KUALA LUMPUR (Oct 27): Malayan Banking Bhd is expecting competition for deposits to intensify among industry peers as interest rates go up, but the bank is going to refrain from competing irrationally, said group president and chief executive officer Datuk Khairussaleh Ramli.

“We are [already] seeing some form of competition, potentially towards the end of the year, that will get a bit more intense,” he told reporters after announcing Maybank’s M25+ midterm strategy on Thursday (Oct 27).

Bank Negara Malaysia has raised overnight policy rate (OPR) three times consecutively so far this year by a total of 75 basis points to 2.5% from a historical low of 1.75%, and the central bank is widely expected to raise the benchmark interest rate further in its 2022 final Monetary Policy Committee meeting next Thursday (Nov 3).

Khairussaleh said Maybank will focus on differentiating itself by providing more value-added services to customers instead of competing purely on offering attractive interest rates.

“Throwing price is easy, but I think that is not our strategy, and we don’t intend to compete on pricing, but more on value and solutions,” he said.

“Now, our expectation is that interest rates may go higher, and hence we may not just be offering long-term deposits, especially on the FD [fixed deposits] side. From our business point of view, we like to focus on fundamentals, like in terms of offering what the customers need.

“So, not necessarily throwing rates, it is about building capability in terms of transactions, lifestyle, and how we can enable banking solutions from their lifestyle point of view. For SMEs (small-and-medium enterprises) and even the corporate side, how can we offer them in terms of cash management, payroll, et cetera,” he explained.

In announcing the group’s M25+ midterm strategy, Khairussaleh also said Maybank has to equip itself with the skills, infrastructure and tools to deliver “hyper-personalised” customer service offerings in real time instead of the conventional one-size-fits-all model.

“The decision to further refine the group’s strategy was driven by the need for the organisation to remain agile for continued growth and delivery of sustained returns beyond 2025.

“It is critical for us to identify and accelerate the development of new capabilities now, especially in technology and people, so that the organization remains relevant beyond 2025,” he said.

Khairussaleh said the refinement of Maybank’s strategy has taken into account the economic conditions like rising inflationary and looming recessionary pressures; the increasing competition within the financial services space from non-bank players; the greater focus by customers and investors for sustainable practices and the demand for transition solutions as more organisations migrate towards net zero carbon emission goals.