Cover Story: What the bankers say...

This article first appeared in The Edge Malaysia Weekly, on September 11, 2017 - September 17, 2017.
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MAYBANK

The adoption of MFRS 9 will result in a higher allowance for impairment losses. Based on our initial impact assessment, the potential reduction to Maybank Group’s capital ratios could range between 60bps and 90bps for Day One adjustment to retained earnings on Jan 1, 2018.

Maybank has a long-term annual dividend payout policy of 40% to 60%. We intend to maintain that payout policy, post MFRS 9.”

— Group CFO Datuk Amirul Feisal Wan Zahir

 

HONG LEONG BANK

Based on the latest assessment, we are expecting additional provisions of between 20% and 30% to be reflected as Day One charge to be adjusted against reserves. This has not incorporated the impact of forward-looking macroeconomic variables (MEV), in which the MEV methodology is still undergoing development and refinement at various stages.”

— Group CEO Domenic Fuda

 

 

CIMB GROUP

There may be an increase in provisions at the initial stage depending on, inter alia, the type, duration and repayment history of loans, as well as market conditions. Overall, we believe that the impact of MFRS 9 on our balance sheet, capital and profitability will be entirely manageable in terms of achieving our T18 targets.”

— Group CEO Tengku Datuk Seri Zafrul Aziz

 

 

AFFIN HOLDINGS

There will be an increase of 50% in the total provision upon the adoption of MFRS 9 (based on preliminary assessment). The group’s balance sheet is strong enough to weather the impact. Dividends are expected to be marginally lower post-MFRS 9.”

— Group CEO Kamarul Ariffin Mohd Jamil

 

 

 

RHB BANK

RHB’s balance sheet remains sound and capital (ratios) are at comfortable levels, taking into account the potential impact of MFRS 9 adoption. We do not see MFRS 9 adoption changing the process that we follow to determine dividend payout, which will continue to be based on a number of different considerations, including the sustainability of the bank’s capital ratios.”

— Group CFO Syed Ahmad Taufik Albar

 

 

AMMB HOLDINGS

A slowdown in the (banking industry’s) offering of loans is not expected. Nevertheless, the new impairment requirements of MFRS 9 may result in shorter tenure loans. The limit of loan commitments extended to customers may also be impacted due to the requirement to recognise expected credit losses on loan commitments provided to customers.”

— Group CEO Datuk Sulaiman Mohd Tahir