Maybank’s 2Q profit up 18%

The increase was due to higher net interest income and reduced expenses


Malayan Banking Bhd (Maybank) posted an 18.1% year-on-year (YoY) increase in net profit to RM1.96 billion for its second quarter (2Q) ended June 30, 2018, as a result of higher net interest income and reduced expenses.

Quarterly revenue rose 5.4% YoY to RM11.51 billion as earnings per share for the period stood at 17.94 sen.

The country’s largest lender recorded a net interest income and Islamic banking income increase of 2.1% YoY or RM88.6 million for the period, while earned insurance premiums from its insurance and takaful subsidiaries rose 18.7% YoY to RM1.49 billion, its filing to Bursa Malaysia noted last Thursday.

Other operating income dropped 34% YoY to RM1 billion for the quarter due to unrealised mark-to-market loss on revaluation of financial assets and liabilities at fair value through profit or loss, a 238% increase in derivatives of RM337.8 million YoY, lower investment income of RM333.8 million and lower fee income of RM16.3 million.

The decrease, however, was offset by higher foreign-exchange gain of RM220 million, along with improved realised gain on derivatives of RM55 million.

Maybank’s net insurance benefits and claims incurred, net fee and commission expenses, change in expense liabilities as well as taxation of life and takaful fund also plunged 20.8% YoY to RM974.3 million due to lower net insurance benefits and claims incurred by its insurance and takaful subsidiaries.

The group’s overhead expenses decreased 2.3% to RM2.7 million, while allowances for impairment losses on loans, advances, financing and other debts shrunk 30% to RM582.1 million.

Maybank’s net profit on a year-to-date basis stood 14% higher at RM3.83 billion compared to the RM3.36 billion recorded in the corresponding period last year. Turnover climbed 3.6% at RM23.02 billion against RM22.2 billion in the first half of 2017 (1H17).

Maybank chairman Datuk Mohaiyani Shamsudin (picture) said in the face of the ever evolving environment along with the shift in the banking industry, the bank’s performance demonstrated strength and resilience.

“The group is confident its strong market position and solid fundamentals will enable it to steer itself through the challenges as it seeks to continue delivering value to stakeholders,” she said.

Group president and CEO Datuk Abdul Farid Alias said the group will continue to ride on the growing economy to strengthen its banking business as well as fulfil its growth strategy notwithstanding the volatility in the current operating environment.

“The macro environment presented many challenges to the banking business this year where we saw a slight compression in net interest margin due to our deliberate strategy to be defensive from a liquidity perspective in the 1H18.

“We have demonstrated our ability to achieve growth even in the middle of significant geopolitical pressures, and we intend to leverage our strong brand equity, digital capabilities as well as our expertise and solid infrastructure to tap into growth opportunities and serve our customers better,” he said.

Maybank’s key priorities for 2018 include maintaining pricing discipline across its products, attaining cheaper funding sources to support loan growth, growing its loan portfolio within the bank’s risk appetite as well as managing its asset quality.