Maybank 1st bank to declare full-year dividend for FY20

Maybank 1st bank to declare dividend post-moratorium

The institution decided to continue with its practice to pay an interim dividend to shareholders, says CEO

by HARIZAH KAMEL / Source: MEDIA MULIA

MALAYAN Banking Bhd (Maybank) declared a single-tier interim dividend of 13.5 sen for the financial year ending Dec 31, 2020 (FY20), making it the first local bank to offer a full dividend for the year despite the turmoil caused by the Covid-19 pandemic.

The dividend announcement was made in its third quarter (3Q) result filing recently, which it said can be reinvested in new ordinary shares under its dividend reinvestment plan (DRP). The dividend will be paid no later than three months from the date of declaration.

Other lenders, including Public Bank Bhd, CIMB Group Holdings Bhd and Affin Bank Bhd, which also reported their 3Q results last Friday have yet to declare any dividend for the year despite posting improved profits.

Chairman Tan Sri Zamzamzairani Mohd Isa (picture) said Maybank decided to continue with its practice to pay an interim dividend to shareholders, albeit at a lower rate compared to last year’s 25 sen per ordinary share.

“While Maybank’s capital position remains robust, we have nevertheless ensured that we continue to take a prudent approach with a DRP in which the entire portion is electable,” he said.

For its 3Q ended Sept 30, 2020, Maybank’s net profit declined 2% year-on-year (YoY) to RM 1.95 billion or 17.37 sen per share from RM1.99 billion or 17.78 sen per share in the same quarter last year, due to the continued impact from the pandemic. However, this was partly offset by reduced overhead expenses and a decline in impairments.

Revenue for the quarter was also lower at RM13.76 billion versus RM13.83 billion previously, it said in a filing to Bursa Malaysia.

In a separate statement, Maybank said its net operating income for the quarter fell 6.5% to RM6.08 billion from RM6.5 billion previously owing to a drop in total net fund based income to RM4.13 billion, due to cuts in the Overnight Policy Rate (OPR).

“Additionally, the group saw a 1.3% dip in total net fee-based income to RM1.95 billion, particularly from lower core fees, following slower business activity due to the pandemic and lower investment gains,” it said.

Meanwhile, Public Bank’s net profit for its 3Q was up 2% YoY to RM1.39 billion or 35.88 sen per share compared to RM1.36 billion or 35.1 sen per share the year prior due to a lower negative effect of OPR reductions for the quarter under review.

This had resulted in a higher overall net interest income and net income from its Islamic banking business.

Its turnover for the quarter, however, was 8.6% YoY lower at RM5.13 billion against RM5.61 billion partly due to higher loan impairment allowance in anticipation of the potential effect of the Covid-19 pandemic.

For CIMB, net profit for its 3Q stood at RM194.44 million or 1.96 sen per share against RM1.01 billion or 10.36 sen per share a year ago, while revenue was 3.8% lower at RM4.46 billion from RM4.64 billion over the same period.

Affin Bank, on the other hand, reported a 3Q net profit of RM48.72 million or 2.38 sen per share, down 32.7% YoY from RM72.4 million or 3.65 sen per share recorded last year, due to higher allowance on loan impairment and other assets, a one-off modification loss related to the loan moratorium and a lower net interest income.