Maybank rose 13 sen to RM5.85 and added 2.1 points to the KLCI on Feb 4, 2016. STAR
KUALA LUMPUR: Malayan Banking Bhd
’s (Maybank) net profit surged 42.9% to RM2.36bil in the fourth quarter ended Dec 31, 2016 compared with RM1.65bil in the same period previously.
During the period, Maybank saw its revenue increase to RM11.24bil from RM11.05bil in the previous corresponding period. The group’s earnings per share (EPS) rose to 23.19 sen from 17.08 sen a year ago.
The country’s largest lender has proposed a final single-tier dividend in respect of the current financial year ended Dec 31, 2016 (FY16) of 32 sen single-tier dividend on amounting to a net dividend payable of RM3.26bil.
The group said its net interest income and Islamic banking income for the quarter ended Dec 31, 2016 increased by RM237.7mil, or 6.1%, compared to the previous corresponding period.
The group’s other operating income decreased by RM304.8mil, or 18.5% to RM1.34bil for in the fourth quarter compared with a year ago. It said the decrease was mainly contributed by higher unrealised mark-to-market loss on revaluation of financial assets at FVTPL and derivatives of RM883.4mil compared to the previous period corresponding quarter ended Dec 31, 2015, lower net gain on disposal of property, plant and equipment of RM134.4mil and lower fee income of RM87.6mil.
The decrease was, however, mitigated by higher investment income of RM512.3mil and unrealised mark-to-market gain on revaluation of financial liabilities at FVTPL of RM267.3mil.
For the full financial year ended Dec 31, 2016, Maybank’s net profit stood to RM6.74bil, down 1.3% from RM6.83bil in the same period a year ago. Its revenue for the period was higher at RM44.65bil against RM40.55bil previously.
Its net interest income and Islamic banking income for FY16 increased by RM704.7mil, or 4.7% to RM15.75bil compared to the previous corresponding financial year ended Dec 31, 2015.
Maybank’s net earned insurance premiums from the insurance and takaful subsidiaries increased by RM247.4mil to RM4.44bil in FY16.
Other operating income of the group for the FY16 was RM6.16bil, an increase of RM396.6mil or 6.9% from RM5.77bil in the previous corresponding financial year. The increase was mainly attributable to higher investment income of RM553.8mil compared to the previous corresponding period a year ago. The increase was, however, offset by lower fee income of RM171.9mil.
Meanwhile, its group corporate banking and global markets’ profit before taxation increased 1.2% to RM5.26bil in FY16. The bank said the increase was mainly due to higher other operating income of RM641.3mil. The increase was, however, offset by higher allowance for impairment losses on loans, advances, financing and other debts of RM389.3mil and higher allowance for impairment losses on financial investments of RM135.6mil.
The group’s investment banking’s pre-tax profit fell by 11.9% to RM341.2mil in FY16 compared with RM387.2mil in the same period a year ago. The decrease was mainly driven by higher overhead expenses of RM69.1mil, lower other operating income of RM44.8mil and higher allowance for impairment losses on financial investments of RM1.1mil.
It said the decrease was, however, mitigated by higher net interest income and income from IBS of RM64.1mil and lower allowance for impairment losses on loans, advances, financing and other debts of RM5.6mil.
Its group insurance and Takaful’s pre-tax profit increased by 43.1% to RM880.2mil in FY16 compared with RM615.1mil for the previous corresponding financial year ended Dec 31, 2015.
Commenting on its prospect for 2017, Maybank said Malaysia’s real GDP growth in 2017 would be underpinned by sustained consumer spending, stronger growth in public and private investments and a rebound in Government consumption expenditure. Growth in public and private investments will be driven by rollout of existing and new major infrastructure and investment projects. The OPR is also expected to remain unchanged at 3% in 2017 to support domestic demand.
“Maybank Malaysia’s loans growth is expected to be slightly ahead of GDP growth in 2017, by focusing on pockets of opportunities within the consumer segment, retail SME and corporate lending,” it said in the notes accompanying its financial results.
It added that Maybank Singapore’s loan growth will mainly be driven by retail SME and consumer financing with an upside to corporate lending, should tradeflows recover.
“Maybank Singapore will also look to build on its wealth management services, expand on its Islamic offerings by providing alternative financing solutions to customers and deepen cross-sell across key customer segments. Another area of focus will be the expansion of internet and mobile banking solutions in an effort to enhance customers’ digital experiences,” it said.
The bank said a key growth driver for Maybank Indonesia in 2017 would be to expand its fee income streams through bancassurance, structured products and e-channel transactions.
“At Maybank group, key strategic priorities for 2017 would be to strengthen our revenue drivers by focusing on pockets of opportunities across the various segments in consumer and corporate lending and capturing regional opportunities through our Maybank Kim Eng, Etiqa and Maybank Islamic franchises.
“We intend to focus on leveraging on our multi-channel digital capabilities, expanding product segments, increasing productivity, and driving regional cross-selling synergies, while keeping customer needs at the forefront,” Maybank said.
Against the backdrop of selective growth in the market, Maybank said it would maintain its approach of proactively managing asset quality. The Group will continue to emphasise on its capital strength, ahead of accounting changes that will be adopted on Jan 1, 2018.
“Barring any unforeseen circumstances, the group expects its financial performance for 2017 to be satisfactory given the persisting challenging global environment. The group has set two
headline key performance indicators of return on equity of 10%-11% and group loans growth of 6%-7%,” Maybank said.
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