Analyze The Performance Of Maybank Group Finance Essay

tumble The Per chance variableance Of Maybank conclave Finance Essay3.1 INTRODUCTIONIn this chapter, the tec entrust look at the history of Maybank group as a whole besides that, the researcher will besides review and give out the performance of Maybank group and withal Moslem return that been offered by Maybank Muslim Berhad.COMPANY HISTORY3.2.1 MaybankMaybank was incorporated on 31 May 1960 and began trading operations on 12 September in the alike(p) division, rising from the gist of Independence to pave the mode for dynamic change in the countrys banking and fiscal landscape. Our fo force outhers were visionary in their desire to see Maybank grow to excel both in the interior(prenominal) food market and in the orbit.Over the geezerhood, Maybank has led an aggressive drive to expand network and maximize reach. The collection has consistently fate new benchmarks in yield and service delivery by achieving umpteen firsts in the industry much(prenominal) as rura l address scheme, tease function, corporate and coronation banking, mobile banking services, internet banking and Moslem banking.Maybank operates through an extensive network of over 1,700 offices in 14 countries including 7 in southeastern East Asia. The crowd is represented in the major pecuniary centres of London, forward-looking York, Hong Kong and Singapore.3.2.2 Maybank MoslemMaybank Islamic Berhad, a wholly-owned subsidiary and the Islamic banking arm of the Maybank mathematical group, is the largest Islamic bank in Malaysia. It started its initial operations offering Islamic financial services through a window opinion in 1993 and by and by converged to full(a)-fledged Islamic banking operations on 1 January 2008. With a pretentiousness of more than 17 years consume in the Islamic banking and finance, Maybank Islamic has been regarded as the lead story Islamic bank in the Asia Pacific region and ranks among the worlds top 15 Islamic financial institutions. Today, Maybank Islamic proudly stands higher up its peers in the home market with sharia-compliant additions of more than USD12 trillion commanding crucial market get by in pay and deposits of over 24% and 21% respectively. Maybank Islamic believes that serving the needs of customers is a priority and as such it is committed to provide a wide array of Shariah-compliant financial products and services to suit its customers preference and choices.Apart from moneymaking(prenominal) banking offered by Maybank Islamic, Maybank Groups Islamic investment banking and cracking market business argon offered through Maybank Investment beach and selected afield offices in major financial centres of Bahrain, London, Singapore and the international inshore financial centre of Labuan. As an industry icon, Maybank Islamic is committed to scoring new heights as reflected in the demeanor the Bank operates its business, the modal value its deliver products and services to customers and in t he way the Bank engages more than 25,000 Maybankers across its home country as well as its business partners and stakeholders globally3.3 OBJECTIVE OF ESTABLISHMENTThe objectives of the establishment of Maybank Islamic Berhad are as follows1. To continues as a Market Leader in Islamic banking field in the aspect of products and services.2. Introduced the financial product that is based on MM concept as a an alternative to current the BBA product3. Introduced the financial product that is based on Ijarah Mutahiah Bittamlek4. Introduced the management of investment in an Islamic way5. Involved in summation management in an openly way6. Introduced Islamic visor credit7. Actively involved in Murabahah goodness productBOARD OF DIRECTORSDato Seri Ismail ShahudinDato Seri Ismail Shahudin was appoint as a coach and chairwoman of Maybank Islamic on 23 January 2010. He was chairman of Bank Muamalat Malaysia Berhad from 2004 until his retreat in July 2008. He has held senior situations in Citibank, serving both in Malaysia and New York, United Asian Bank and Maybank where he was appointed executive director Director in 1997. He left Maybank in 2002 to assume the position of Group ingestr Executive Officer of MMC Corporation Berhad prior to his appointment to the Board of Bank Muamalat Malaysia Berhad. His current directorships in companies at heart the Maybank Group complicate as Director of Maybank Berhad. He serves as Chairman of the nomination and profits Committee and as a member of the Credit Review, Risk Management, and Employee deal Option Scheme Committees of Maybank Berhad. convert Sri Datuk Dr Hadenan bin A. JalilTan Sri Datuk Dr Hadenan bin A. Jalil was appointed as a Director of Maybank Islamic on 23 January 2010. Tan Sri Datuk Dr Hadenan bin 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 wor