1.

Introduction
Malayan Banking Berhad (Maybank) founded by Khoo Teck Puat, since 2 august 2013, Dato'
Sri Abdul Farid Alias have been the chief executive officer (CEO) and president of Maybank
Corporation (see appendices 1). In Malaysia, Maybank is the leading financial services group
while in South East Asia it hold a one of the solid and largest regional banking group. On 31
May 1960, Maybank was formed and incorporated with few investor in Malaysia and it begin
its commencing operations on 12 September 1960, on the same year Maybank launch their
branch into Brunei and Singapore. Following branch on 12 February in Hong Kong, 12
September in London and Maybank lists on Malaysian Stock Exchange (Maybank,
MYX:1155) at Kuala Lumpur on 17 February. Maybank envision to be a regional financial
services leader and humanize financial services across Asia. Maybanker proven their vision
and mission through their obligation towards society with access to financial services at fair
terms and pricing. Not only have that, Maybanker will guiding customer based on their needs
and presence at the heart of the community all the time. (Maybank, 2012)

As Maybank group expand its market time to time and involve in various market, it provide
several product and services to client which from banking to financial services include
commercial banking, insurances, investment banking, internet banking, Maybank asset
management(“Maybank AM”), hire purchase and so on. According to Forbes Global 2000
Leading Companies in May 2014 states that Maybank is ranked 326 th and for The Banker’s
2014 Top 1000 World Banks ranking as at July 2014 presented that Maybank is ranked 103 rd.

Maybank have more than 47,000 employees, 20 countries, 10 ASEAN countries, 2,200
offices, 22 million client base, RM77 billion market capitalisation, total of RM495 Billion
assets and for FY2012 Net Profit of RM5.74 billion. And then Maybank Headquarter which
located at Malaysia capital city, Kuala Lumpur. There are numerous strong competitor in
banking industry that Maybank needed to overcome which is CIMB Bhd, Public Bank
Berhad, RHB Bank Bhd, Hong Leong Bank Bhd, HSBC Bank Malaysia Bhd, AMMB
Holdings Bhd and others.

The objective of the report is to outline the several environmental factors that affecting
Malayan Banking Berhad (Maybank) and the effect of environment shape their strategy and
identify how Malayan Banking Berhad (Maybank) react and succeed in the environment that
constantly change.
2. PESTLE Macro-Environment
Macro-environment sometime called as external environment, defined as PESTLE – it
classify as ‘political, economic, social, etc. Environment which affect the specific industry
operation and also business’ (Cambridge Dictionaries Online, 2012). PESTLE analysis will
examine Malayan Banking Berhad (Maybank) which include political, economic, social,
technological, legal and environmental forces.

2.1 Political Environment

Political decisions will implement the business institutions and also the business strategy.
(Hamilton & Webster, 2012). Malayan Banking Berhad (Maybank) owned by the government
policy which is GLC Transformation Program on 1969, it hold by Khazanah that serves as
government investment agency that consist of 17 biggest and leading strategically in Malaysia
which include of Maybank, CIMB bank, Tenaga Nasional and so forth. Malayan Banking
Berhad (Maybank) have into industrialisation growing their value rapidly from 1969 onwards.

Malaysia’s government-linked companies (GLCs) will differ accordingly towards it’s market
conditions and also the company performance. For Maybank are growing to be national
companies but others will changing their organization structure such as Malaysia Airlines
which struggling by various event like MH370, MH17 tragedies.

YAB Prime Minister have launch the government transformation programme (GTP) on 2009
and economic transformation programme (ETP) on 2010 due to slowdown of the global
financial crisis in 2008/2009, and encourage private sector to regain their confident in
investing into various project in ETP. In G20 Support of Government Transformation
Programme (GTP), Malayan Banking Berhad (Maybank) have been assisting for government
projects and other related initiatives which include fighting corruption, assuring quality
education. In addition, for G20 support of ETP have make Malayan Banking Berhad
(Maybank) responsible for the financial aid towards renew oil, gas and energy storage and
their infrastructure growth, other than that Malayan Banking Berhad (Maybank) is one of the
major financial company which serves as global centre of Islamic finance and significant
investment in numerous major banks in Malaysia to develop national banking and upgrading
services in bank industry. Few more areas in ETP that related to Malayan Banking Berhad
(Maybank) financial services are in tourism, greater Kuala Lumpur / Klang valley and also
healthcare in Malaysia. (GLC, 2014)

