KUALA LUMPUR: Malayan Banking Bhd (Maybank) recorded a higher net profit of RM2.05 bil in the first quarter ended March 31, up 13.3% from RM1.81 bil in the same period last year.
Revenue rose to RM13.22 bil from RM12.98 bil previously, it said in a filing to Bursa Malaysia today.
The country’s largest bank by assets said its net fund-based income grew marginally by 0.9%, net fee-based income rose 53.2% while net operating income increased to RM6.72 bil.
The results translate into a return on equity of 10.6% and earnings per share of 18.2 sen, up 11.4% from 16.4 sen in the same period last year.
Maybank chairman Datuk Mohaiyani Shamsudin said a steady result was achieved in 1Q despite the significant market volatility and disruption as a result of the Covid-19 outbreak.
“This is a reflection of Maybank’s resilience arising from the prudent stance we have taken over the years to build a solid foundation especially in terms of capital and liquidity.
“At the same time, we are pleased that our rapid response in activating our Business Continuity Plan from January itself has enabled us to continue serving our customers and creating value for all our stakeholders. The group will remain proactive on all fronts as we seek to ride through the impact of this pandemic,” said Mohaiyani.
Meanwhile, group president and CEO Datuk Abdul Farid Alias cautioned that the 1Q results are not representative of the way the bank will perform for the rest of the year.
“The largest contributor came from the sell-down of some of our liquid assets and fixed income instruments, which was above the optimal level. This resulted in a 53.2% rise in our net fee-based income, which then lifted our net operating income by 14.7%.
“While we still hold a large level of liquid assets, we need to strike a balance when selling them to ensure that it will not contract our net interest income, particularly in the current declining interest rate regime globally,” he said
Abdul Farid said the bank expects the operating environment for the rest of 2020 to remain uncertain and sensitive to the kinetics of the pandemic as well as the outlook for treatment and vaccines, which will have implications to public health and economic policies.
“We will continue to help our customers (with) the strain from supply and demand disruptions as a result of the sub-optimal market environment caused by the restricted movement globally. This will be very challenging,” he added.
On loans and deposits, the group saw loans at its Malaysian operations grow 5% year-on-year (yoy) in the first quarter, lifted by increases in both the community financial services and global banking segments.
Maybank’s liquidity coverage ratio, meanwhile, was at a healthy 138.2%, way above the regulatory requirement of 100%, while its gross impaired loan ratio moved up to 2.71% as at March 2020 from 2.48% last year.
The group’s Islamic banking business continued to perform strongly, with profit before tax for the first quarter 2020 rising 10.4% yoy to RM990.1 mil.
Its Etiqa insurance & Takaful businesses saw an 8.5% rise in total net adjusted premium on the back of a 13.3% increase in total life & family premium as well as a 3% rise in total general premium. – May 21, 2020, Bernama
