• Total Assets: Maybank's total assets grew steadily from approximately RM 835 billion in 2019 to an estimated RM 1.02 trillion in 2023, reflecting its solid balance sheet and strong regional expansion.

• Revenue Trends: The group’s total income remained relatively stable, hovering around RM 51–53 billion annually. While there was a slight dip in 2020 due to the COVID-19 pandemic, revenue recovered in subsequent years, supported by improved loan growth and digital banking initiatives.

• Market Position: Maybank consistently ranks as the largest bank in Malaysia by total assets and among the top five banks in ASEAN. It holds a dominant share in retail and Islamic banking and is recognized for its strong digital banking platform and regional connectivity.

(b) Return on Equity (ROE)

Credit risk is defined as the possibility of loss because borrowers cannot pay their financial obligations.​

Impact on Maybank:

NPL ratio of Maybank fluctuated during the period of the COVID 19 pandemic. The NPL ratio in March 2020 was 2.02%, as borrowers were affected by economic challenges during lockdowns and recessions.

Nevertheless, Maybank’s NPL ratio improved from 2019 to 2023 and its loan loss provision coverage ratio went from under 100% to 124.9% in 2023 which shows the enhanced credit risk management and financial resilience of the bank.

https://www.moomoo.com/my/learn/detail-decode-maybank-s-earnings-can-the-bank-sustain-its-steady-performance-117050-240202074?utm_source=chatgpt.com

https://www.cliffsnotes.com/study-notes/22157886?utm_source=chatgpt.com

Real-life Example:

This shows that Maybank had improved its ability to absorb potential loan defaults, giving a better financial performance.

Interest rate risk is potential net interest income and economic value of assets and liabilities to change of the bank financial condition because of volatility in interest rates.​

Impact on Maybank:

The compression in Maybank’s net interest margin (NIM) was 27 basis points lower on a year on year basis, to 2.12 per cent, mainly from higher funding costs from interest rate hikes and increased deposit competition.

https://maybank.listedcompany.com/newsroom/Maybank_Integrated_AR_2023_Part_2_20240327.pdf?utm_source=chatgpt.com

The interest rate sensitivity of earnings can also influence the bank’s profitability as interest rates influence the cost of funds and the yield on earning assets.​

Real-life Example:

According to Maybank’s Basel II Pillar 3 Disclosure Report, the changes in interest rates could cause its earnings and capital to change by ±200 basis point.

https://www.maybank.com/iwov-resources/documents/pdf/annual-report/2023/Maybank-2023-Basel-II-Pillar-3-Disclosure.pdf?utm_source=chatgpt.com

Operational risk encompasses potential losses due to inadequate or failed internal processes, people, systems, or external events. The sub domain of Cybersecurity risk is threats to information systems and the integrity of data.​

Impact on Maybank:

Maybank was hit by a threat actor in July 2024 who breached its online banking platform Maybank2u and supposedly stole sensitive customer data. Maybank denied it and such incidents could erode customer trust, prompting more investment in cybersecurity.

Although cyber threats as well as system failures can cause financial losses, regulatory penalties and reputational damage, they cause operational disruptions as well.

https://cybersecurityasia.net/maybank-database-leaked-again-or-did-it/?utm_source=chatgpt.com

https://www.maybank2u.com.kh/en/announcements/2020/fd_rate_change.page?utm_source=chatgpt.com

Real-life Example:

The data breach was alleged to have occurred and, in a bid to reinforce its commitment to data security, Maybank backed its claim stating that robust cybersecurity frameworks are crucial in maintaining operational integrity.

Leverage ratio is an indicator to measure the extent that the companies use the debts financing. The common leverage ratios includes Debt-to-Assets ratio, Debt-to-Equity ratio and Equity Multiplier. The high or low leverage ratio can reflect the financial structure and risks of the company. A higher leverage ratio means that the company has potential to get a greater profit but also having higher financial risks (Hayes, 2024b). 