2.2 Economic Environment

As global oil price depreciated, it affect the stock market and the Malaysia currency. As
Malayan Banking Berhad (Maybank) investment have strong tied into the G20 support of the
Economic Transformation Programme (ETP) with financial related to oil and gas industry. It
have various impact toward Malaysia GDP which deficit -3% in budget 2015.
2015 budget expected crude oil price will be at average of plus/minus around US$100-
US$105 per bottles. On mid of year 2014, crude oil price decrease 40% and this situation
have major impact towards Malayan Banking Berhad (Maybank) investment that related to
oil industry. And for federal government’s projected on 2014 there is 30% of total revenue
shortfall.

Government have make a projection on 2015 Budget, and it assumed that revenue of RM62.4
billion (2014E :RM68.8 billion) however this assumption have not been agree by Petronas.
Petronas advised that there will be different of RM19.4 billion (RM43 billion) gap in
contradiction of government Budget 2015, it include various payment to government (taxes,
dividend and also royalties), because Petronas doubt the crude oil price are still around
US$70-US$75 per bottles. (Business News, 2014)
This economy circumstances have been accounted by RM11 billions of fuel subsidies on
2015. This solution stating on December 2014 which is one of the solution to solve the price
RON95 and diesel, and still lack of RM8.4 billion after deduction of fuel subsidies. This will
affect 2015 Budget which deficit to -4% of GDP. (Business News, 2014)
Meanwhile, Malayan Banking Berhad (Maybank) have been benefit from the tourism and as
the crude oil price crash which decrease the biggest expenses which from 2014 Jan-Sept :
+RM24.8 billion and from 2013 Jan-Sept : +RM21.5 billion, from there we can see the
growth of RM3.3 billion. (Business News, 2014)

2.3 Social Environment

In 2010 Malayan Banking Berhad (Maybank) decided to set up a foundation which are
dedicated to benefit Malaysia communities by giving various personalised services. Maybank
strongly understand that social and environment responsibility is vital need for the
corporation to balance corporation financial goals. According to Plummer (2012)
corporate social responsibility is not just an activities which to gain social attention but it
is the return of the responsibility in charities and its reasons for sustainable business.

Malayan Banking Berhad (Maybank) foundation have pledge to impact the community
which included RM7million in scholarships, RM3.2 million in education, RM0.2 million in
conversation, RM1.5 million in healthcare and others contribution for charity expenses
RM1.9 million. Total of pledge towards charity have RM13.8 million in statement of
income and expenditure for 2013.

To thrive for sustainable banking leader in Malaysia, Malayan Banking Berhad (Maybank)
create a foundations that not only benefit to local Malaysia community but also toward
region wide such as those developing countries people that are less-fortuned. Maybank
foundation are one of the grounds to build a culture which generates an opportunities and
goals accomplishment that create an economic value.

In order for Maybank to gain the sustainability in competitive advantages in banking

industry, Accoridng to Datuk Abdul Farid Alias who is President and CEO of the Maybank
group mention that Maybank humanising mission wasn’t imposed form the superior
authority and it is from the sincere heart of our society. (Sustainability, 2013)
2.4 Technology Environment
Business operations affected by the changes of the technology (Business Dictionary, 2012).
Technology act as main role in banking industry, it affect the business module and also its
culture, as previously in traditional banking which needed the blank and white document to
proceed into the transaction, using check as a tool or other banking and financial purposes.
Modern society today, e-banking have been a competitive advantages among the competitor
as it shorten the time of transaction, investment information, online registration and so on.
Maybank2u make Maybank as operation excellent banking companies as in Malaysia,
www.maybank2u is one of the most visit banking industry website among other competitor.

2.5 Environmental Factor

For environmental factor, Malaysia are one of the least disaster, least pollution and it is the
country that only have one season at all time. However Malaysia are one of the urban
environment country which protected by neighbouring country from tsunami which allows
Malayan Banking Berhad (Maybank) may benefit from this advantages and also lower their
concerns on problem which come from natural disaster. This is one of the factor that attract
foreign direct investment (FDI) to invest in this upright environment country.

