Maybank cautious despite record profits

CEO says 2018 looks to be as challenging as last year

BY P PREM KUMAR / Pic By MUHD AMIN NAHARUL

Malayan Banking Bhd (Maybank) expects Malaysia’s domestic consumption and investment to recover this year, in line with the encouraging economic growth.

Maybank group president and CEO Datuk Abdul Farid Alias said the country’s largest lender based on assets expects domestic loan growth to be at 5%, unchanged from last year.

Maybank missed its total loan growth target of at least 6% n 2017. The bank’s gross loans grew 1.7% on a reported basis in 2017. However, it expanded 4% after normalising on the foreign-exchange impact.

He said loan growth will be supported by corporate lending pick-up and a stable consumer lending.

“The demand for fundraising last year was still robust, but was not really visible because some had opted for bond market to raise cash.

“We foresee investment and capital expenditure cycle to start this year, signalling increased corporate activity in Malaysia,” said Abdul Farid in Kuala Lumpur yesterday.

The bank also expects its return on equity to grow 11% this year, similar to its achievement in 2017 of 10.9%.

Abdul Farid said 2018 looks to be equally challenging as last year, given the volatile markets seen early this year.

“We remain cautious of sudden shocks to the environment, and will maintain a prudent approach in pursuing growth by focusing on profitability, as well as effective management of costs and liquidity,” he added.

He said Maybank continues to see growth opportunities and seeks to increase market share in wealth management, digital payments, Islamic banking and insurance.

Maybank reported a record net profit of RM7.52 billion in 2017, 11.5% higher than the RM6.74 billion posted in 2016, supported by growth in key business segments and lower impairments.

The group has also proposed a final dividend of 32 sen per share for the period, making the full-year payout at RM5.9 billion or 78.5% of the lender’s net profit.

The proposed dividend, to be made under the dividend reinvestment plan, will comprise 18 sen per share to be paid in cash, and an electable portion of 14 sen per share, which can be reinvested into new ordinary shares or paid in cash.

Meanwhile, Abdul Farid said the bank will not be shifting its headquarters to Menara Warisan Merdeka in the city centre, developed by Permodalan Nasional Bhd (PNB). PNB is the major shareholder of Maybank.