ks prior to his appointment as Auditor General. His current directorships in companies within the Maybank Group include as Director of Maybank Berhad. He serves as Chairman of the Audit Committee and as a member of the Credit Review, Nomination and Remuneration, and Employee Share Option Scheme Committees of Maybank Berhad.Zainal Abidin JamalZainal Abidin Jamal was appointed as a Director of Maybank Islamic on 23 January 2010. He is a practicing corporate and technical lawyer and established his firm, Zainal Abidin Co, in 1987, where he is a Senior Partner. He was enrolled as an advocate Solicitor of the High Court of Malaya in 1986. surrounded by 1983 and 1986, he served as the Comp any Secretary of Harrisons Malaysian Plantations Berhad. Prior to that, he had practiced 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 compa nies within the Maybank Group include as Chairman of Mayban Trustees Berhad and Director of Maybank Berhad, a Director of Etiqa restitution Berhad, Etiqa Takaful Berhad, Maybank International (L) Limited, and Mayban International Trust (L) Ltd.Datuk Dr. Syed Othman bin Syed Hussin AlhabshiDatuk Dr. Syed Othman bin Syed Hussin Alhabshi was appointed as a Director of Maybank Islamic on 30 January 2008. Datuk Dr. Syed Othamn has vast experience as an academician. He held various academic leadership and research come out at International Islamic University of Malaysia, University Utara Malaysia, University Tun Abdul Razak and Institute of Islamic Understanding of Malaysia sooner he assumed responsibility as the Professor of Islamic Economics, Chief Academic Officer and Head of Takaful at International Centre for breeding in Islamic Finance (INCEIF). Datuk Dr. Syed Othman is a director of Etiqa Takaful Berhad. He is also a director of Prima Prai Sdn Bhd, Epen Bina Sdn Bhd and Univers iti Teknikal MARA Sdn Bhd.PRODUCTS AND SERVICES IN MAYBANK Moslem household Equity-iHomeEquity-i is a shariah compliant home financial backing scheme based on the Musharakah Mutanaqisah or decrease partnership concept.Maybank Islamic (the bank) and applicator enter into a joint partnership with bank to raise capital for acquiring a blank space. Both parties become joint property owners with shares assignation based on get along of capital contributed. Maybank Islamic releases its shares to applicant who little by little acquires banks ownership of the property with monthly requitalments do over an concord epoch period in that respectby diminishing the banks share till property is fully owned by applicant.Home Fianancing -iBBA is defined as parryred recompense trade. BBA involves the sale and get proceeding between the bank and the customer. Under this concept, customers may defer chalk up payment of asset which is the property in installments over a specific perio d of time.Fixed payment that shows save what customers need to pay throughout the tenure. useful for those working on a monthly budget.MaxiHome-iMaxiHome-i refers to Home Financing at a lower place Variable station Financing (VRF). Maxihome contribute Packages render to the needs of individuals and small businesses, including financing the purchase of new properties, sub-sales, refinancing, redraws and remortgages. This product is employ under the concepts of Bai Bithaman Ajil (BBA).BBA is defined as deferred payment sale. BBA involves the sale purchase transactions between the bank and the customer. Under this concept, customers may defer perfect payment of the property in installments over a specific period of time. sponsorhouseEquity-iShophouseEquity-i is a shariah compliant home financing plan based on the Musharakah Mutanaqisah or diminishing partnership concept.Maybank Islamic and applicant enter into a joint partnership with bank to raise capital for acquiring a prop erty.Both parties become joint property owners with shares allotment based on nub of capital contributed.Maybank Islamic releases its shares to applicant who gradually acquires banks ownership of the property with monthly payments made over an agreed time period thereby diminishing the banks share till property is fully owned by applicant.Shop house Financing-iA fixed rate financing for shop houses shortly being practiced under the concept of Bai Bithaman Ajil (BBA), Shop house Financing-i is recommended curiously for homebuyers who prefer a fixed monthly budget where you know exactly how much to pay throughout the tenure, whether by a single installation sum or in-line with the multi-tiered rates.MaxiShop-iMaxiShop-i refers to Shophouse Financing-i under Variable Rate Financing (VRF). MaxiShop impart Packages catering to the needs of individuals and small businesses, including financing the purchase of new commercial properties, sub-sales, refinancing, redraws and remortgages. The scope of commercial properties