Maybank eyes Johor-Singapore SEZ for growth; targets 25% profit contribution from Singapore by 2027
The zone could generate a need for financing among companies – an area Maybank is eager to support
THE upcoming Johor-Singapore Special Economic Zone (SEZ) could drive a 10 to 20 per cent growth in Maybank Singapore’s loan book within the first year of operation, country chief executive Alvin Lee told The Business Times.
Malaysia’s largest lender also aims to have its Singapore operations account for 25 per cent of group income by FY2027, up from 18 per cent in FY2023. (See *Amendment note)
For the year ended Dec 31, 2023, Maybank reported a profit before tax and zakat of RM12.5 billion (S$3.8 billion), up from RM11.9 billion in the prior year.
Its Singapore operations – the bank’s second-largest market – posted a profit before tax and zakat of RM2.3 billion in FY2023, a 39.4 per cent increase from RM1.7 billion in FY2022.
Achieving this seven-percentage-point increase in contributions will not be “a walk in the park”, acknowledged Lee, who assumed leadership of Maybank Singapore on Jan 1 this year.
“To do that, I have to do a few things: I have to transform the organisation so that we are leaner, we are more effective, (and) more efficient.”
He spoke to BT on Nov 15 at an event to support small and medium-sized enterprises (SMEs) in adopting sustainable practices, and improving financing access for female entrepreneurs.
On the SEZ, businesses and bankers alike are awaiting details of the proposed zone, with an agreement between Singapore and Malaysia widely expected to be signed in December.
Depending on the terms, Singapore companies could gain access to Johor’s land, energy and labour resources, generating a need for financing – an area Maybank is eager to support.
“The Singapore tycoons, the businessmen, are very positive and optimistic about the SEZ,” Lee said.
Singapore’s SMEs could benefit by relocating some operations, such as factories and workshops, to the zone to lower costs.
“Doing business in Singapore has become very costly – raw materials, rental (and) access to labour all are problematic areas for SMEs,” Lee explained.
Malaysia’s comparatively cheaper manpower, land and resources offer solutions. “If we don’t avail cheaper resources and land to SMEs, they can’t compete in Singapore,” he added.
Gearing up
Maybank is already gearing up for the SEZ by training its relationship managers to guide clients on the zone’s potential advantages.
Beyond the SEZ, the bank also plans to “double down” on efforts to engage Singapore SMEs, Lee said.
Currently, about 20 per cent of Singapore’s SMEs – approximately 60,000 businesses – hold accounts with Maybank.
The lender aims to increase this to at least 30 per cent – or 90,000 businesses – within three years, and double its market share for SME loans in Singapore, a “very competitive space” where it currently holds a “low single-digit” percentage.
To achieve this, Maybank is focused on improving accessibility to financing for SMEs, including those with “maybe just one year of track record”, alongside other initiatives.
“If you’re an SME – especially if you’re a startup – the most pressing issue you face is access to financing,” Lee said.
He acknowledged that increasing SME support would require a greater risk appetite, but noted that this aligns with positive macroeconomic conditions.
“To me, we don’t make risk-appetite decisions by looking at the rear-view mirror,” he added. “It’s always forward-looking.”
* Amendment note: Maybank has clarified that an earlier version of this article, based on information provided by the lender, referred to “profit before tax”. It should instead be “group income”.
