577,136

1,006,637,631

86.54

13.46

0.27

AGM Information

GOVERNMENT AGENCIES/
INSTITUTION
NOMINEES

98
10
18
727

2,132

25,260,344
305,548,670
10,306,746
1,754,605

% of Total Shareholdings
Malaysian
Foreign

Financial & Others

BODY CORPORATE
a. Banks/Finance
b. Investment/Trust
c. Societies
d. Industrial

3,476
41,781
1,669
248

No. of Shareholdings
Malaysian
Foreign

Governance

INDIVIDUAL
a. Bumiputera
b. Chinese
c. Indian
d. Others

No. of Shareholders
Malaysian
Foreign

Leadership

Category

Business Review

HSBC Nominees (Asing) Sdn Bhd

(Exempt AN for JPMorgan Chase Bank, National Association (U.S.A))
Citigroup Nominees (Asing) Sdn Bhd
(Legal & General Assurance (Pensions Management) Limited (A/C 1125250001))
Citigroup Nominees (Tempatan) Sdn Bhd
(Employees Provident Fund Board (PHEIM))
Yong Siew Yoon
Citigroup Nominees (Tempatan) Sdn Bhd
(Employees Provident Fund Board (CIMB Prin))
HSBC Nominees (Asing) Sdn Bhd
(BNY Brussels for Wisdomtree Emerging Markets Equity Income Fund)
AmanahRaya Trustees Berhad
(Sekim Amanah Saham Nasional)
Tokio Marine Life Insurance Malaysia Bhd
(As Beneficial Owner (PF))
Citigroup Nominees (Asing) Sdn Bhd
(CBLDN for Stichting PGGM Depository)

% of
Shares

Performance

22.

No. of
Shares Held

Strategy

Name of Shareholders

Who We Are

No.

536

Maybank Annual Report 2011

OTHER INFORMATION

Changes in
Share Capital
Authorised Share Capital
The present authorised share capital of the Bank is RM10,000,000,000 divided into 10,000,000,000 ordinary shares of RM1-00 each. Details of changes in its
authorised share capital since its incorporation are as follows:Increase in Authorised
Share Capital

Total Authorised
Share Capital

31-05-1960

20,000,000

20,000,000

06-09-1962

30,000,000

50,000,000

09-04-1977

150,000,000

200,000,000

17-01-1981

300,000,000

500,000,000

06-10-1990

500,000,000

1,000,000,000

09-10-1993

1,000,000,000

2,000,000,000

19-06-1998

2,000,000,000

4,000,000,000

11-08-2004

6,000,000,000

10,000,000,000

Date

Issued and Paid-Up Share Capital

Details of changes in the Banks issued and paid-up share capital since its incorporation are as follows:Date
of
Allotment

No. of
Ordinary
Shares
Allotted

Par
Value
RM

31-05-1960

1,500,000

5.00

Cash

7,500,000

18-05-1961

500,000

5.00

Cash

10,000,000

31-05-1962

1,000,000

5.00

Rights Issue (1:2) at RM7.00 per share

15,000,000

21-08-1968

1,500,000

5.00

Rights Issue (1:2) at RM7.00 per share

22,500,000

04-01-1971

22,500,000

1.00*

Rights Issue (1:1) at RM1.50 per share

45,000,000

06-05-1977

15,000,000

1.00

Capitalisation of Share Premium Account (Bonus Issue 1:3)

60,000,000

23-06-1977

30,000,000

1.00

Rights Issue (1:2) at RM3.00 per share

90,000,000

21-02-1981

30,000,000

1.00

Capitalisation of Share Premium Account (Bonus Issue 1:3)

120,000,000

10-04-1981

60,000,000

1.00

Rights Issue (1:2) at RM4.00 per share

180,000,000

14-11-1984

45,000,000

1.00

Capitalisation of Share Premium Account (Bonus Issue 1:4)

225,000,000

28-12-1984

45,000,000

1.00

Rights Issue (1:4) at RM6.00 per share

270,000,000

31-11-1985

68,249

1.00

Conversion of Unsecured Notes

270,068,249

15-11-1986

9,199,999

1.00

Issued in exchange for purchase of Kota Discount Berhad (Now

known as Mayban Discount Berhad)

279,268,248

01-12-1986

10,550

1.00

Conversion of Unsecured Notes

279,278,798

29-07-1987 to
20-10-1987

90,000

1.00

Exercise of Employees' Share Option Scheme ("ESOS")

279,368,798

Consideration

Resultant Total Issued

and
Paid-Up Capital
RM000

OTHER INFORMATION

Maybank Annual Report 2011

537
At A Glance

1.00

Capitalisation of Share Premium Account (Bonus Issue 1:10)

307,318,785

30-11-1988

10,725

1.00

Conversion of Unsecured Notes

307,329,510

16-03-1989 to
21-06-1989

9,198,206

1.00

Exchange for Kwong Yik Bank Berhad ("KYBB") shares

316,527,716

11-07-1989 to
23-11-1989

7,555,900

1.00

Exercise of Employees' Share Option Scheme ("ESOS")

324,083,616

46,174,316

1.00

Conversion of Unsecured Notes

370,257,932

4,508,900

1.00

Exercise of Employees' Share Option Scheme ("ESOS")

374,766,832

16-11-1990

187,383,416

1.00

Capitalisation of Share Premium Account (Bonus Issue 1:2)

562,150,248

27-11-1990

11,550

1.00

Exercise of Employees' Share Option Scheme ("ESOS")

