MALAYAN BANKING BHD(Maybank), the country’s biggest financial services group, expects the Malaysian economy to shrink 3.3% this year due to the novel coronavirus (Covid-19) pandemic and the lower price of crude oil.
The bank also predicted Singapore, one of its key regional market, to fall into a recession in 2020, while growth in Indonesia to slow to 2%.
In the bank’s 2019 annual report released today, Maybank’s economic team said the combined lethal shocks of the Covid-19 pandemic and weakening commodity prices to push the global economy into a recession this year.
“We anticipate Asean-6 growth in 2020 to be similarly affected,” it said.
“Nevertheless, aggressive monetary policy easing and stimulus by central banks, as well as fiscal stimulus worldwide, have been put in place to mitigate the supply, demand, market and commodity shocks of Covid-19.”
Maybank posted its highest ever net profit of RM8.2bil in 2019, but the outlook for 2020 is challenging.
“The year has turned out differently from our earlier expectations,” group president and CEO Datuk Abdul Farid Alias said in the bank’s latest annual report.
“Although the true impact of this virus on the real economy cannot be quantified at this juncture, we have seen financial markets swing violently…on severe sell-offs by investors,” he said.
Faced with the unprecedented economic challenges in 2020, Farid said Maybank will continue to prioritise its capital and liquidity strength, maintain selective balance sheet expansion.
This he said is in tandem with the Group’s risk appetite and remain focused on its ongoing cost discipline and proactive engagements with customers on asset quality management given the softer economic landscape.
“The Group will leverage its diversified franchise to drive revenue growth, enhance customers’ experience through digital innovations and continue upskilling our workforce to improve productivity,” he said.
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22 April 2020