PETALING JAYA: The country’s largest bank by assets, Malayan Banking Bhd (Maybank), says it is expecting a “challenging year” even as it reported a 6.2% year-on-year net profit increase in its first quarter ended March 31.
For the quarter under review, the lender made a net profit of RM1.7bil or 18.27 sen per share compared with RM1.6bil or 18.09 sen per share for the same period last year.
Revenue was also higher at RM9.2bil, 9.5% more than the RM8.4bil it had registered earlier.
“The rest of the year is expected to remain challenging and we are closely monitoring regional developments, particularly the level of business activity post-implementation of the goods and services tax in Malaysia,” group president and chief executive officer Datuk Abdul Farid Alias said in a statement.
He said the group, however, remained optimistic that its Asean home ground would “continue to present us with sustained business opportunities, especially with greater realisation of the benefits that will come from the impending formalisation of the Asean Economic Community.”
Hong Leong Investment Bank head of research Low Yee Huap said Maybank’s first-quarter results were within expectations, adding that they made up 24% of its full-year profit estimates for the lender.
For the quarter under review, Maybank’s net profit grew on the back of an expansion in total loans, which increased 14.3%, led by its international segments which finished higher by 19.4%.
In Malaysia, Singapore and Indonesia, loans rose 10.2%, 11.6% and 7.1%, respectively, while Islamic financing surged 29.5%, according to the statement.
Farid said the growth was a result of rigorous efforts to increase fee income as well as build its financing portfolios responsibly.
“These were complemented by improved liquidity, proactive capital management and tightly managed expenses,” he said.
Meanwhile, group deposits increased 13%, contributed mainly by the Singapore operations which was up 17.1% and Malaysia, which grew 7.9%.
The group saw its common equity tier one ratio, which measures a bank’s total financial strength, increasing to 11.15% from 10.76% in March 2014, while the total capital ratio rose to 15.35% from 15.11% a year earlier.
Maybank’s Indonesian outfit, PT Bank Internasional Indonesia Tbk’s (BII) net profit for the quarter increased 33% to 256 billion rupiah compared with 191 billion rupiah a year earlier, helped by an “intensified strategic cost management programme” and “discipline in pricing for both deposits and lending”.
Despite an economic slowdown, Maybank noted that BII had registered loan growth in business banking (15.3%) and retail banking (14.7%), which exceeded the industry’s growth of 12.3%.
