Maybank is Malaysia’s largest bank today, but its origins can be traced back to a single ambitious man, Kwok Tai Chiu (Mr. Kwok). Born in 1918 in Singapore to a rich Chinese businessman, Mr. Kwok grew up surrounded by bankers. After finishing school, he joined OCBC Bank in Singapore as a clerk at just 15 years old in 1933.
Mr. Kwok diligently climbed the ranks at OCBC over 26 years to become Deputy General Manager by 1959. However, he disagreed with OCBC’s conservative approach and reluctance to expand into Malaysia. This led Mr. Kwok, along with 80 other OCBC staff, to break away and start their own bank – Malayan Banking Berhad (Maybank) in Malaysia in 1960.
Humble Beginnings
Maybank began as a small operation focusing on communities neglected by foreign banks. They served rural areas and small towns, granting loans to small businesses and borrowers. This strategy allowed Maybank to expand rapidly across Malaysia within just 5 years. By 1965, they had over 100 branches and $500 million in deposits – nearly as large as OCBC which had a 30 year head start.
Diversification and Growth
Buoyed by early success, Maybank began diversifying into financing, real estate and hotels. They acquired the prestigious Goodwood Park Hotel in Singapore for $5 million in 1963. Mr. Kwok even became a Malaysian citizen and was appointed Senator by the King in 1964-65. At this point, Maybank seemed destined for greatness under Mr. Kwok’s leadership.
Cracks Emerge
In 1965 however, simmering political tensions resulted in Singapore separating from Malaysia. Overnight, Maybank’s investments in Singapore plummeted in value. Panic set in as customers rushed to withdraw funds, sparking a bank run.
Then rumors emerged accusing Mr. Kwok of improperly using Maybank’s money for his own investments. It was discovered that he had directed many of Maybank’s loans to his own companies in Singapore.
With Maybank on the brink of collapse, the Malaysian government intervened. Mr. Kwok was forced to repurchase Goodwood Hotel for $50 million and resign as Managing Director in 1967. By 1976, he was kicked out of Maybank completely.
Government Takeover
Maybank was then taken over by the Malaysian government and later came under control of Permodalan Nasional Berhad (PNB). This aligned with the government’s New Economic Policy (NEP) in the 1970s of affirmative action for Malays and bumiputera groups.
The NEP aimed to eliminate poverty, reduce economic inequality between races, and increase Malay corporate ownership to 30% by 1990. As part of this push, many new Malay or state-owned banks emerged while smaller banks were acquired and consolidated.
Mergers and Acquisitions
Two more major mergers occurred in the 1980s and 1990s, reducing the number of banks in Malaysia from 80 to 54. The Asian Financial Crisis of 1997 spurred further consolidation under Bank Negara’s “guided merger” policy. Local banks were forced to merge into just 10 anchor banks, including Maybank.
Maybank has continued acquiring banks overseas to cement its position as Malaysia’s largest bank. This includes PT Bank Internasional Indonesia and Kim Eng Holdings Limited in Singapore. An attempted merger with RHB Bank in 2011 failed due to asset duplication.
Conclusion
In just over 60 years, Maybank has transformed from a small community bank into Malaysia’s banking behemoth with assets of over RM700 billion. However, its success came at the cost of its pioneering founder Kwok Tai Chiu, who was ousted in the government’s quest for Malay dominance in banking. Nevertheless, Maybank remains a source of national pride and a symbol of Malaysia’s banking sector strength