KUALA LUMPUR, May 26 — Malayan Banking Bhd’s (Maybank) net profit declined 14.5 per cent to RM2.04 billion in the first quarter ended March 31, 2022 (Q1 FY2022) due to the impact of geopolitical tensions and market volatility.
The reopening of regional economies had led to a pick-up in loans and reduced impairment charges, but the positive impact was offset by market weaknesses, Southeast Asia’s fourth-largest bank, and Malaysia’s largest bank by asset size, said in a statement today.
The bank’s revenue also fell to RM11.91 billion versus RM12.22 billion in Q1 FY2021, while basic earnings per share slipped to 17.22 sen compared with 20.96 sen previously.
“The start of 2022 looked promising with the active resumption of economic activities and the gradual reopening of international borders. However, the escalation of geopolitical tensions and resultant market volatility, as well as inflationary pressures, have somewhat dampened sentiments,” chairman Tan Sri Zamzamzairani Mohd Isa said.
He said while the bank is cautious in its outlook for the rest of the year given the significant uncertainties, Maybank would remain guided by the forward-looking strategies set out in its M25 Plan.
“We intend to actively drive new business growth in this recovery period, while at the same time continue supporting our customers to ensure they are able to remain sustainable in the long term.”
Meanwhile, group president and chief executive officer Datuk Khairussaleh Ramli said Maybank will focus on tapping into growth opportunities across customer segments in key markets while maintaining capital and liquidity strength to facilitate these growth opportunities.
“At the same time, we will ensure our risk management capabilities remain robust, and cost management and productivity efforts continue.
“Additionally, we aim to accelerate solution rollouts on our digital platforms to continue to fulfil customers’ journeys, while increasing our market penetration regionally.”
For the first three months of 2022, Maybank’s net fund-based income grew 5.3 per cent to RM4.89 billion as net interest margin (NIM) expanded three basis points year-on-year (y-o-y) on lower interest expense, and loans rose 5.2 per cent.
However, this was offset by a 28.3 per cent decrease in total net fee-based income to RM1.56 billion across most business segments due to market volatility.
Consequently, net operating income came in 5.4 per cent lower at RM6.45 billion from RM6.83 billion previously.
On the back of improved economic activities regionally, overheads grew four per cent y-o-y on higher revenue-related expenses.
The group’s cost to income ratio (CIR) stood at 45.5 per cent, well within the financial year 2022 guidance of 45 per cent to 46 per cent.
Maybank’s impairment losses continued to decline by 31.3 per cent to RM597.1 million from RM868.5 million last year.
Its gross loans rose to RM562.0 billion in Q1 FY2022 from RM534.4 billion a year ago, led by its Singapore operations which grew 7.2 per cent, and Malaysia operations which expanded 4.9 per cent.
Maybank’s Indonesia operations, however, registered a 2.0 per cent decline primarily from its ongoing strategy to rebalance its non-retail portfolios in the community financial services segment to mitigate risks.
On a sectorial review, Maybank’s group global banking registered a steady 8.9 per cent rise in net fund based income to RM1.58 billion for Q1 FY2022, underpinned by higher income from group corporate banking and global markets and investment banking group.
Islamic banking business registered a 3.6 per cent rise in total income to RM1.74 billion from RM1.68 billion a year earlier on the back of a 7.4 per cent rise in financing and advances and a 4.8 per cent increase in deposits and investments accounts, while Etiqa insurance and Takaful saw a 4.6 per cent rise in total net adjusted premium to RM1.57 billion on the back of a 21.6 per cent increase in total general premium.
In line with the group’s mission of humanising financial services, Maybank continued to offer various repayment assistance packages to customers affected by the Covid-19 pandemic.
As of April 30, 2022, some 16.8 per cent of the outstanding loan balance in Malaysia remained under relief, while the proportion in Indonesia and Singapore stood at 11.6 per cent and 3.3 per cent, respectively.
At lunch break, shares of Maybank rose 0.11 per cent to RM8.97 with 1.75 million shares transacted.
— Bernama
