PETALING JAYA: Malayan Banking Bhd (Maybank), Southeast Asia’s fourth largest bank by assets, today announced profit after tax and minority interest (patami) of RM6.96 billion for the nine-month period ended Sept 30, 2023 (9M23), an increase of 21% from the same period a year earlier.
Meanwhile profit before tax (PBT) increased by 14.4% year-on-year (y-o-y) to RM9.58 billion. The better results were attributed to steady income growth and significant improvement in net impairment provisions.
Net operating income for the nine months increased by 3.6% y-o-y to RM20.38 billion driven by higher non-interest income (NOII) of 37.8% to RM5.95 billion compared with a year earlier. Net fund-based income was lower by 6% as net interest margin compressed 25 basis points (bps) due to higher funding costs led by interest rate hikes in the past year and continued deposit competition.
Overhead costs expanded to RM9.77 billion from RM8.83 billion a year earlier on higher personnel costs, credit card related fees due to higher billings, right of use assets depreciation and information technology-related costs. As a result, the group’s pre-provisioning operating profit decreased slightly by 2.1% y-o-y to RM10.61 billion.
Net impairment provisions reduced by 53.4% to RM1.21 billion following a writeback in financial investments and others of RM152.5 million and lower net loan provisions of 27.6% to RM1.36 billion on writeback for corporate borrowers, recoveries and stable impairment balances. As a result, net credit charge off rate for loans reduced to 31bps from 45bps the year before.
Gross impaired loans ratio declined by 27bps to 1.43% from 1.70% a year earlier while loan loss coverage strengthened to 127.1% in the nine months from 122.3% compared with a year earlier.
Total assets grew from RM945 billion as at December 2022 to RM1 trillion as at September 2023 and for the first time it has exceeded the RM1 trillion mark.
For the third quarter of 2023, patami rose 12.3% y-o-y to RM2.36 billion compared with the same period last year, while PBT for the quarter was up 1.8% to RM3.16 billion.
Net operating income decreased by 5.2% y-o-y to RM6.75 billion, attributed to a decrease in net fund-based income of RM4.81 billion compared with RM5.29 billion a year earlier as NIM compressed due to persisting funding competition. NOII however was up 6.1% y-o-y at RM1.94 billion while net impairment provisions improved with a 59.3% decrease to RM342.2 million.
Net profit for the third quarter came in slightly higher by 0.8% compared with the preceding quarter’s (Q2’23) RM2.34 billion as net impairment provisions declined by 40.4% following a net write-back in financial investments and others as well as lower loan loss provisions by 21.6%. PBT for the quarter, meanwhile, was 6.3% lower at RM3.16 billion compared with Q2’23.
Total group gross loans grew strongly by 5.1% y-o-y as at Sept 30, 2023, lifted by increases of 3.7% and 3.0% in its home markets of Malaysia and Singapore respectively, while other markets contributed a rise of 5.5%.
The group’s gross deposits, meanwhile expanded 3.5% as fixed deposits grew 20.3% offsetting a decline of 8.8% in other deposits and 8.9% in current accounts and savings accounts.
Group president and CEO Datuk Khairussaleh Ramli said global challenges remain but Maybank will continue to pursue opportunities for growth guided by its corporate strategy across all its customer and business segments within its Asean operations, while maintaining its strong liquidity position, improving asset quality, and preserving sound capital levels.
The group will continue to bring about positive impact to the communities it serves in line with its purpose of “Humanising Financial Services”.
“As we deepen our M25+ strategy execution coupled with the agile ways of working, we have made encouraging strides in further shaping Maybank to be forward-looking, innovative and customer centric as we navigate through the ever-evolving operating landscape. Providing benefits to customers and uplifting customer experience via relevant product and solutions as well as process improvements facilitating account openings and loan applications have resulted in broader services uptake.
“We continue to drive digitalisation and operational efficiencies as well as building on the momentum for future revenue growth boosted by the 12 Strategic Programmes under the M25+ strategy and its targeted investments.”
Maybank, he said, aims to further deploy sustainable financing and decarbonisation solutions for its customers as the group itself carves a clear pathway to net zero.