KUALA LUMPUR: Malayan Banking Bhd (Maybank) expects its loans portfolio to continue growing at a high single-digit pace this year despite the stricter borrowing measures which had been put in place since January.
The largest bank in Malaysia by assets is “positive” on the move by Bank Negara to introduce the responsible financing guidelines because they would ensure prudence in lending and healthy growth in the banking and finance industry.
“The various measures introduced by Bank Negara are a very healthy approach. As much as banks are responsible to grow profitably and responsibly, the financial market is also participated by various other industries as well,” president and CEO Datuk Seri Abdul Wahid Omar told a press conference here to announce Maybank's half-year financial results here yesterday.
“The move by Bank Negara to introduce the responsible financing guidelines that would also cover the non-bank financial institutions is a good move it is a proactive move to intervene in the market before it gets too hot to participate.
“It is a pre-emptive measure to ensure we don't experience any bubble in the economy,” Abdul Wahid said.
Abdul Wahid said that loans would still grow at a high single-digit pace based on historical trends and observations albeit at a slightly slower pace compared with the previous year.
“We are looking at a gross domestic product (GDP) growth for Malaysia at 4%, typically the loans growth would be double the GDP rate. For the month of January, we have seen that loans continued to grow,” he said.
Maybank's net profit for the six months ended Dec 31, 2011 had surged by 20% to a record RM2.58bil on the back of revenues which had gone up by 26.4% to RM12.88bil. It has proposed a final dividend of 36 sen per share less 25% tax for its shareholders to be paid in cash and/or shares, depending on shareholders' preference.
On a quarterly year-on-year basis, the bank had recorded 15% growth in net profit to RM1.3bil on the back of second quarter revenues growing by 31.3% to RM6.81bil.
When compared to the preceding first quarter, Maybank's second quarter net profit was flat with 0.8% growth on the back of 12% increase in revenue.
Abdul Wahid said the robust double-digit percentage increase across all business segments was due to sustained loans growth and fee-based activities and noted that the bank also recorded a “marked decline in allowance for losses for loans”.
Maybank said that loans growth for the six months annualised period for the group was at 16.2% and deposits also grew by 22.5%. Meanwhile, its risk weighted capital ratio was at 16.4% while return on equity was at 16.2%.
RHB Research banking analyst David Chong said that Maybank's results were in line with consensus forecast and dividends were “higher than forecast”.
OSK Research House said that the results were in line with expectations and that the dividends declared was a surprise.
On the broader Malaysian economy, Maybank expected the ringgit to strengthen to RM2.95 per US dollar by the end of 2012, the overnight policy rate would remain unchanged at 3% until the end of 2012 while the consumer price index or inflation is also expected to moderate to 2.7% from 3.2% in 2011.
On its Indonesian operations, Maybank said that it was actively looking for buyers for its 20% stake in PT Bank Internasional Indonesia Tbk but added that current market condition did not allow it to do that because it would incur a loss should it be done at this point of time.
“For all intents and purposes, we are not going to selldown (from 100% due to the newly imposed Indonesian regulations) if we are going to incur a loss but we would actively seek for opportunities to further divert these shareholdings. We are open to anyone who can help us sell at a profit,” said its deputy president and group chief financial officer Khairussaleh Ramli.
On its expansion targets and aims, Maybank said that it preferred organic growth but that it was open to any inorganic opportunities especially in Thailand.