2.6 Legal Environment

At Malaysia, National Bank of Malaysia (Bank Negara) are one of the bank regulate
Malaysia’s bank, financial companies, Bank system and also monetary policy. According to
National Bank of Malaysia Administered Legislation 2014, Malayan Banking Berhad
(Maybank) and other bank such as Public Bank, Hong Leong Bank and so on are tie to
financial services act 2013 same as other financial institutions.
3. SWOT Analysis Micro-Environment
Macro-environment of Malayan Banking Berhad (Maybank) have showed numerous of the
information about the strengths and also weakness of Maybank, as in PESTLE analysis there
are few significant opportunity and strength which allow Maybank to be largest and leading
in banking and financial services industry across Asia and most significantly in Malaysia.
Nonetheless, the internal environment also act as major factor to determine business
sustainability. In order to pursue business sustainable, SWOT analysis of Malayan Banking
Berhad (Maybank) will be implement to clarify the weakness and also the threats.

3.1 Strength of Malayan Banking Berhad

Maybank Largest Bank: Malayan Banking Berhad (Maybank) is one of the largest
banking companies across Asia and according to Maybank Sustainability Report 2013
Maybank serves as the largest bank in Malaysia with total RM560 billion of their assets.
Moreover, the most widely ATM banking service provider in Malaysia and ATM can be
reach at almost all of the places. Malayan Banking Berhad (Maybank) have been selected
to assist in GTP and ETP as GLC, and this is one of the major strength of the Maybank.

Maybank Leading In Technology: Furthermore, Maybank are the first bank which
provide an instant money transfer across seven Asian country and Maybank also are the
first bank invest their services into e-banking(www.maybank2u.com.my) in Malaysia. It
not only allow user to get recent financial information and also allow the client to do
transaction more easy than before, beside that Malayan Banking Berhad (Maybank)
provided wide range of the investment and also financial services such as insurance,
variety of loans and so on. In financial industry, Maybank has total RM527 billion which
showed that the strong financial from others competitor.

Maybank Good Performance: On 2010 Malayan Banking Berhad (Maybank) won the
CRM (customer relationship management) Excellence Award with their high
performance and ROI in CRM.

3.2 Weakness of Malayan Banking Berhad

Maybank Customer Satisfaction Rate: In 2012 of Malayan Banking Berhad
(Maybank) is ranked 7 of 8 bank in Malaysia for it’s customer satisfaction rate. Another
weakness in Maybank is their operation in customer service, as Maybank operation
system do not have automated detail security features that verify client’s accounts, this
affect client take more time to replace or change their information and card at others
branch.
Maybank Limited Market: Malayan Banking Berhad (Maybank) focused their
operation mostly at local (Malaysia) and Singapore, because of this it limited Maybank to
penetrate into global market. Moreover the revenue of the companies mostly are from
Islamic banking and retail banking. Maybank have to be innovative and creative in
penetrate into existing and other financial product to gain a market advantages.
3.3 Opportunities for Malayan Banking Berhad
Maybank Leading Market: As Malayan Banking Berhad (Maybank) serves as
government linked companies in 1969, it because of the political advantages where
Maybank allowed to participate in the government transformation programme (GTP) and
economic transformation programme (ETP). Because of that, Malayan Banking Berhad
(Maybank) have opportunity to held the project that implemented by government which
varies from oil, gas and energy, infrastructures growth, global centre of Islamic finance,
investment in various major banks in Malaysia, develop national banking and upgrading
services in bank industry in tourism, greater Kuala Lumpur / Klang valley and also
healthcare in Malaysia. (GLC, 2014)
Malayan Banking Berhad (Maybank) provide financial aids towards various companies
that in oil, gas and energy storage industry, this allows Maybank to expose to various
multi-national companies such as Petronas,Gas Malaysia, Malaysia LNG and Scomi and
so on.

Maybank Global Network: Malaysia government linked companies (GLC) which easily
gain the trust across the ASEAN, with this opportunity, Maybank have a strong sales and
marketing advantageous.

Maybank Wide Range Product: wider range of products and services with which
allows Maybank to help in finance different customer’s project that came from numerous
industries.

Maybank Financial Power: Malayan Banking Berhad (Maybank) ranked 17 th of the

world’s Strongest Bank according to Bloomberg Markets on 2015 and Ranked 4 th for
ASEAN bank.

