Maybank group president & CEO Datuk Abdul Farid Alias said that notwithstanding the volatility in the current operating environment, the group will continue to ride on the growing economy to strengthen its banking business as well as fulfil its growth strategy.
KUALA LUMPUR: Malayan Banking Bhd
posted net profit of RM1.96bil in the second quarter ended June 30, 2018, underpinned by higher net interest income and Islamic banking income.
Declaring an interim dividend of 25 sen a share, Maybank, Southeast Asia’s fourth largest bank by assets, announced on Thursday the net profit was 18.1% higher compared with RM1.658bil a year ago.
Maybank's profit before tax rose 16.3% to RM2.61bil from RM2.24bil a year ago. Revenue for the quarter rose 5.3% to RM11.51bil from RM10.92bil. Earnings per share were 17.94 sen compared with 16.06 sen.
It said net interest income and Islamic banking income increased by RM88.6mil or 2.1% on-year, net earned insurance premiums from the Insurance and Takaful subsidiaries increased by RM234.2mil or 18.7% to RM1.49bil.
The group's other operating income fell by RM519.2mil or 34.0% to RM1bil. The decrease was mainly contributed by unrealised mark-to-market loss on revaluation of financial assets/liabilities at FVTPL and derivatives of RM337.8mi.
This compared to unrealised mark-to-market gain on revaluation of financial assets/liabilities at FVTPL and derivatives of RM99.5mil a year ago, lower investment income of RM333.8mil and lower fee income of RM16.3mil.
The decrease was, however, offset by higher foreign exchange gain of RM220mil and higher realised gain on derivatives of RM55mil.
“The group's allowances for impairment losses on loans, advances, financing and other debts decreased by RM248.1mil to RM582.1 million for the quarter ended 30 June 2018 from a year ago,” it said.
For the first half, profit before tax rose by 15% to RM5.17bil from RM4.49bil a year earlier. The higher profit was due to higher operating income, lower impairments as well as reduced overheads as a result of better cost management.
Net profit rose by 13.9% to RM3.83bil from RM3.36bil in the previous corresponding period. Revenue increased by 3.7% to RM23.02bil from RM22.20bil.
Maybank said despite the challenging global economic environment, operating income for the rose 3.2% to RM11.67 billion, aided by steady growth in the group’s diversified operations and strong franchise across the region.
This lifted pre-provisioning operating profit (PPOP) by 7.3% to RM6.19bil compared with a year earlier.
Net fee based income grew 7.4% to RM3.28bil, aided by higher income from Islamic banking operations, net earned insurance premiums and foreign exchange profits.
Net fund based income, meanwhile, increased 1.6% to RM8.39bil, supported by a 4.6% rise in gross loans. Singapore operations saw its loans expand a robust 8.9% on-year, followed by Indonesia at 6.6% and Malaysia 6.1%.
Gross deposits, meanwhile, rose 5.5%, boosted by an 11.6% rise in Singapore and a 10.1% increase in Malaysia.
For the half year, net impairment losses declined by 22.9% to RM1.06bil, from RM1.38bil a year earlier.
Maybank chairman, Datuk Mohaiyani Shamsudin said, “Maybank’s performance clearly demonstrates its strength and resilience in facing the evolving environment and the shift in the banking landscape.
“The group is confident that 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.
Meanwhile, group president and CEO Datuk Abdul Farid Alias said that notwithstanding the volatility in the current operating environment, the group will continue to ride on the growing economy to strengthen its banking business as well as fulfil its growth strategy.
“The macro environment presented many challenges to the banking business this year where we saw a slight compression in net interest margin (NIM) due to our deliberate strategy to be defensive from a liquidity perspective in the first half of the year.
"We have demonstrated our ability to achieve growth even in the midst 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.”
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