562,161,798

30-11-1990

280,497

1.00

Conversion of Unsecured Notes

562,442,295

03-01-1991

3,300

1.00

Exercise of Employees' Share Option Scheme ("ESOS")

562,445,595

03-01-1991

188,991,002

1.00

Rights Issue (1:2) at RM5.00 per share

751,436,597

04-01-1991

4,950

1.00

Rights Issue (1:2) upon ESOS at RM5.00 per share

751,441,547

726,000

1.00

Exercise of Employees' Share Option Scheme ("ESOS")

752,167,547

35,197

1.00

Conversion of Unsecured Notes

752,202,744

11-12-1991 to
20-05-1992

5,566,000

1.00

Exercise of Employees' Share Option Scheme ("ESOS")

757,768,744

30-11-1992 to
30-11-1993

3,153,442

1.00

Conversion of Unsecured Notes

760,922,186

18-01-1994

380,461,093

1.00

Capitalisation of Share Premium Account (Bonus Issue 1:2)

1,141,383,279

29-12-1994

2,030,428

1.00

Conversion of Unsecured Notes

1,143,413,707

19-06-1998

1,143,413,707

1.00

Capitalisation of Share Premium and Retained Profit Account (Bonus

Issue 1:1)

2,286,827,414

72,909,000

1.00

Exercise of Employees' Share Option Scheme ("ESOS")

2,359,736,414

1,179,868,307

1.00

Capitalisation of Retained Profit Account (Bonus Issue 1:2)

3,539,604,721

25-10-2001 to
05-08-2003

60,567,200

1.00

Exercise of Employees' Share Option Scheme ("ESOS")

3,600,171,921

29-09-2004 to
10-08-2007

290,898,600

1.00

Exercise of Employees' Share Option Scheme ("ESOS")

3,891,070,521

17-08-2007 to
06-02-2008

13,159,500

1.00

Exercise of Employees' Share Option Scheme ("ESOS")

3,904,230,021

30-11-1989
01-12-1989 to
24-10-1990

25-01-1991 to
28-11-1991
30-11-1991

21-09-1998 to
09-10-2001
23-10-2001

AGM Information

27,938,071

Financial & Others

08-06-1988

Governance

279,380,714

Leadership

Conversion of Unsecured Notes

Responsibility

1.00

Business Review

11,916

Performance

30-11-1987

Consideration

Resultant Total Issued

and
Paid-Up Capital
RM000

Strategy

Par
Value
RM

Who We Are

No. of
Ordinary
Shares
Allotted

Our Perspective

Date
of
Allotment

538

Maybank Annual Report 2011

OTHER INFORMATION

Changes in
Share Capital

Date
of
Allotment

No. of
Ordinary
Shares
Allotted

Par
Value
RM

20-02-2008

976,057,505

1.00

Capitalisation of Share Premium Account (Bonus Issue 1:4)

4,880,287,526

859,625

1.00

Exercise of Employees' Share Option Scheme ("ESOS")

4,881,147,151

2,196,516,217

1.00

Rights Issue (9:20) at RM2.74 per share

7,077,663,368

319,400

1.00

Exercise of Employees' Share Option Scheme ("ESOS")

7,077,982,768

20-12-2010

244,257,623

1.00

Dividend Reinvestment Plan (DRP) at RM7.70 per share

7,322,240,391

12-05-2011

155,965,676

1.00

Dividend Reinvestment Plan (DRP) at RM7.70 per share

7,478,206,067

8,700

1.00

Exercise of Employees' Share Option Scheme ("ESOS")

7,478,214,767

22-02-2008 to
24-10-2008
27-04-2009
29-07-2009 to
26-08-2009

05-07-2011 to
25-07-2011

Consideration

* The par value of the Banks shares was changed from RM5.00 to RM1.00 on 25 November 1968

Resultant Total Issued

and
Paid-Up Capital
RM000

OTHER INFORMATION

Maybank Annual Report 2011

539
At A Glance

No. of Properties

1
1
2
1

1
1
1

294.00
1,330.00
595.42
857.74
445.93
257.62
314.00
1,269.13

793,638.00
2,303,127.94
1,034,395.58
2,529,446.85
793,930.39
1,102,661.00
934,543.57
3,228,285.76

W.P. Labuan

1,089.81

USD192,137.71

Maybank Investment Bank Berhad

Negeri Sembilan Darul Khusus
Pahang Darul Makmur
Pulau Pinang
Perak Darul Ridzuan

1
1
1

2
1

549.25
229.11
84.04
260.00

445,056.27
318,514.13
146,940.00
231,865.90

ETIQA
Kuala Lumpur
Johor Darul Takzim
Kedah Darul Aman
Melaka
Negeri Sembilan Darul Khusus
Pahang Darul Makmur
Pulau Pinang
Sabah
Selangor Darul Ehsan

2
2
2

3
1
1

1
1
1
2
1
1
1

24,258.47
464.00
1,127.97
452.00
1,659.64
18,334.57
624.00
222.22
38,927.49

552,393,529.00
1,039,090.00
1,264,864.00
1,200,000.00
2,607,640.00
2,843,238.00
3,400,000.00
1,344,184.00
32,466,494.00

Maybank International (L) Ltd

AGM Information

2
1
1
1

Aurea Lakra Holdings Sdn Bhd

(Formerly known as Mayban P.B. Holdings Sdn Bhd)
Kuala Lumpur
Johor Darul Takzim
Pahang Darul Makmur
Perak Darul Ridzuan
Pulau Pinang
Sabah
Sarawak
Selangor Darul Ehsan