3.4 Threats for Malayan Banking Berhad

Maybank have Strong Competitor: Various strong competitor such as CIMB Bank,
Public Bank, Hong Leong Bank and so on.
Maybank Do Not Monopoly: Larger merging of three main financial institution
included CIMB Bank, RHB Bank and MBSB have almost overtake Maybank the title of
the largest bank in Malaysia but it fail. Maybank have to come up with several strategy to
overcome this situation as customers have tendency to switch their account to
competitor’s account. (Reuters, 2015)

Maybank Online Security Instability: There are various fault Maybank website which
is serves as “Phishing” website and “Spoofing” email which came from hacker or
computer crime. This Situation allow Maybank to aware that internet security is one of
the major factor towards competitive advantages.

Maybank macro-environment serves as largest Islamic banking and financial service,

assumed that there are changes in political instability or economic policy changes, this
situation will brings a huge impact towards Maybank as Maybank hold a high percentage
in Islamic banking and financial services.
4. Recommendation
According to the appendices 3, SWOT analysis below show that in order for Malayan
Banking Berhad (Maybank) to be largest banking and financial services companies, there are
various strategy needed to implement to overcome two weakness and four major threats that
have possible to threat company value. (Khandwalla, 1972).
 Weakness and Threats

Low Customer rating rate & Online Security Instability:

In order to improve the customer service, various strategy needed to carry out to overcome
the low satisfaction of client. Customer relationship management plan, decrease client’s
waiting time, implement self-service counters and improve company staff communication
skills and evaluate the website and the procedure in online banking.
In addition, to improve the Maybank online security, companies have to clarify the existing
online problems such as “spoofing” and “Phishing” and overcome it by implementing an
information system security centre that 24-hour protecting Maybank online security and
destroy computer crime that affect company reputation. (Miller and Friesen, 1983)

Limited Market & Government Economic Policy:

Malayan Banking Berhad (Maybank) have to create a detail strategy and plan to gain the big
portion of the market share in the market which is vary from Islamic banking and financial
services and focus on the non-Islamic product. (Lawrence and Lorsch, 1967; Miller and
Friesen, 1983) As this situation can be one of the major threats for Malayan Banking Berhad
(Maybank) as once the possibility of the political and economic changes in policy will direct
affect a big portion of Maybank revenue. (Smith et al., 1991).

Strong Competitor & Market Monopoly:

To be a Largest and sustainable business, Malayan Banking Berhad (Maybank) have to
implement numerous of strategy to monopolies the Malaysia banking and financial services
and learn from the strength of Competitor. (Lo et al., 2001; CCFA, 2009; Mofcom, 2011;
Uncles, 2010; Yu, 2011)

 Strength and Opportunity

As the banking and financial industry in Malaysia have strong competitor, but Malayan
Banking Berhad (Maybank) have astounded into the competitor core finance support as
implemented by government previously on ETP. (GLC, 2014)
5. Conclusion
Malayan Banking Berhad (Maybank) have been evaluated the environment and to recognize
the external environment changes that going to threat companies value, this combination of
PESTLE and SWOT analysis allows Maybank to achieve business sustainability. (Yu, 2011)

For the Maybank global network in ASEAN let Maybank to be more proactive to achieve
their greater high in Maybank sale and marketing sector. This situation make Maybank have
opportunity to create Maybank group environment that companies will continually prosper
and rewards back to the society. Malayan Banking Berhad (Maybank) highlighting the
balance of external and internal environment so that Maybank have the capability to regulate
and respond to the threats earlier. (Kotler et al, 2006)

Malayan Banking Berhad (Maybank) have identify the political instability and possibility of
the changing in government policy, this external factor does not threated Maybank. This is
because Maybank have been detail strategies the possible threats and outcome in the early of
1969 when the time of government linked company programme have launch. This Strategy is
allow Maybank act as a major financial support towards other private owned financial
institutions. There are one of the business strategy that blinded the public vision as in case
there are political instability which affect government changes, there are still financially
control by Maybank. This business activities offer smarter opportunities to eliminated
competitor strength. (Miller and Friesen, 1983).

Therefore, Maybank have to have smarter business activities reasoning in order to allocate,
accepting and mastering threats and turn it into the company opportunity. Uncontrollable of
environmental vitality have to identify as fast as possible for future planning. (Dess and
Beard, 1984).

In conclusion, in order for Malayan Banking Berhad (Maybank) remain in high performance
and achieved its business sustainability, company have to conscious and be sensitive toward
the business environment which allow company to respond quickly and balance with the
adjustment of company strategy. (Dess and Beard, 1984; Miller and Friesen, 1983).