By SHAZNI ONG / Pic By ISMAIL CHE RUS
The prospect of the country’s growth for the year looks positive, despite headwinds from the local and global fronts, along with a lower GDP projection growth of 4.3% to 4.8% for 2019 by the central bank recently.
Standard Chartered Bank Malaysia Bhd (StanChart) MD and CEO Abrar A Anwar (picture) said banks are also expected to see a healthy growth on the back of stronger domestic consumption and exports supported by small and medium enterprises (SMEs).
“As and from the industry perspective, you have recently noted that Bank Negara Malaysia (BNM) has released its annual report and is looking at 4.3% to 4.8% total for 2019. But still, there are pockets of opportunities for the banks to grow, especially in the SME sector.
“SMEs need to borrow support for access to credit. And that has been our fastest growing business also for us,” he told reporters at the joint press conference on the launch of Signature Heirloom (II) between Manulife Insurance Labuan Ltd and StanChart in Kuala Lumpur yesterday.
At the end of last month, BNM projected the economy to sustain its growth momentum and to expand between 4.3% and 4.8% in 2019, compared to 4.7% in 2018, against the backdrop of a challenging global environment.
The central bank in its 2018 Annual Report stated that domestic demand will remain the anchor of growth, underpinned by continued expansion in private sector activity.
“Similarly, if you look at export projection, and also supporting domestic consumption and the real estate sector. There have been a lot of initiatives being taken with the government out to re-energise the real estate sector.
“Because you may have heard, there has been an overhang in that space. So, we are working with our regulator to ease the access to financing in that sector so that the end- buyers are facilitated. Hence, there is a lot of work on that,” Abrar said.
He added that much of the SMEs in the country need to be supported and that efforts are being done towards capacity building of exporters who can explore new markets, where StanChart and media partner The Star — through the Export Excellence Award — can come in and support in mitigating the risk coming from exports.
“So, diversifying the export base by products and markets. This is one area that we see Malaysia has the opportunity to grow. Hence, domestic consumption, export will be a mainstay. We see a lot of opportunities in that space. Even growing at 4.3% to 4.8%, there will be substantial opportunities for the banks,” he said.
Abrar said while Malaysia is a very open economy, the country is also exposed to the global economic environment or headwinds.
“If you look at it globally, the growth has come down. Also, the US-China trade war, though it is now positive for Malaysia because there are a lot of people trying to shift to Malaysia for production activities — specifically the Chinese.
“China is the highest in terms of manufacturing foreign direct investment now. It is much higher than any other countries,” he said.
He said in the long term, should the trend continue, the economy would also get impacted.
“So overall, if the global growth goes down, then of course there will be impact. But at this point in time, I think fundamentally Malaysia is strong,” he said.
Meanwhile, on the insurance industry outlook, Manulife Holdings Bhd group CEO Lee Sang Hui said he is relatively positive on the industry as there are lots of opportunities in Malaysia, which has also been quoted many times by industry participants.
Lee observed that the level of protection Malaysians have now is actually quite low.
“You have pockets in the population that have decent coverage. But if you look on the average, they have a lot of savings and they use savings for insurance, as well as the banking products,” he said.
Earlier, both Abrar and Lee were present for the launch of the US dollar-denominated Signature Heirloom (II), which is the first of its kind to be made available in Malaysia.
The universal life insurance product is specifically designed to cater to the demands of the high net worth market to help them grow and transfer their wealth to the next generation.
With a minimum sum assured of US$500,000 (RM2.05 million), Signature Heirloom (II) can also help business owners achieve their business continuity plans, many of whom have large asset bases that are not always liquid.