Financial & Others

204,719,088.33
56,289,879.26
10,213,959.28
2,801,899.75
5,070,821.65
8,245,032.80
12,617,184.12
13,488,862.56
1,666,644.80
25,952,574.15
14,276.92
20,228,313.69
126,795,012.12
4,502,718.91
HKD1,207,413.91
GBP4,348,000.46
SGD105,965,079.88

Governance

48,546.58
18,716.86
6,361.83
1,953.00
3,253.00
23,655.20
16,471.80
9,828.85
1,475.00
13,903.26
15,102.36
6,962.97
105,442.97
4,329.00
193.00
1,215.00
20,858.00

Leadership

13
10
6
4
4
5
15
8
3
3
17
14
18
2
2
5
12

Responsibility

11
29
11
1
1
12
9
13
1
24

9
29
6

1
11

Maybank
Kuala Lumpur
Johor Darul Takzim
Kedah Darul Aman
Kelantan Darul Naim
Melaka
Negeri Sembilan Darul Khusus
Pahang Darul Makmur
Perak Darul Ridzuan
Perlis Indera Kayangan
Pulau Pinang
Sabah
Sarawak
Selangor Darul Ehsan
Terengganu Darul Iman
Hong Kong
London
Singapore

Business Review

Book Value as
at 30.6.2011 (RM)

Performance

Land Area
(sq. m.)

Strategy

Leasehold

Who We Are

Freehold

Area

Our Perspective

Properties Owned by
Maybank Group

540

Maybank Annual Report 2011

OTHER INFORMATION

List of Top 10 Properties

Owned by Maybank Group
As at 30 June 2011

Description

Current Use

Tenure

Remaining
Lease Period
(Expiry Date)

Etiqa Twins
No. 11
Jalan Pinang
Kuala Lumpur

27-storey Twin
Office
Buildings

Office &
Rented out

Freehold

16 years

6,612

1994

320,000,000.00

2 Battery Road
Maybank Tower
Singapore

32-storey
Office Building

Office

Leasehold
999 years

816 years
(expiring 2825)

9 years

1,135.70

1962

SGD69,943,515.20

Dataran Maybank
No. 1
Jalan Maarof
Bangsar

2 Blocks of 20
storey
and a block 22
storey
Office
Buildings

Office &
Rented out

Leasehold
99 years

75 years
(expiring
3.12.2085)

10 years

9,918

2000

136,329,290.56

Menara Maybank
100
Jalan Tun Perak
Kuala Lumpur

58-storey
Office
Building

Head office
&
Rented out

Freehold

23 years

35,494

1978

129,101,407.70

Akademi
Etiqa
23, Jalan Melaka
Kuala Lumpur

25-storey
Office
Building

Office &
Rented out

Leasehold
99 years

56 years
(expiring
2065)

15 years

1,960.47

1994

55,000,000.00

Lot 153
Section 44
Jalan Ampang
Kuala Lumpur

Commercial
Land

Vacant

Freehold

3,829.00

2008

50,000,000.00

1079
Section 13
Shah Alam

Commercial
Land

Vacant

Leasehold
99 years

93 years
(expiring
11.3.2102)

38,417.00

1994

31,000,000.00

Retail UnitsLevel 1
(podium)
Level 2
(podium)
Level 3
(podium)
Level 8 (office
tower)

Office

Leasehold
99 years

82 years
(expiring
14.6.2091)

10 years

3,972

2000

27,037,004.25

Lot 379
Section 96
Bangsar
Kuala Lumpur

Vacant Land

Rented out

Leasehold
99 years

56 years
(expiring
25.7.2065)

4,645.00

1975

27,000,000.00

Jalan Air Itam

Bangi, Kajang
Selangor

5-storey
Building

Maybank
Academy

Leasehold
99 years

77 years
(expiring
18.12.2086)

23 years

80,692

1987

23,446,037.36

Location

Johor Bahru City

Square
Level 1 (M1-22)
2 (M2-15)
3 (M3-25)
and Level 8
City Square
Johor Bahru

Age of
Building

Land Area
(sq.m.)

Year of
Acquisition

Net Book
Value
(RM)

OTHER INFORMATION

Maybank Annual Report 2011

541
At A Glance

Board of Directors

Abdul Farid Alias

Deputy President & Head, Global Wholesale Banking

Dato Johan Ariffin

Tengku Dato Zafrul Tengku

Abd Aziz

Dato Mohd Salleh Hj Harun

Non-Independent Non-Executive Director

Muzaffar Hisham

DATUK MOHAIYANI BINTI SHAMSUDIN

Head Islamic Banking & Chief Executive Officer,

Maybank Islamic Berhad

DSDK
Independent Non-Executive Vice Chairman

Dato Sri Abdul Wahid Omar

SSAP, DSAP
Non-Independent Executive Director (President and
Chief Executive Officer)

PSM, PNBS, SIMP, DMSM, JMN, KMN, AMN

Independent Non-Executive Director

Dato Seri Ismail Shahudin

Mohd Nazlan Mohd Ghazali

(LS0008977)
General Counsel & Company Secretary

Dato Sri Abdul Wahid Omar

Head, Group Human Capital

PhD DMPN
Independent Non-Executive Director

Khairussaleh Ramli
Deputy President & Group Chief Financial Officer

Lim Hong Tat

Deputy President & Head, Community Financial
Services

Nora Abd Manaf

Pollie Sim Sio Hoong
Chief Executive Officer, Maybank Singapore

Rahardja Alimhamzah
Acting President Director, PT Bank Internasional
Indonesia TBK

