KUALA LUMPUR: Following promising results in the first half of the year, Malayan Banking Bhd (Maybank) says it is positive on the outlook in the region, especially in its home markets.
“We are optimistic that better business opportunities remain, driven by policies outlined by the government to further drive private sector investments and enhance consumer confidence.
“We intend to leverage our strong brand equity, digital capabilities as well as expertise and solid infrastructure to tap into growth opportunities and serve our customers better,” said chairman Tan Sri Zamzamzairani Mohd Isa in a statement.
The banking group, the fourth largest in Southeast Asia by assets, posted a 45.4% year-on-year (y-o-y) jump in net profit to RM2.34bil in the second quarter of 2023 for an earnings per share (EPS) of 19.4 sen.
This compares to a net profit of RM1.61bil in the same quarter in 2022, and EPS of 13.44 sen.
In light of the performance, the board of directors declared a first interim full cash dividend of 29 sen per share, which translates to a dividend payout ratio of 75.9%, or RM3.5bil.
During the quarter, the group also reported higher revenue of RM16.13bil, compared to RM10.21bil in 2QFY22.
It said net operating income rose 15.9% y-o-y to RM7.31bil on higher non-interest income from stronger treasury and markets income, which surged 119.3% to RM2.48bil from the year-ago quarter.
Net fund-based income however recorded a slight decrease to RM4.83bil from RM5.17bil as net interest margin (NIM) compressed due to persisting funding competition.
For the six months to June 30, 2023, the group’s net profit rose to RM4.6bil from RM3.66bil while revenue climbed to RM31.32bil from RM21.36bil.
According to the group, net operating income during the first half of 2023 was up 8.6% y-o-y to RM13.63bil on the back of a 61% jump in non-interest income to RM4.01bil.
This was, however, offset by a lower net fund-based income, which dropped 4.4% y-o-y to RM9.62bil as NIM was compressed due to higher funding costs led by interest rate hikes in the past year and deposit pressure.
Overhead cost was higher at RM6.47bil compared with RM5.62bil a year earlier attributed to higher personnel costs mainly from provisions for the recently concluded collective agreements, credit card-related fees, IT-related costs and marketing expenses.
Notwithstanding this, pre-provisioning operating profit (PPOP) increased 3.3% to RM7.16bil from RM6.94bil in 1HFY22.
Asset quality improved as gross impaired loans declined by 34bps to 1.47% from 1.81% a year earlier due to write offs and low formation of newly impaired loans.
Loan loss coverage continued to strengthen to 130.3% in the first half from 122.3% compared with a year earlier, while net impairment provisions decreased 50.5% to RM867.4mil in 1HFY23.
Maybank group president and CEO Datuk Khairussaleh Ramli said the group’s aim going forward will be to accelerate its growth momentum and boost revenue drivers with emphasis on key growth areas, while improving asset quality and maintaining strong liquidity and capital positions to manage potential risks that may arise from changes in the operating environment.
“We will continue to prioritise customer centricity through the enhancement of our customers’ journey by providing relevant financial solutions and services across various touchpoints and focus on our strategic initiatives under Maybank’s M25+ strategy anchored on the five strategic thrusts,” he said.
– The Star