For banking sector, it usually highly leveraged due to their profit model is to invest or provide loan by absorbing customer’s deposits and earn from return of investments and loan interest. In order to maintain the stability of overall financial systems, banking regulations has implement framework like Basel III to restrict how much banks can lend relative to the capital that invests in its own assets (Hayes, 2024a). As there is difficulty to understand if a bank is overly leveraged by using common leverage ratios It is necessary for banks to monitor its financial leverage to ensure there is sufficient capital to absorb losses and remain the ability of repayment (Sean, 2021).

Formula:  

Debt-to-Equity Ratio = Total Liabilities ÷ Shareholders’ Equity​

Formula:

Equity Multiplier = Total Assets ÷ Total Equity​

•Why it is important?

  - Show how well a company manages its expenses to generate profits.

  - Help investors and managers to assess financial health and performance.

  - Guide strategic decisions such as cost control, pricing, and investment.

  - Allow comparison between companies or across time periods.

• Higher % : More effective in cost control and stronger pricing power

• Lower % : High expenses, weak pricing, or operational inefficiencies.

• Higher % : Effective use of shareholder funds to generate earnings.

• Lower % : Poor profitability or excessive equity base.

• Macroeconomic Risks: A possible global economic slowdown could reduce loan demand and increase default risks. Inflationary pressures and US-China tensions may further strain the financial sector (IMF, 2024).

• Regulatory Burdens: Compliance with Basel III requirements and Bank Negara Malaysia’s liquidity coverage ratio puts pressure on capital reserves and operating costs (BNM, 2023).

• Fintech Disruption: Startups offering P2P lending and digital wallets (like Boost, BigPay) are intensifying competition, especially among younger customers.

• Maybank’s future looks promising with strong financials and strategic growth paths in digital banking and ESG sectors.

• However, to sustain its leadership, the bank must remain agile, invest in tech, and stay compliant with evolving regulations.

• Proactive risk management and continued innovation will be key to navigating future challenges.

Bank Negara Malaysia (2023) Regulations and Guidelines. Available at: https://www.bnm.gov.my/regulations (Accessed: 25 April 2025).

Bank Negara Malaysia (n.d.) Monthly Statistical Bulletin. Available at: https://www.bnm.gov.my/statistics (Accessed: 25 April 2025).

IMF (2024) World Economic Outlook: April 2024. Available at: https://www.imf.org/en/Publications/WEO (Accessed: 25 April 2025).

KPMG (2023) Fintech Malaysia Report 2023. Available at: https://home.kpmg/my/en/home/insights/2023/07/fintech-malaysia-report.html (Accessed: 25 April 2025).

Maybank (2024) Annual Report 2024: Financial Statements. Available at: https://www.maybank.com/iwov-resources/documents/pdf/annual-report/2024/Maybank-AR2024-Financial-Statements.pdf (Accessed: 25 April 2025).

Maybank (2024) Sustainability Report 2024. Available at: https://www.maybank.com/en/sustainability/sustainability-reports.page (Accessed: 25 April 2025).

Maybank (2024) Group Strategy Overview. Available at: https://www.maybank.com/en/about-us/who-we-are/strategy.page (Accessed: 25 April 2025).

McKinsey & Company (2023) The Digital Future of Banking. Available at: https://www.mckinsey.com/industries/financial-services/our-insights/the-digital-future-of-banking (Accessed: 25 April 2025).

S&P Global (2024) Banking Industry Country Risk Assessment Update: January 2024. Available at: https://www.spglobal.com/ratings/en/research/articles/240124-banking-industry-country-risk-assessment-update-january-2024-12894366 (Accessed: 25 April 2025).

The Edge Markets (2024) Maybank Sees Growth Through MAE and Digital Banking Strategy. Available at: https://www.theedgemarkets.com (Accessed: 25 April 2025).

How much risk are they taking for their returns?

How liquid are their short-term assets?

To address net interest margin pressure, Maybank must work harder to improve its funding situation. It can grow current plus savings account deposits that cost little along with it can look into new deposit offerings. At the same time improvements to asset yields are helpful. This involves repricing some loans and growing lending areas with better margins. Doing this helps reduce margin strain. Entering fee-based income streams besides online finance areas is something to consider. That cuts reliance on interest income and helps keep earnings steady over time.