Independent Non-Executive Director

Responsibility

Mr Alister Maitland

Geoffrey Stecyk
Head, Enterprise Transformation Services

President & Chief Executive Officer

Non-Independent Non-Executive Director

Dr. John Lee Hin Hock

Group Chief Risk Officer

Group Executive
Committee

Dato Dr Tan Tat Wai

Encik Zainal Abidin Jamal

Hans De Cuyper
Head, Insurance & Takaful
Chief Executive Officer, Mayban Ageas Holdings
Berhad

Business Review

SPMP
Independent Non-Executive Director

PJN
(Appointed on 22 August 2011)
Independent Non-Executive Director

Performance

Tan Sri Datuk Dr Hadenan A. Jalil

Mr Sreesanthan Eliathamby

Head, Investment Banking & Chief Executive Officer,

Maybank Investment Bank Bhd

Strategy

DPCM, PJN, PSM

Non-Independent Non-Executive Chairman

DPTJ
Independent Non-Executive Director

Who We Are

Tan Sri Dato Megat Zaharuddin

Megat Mohd Nor

Mr Cheah Teik Seng

Independent Non-Executive Director

Our Perspective

Corporate
Information

Share Registrar

External Auditors

Leadership

14th Floor, Menara Maybank

100, Jalan Tun Perak
50050 Kuala Lumpur, Malaysia
Telephone : (6)03-2070 8833
Facsimile : (6)03-2031 5949
(Investor Relations)

: (6)03-2711 3421
(Customer Feedback
Management)

: 1300-88-8899
(Maybank Group
Customer Care)

: (6)03-2031 0071
(Group Corporate
Secretarial)
SWIFT
: MBBEMYKL
Website
: http://www.maybank.com
E-Mail
: [email protected]

Malayan Banking Berhad

14th Floor, Menara Maybank
100, Jalan Tun Perak
50050 Kuala Lumpur, Malaysia
Telephone : (6)03-2074 7822
Facsimile : (6)03-2072 0079

Messrs. Ernst & Young

(AF : 0039)
Chartered Accountants
Level 23A, Menara Milenium
Jalan Damanlela
Pusat Bandar Damansara
50490 Kuala Lumpur, Malaysia
Telephone : (6)03-7495 8000
Facsimile : (6)03-2095 9076/78

Governance

Stock Exchange Listing

Main Market of Bursa Malaysia Securities
Berhad
(Listed since 17 February 1962)

AGM Information

AGM Helpdesk
Telephone : (6)03-2264 3883
(Tricor Investor Services Sdn Bhd)

: (6)03-2074 8256
(Group Corporate Secretarial,
Maybank)

Financial & Others

Registered Office

542

Maybank Annual Report 2011

OTHER INFORMATION

Group
Directory
Commercial Banking
Malayan Banking Berhad
14th Floor, Menara Maybank
100, Jalan Tun Perak
50050 Kuala Lumpur
Tel: (6)03-2070 8833
Fax: (6)03-2031 0071
Corporate website: www.maybank.com
Email: [email protected]

Maybank Islamic Berhad

14th Floor, Menara Maybank
100, Jalan Tun Perak
50050 Kuala Lumpur
Tel: (6)03-2070 8833
Fax: (6)03-2031 0071
Website: www.maybankislamic.com.my

P.T. Bank Maybank Syariah Indonesia

(formerly known as P.T. Bank Maybank Indocorp)
1st Floor 3rd Floor, Sona Topas Tower
Jalan Jenderal Sudirman Kav. 26
Jakarta 12920
Indonesia
Tel: (62)-21-250 6446
Fax: (62)-21-250 6445
Corporate website: www.maybank.com

Maybank Philippines Incorporated

Legaspi Towers 300
Roxas Boulevard
Manila 1004
Philippines
Tel: (632)-523 7777
Fax: (632)-521 8513
Website: www.maybank2u.com.ph

Maybank (PNG) Ltd

Corner Waigani Road/Islander Drive
P.O. Box 882 Waigani, National Capital District
Papua New Guinea
Tel: (675)-325 0101
Fax: (675)-325 6128
Corporate website: www.maybank.com
Email: [email protected]

Maybank International (L) Ltd

Level 16 (B), Main Office Tower
Financial Park Labuan
Jalan Merdeka
87000 Wilayah Persekutuan Labuan
Tel: (6)087-414 406
Fax: (6)087-414 806
Corporate website: www.maybank.com
Email: [email protected]

P.T. Bank Internasional Indonesia Tbk

Plaza BII, Tower 2, 6th Floor
JI.MH.Thamrin No. 51
Jakarta 10350
Indonesia
Tel: (62)-21-230 0888
Fax: (62)-21-230 1380
Website: www.bii.co.id
Email: [email protected]

INVESTMENT BANKING
Maybank Investment Bank Berhad
33rd Floor, Menara Maybank
100, Jalan Tun Perak
50050 Kuala Lumpur
Tel: (6)03-2059 1888
Fax: (6)03-2078 4194
Website: www.maybank-ib.com
Email: [email protected]

Mayban IB Holdings Sdn Bhd

(formerly known as Aseam Credit Sdn Bhd)
32nd Floor, Menara Maybank
100, Jalan Tun Perak
50050 Kuala Lumpur
Tel: (6)03-2059 1888
Fax: (6)03-2031 5633

Kim Eng Holdings Limited

Kim Eng Securities Pte Ltd
9 Temasek Boulevard
#39-00 Suntec Tower Two
Singapore 038989
Tel: (65)-6336 9090
Fax: (65)-6339 6003
Website: www.kimeng.com or www.kimeng.com.sg
Email: [email protected]

