Maybank’s gains jump on cost-efficient portfolios

The country’s largest banking group posts a 108.4% YoY jump in earnings to RM1.9b for 2Q21


MALAYAN Banking Bhd’s (Maybank) would remain focused on robust risk management, strengthen its capital buffers and grow its current and savings accounts (CASA) deposit base to face unexpected events and a more challenging second half of the year (2H21).

Group president and CEO Datuk Abdul Farid Alias (picture) said Maybank’s strong liquidity and capital positions have enabled the lender to support customers through the prolonged Covid-19 pandemic.

At the same time, he said the group is able to pursue growth opportunities and investments across the region to future-proof the company.

“We will continue to strengthen our digital capabilities and pursuit of innovation, as well as accelerate our sustainability commitments, which we believe will provide us the competitive edge in pursuing our growth agenda,” he said in a statement yesterday.

The country’s largest banking group posted a 108.4% year-onyear (YoY) jump in earnings to RM1.96 billion for the second quarter ended June 30, 2021 (2Q21), driven by loan growth, improved net interest margins (NIM) from a more cost-effective funding mix and lower impairments.

Revenue, however, declined 3.9% to RM11.34 billion from RM11.79 billion in 2Q20.

Maybank, the largest company by market capitalisation on Bursa Malaysia, has proposed a single-tier first interim dividend of 28 sen per share.

The dividend comprises 14 sen per share to be paid in cash and an electable portion of 14 sen per share that can be reinvested in new ordinary shares or paid in cash.

The dividend payout to shareholders amounts to RM3.27 billion or 75.2% of the half-year net profit of RM4.35 billion.

The group has set its headline key performance indicator of return on equity at circa 9% for the financial year 2021.

For the six months, the group saw net fee-based income ease by 16.5% to RM3.5 billion from RM4.19 billion in 1H20, owing primarily to lower investment disposal gains and marked-to-market losses.

This was offset by higher net fund-based income by 16.1% to RM9.5 billion as loans grew and NIMs expanded as a result of strong CASA growth.

Its net operating income for 1H21 came in at RM13 billion, rising 5.1% from RM12.37 billion in 1H20, while pre-provisioning operating profit rose 7.9% to RM7.26 billion in the period.

Net impairment losses for 1H21 halved to RM1.44 billion from RM2.77 billion in 1H20, the bank stated.

After deducting some RM1.44 billion for income tax and zakat, the group’s net profit for 1H21 came in at RM4.35 billion versus RM2.99 billion a year earlier.

Its Malaysian operations registered a steady 4.7% expansion in gross loans for the 1H21, outpacing the industry growth of 3.4%, underpinned by a healthy 6.7% rise in the community financial services (CFS) segment on strong consumer and business banking and small and medium sized enterprises (SMEs) demand.

Gross deposits at the group level expanded by 5.5% with all home markets showing steady increases, led by Malaysia at 4.7%, Singapore (3.7%) and Indonesia (1.5%).

On its sectoral review, group CFS registered an 11.8% YoY increase in net operating income to RM7.07 billion, backed by steady double-digit growth in both its net fee (13.0%) and fund-based (11.5%) income.

Its wealth management segment maintained its upward trajectory with total financial assets rising 7.6% from a year earlier to RM387.8 billion at the end of June. Total CFS deposits rose 9.2%.

Group global banking saw a marginal dip in net operating income of 3.8% YoY to RM5.02 billion.

The decline was offset by robust net operating income growth in group investment banking and group asset management by 28.4% and 29.8% respectively.

Its Islamic banking business continued to perform strongly, with profit before tax rising RM2.34 billion in 1H21, compared to RM861.6 million on the back of a robust 42.1% rise in total income, mainly from lower dividend expense and lower impairment provisions by 69.4%.

Maybank Islamic saw total gross financing rising to RM211.1 billion while Etiqa insurance and takaful registered a 6.9% rise in net operating income to RM919 million for the six months.

Maybank shares finished 1.44% or 12 sen higher to RM8.45 yesterday, giving it a market value of RM98.81 billion.