Malaysian banking sector to see moderate growth this year

KUALA LUMPUR: The Malaysian banking sector is expected to see moderate growth this year, in line with the slowdown in global gross domestic product (GDP).

United Overseas Bank (Malaysia) Bhd (UOB) managing director and country head of personal financial services Ronnie Lim said the ongoing US-China trade war was not doing any good to global markets and was among the main factors contributing to the slowdown.

He said the US economy was expected to grow at 2.6% this year and China at 6.2%, down from the earlier forecast of 6.6%.

“The United Kingdom, Japan, Europe and other developed countries, which grew by about 1% to 2% last year, are also expected to have moderate growth this year.

“With the US-China trade war truce ending in February, how these countries, including Malaysia, chart their next growth will depend on the result of the discussions taking place between the two countries.

“Hopefully, something good will come out at the end of February as the trade war is not doing anyone any good,” he told reporters after the launch of the UOB Visa Infinite Metal Card here today.

US President Donald Trump and Chinese President Xi Jinping had agreed to a 90-day trade war truce in Buenos Aires, Argentina, last December to enable the two sides to bridge the differences between their positions in key issues.

On the UOB Visa Infinite Metal Card, Lim said it was the first bronze metal credit card in Malaysia and would only be available by invitation to high net worth customers.

He said UOB Malaysia was the second largest card issuer on a monthly basis for the last three years, reaching a card base of almost one million, which contributed to over 30% of the bank’s top line revenue.

“For the new card, we are targeting our existing 60,000 Visa Infinite Credit Card members, who have a minimum annual income of RM300,000 and investable assets of above RM3 million placed with UOB Malaysia.

“We have identified some 100 customers from this group and we will invite more high net worth and ultra-high net worth customers for the card moving forward,” he said.

Lim said the new infinite card was designed to meet the travel needs and expectations of its affluent customers.

Its benefits included first-class travel privileges, a competitive miles redemption programme, accelerated reward points and a 24-hour worldwide concierge service.

According to UOB Malaysia’s data, travel-related expenditures among affluent cardholders had grown 35% since 2016. Last year alone, the group spent RM205 million on travel-related products and services, a 23% increase from 2017.

Visa country manager for Malaysia Ng Kong Boon said Malaysia continued to see strong growth in the number of affluent individuals at close to 20% year-on-year.

“We believe it is important to provide affluent cardholders a product tailored to their premium travel and lifestyle requirements,” he said.

Source: FMT