under MaxiShop includes shop houses, shop offices, commercial lot in shopping complex, office lots, factories, industrial buildings. This product is applied under the concepts of Bai Bithaman Ajil (BBA).BBA is defined as deferred payment sale. BBA involves the sale purchase transactions between the bank and the customer. Under this concept, customers may defer total payment of the property in installments over a specific period of time.Variable Rate Financing (VRF) CASH LINE -i (OVERDRAFT)Murabahahis a nonher type of sale and purchase contract, with a deferred payment element. The contract of sale may take model when a buyer who wishes to purchase assets, requests the Bank to purchase assets at be (purchase price) and in return the Bank will charge the buyer an agreed profit margin which is incorporated into the distributeing price. The transfering price is by and by payable on a deferred single payment.ExeCash-i StandardExeCash-i Standard bundle is an Islamic Personal Term Financing under the Shariah ruler ofBai Inah(sale with speedy repurchase).Bai Inahis a buy and mete out contract whereby Maybank Islamic (the Bank) would sell its assets to the applicant on deferred payment basis. Subsequently, Maybank Islamic (the Bank) would buy back the like asset from the applicant at a lower price on gold basis.UnderBai Inahconcept, Maybank Islamic will use its asset as an cardinal asset for the sale and purchase transactions.ExeCash-i SpecialExeCash-i Special parcel is an Islamic Personal Term Financing under the Syariah normal ofBai Inah(sale with immediate repurchase).Bai Inahis a buy and sell contract whereby Maybank Islamic (the Bank) would sell its assets to the applicant on deferred payment basis. Subsequently, Maybank Islamic (the Bank) would buy back the very(prenominal) asset from the applicant at a lower price on cash basis.ExeCash-i for GLCExeCash-i for GLC is an Islamic Personal Term Financing under the S hariah dominion ofBai Inah(sale with immediate repurchase).Bai Inahis a buy and sell contract whereby Maybank Islamic (the Bank) would sell its assets to the applicant on deferred payment basis. Subsequently, Maybank Islamic (the Bank) would buy back the same asset from the applicant at a lower price on cash basis.TheExeCash-i for Government Linked Companies (GLC)provides financing without collateral to accommodate any of your personal needs.KOWAMASKOWAMAS is an Islamic Personal Term Financing under the Syariah principle ofBai Inah(sale with immediate repurchase).Bai Inahis a buy and sell contract whereby Maybank Islamic (the Bank) would sell its assets to the applicant on deferred payment basis. Subsequently, Maybank Islamic (the Bank) would buy back the same asset from the applicant at a lower price on cash basis.The personal financing packet boat forKoperasi Wawasan Malaysia Berhad (KOWAMAS)provides financing without collateral to meet any of your personal need.Hire Purchase-i Hire Purchase-i is based on the underlying Shariah principle of Al-Ijarah Thumma Al-Bai (AITAB). It means leasing and subsequent purchase. It refers to 2 contracts undertaken separately and consequentially i.e.Al-Ijarahcontract (leasing) andAl-Baicontract (purchase). It is an extension of the principle ofAl-Ijarahwhereby both parties further agreed that at the end of the lease period, the customer will purchase from the Bank the asset concerned at an agreed price with all the lease rentals antecedently paid constituting part of the price.Operations of Hire Purchase-i are based on Hire Purchase Act 1967 whereby all provisions that conform to Shariah requirement are applicable.Maybankinvest-iMaybankinvest-i is an alternative Share Trading / Financing package from Maybank that is based on the Shariah principle of Murabahah. Under this contract, Maybank agrees to finance your share trading activities in approved Shariah counters listed in Bursa Malaysia.ASB Financing-iASB Financing-i is another form of term financing to purchase ASB unit trust based on Shariah principles ofBai Inah(sales with immediate repurchase)3.6 PERFORMANCE ANALYSIS OF MAYBANK ISLAMIC BERHADThe performance of Maybank Islamic Berhad are analyzed from the information that have been obtained from overall performance info of Maybank Maybank Islamic just been setup recently , thus the performance will be measured along with the parent company, all of the performance regarding impart that had been published and other information are depend from the performance of Maybank. The only thing that is separated is total net income and operational income of a Maybank Islamic1.The analyses that have been done by the researcher are from the analysis of a Maybank itself. It includes various information of a bank performance as a whole that gave a clearer picture about the important information regarding