By Xavier Kong
Malayan Banking Bhd announced that the banking group’s profit before tax (PBT) for the third quarter that ended Sept 30, 2015 (3Q15) rose 7.1% to reach RM2.38 billion, raising the group’s PBT for the nine months of FY15 to RM6.78 billion, a year-on-year increase of 1.4%.
Maybank’s net profit for 3Q15 came in at RM1.9 billion, a 18.1% increase year-on-year from last year’s RM1.61 billion. At the same time, this brings Maybank’s 9M15 net profit to RM5.18 million, an increase of 8.3% over last year’s RM4.79 billion.
The banking group attributed the better results to higher net operating income along with rigorous cost management, as well as a lower net interest margin compression during the nine-month period. The group had also benefitted from a one-off gain from the sale of its Papua New Guinea operations, with the disposal completed in September 2015.
Post-normalisation, the group’s net profit for their 3Q15 rose 5.8% to RM1.7 billion, while the net profit for the group’s 9M15 rose 4.2% to RM5 billion.
Megat Zaharuddin Megat Mohd Nor
“In spite of the challenges in the operating environment, which was exacerbated by lower commodity prices and heightened forex volatility in 3Q, the group had remained resilient owing to its diversified franchise,” said Maybank chairman Megat Zaharuddin Megat Mohd Nor.
“Our capital position remains strong which places us among the top of our peer banks. Our discipline and focus on the Asean region are key drivers that help us pursue opportunities in the current environment and convert them to business value that has led us to our strong growth.”
The group saw strong growth in income during the nine months period, with net fund based income 13.6% higher at RM10.77 billion on the back of strong loans growth, and net fee-based income rising 22.1% to RM4.85 billion. This resulted in a 16.1% overall rise in net operating income to RM15.62 billion. Separately, for 3Q15, net operating income surged 26.7% from a year ago to RM5.75 billion aided by an 18.4% rise in net fund based income to RM3.81 billion, and a 46.8% increase in net fee based income to RM1.93 billion.
The group’s loans growth remains sustained, expanding at an annualised rate of 17.8% for the nine months. This was boosted by a 34.5% increase from international operations while Malaysian operations recorded a growth of 6.4%, attributed to a 36.4% increase in the SME segment, 8.1% in the consumer sector and 2.4% in global banking. After accounting for the depreciation of the Ringgit against currencies of Maybank’s key markets (Singapore, Indonesia, Philippines and Greater China) annualised loans growth for the nine months was 8.7%.
Deposits grew at an annualised 12.6% for the nine months as momentum improved in 3Q15. It was led by a 26.7% rise in international markets and a 4.1% increase in Malaysian operations. Despite intense competition for deposits, the group improved its ratio of low-cost CASA (current account and savings account) deposits to total deposits, to 35.3% from 34.5% a year earlier. This, together with a firm discipline on pricing of loans, helped ease pressure on margins. For the nine months of FY15, the group saw a marginal contraction in net interest margin to 2.31% from 2.34% in the corresponding period last year.
At the same time, disciplined cost management efforts during the year saw the group post improvement in its cost-to-income (CIR) ratio. This resulted in the CIR for the nine months improving to 47.9% from 48.3% a year earlier.
Malaysian operations continued to be the mainstay of the group’s earnings, making up 66.9% of the group’s total for the nine-month period. Local operations also saw the community financial services segment as the largest contributor, counting for 40%, with a 9.6% rise in net operating income to RM6.10 billion.
The community financial services franchise remained strong with loans growing 8.2% on an annualised basis, on the back of steady growth in SME (which rose 36.4%), mortgages (13.5%), automobile finance (7.7%), and credit cards (4.6%). The high net worth & affluent market segment recorded a solid increase of 10.8% in total financial assets to RM161.1 billion as a result of improved product cross sell, with the product cross sell ratio rising to 7.12 per customer from 6.59 last year. community financial services deposits, meanwhile, grew at an annualised rate of 9.1%.
At the same time, the group’s Islamic banking segment maintained its strong performance trend, registering a 13.2% increase in PBT for the nine months to RM1.23 billion on the back of a 21% rise in total income to RM2.98 billion.
Maybank Islamic saw healthy growth in total financing, which rose 23% on an annualised basis, reaching RM127 billion. This was attributed to a 31% increase in global banking financing and a 20% rise in community financial services financing.
Maybank has a 33.6% market share in Islamic financing and 27.9% share in deposits in Malaysia, up 31.6% and 24.7% year-on-year respectively. The group also maintained leading market shares in key business segments such as automobile financing (42.0% from 38.3% a year earlier), home financing (27.2% vs 25.0%) and term financing (30.8% vs 29.7%). Islamic financing now constitutes 48.7% of Maybank’s total domestic loans and financing as at September 2015, compared with 43.8% in December 2014.
Global Banking (GB) saw its net operating income rise 3.1% on the back of an 8.3% rise in income from Global Markets, 11.9% rise from Asset Management and 1.9% from Corporate Banking. Investment Banking, however, saw a mild 2.1% dip in net operating income owing to the continued impact of weaker regional capital markets. Total GB loans in Malaysia, meanwhile, increased at an annualised rate of 2.4% driven by a 7.7% rise in trade finance and other loans.
Etiqa Insurance & Takaful continued to be a market leader in the General Insurance and Takaful business commanding 13% market share and ranked 4th in the Life/Family (New Business) segment with 9.8% market share. Total gross premium/contribution grew 4.2% YoY aided by a 7.9% increase in Total General Insurance/Takaful and a 0.3% rise in Total Life Insurance/Family Takaful business.
Profit before tax, however, declined to RM349.5 million from RM560.9 million a year earlier owing mainly to adverse equity income as a result of higher equity impairments.
Abdul Farid Alias
Meanwhile, group president & CEO, Datuk Abdul Farid Alias said that efforts will continue to sustain the group’s performance through effective management of balance sheet and liquidity, selective asset growth, and proactive management of asset quality.
“Given the expected headwinds that will remain in the coming year, we will also redouble our efforts to raise operational and capital efficiencies, as well as leverage growth opportunities throughout this region.”
At the start of the afternoon’s trading, Maybank’s shares were last traded at RM8.42, up 1 sen.
You must be logged in to post a comment.