Kim Eng Securities (Thailand) Public Company

Limited
999/9 The Offices at Central World
20th-21st, 24th Floor Rama 1 Road Pathumwan
Bangkok, 10330 Thailand
Tel: (+66)-2 6586 300
Fax: (+66)-2 6586 301
Website: www.kimeng.com
Email: [email protected]

OTHER INFORMATION

Maybank Annual Report 2011

543
At A Glance

PT Kim Eng Securities

Etiqa Life International (L) Ltd

Etiqa Offshore Insurance (L) Ltd

Mayban-JAIC Capital Management Sdn Bhd

Mayban-JAIC Management Ltd
Mayban Agro Fund Sdn Bhd
41st Floor, Menara Maybank
100 Jalan Tun Perak
50050 Kuala Lumpur
Tel: (6)03-2032 2188
Fax: (6)03-2031 2188

Mayban (Nominees) Sendirian Berhad

Mayban Nominees (Tempatan) Sdn Bhd
Mayban Nominees (Asing) Sdn Bhd
14th Floor, Menara Maybank
100, Jalan Tun Perak
50050 Kuala Lumpur
Tel: (6)03-2070 8833
Fax: (6)03-2031 0071
Website: www.mayban.com

Mayban Securities Nominees (Tempatan)

Sdn. Bhd.
Mayban Securities Nominees (Asing)
Sdn. Bhd.

AGM Information

Level 8, Tower C
Dataran Maybank
No.1, Jalan Maarof
59000 Kuala Lumpur
Tel: (6)03-2297 8888
Fax: (6)03-2282 5136

Financial & Others

Level 19, Tower C

Dataran Maybank
No. 1, Jalan Maarof
59000 Kuala Lumpur
Tel: (6)03-2297 3888
Fax: (6)03-2297 3800
Website: www.etiqa.com.my
Email: [email protected]

41st Floor, Menara Maybank

100, Jalan Tun Perak
50050 Kuala Lumpur
Tel: (6)03-2032 2188
Fax: (6)03-2031 2188
Website: www.mayban-ventures.com.my

Governance

Etiqa Insurance Berhad

Etiqa Takaful Berhad

Mayban Ventures Sdn Bhd

Mayban Venture Capital Company Sdn Bhd

Leadership

Level 11B, Block 4 Office Tower

Financial Park Complex
Jalan Merdeka
87000 Wilayah Persekutuan Labuan
Tel: (6)087-582 588
Fax: (6)087-583 588
Website: www.etiqa.com.my
Email: [email protected]

34th Floor, Menara Maybank

100, Jalan Tun Perak
50050 Kuala Lumpur
Tel: (6)03-2078 8363
Fax: (6)03-2070 9387
Corporate website: www.maybank.com
Email: [email protected]

Responsibility

Level 19, Tower C

Dataran Maybank
No. 1, Jalan Maarof
59000 Kuala Lumpur
Tel: (6)03-2297 3888
Fax: (6)03-2297 3800
Website: www.etiqa.com.my
Email: [email protected]

Mayban Trustees Berhad

Business Review

Mayban Ageas Holdings Berhad

(formerly known as Mayban Fortis Holdings Berhad)

Level 13, Tower C

Dataran Maybank
No. 1, Jalan Maarof
59000 Kuala Lumpur
Tel: (6)03-2297 7888
Fax: (6)03-2297 7880
Corporate website: www.maybank.com

Performance

INSURANCE

Mayban Investment Management Sdn Bhd

Strategy

Plaza Bapindo-Citibank Tower 17th Floor

Jalan Jenderal Sudirman Kav 54-55
Jakarta 12190 Indonesia
Tel: (62)-21-2557-1188
Fax: (62)-21-2557-1189
Website: www.kimeng.com
Email: [email protected]

OTHERS

Who We Are

Unit 811, Tower One & Exchange Plaza

Ayala Triangle, Ayala Avenue
Makati City, Philippines
Tel: (632)-893 1150, 810 0106
Fax: (632)-893 1145
Website: www.atrkimengfinancial.com
Email: [email protected]

Our Perspective

ATR KimEng Financial Corporation

544

agm information

Maybank Annual Report 2011

Notice
of the 51st
Annual
General
Meeting

51

NOTICE IS HEREBY GIVEN THAT the 51st

Annual General Meeting of Malayan Banking
Berhad (Maybank/the Company) will be held
at the Grand Ballroom, Level 1, Sime Darby
Convention Centre, 1A Jalan Bukit Kiara 1,
60000 Kuala Lumpur on Thursday,
29 September 2011 at 10.00 a.m. for the
following businesses:AS ORDINARY BUSINESS:
1.

Chairman, RM285,000 per annum for the

Non-Executive Vice Chairman and RM190,000 per
annum for each Non-Executive Director with
effect from 1 July 2010; and

To receive the Audited Financial Statements for the

financial year ended 30 June 2011 together with the
Reports of the Directors and Auditors thereon.

(Ordinary Resolution 1)

(b)

payment of directors fees in respect of Board

Committees amounting to RM45,000 per
Committee per annum for the Non-Executive
Committee Chairman and RM30,000 per
Committee per annum for each Non-Executive
Director with effect from 1 July 2010.

(Ordinary Resolution 8)

2.

To approve the payment of a Final Dividend of 32 sen

per ordinary share less 25% income tax, for the
financial year ended 30 June 2011 as recommended by
the Board.

(Ordinary Resolution 2)
3.