total asset, total liability, total bring and various more. Besides that, there is also analysis of a statement of income that includes the performance of Maybank Islamic.3.6.1 Total Assets2For the financial year ended 30 June 2010, outstanding assets of the Group expanded by 8.4% or RM26.0 trillion resulting the total asset of group at RM 336,700 Million temporary hookup at the Bank level, it accessiond 4.2% or RM10.1 gazillion to record an amount of RM 248,392 Million . For the anterior year, the corresponding gain rates were 15.5% at Group level and 8.7% at Bank level. The bulk of the Groups growth in assets was derived from the working out of net loans and advances which grew by RM19.8 meg or 10.6% and RM7.0 trillion or 4.9% for the Group and the Bank respectively.As at end of June 2010, net loans and advances represented 61.0% of total Group assets, higher than the 59.8% as at the end of June 2009.3.6.2 Securities purchased under resale agreements3Securities purchased under resale agreements are securities which the Group and the Bank had purchased with a commitment to r esell at future dates. The commitments to resell the securities are reflected as assets on the dimension sheet. Conversely, obligations on securities exchange 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 proportion sheet.As at end June 2010, the Group held RM371.2 million of securities purchased under resale agreements.3.6.3 Deposits and Placements with fiscal Institutions4The Groups deposits and placements with financial institutions grew by RM2.6 billion to RM8.9 billion or 41.5% as customer deposits growth outpaced the growth in loans and advances.3.6.4 Life, General Takaful and Family Takaful Fund Assets5After a growth of 7% or RM1.1 billion in the preceding(prenominal) year, this balance sheet item grew by a similar 7% to RM18.0 billion as at end of J une 20103.6.5 Securities Portfolio6The investment securities portfolio of the Group decreased by RM3.6 billion or 6.2% in general imputable to a decline of shorter tenor voice Available-for-Sale holding (RM5.2 billion) as please rates were expected to rise in the first half of 2010.Securities Held-for-Trading enlarged by RM1.2 billion which was partially counterpoise by the reduction in Available-for-Sale portfolio. Around 79% of the securities portfolio comprised of securities Available-for-Sale and further 16.5% securities Held-to-Maturity dapple 4.9% of the securities portfolio is Held-for-Trading.3.6.6 Loans, Advances and Financing7The Groups net loans and financing for financial year of 2010 expanded by 10.6% or RM19.8 billion compared to 12.9% or RM21.2 billion the old financial year. The Groups receipts loans grew 10.3% compared to 13.0% the previous year with home(prenominal) and overseas loans growth of 11.0% and 8.8% respectively. The domestic operations growth o f 11.0% was better than the 6.5% recorded in the previous year as consumer loans expanded by 15.0% on the back of the RM3.3 billion or 28.6% growth in securities loans, mainly for the purchase of relatively low-risk Amanah Saham Bumiputera units, and the RM2.6 billion or 13.2% subjoin in vehicle loans. The Groups overall domestic loans market share stood at 17.6% compared to 17.8% the previous year. Mortgage loans grew by RM3.1 billion or 9.8% compared to 3.3% in the previous year with market share at 13.4% compared to 13.9% the previous year. Credit card receivables for the financial year lift RM0.6 billion or 16.0%, outperforming the industrys 11.3% growth leading to market share rising to 12.8% from 12.7% the previous year. Automobile financing for domestic operations recorded a growth of 12.2% compared to 11.0% in the previous financial year and outperformed the industrys growth of 8.5%. With growth exceeding the industry, the market share for financing of motor vehicles rose to 17.4% from 16.8% in June 2009.As at June 2010, the overseas operations loan book accounted for 32.3% of the Groups loan base from 32.8% in the previous year. The unrefined loans book for Singapore recorded a growth of 3.4% or RM1.3 billion after registering a growth of 6.2% in 2009. While for Indonesia, mainly due to Bank Internasional Indonesia, clear loans grew 37.7% or RM4.7 billion to RM17.1 billion. In the other overseas locations, total earn loans declined 3.7% or RM0.4 billion mainly due to the reduction in loan exposure in the US and United land following the financial crisis. The Groups Islamic gross financing and advances grew by 31.2% or RM8.2 billion during the year. Islamic banking constitutes a growing portion of the Groups banking business, accounting for 16.3% of gross loans and financing from 13.7% the previous year. Islamic gross financing accounted for 24.0% of domestic gross loans, rising from 20.3% recorded in the previous year. Sustained