PETALING JAYA: Malayan Banking Bhd (Maybank) continues to see sustained growth in its gross loans and total deposits, as well as a drop in impaired loans, despite the weak third-quarter (Q3) economic performance.
The bank, which is the fourth largest in South-East Asia by asset size, also reported a 23-basis-point expansion in net interest margin (NIM) to 2.31% for the nine-month period ended Sept 30, on a year-on-year (y-o-y) basis.
However, on a quarter-on-quarter comparison, the NIM in Q3 ended Sept 30 declined by 11 basis points to 2.26%.
The drop was due to the impact from net modification loss arising from the moratorium granted to consumer and small and medium enterprise borrowers during the third quarter.
Varying levels of movement restrictions in the recent Q3 across its home markets Malaysia, Singapore and Indonesia have weighed down Maybank’s bottom line.
In the July-September 2021 period, Maybank reported a net profit of RM1.68bil, down by 13.71% y-o-y from RM1.95bil in the previous corresponding quarter.
Revenue fell by almost 19% y-o-y to RM11.15bil from RM13.76bil.
Maybank’s profitability was affected as a result of a lower net fee-based income as well as higher net impairment losses, which have more than offset the rise in net fund-based income.
In Q3 ended Sept 30, Maybank’s net fund-based income was up 14.3% y-o-y to RM4.72bil.
However, net fee-based income was lower at RM1.43bil from RM1.95bil, while net impairment losses increased to RM1.13bil from RM805.9mil.
Commenting on the increased net impairment losses, Maybank said it continued to undertake proactive provisioning through management overlay for borrowers under the repayment assistance programmes and to facilitate some write-offs of accounts.
The group’s pre-provisioning operating profit came in at RM3.33bil in the latest Q3, down from RM3.37bil a year earlier.
Cumulatively, in the first nine months of financial year 2021, Maybank registered a net profit of RM6.04bil, which represents a 22.16% y-o-y increase from RM4.94bil a year earlier.
Revenue, on the other hand, dropped by 10.53% y-o-y to RM34.7bil from RM38.79bil in the previous corresponding period.
“The group recorded a net operating income of RM19.15bil, a 3.8% rise from a year earlier on the back of higher net fund based income which rose by 15.5% y-o-y to RM14.22bil.
“Net impairment losses decreased by 28.3% to RM2.56bil from RM3.57bil a year earlier, as the group benefitted from its earlier prudent stance in accelerating its forward looking assumption provisioning,” according to Maybank.
As at Sept 30, Maybank’s total group gross loans grew 4% y-o-y, lifted mainly by increases of 11.3% and 2.2% in its Singapore and Malaysia operations, respectively, while the Indonesia operations saw a 9.9% decline.
Meanwhile, its total deposits expanded 2.8%, primarily led by the 4.1% growth in Malaysia. However, this was mitigated by a decrease of 5.7% and 12.9% in Singapore and Indonesia, respectively.
Asset quality improved as the group’s gross impaired loans (GIL) ratio declined to 1.93% in September 2021 from 2.35% in September 2020.
“Maybank continued with its strategy to maintain robust capital and liquidity positions, with its CET1 capital ratio at 14.24%, and total capital ratio at 18.21% as at Sept 30, making it one of the best capitalised banks in the region.
“The group’s liquidity coverage ratio stood at a healthy 138.1%, way above the regulatory requirement of 100%,” it said.
Group president and CEO Datuk Abdul Farid Alias said Maybank will continue to provide tailored financial solutions to meet the current needs of customers, while continuing to support customers who require targeted financial assistance.
“We will help our customers capitalise on growth opportunities arising from the recovery and so they are able to sustain themselves moving forward in this new operating environment.
“This includes supporting them in embracing digitalisation in their operations, exploring alternative forms of financing solutions and looking at investment solutions that can help grow their wealth,” he said in a statement yesterday.