Maybank misses 6% loan growth target for 2017, sees more corporate loans coming in

KUALA LUMPUR: Malayan Banking Bhd (Maybank), which missed its loan growth target of at least 6% in 2017 despite strong economic expansion, expects more corporate loans coming in to support its loan base in 2018.
The bank’s gross loans grew 1.7% on a reported basis in 2017. However, its loan expanded 4% after normalising for the forex impact.
For 2018, Maybank president and CEO Datuk Abdul Farid Alias sees the loan growth to be similar with that of 2017.
“Last year, much of fundraising exercise went to bond market, but we expect this (corporate loans) will reverse this year driven by domestic investment activities ... corporate loans could even grow 8% in 2018,” he told a press conference today in conjunction with the release of the group’s full-year financial results.
Maybank reported a record high in net profit to RM7.52 billion in 2017, 11.5% higher than the RM6.74 billion in 2016, supported by growth in key business segments and lower impairment by 32.7%.
Full-year revenue rose 2.1% from RM44.66 billion to RM45.58 billion.
Fourth-quarter net profit fell 9.7% from RM2.36 billion to RM2.13 billion due to higher taxation, while revenue was up 4.8% from RM11.25 billion to RM11.79 billion.
The group has proposed to declare a final dividend of 32 sen per share for the quarter under review, bringing full-year dividend to 55 sen, representing a dividend payout of 78.5%.
Its net interest margin improved nine basis points to 2.36% in 2017 and is projected to expand five basis points in 2018 despite stiff market competition for loans and deposits.
Gross impaired loans ratio edged up to 2.34% as at end-December 2017 from 2.28% as at end-December 2016.
Loan provisions fell 30.8% to RM1.96 billion in 2017 from RM2.83 billion in 2016 on the back of its proactive restructuring and rescheduling efforts for customers impacted by the challenging business environment in the past two years.
Meanwhile, Maybank CFO Datuk Amirul Feisal Wan Zahir said the group is not concerned over its exposure in the oil and gas and property sectors as some oil and gas borrowers have settled their loans. However, he said it remains to be seen whether there will be more impairments from the oil and gas sector in Singapore.
Maybank’s total exposure in the oil and gas segment has fallen to 3.54% in Q4 2017 from 3.96% in Q3 2017.
For the property sector, Amirul Feisal said it will be a concern only when the unemployment rate is high and there is a rapid increase in interest rates.
On Bursa Malaysia today, Maybank was unchanged at RM10.46, with 37.08 million shares traded.