This article first appeared in The Edge Malaysia Weekly on August 10, 2020 - August 16, 2020

MALAYAN Banking Bhd (Maybank) chairman Datuk Mohaiyani Shamsudin will be retiring after nine years on the bank’s board, ­sources say, and there is already much speculation as to who will take her spot at the country’s largest banking group.

Mohaiyani, 71, who has been the group’s chairman for just over three years — she was appointed to the role on April 1, 2017 — will have completed nine years on the bank’s board come Aug 22. She had been an independent director of the bank prior to being made chairman.

Sources say she is choosing to leave after the nine years as a matter of good corporate governance. It is understood that, technically, there is no regulation requiring her to leave  as corporate governance rules dictate only that an independent director should not exceed a cumulative term of nine years whereas Mohaiyani had been an independent director for less than six years, from August 2011 to March 2017. As chairman, she was a non-independent non-executive director by virtue of being a nominee of the bank’s largest shareholder, Permodalan Nasional Bhd.

Sources say the board has yet to firm up a date for her retirement but it is likely that she may leave before the end of the year. Mohaiyani is the Maybank group’s first-ever female chairman.

A Maybank spokesperson said the bank “does not comment on market speculation”.

“As a listed financial institution, appointments at board level, if any, are subject to necessary approvals and will be announced at the appropriate time,” the spokesperson told The Edge via email last Friday.

Meanwhile, all eyes are on who will take over the chairmanship from Mohaiyani.

According to several sources, the group’s internal candidate is Hasnita Hashim. She has been an independent director at Maybank since July 2016 and is also the chairman of Maybank Asset Management Group Bhd.

Other sources say the role is likely to fall to an external candidate. Tan Sri Zamzamzairani Mohd Isa, who retired as chairman of UEM Sunrise Bhd last month, is said to be a candidate.

Zamzamzairani, 60, was previously the CEO and managing director of Telekom Malaysia Bhd. He has more than 30 years’ experience in the telecommunications sector. In June, he was appointed telecommunications adviser to Communications and Multimedia Minister Datuk Saifuddin Abdullah.

Hasnita, who holds a PhD in nuclear physics from Oxford University in the UK and is a trained actuary, has 30 years of global financial management experience in asset management, structured finance and asset securitisation, according to Maybank’s latest annual report. She was CEO of Guidance Investments, the investment arm of Guidance Financial Group.

She became chairman of Majlis Amanah Rakyat, better known as Mara, in October 2018, before having to step down in May this year after the government of the day appointed Beaufort MP Datuk Azizah Mohd Dun to take over from her.

The upcoming change in Maybank’s chairmanship will be keenly watched as it comes at a time banks are facing some unprecedented challenges as a result of the Covid-19 pandemic. This will, more than ever, require strong and capable leadership at the top, industry observers say.

Maybank’s net profit has grown for each of the last three years to Dec 31, 2019 (FY2019). Last year, the group’s net profit stood at a new high of RM8.2 billion, a slight increase from RM8.11 billion in the previous year. This was on the back of an 11.7% rise in operating revenue to RM52.84 billion.

As with other banks, analysts expect Maybank to see a year-on-year decline in earnings in FY2020 amid a host of challenges, including higher provisions for loans that could sour, a margin squeeze — Bank Negara Malaysia has cut the overnight policy rate by 125 basis points so far this year — and the impact from the six-month blanket loan moratorium that banks offered retail and SME borrowers.

In 1Q2020, Maybank reported a decent 13.3% y-o-y growth in net profit to RM2.04 billion, but warned of margin compression and possible weakness in asset quality once the six-month loan moratorium is over. Late last month, banks agreed to extend the moratorium and offer repayment flexibility, albeit on a targeted rather than blanket basis.

Last Friday, Moody’s Investors Service affirmed its A3 long-term foreign currency deposit and A3 long-term foreign currency senior unsecured debt ratings on Maybank. It also affirmed Maybank’s Baseline Credit Assessment (BCA) and Adjusted BCA of a3.

“The affirmation … reflects Moody’s view that the bank’s financial performance will remain resilient, underpinned by its robust track record over the past decade, strong capital buffers, favourable funding and ample liquidity. The rating action also takes into account Moody’s expectation of a moderate strain on the bank’s asset quality and profitability due to the economic disruption caused by the coronavirus outbreak,” it said in a statement.

Bloomberg data shows that of the 21 analysts who track the stock, most (nine) have a “hold” call, while five have a “buy” and seven, a “sell”. Their average 12-month target price was RM7.63.

The stock, which has shed 8.7% year to date, closed at RM7.50 last Friday, giving the company a market capitalisation of RM84.3 billion.

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