To re-elect the following Directors, each of whom

retires by rotation in accordance with Articles 96 and
97 of the Companys Articles of Association:i)
Dato Dr Tan Tat Wai
(Ordinary Resolution 3)
ii)
Encik Zainal Abidin bin Jamal

(Ordinary Resolution 4)
iii) Mr Cheah Teik Seng
(Ordinary Resolution 5)

7.

To re-appoint Messrs Ernst & Young as Auditors of the

Company for the 6-month financial period ending
31 December 2011 and to authorise the Directors to fix
their remuneration.

(Ordinary Resolution 9)

AS SPECIAL BUSINESS:

To re-elect Datuk Mohaiyani binti Shamsudin who

retires in accordance with Article 100 of the Companys
Articles of Association.

(Ordinary Resolution 6)

To consider, and if thought fit, to pass the following ordinary

resolution:-

5.

To consider and, if thought fit, to pass the following

resolution in accordance with Section 129(6) of the
Companies Act, 1965:-

That Mr Alister Maitland, retiring pursuant to Section

129(6) of the Companies Act, 1965, be re-appointed a
Director of the Company to hold office until the next
Annual General Meeting.
(Ordinary Resolution 7)

6.

To approve directors remuneration as follows:-

4.

(a)

payment of directors fees amounting to

RM300,000 per annum for the Non-Executive

8.

AUTHORITY TO DIRECTORS TO ISSUE SHARES

THAT subject always to the Companies Act, 1965, the

Companys Articles of Association and approval of the
relevant government/regulatory authorities, the
Directors be and are hereby authorised pursuant to
Section 132D of the Companies Act, 1965, to issue
shares in the Company at any time until the conclusion
of the next Annual General Meeting and upon such
terms and conditions and for such purposes as the
Directors may, in their absolute discretion deem fit,
provided that the aggregate number of shares to be
issued does not exceed 10% of the issued share capital
of the Company for the time being.

(Ordinary Resolution 10)

agm information

Maybank Annual Report 2011

545
At A Glance

Duly completed Form of Proxy must be deposited at the office

of the appointed share registrar for this AGM, Tricor Investor
Services Sdn Bhd at Level 17, The Gardens North Tower, Mid
Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur no later
than 27 September 2011 at 10.00 a.m.

4.

For a Form of Proxy executed outside Malaysia, the signature

must be attested by a Solicitor, Notary Public, Consul or
Magistrate.

5.

Only members registered in the Record of Depositors as at 23

September 2011 shall be eligible to attend the AGM or appoint
proxy to attend and vote on their behalf.

6.

If the proxy or proxies appointed is/are not a member of

Maybank, please ensure that the proof of eligibility (referred to
in Note 1 above) of the proxy or proxies is/are enclosed with
the Form of Proxy submitted and the original counterpart of
such proof of eligibility is/are presented by your proxy or
proxies for verification purposes during the registration
process.

Financial & Others

3.

Governance

A member shall not be entitled to appoint more than two (2)

proxies to attend and vote at the meeting provided that where
a member is an authorised nominee as defined under the
Securities Industry (Central Depository) Act 1991, it may
appoint at least one proxy but not more than two proxies each
in respect of each Securities Account it holds with ordinary
shares of the Company standing to the credit of the said
Securities Account.

Leadership

To transact any other business of the Company for

which due notice shall have been received in
accordance with the Companies Act, 1965.

2.

Responsibility

10.

Notes:
1.
A member entitled to attend and vote at the AGM is entitled
to appoint a proxy to attend and on a show of hands or on a
poll, to vote in his stead. A proxy shall be a member of the
Company, an Advocate, an approved Company Auditor or a
person approved by the Companies Commission of Malaysia.
The instrument appointing a proxy shall be in writing under
the hand of the appointor or his attorney duly authorised in
writing, or if the appointor is a corporation, under its common
seal or in some other manner approved by its directors.

Business Review

AND THAT the Directors and the Secretary of the

Company be and are hereby authorised to do all such
acts and enter into all such transactions, arrangements
and documents as may be necessary or expedient in
order to give full effect to the Dividend Reinvestment
Plan with full power to assent to any conditions,
modifications, variations and/or amendments (if any)
as may be imposed or agreed to by any relevant
authorities or consequent upon the implementation of
the said conditions, modifications, variations and/or
amendments or at the discretion of the Directors in
the best interest of the Company.

(Ordinary Resolution 11)

Kuala Lumpur
7 September 2011

Performance

MOHD NAZLAN MOHD GHAZALI

LS0008977
Company Secretary

Strategy

THAT pursuant to the Dividend Reinvestment Plan as

approved by the Shareholders at the Extraordinary
General Meeting held on 14 May 2010, approval be
and is hereby given to the Company to allot and issue
such number of new Maybank Shares for the Dividend
Reinvestment Plan until the conclusion of the next
AGM upon such terms and conditions and to such
persons as the Directors may, in their absolute
discretion, deem fit and in the interest of the Company
PROVIDED THAT the issue price of the said new
Maybank Shares shall be fixed by the Directors at not
more than ten percent (10%) discount to the adjusted
five (5)-day volume weighted average market price
(VWAMP) of Maybank Shares immediately prior to
the price-fixing date, of which the VWAMP shall be
adjusted ex-dividend before applying the
aforementioned discount in fixing the issue price;

BY ORDER OF THE BOARD

Who We Are

ALLOTMENT AND ISSUANCE OF NEW ORDINARY

SHARES OF RM1.00 EACH IN MAYBANK (MAYBANK
SHARES) IN RELATION TO THE RECURRENT AND
OPTIONAL DIVIDEND REINVESTMENT PLAN THAT
ALLOWS SHAREHOLDERS OF MAYBANK
(SHAREHOLDERS) TO REINVEST THEIR DIVIDEND
TO WHICH THE DIVIDEND REINVESTMENT PLAN
APPLIES, IN NEW ORDINARY SHARES OF RM1.00
EACH IN MAYBANK (DIVIDEND REINVESTMENT
PLAN)

Our Perspective

9.

