by PRIYA VASU / pic by TMR FILE
MALAYAN Banking Bhd’s (Maybank) net profit for the for the second quarter ended 30 June 2021 (2QFY21) jumped 108% to RM1.96bil compared to RM941.7mil posted a year ago as loan growth, net interest margin (NIM) expanded from a more cost-effective funding mix and impairments came in lower compared with a year earlier.
In a filing with Bursa Malaysia, Maybank noted revenue for the quarter under review was RM11.34bil against RM11.79bil posted in 1QFY20.
The group declared a single-tier first interim dividend of 28 sen per share to be made under its Dividend Reinvestment Plan.
This dividend comprises 14 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.
The dividend payout to shareholders amounts to some RM3.27 billion or 75.2% of the half-year net profit of RM4.35 billion.
In a statement today Maybank said it recorded a steady growth in net operating income for the quarter which came in 9.3% higher at RM6.17 billion from a year earlier.
This was on the back of a 26.4% improvement in net fund based income as a result of loans expansion and strong growth in low-cost current and savings accounts (CASA) deposits.
Group President and CEO, Datuk Abdul Farid Alias said given the expectation for a more challenging second half, the Group will continue its strategy of focusing on robust risk management, strengthening its capital and growing its CASA deposit base to provide sufficient buffers for unexpected events.
“Our strong liquidity and capital positions have given us the ability to support our customers through this prolonged pandemic while at the same time, enabled us to pursue growth opportunities across the region and undertake the necessary investments to prepare ourselves for the future,” he said.
The growth in CASA offset the 27.0% decline in net fee based income which was mainly attributable to the impact from the movement restrictions in the region. Additionally, net fund based income last year was lower as there was a significant Day-1 modification loss owing to the six-month blanket moratorium effective 1 April 2020.
The group’s earnings were, however, 18.0% lower than the RM2.39 billion net profit registered in 1QFY21, mainly owing to a decline in net fee based income arising from the impact of the sudden resurgence of the COVID-19 pandemic as well as higher marked-to-market losses and overhead expenses.
For the first half of 2021, the bank’s net profit rose to RM4.35bil compared to RM3bil in the first half of 2020, while revenue dipped to RM23.56bil from RM25.03bil in the comparative period.
The Group’s Malaysian operations registered a steady 4.7% expansion in gross loans for 1HFY21, outpacing the industry growth of 3.4%.
This was underpinned by a healthy 6.7% rise in the Community Financial Services (CFS) segment on strong consumer as well as Business Banking and Small & Medium Sized Enterprises (SME) demand.
The Group registered an improvement in asset quality with its Gross Impaired Loans (GIL) ratio declining to 2.18% in June 2021 from 2.49% in June 2020, contributed by write-offs, repayments and recovery proceeds received.
Loan loss coverage as at June 2021 continued to register further improvement, reaching 114.8% from 90.5% a year earlier as a result of the higher provisioning undertaken during the year as well as the lower formation of new impaired loans.