Maybank reaches half of RM80 billion green loans goal, CEO says

MALAYSIA’S biggest lender Malayan Banking is halfway towards meeting its target of putting RM80 billion (S$23.49 billion) towards sustainable finance by 2025.

A big chunk of the green loans has been disbursed to support Singapore-based companies’ shift to low-carbon sources, Maybank Group chief executive officer Khairussaleh Ramli said in an interview at his office.

“We can talk about moving into renewables straight away, but equally important is how we support our clients on transition financing, transition advisory,” he said.

Maybank is among major Malaysian banks pledging to funnel money into green loans. CIMB Group Holdings, which counts sovereign wealth fund Khazanah Nasional as its largest shareholder, aims to allocate RM60 billion to sustainable funding by 2024, twice its initial goal, while RHB Bank plans to put RM20 billion towards sustainable funding by 2026.

The amounts, while large, aren’t enough to wean businesses off fossil fuels and address other sustainability goals. Malaysia is estimated to need RM637 billion of investments over the next three decades to support its renewable energy goal to reach 70 per cent of the energy mix by 2050. The country would “need support from overseas” for funding, Khairussaleh said.

The Asian Development Bank estimates that South-east Asia needs annual investments of US$210 billion to meet its climate-change goals, prompting Maybank to further expand its footprint in the region.

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Already the South-east Asia’s fourth-largest lender by assets, Maybank has made Cambodia a new universal banking market, Khairussaleh said. The Malaysian lender, currently No 11 in Cambodia, could be in the top 10 in the local market soon, he added.  

Excerpts from the interview:

• Maybank has set aside RM45 billion for capital expenditure for the next three-to-five years, mainly for upgrading its digital infrastructure.
• The lender expects Bank Negara Malaysia to keep interest rates on hold for the rest of the year as inflation eases.
• Expects foreign investors to return to Malaysia in a “big way” as there’s greater clarity on policy and direction of the economy.
• Maybank isn’t averse to inorganic growth but any M&As must align with the basic principle of adding value, right timing, right price.