AGM Information

546

Maybank Annual Report 2011

agm information

Notice of the 51st Annual General Meeting

Payment of Final Dividend

7.

The proposed gross dividend as per Resolution 2 consists of an

electable portion of 28 sen (21 sen net per ordinary share)
which can be elected to be reinvested in new ordinary shares
in accordance with the Dividend Reinvestment Plan as
disclosed in Note 29 (b) to the financial statements.

Pursuant to Paragraph 8.26 of the Main Market Listing

Requirements of Bursa Securities Malaysia Berhad the final
dividend, if approved, will be paid no later than three (3)
months from the date of the shareholders approval. The Book
Closure Date will be announced by the Company after the
AGM.

Absentation from Voting

8.

All the Non-Executive Directors who are shareholders of the

Company will abstain from voting on Resolution 8 in relation
to the remuneration of Non-Executive Directors at the 51st
AGM.

9.

Explanatory notes on Special Business :-

Ordinary Resolution 10 - Authority to Directors to Issue

Shares
The Company has not issued any new shares under the
general mandate for issuance and allotment of shares up to
10% of the issued and paid-up capital of the Company, which
was approved at the 50th AGM held on 29 September 2010
and which will lapse at the conclusion of the 51st AGM held
on 29 September 2011. A renewal of this mandate is sought at
the 51st AGM under proposed Ordinary Resolution 10.

The proposed Ordinary Resolution 10, if passed, will give

powers to the Directors to issue ordinary shares in the capital
of the Company up to an aggregate amount not exceeding
10% of the issued and paid-up share capital of the Company
for the time being without having to convene a general
meeting. This authority, unless revoked or varied at a general
meeting, will expire at the next AGM.

The purpose of the proposed mandate from shareholders is to

provide the Company flexibility to undertake any share
issuance during the financial year that is not material in nature
under exceptional circumstances i.e. in the event of any
strategic opportunities involving equity deals which may
require the Company to allot and issue new shares on urgent
basis - and which is only to be undertaken if the Board
considers it to be in the best interest of the Company.

10.

Statement Accompanying the Notice of Annual General

Meeting

Additional information pursuant to Paragraph 8.27(2) of the

Main Market Listing Requirements of Bursa Malaysia Securities
Berhad is set out in Annexure A in Maybank Annual Report
2011.

agm information

Maybank Annual Report 2011

Strategy

The details of any interest in the securities of Maybank and its subsidiaries (if any) held by the said Directors are stated on
page 250 of the Annual Report 2011.

Who We Are

The Profile of the Directors who are standing for re-election (as per Ordinary Resolutions 3 to 7 as stated above) at the 51st
Annual General Meeting of Malayan Banking Berhad which will be held at Grand Ballroom, Level 1, Sime Darby Convention
Centre, 1A Jalan Bukit Kiara 1, 60000 Kuala Lumpur on Thursday, 29 September 2011 at 10.00 a.m. are stated on pages 186
to 193 of the Annual Report 2011.

Our Perspective

(Pursuant to Paragraph 8.27(2) of the Main Market Listing Requirements of Bursa Malaysia
Securities Berhad)

At A Glance

Annexure A
Statement Accompanying
Notice of the 51st Annual General Meeting

547

Performance
Business Review
Responsibility
Leadership
Governance
Financial & Others
AGM Information

548

Maybank Annual Report 2011

agm information

Financial
Calendar
20 August 2010

12 May 2011

Announcement of the audited results of Maybank and of the

Group and announcement of the final dividend for the
financial year ended 30 June 2010

Date of payment of interim cash dividend of 28 sen per

share (less 25% Malaysian Income Tax) of which the Dividend
Reinvestment Plan was applied to the dividend payment,
and the gross electable portion is 24 sen per Maybank Share
held in respect of the financial year ended 30 June 2011

7 September 2010
Notice of the 50th Annual General Meeting and issuance of
annual report for the financial year ended 30 June 2010

12 May 2011

29 September 2010

Announcement of the unaudited results of Maybank and the

Group for the third quarter of the financial year ended 30
June 2011

50th Annual General Meeting

30 May 2011
12 November 2010
Announcement of the unaudited results of Maybank and the
Group for the first quarter of the financial year ended 30
June 2011

23 November 2010
Book closure for determining the entitlement of the
dividends

20 December 2010
Date of payment of the final cash dividend of 44 sen per
share (less 25% Malaysian Income Tax) of which the Dividend
Reinvestment Plan was applied to the dividend payment,
and the gross electable portion is 40 sen per Maybank Share
held in respect of the financial year ended 30 June 2010

Notice of Extraordinary General Meeting in relation to the

proposed establishment of an Employees Share Scheme
(ESS) of up to ten percent (10%) of the issued and paid-up
share capital of the Company at any point in time and
proposed allocation of options and/or grant of Maybank
Shares to Dato Sri Abdul Wahid Omar

13 June 2011
Extraordinary General Meeting in relation to the proposed
establishment of an Employees Share Scheme (ESS) of up to
ten percent (10%) of the issued and paid-up share capital of
the Company at any point in time and proposed allocation
of options and/or grant of Maybank Shares to Dato Sri Abdul
Wahid Omar

22 August 2011
21 February 2011
Announcement of the unaudited results of Maybank and the
Group for the second quarter of the financial year ended 30
June 2011

Announcement of the audited results of Maybank and of the

Group and announcement of the final dividend for the
financial year ended 30 June 2011

7 September 2011
15 April 2011

Notice of the 51st Annual General Meeting and issuance of

annual report for the financial year ended 30 June 2011

Book closure for determining the entitlement of the

dividends

29 September 2011
51st Annual General Meeting

For the 51st

ANNUAL
GENERAL MEETING

MALAYAN BANKING BERHAD

(Company No. 3813-K)
(Incorporated in Malaysia)

Number of shares held

Form of
Proxy

CDS Account No.

