Maybank Q3 earnings up 13% on higher net interest income, Islamic banking scheme

PETALING JAYA: Malayan Banking Bhd's (Maybank) net profit for the third quarter ended Sept 30, 2017 rose 12.9% to RM2.03 billion from RM1.80 billion a year ago, mainly driven by higher net interest income, income from Islamic Banking Scheme and net earned insurance premiums.
The bank's revenue increased 3% to RM11.59 billion compared with RM11.29 billion in the previous year's corresponding quarter.
Its net impairment losses also dropped 51.0% in the quarter, as the group continued to realise the benefits from the proactive stance taken since early last year to restructure and reschedule (R&R) the credit facilities of customers impacted by the challenging economic environment.
For the nine-month period, Maybank's net profit jumped 23% to RM5.39 billion compared with the previous corresponding nine-month period's net profit of RM4.38 billion as the group benefitted from the improving economic climate across the region, with higher net fund-based income as well as a 25.2% decline in net impairment losses.

Revenue was 1% higher at RM33.79 billion compared to the previous corresponding nine-month period's revenue of RM33.41 billion.
Net interest margin (NIM) for the nine months improved 12 basis points to 2.39% compared with December 2016. However, it was two basis points lower than the 2.41% recorded in the second quarter of ended June 30, 2017, reflecting the increasing pressure on margins owing to rising cost of funds
Group deposits expanded 2.7% year-on-year, led mainly by Malaysian operations which grew 7.5% and Indonesia operations at 3%.
The continued growth in current account and savings account (CASA) helped maintain the group’s CASA ratio at a stable rate of 36.8%.
The group also preserved its robust liquidity position with a liquidity coverage ratio of 137.0% from 136.0% a year earlier, well above Bank Negara Malaysia’s minimum requirement of 80% for 2017.

In a statement, Maybank chairman Datuk Mohaiyani Shamsudin said the results it achieved demonstrate that the group has been able to sustain its growth momentum across its business lines as well as home markets in the last nine months.
"The outlook for the remaining months appears to be improving, giving us the opportunity to seek new growth segments. We will, nevertheless, continue to manage our business prudently, ensuring that we grow responsibly while managing costs and risks in a highly disciplined manner.”

Meanwhile, group president & CEO Datuk Abdul Farid Alias said it is now seeing a pick-up in business and loan growth as well as market sentiments, which it intend to leverage further in the coming months.
"However, in the midst of this more positive outlook, we are conscious of the heightening pressure on interest margins owing to the increasing cost of funds. While we remain focused on building our core franchise for the long term, we will ensure that we price our assets and liabilities appropriately to ensure continued profitability.”
The group's share price was up five sen to close at RM9.25 with some 62.1 million shares changing hands.