Maybank’s 1Q net profit up 9.9% to RM1.9b

The lender aims to accelerate its growth momentum and boost revenue drivers


Malayan Banking Bhd’s (Maybank) registered a higher net pro t for the first quarter ended March 31, 2018 (1Q18), rising 9.9% year-on-year (YoY) to RM1.87 billion, on the back of better net interest income and Islamic banking income.

Quarterly revenue also increased 2.1% YoY to RM11.52 billion, the bank said in a filing to the local bourse on Monday. Earnings per share for the quarter was at 17.26 sen versus 16.73 sen in 1Q17.

The region’s fourth-largest lender by assets noted that its Malaysian operations recorded a strong 6.7% YoY increase in loans in 1Q18, while both its Singapore and Indonesia operations also posted healthy growth, up 5.5% and 2.9% respectively.

On a group basis, loans expanded 1.5% YoY, while deposits expanded 4.7% YoY to RM532.1 billion. Gross deposits surged 11.5% in its Malaysian operations, followed by Singapore and Indonesia which expanded 3.6% and 2.6% respectively.

“Maybank Malaysia’s loan growth is expected to be in line with industry growth as the bank focuses on pockets of opportunities within the consumer, retail, small and medium enterprises, and corporate lending segments,” Maybank noted in a filing to Bursa Malaysia on Monday.

“The ratio of low-cost (current account, savings account) deposits to total deposits remained healthy at 35.3%, while the loan-to-deposit ratio stood at a comfortable 92.5% against 95.7% a year earlier,” it said.

Group president and CEO Datuk Abdul Farid Alias (picture) said going forward, Maybank aims to accelerate its growth momentum and boost revenue drivers.

“We will also ensure the group maintains its strong liquidity and capital position to manage potential risks that could arise from any changes in the operating environment,” he said.

The group has implemented Malaysian Financial Reporting Standards 9 (MFRS 9) on Jan 1, 2018, and will continue to keep its capital and liquidity positions strong.

The impairment assessment under MFRS 9 is based on the expected credit loss model, which uses forwardlooking assumptions, as opposed to the previous accounting standard MFRS 139, in which the impairment assessment is based on an incurred loss model.

As such, the allowances for impaired loans and financing in financial year 2018 are expected to be higher than the previous year, Maybank explained.

The group’s cost-to-income ratio improved further to 47.6% in 1Q18 from 50.1% a year earlier, as income growth outpaced overheads growth. Net operating income for 1Q18 amounted to RM5.83 billion, up 5.4% YoY on the back of a 12.6% YoY increase in net fee-based income to RM1.59 billion and 2.9% YoY rise in net fund-based income to RM4.24 billion.

The group’s Islamic banking business recorded a 6% YoY rise in income to RM1.22 billion in 1Q18 as financing and advances rose 11.5% YoY to RM178.7 billion, the banking group noted.

Pretax profit declined to RM455.3 million in 1Q18 from RM662.3 million in 1Q17 due to higher impairment charges from corporate clients.

Maybank Islamic Bhd saw its total gross financing rising to RM167.8 billion from RM150.5 billion on the back of a 21% surge in global banking financing and an 8% rise in consumer financing.

Total deposits and investment accounts saw a strong 18.7% increase to RM165.1 billion. As at March 2018, the ratio of Maybank Islamic’s financing to Maybank Malaysia’s total financing stood at 57.7%.

Etiqa Insurance and Takaful registered a 29.1% increase in total life/family gross premium and a 14.5% increase in total general premium, helping it maintain its top position in the general insurance and takaful segment with an 11.6% market share and fourth in the life/family (new business) segment with a 9.9% market share.

Net operating income for the quarter, however, dipped 9.6% to RM312 million, while 1Q18 pretax profit came in at RM120.8 million against RM201 million last year, owing to the period’s adverse equity investment performance, compared to a huge gain in 1Q17.