Please refer to the notes below before completing this Form of Proxy.
I/We

NRIC/Passport/Co. No.

(full name in block letters)

of

Telephone No.

(full address)

a shareholder/shareholders of MALAYAN BANKING BERHAD, hereby appoint

NRIC/Passport/Co. No.

(full name in block letters)

of

(full address)

or failing him/her

(full name in block letters)

of

NRIC/Passport/Co. No.

(full address)

or failing him/her, the Chairman of the meeting, as my/our proxy to vote for me/us on my/our behalf at the 51st Annual General Meeting of Malayan Banking
Berhad to be held at Grand Ballroom, Level 1, Sime Darby Convention Centre, 1A Jalan Bukit Kiara 1, 60000 Kuala Lumpur on Thursday, 29 September 2011
at 10.00 a.m. and at any adjournment thereof for the following resolutions as set out in the Notice of Annual General Meeting:No.

Resolution

For

Ordinary resolutions:
Receipt of Audited Financial Statements and Reports.

Declaration of Final Dividend.

Against

Re-election of the following Directors in accordance with Articles 96 and 97:3

i.

Dato Dr Tan Tat Wai

ii.

Encik Zainal Abidin Jamal

iii.

Mr Cheah Teik Seng

Re-election of the following Director in accordance with Article 100:6

i.

Datuk Mohaiyani Shamsudin

Re-appointment of the following Director in accordance with Section 129(6) of the Companies Act, 1965:7

i.

To approve the following directors remuneration:-

Mr Alister Maitland

(a)

payment of directors fees amounting to RM300,000 per annum for the Non-Executive Chairman, RM285,000 per
annum for the Non-Executive Vice Chairman and RM190,000 per annum for each Non-Executive Director with
effect from 1 July 2010; and
(b) payment of directors fees in respect of Board Committees amounting to RM45,000 per Committee per annum
for the Non-Executive Committee Chairman and RM30,000 per Committee per annum for each Non-Executive
Director with effect from 1 July 2010.
Re-appointment of Messrs Ernst & Young as Auditors.

10

Authorisation for Directors to issue shares pursuant to Section 132D of Companies Act, 1965.

11

Allotment and issuance of new ordinary shares Of RM1.00 each in Maybank in relation to the recurrent and optional
dividend reinvestment plan (Dividend Reinvestment Plan).

My/Our proxy is to vote on the resolutions as indicated by an X in the appropriate space above. If no indication is given, my/our proxy shall vote or abstain
as he/she thinks fit.
Dated this

day of

2011
Signature(s) of shareholder(s)

Notes:
1. A member entitled to attend and vote at the AGM is entitled to appoint a proxy to
attend and on a show of hands or on a poll, to vote in his stead. A proxy shall be a
member of the Company, an Advocate, an approved Company Auditor or a person
approved by the Companies Commission of Malaysia. The instrument appointing a
proxy shall be in writing under the hand of the appointor or his attorney duly authorised in writing, or if the appointor is a corporation, under its common seal or in some
other manner approved by its directors.
2.

A member shall not be entitled to appoint more than two (2) proxies to attend and
vote at the meeting provided that where a member is an authorised nominee as
defined under the Securities Industry (Central Depository) Act 1991, it may appoint
at least one proxy but not more than two proxies each in respect of each Securities
Account it holds with ordinary shares of the Company standing to the credit of the
said Securities Account.

3.

Duly completed Form of Proxy must be deposited at the office of the appointed
share registrar for this AGM, Tricor Investor Services Sdn Bhd at Level 17, The Gardens
North Tower, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur no later than
27 September 2011 at 10.00 a.m.

4.

For a Form of Proxy executed outside Malaysia, the signature must be attested by a
Solicitor, Notary Public, Consul or Magistrate.

5.

Only members registered in the Record of Depositors as at 23 September 2011 shall

be eligible to attend the AGM or appoint proxy to attend and vote on their behalf.

6.

If the proxy or proxies appointed is/are not a member of Maybank, please ensure
that the proof of eligibility (referred to in Note 1 above) of the proxy or proxies is/
are enclosed with the Form of Proxy submitted and the original counterpart of such
proof of eligibility is/are presented by your proxy or proxies for verification purposes
during the registration process.

Fold here

Affix Stamp

Share Registrar for Maybanks 51st AGM

Tricor Investor Services Sdn Bhd
Level 17, The Gardens
North Tower, Mid Valley City
Lingkaran Syed Putra
59200 Kuala Lumpur
Malaysia

Fold here

MALAYAN BANKING BERHAD (3813-K)

14th Floor, Menara Maybank, 100 Jalan Tun Perak,
50050 Kuala Lumpur, Malaysia
Telephone: (6)03-2070 8833
Website: www.maybank.com
E-mail: [email protected]