efforts implemen ted to perpetually improve asset quality have been effective. The Groups gross NPL ratio declined to 2.9% from 3.5% the previous year. The Groups net NPL ratio declined to 1.2% from 1.6% the previous year. The Groups net NPLs declined by RM0.5 billion to RM2.3 billion as at June 2010. The Groups NPL reserve cover (net of IIS) rose to a good for you(p) 124.5% compared to 112.9% the previous year.3.7 Deposits from Customers8The Groups customer deposits expanded by 11.4% or RM24.3 billion to RM236.9 billion while at the Bank level it grew by RM7.3% or RM11.9 billion to RM175.4 billion. The Groups strong franchise contributed to a growth of 9.1% for demand deposits and 9.9% for savings deposits. The Banks domestic operations remained the leader in both demand and savings deposits with market shares of 20.7% and 27.4% compared to 21.3% and 26.6% respectively in the previous year. Fixed deposits grew by 10.0% compared to 12.3% in the previous year. The Groups overall deposit funding mix improved slightly as the Groups higher cost fixed deposits declined to 55.1% of total customer deposits from 55.8% in June 20093.6.8 Deposits and Placements of financial Institutions9This item fell by 19.2% or RM5.5 billion due to change magnitude in deposits from customers (RM24 billion) which resulted in less sourcing of funds from interbank market.3.6.9 Shareholders Equity10The Groups shareholders equity rose by 12.0% or RM3.0 billion to RM27.9 billion. The join on was mainly due to increase in retained profits for the year.3.6.10 realize Interest Income11Net touch on group income of the Group increased by RM851.4 million or 14.4%. The average net interest margin was 2.82% from 2.72% the previous year due to lower interest expenses in the Malaysian operations, especially interest expenses from fixed deposits, and lower interest expenses in the Singapore operations as well as full year contribution from Bank Internasional Indonesia (BII) for financial year of 2010.3.6.11 Is lamic Banking12Net income from the Groups Islamic banking operations increased by RM210.4 million or 17.2% to RM1.4 billion. The increase was mainly due to growth of assets in Islamic business, specifically hire purchase and residential mortgages.3.6.12 Overhead Expenses13The Groups overheads expenses rose by RM852.9 million or 15.3% over that of the corresponding year as a result of an increase in personnel cost, full-year contribution from BII and expansion of BII, higher establishment be, and credit card related expenses due to higher transaction, volume. The Groups cost to income ratio declined to 49.8% from 52.8% antecedently as net income growth outpaced the growth in expenses. Personnel costs increased by RM364 million or 14.3% due to an increase in salary, EPF, bonus and training. Establishment costs increased by RM66.2 million as a result of higher cost from depreciation and rental. On a comparable basis, the Groups adjusted cost to income ratio (without insurance claims a nd unrealised loss) would be 47.8% against 49.1% for the previous financial year.3.6.13 Loan and Financing Loss and Provisions14Loan loss and provisions of the Group amounted to RM1.2 billion, which is RM510.8 million or 30.1% lower than that of the previous year. This decrease was primarily due to high general provisions made in the final quarter of financial year end of 2009 resulting from the wonky global economic situation.3.6.13 Taxation15The effective tax rate of the Group is 26.1% which is higher than the statutory rate of 25% mainly due to non-deductible expenses.3.7 resultantFrom the analysis it clearly shows that the financial performance of Maybank Islamic experienced a strong growth. The increasing of the loan product especially individual loan and also with the stable increase of total income after tax , in addition to that the reducing of non performing loan portrayed the growth of Maybank Islamic especially their financial performance .According to a rough union f rom the analysis, it clearly shows that Maybank Islamic can compete with other Islamic banking institution. base on the total asset that is increasing yearly and non performing loans that are reducing, it portrayed that the total net asset of Maybank Islamic are overtaking stronger. Besides that, the increasing of individual loan shows that this institution gaining the trust of the community.Although there is a slight fall in Islamic deposit, but it is mainly because of Islamic debt and sukuk debt that occur outside of the country resulting the cost of fund to increase, and it is not because of a belief of a people about Islamic product offered by Maybank Islamic are not interesting enough.As a conclusion, Maybank Islamic Berhad has a strong position in their field as their finance and asset position are really good.