KUALA LUMPUR • Malayan Banking (Maybank), Malaysia's largest lender, has posted its highest first-quarter profit, helped by a drop in expenses and continued decline in impairment losses.
Maybank's net profit for the quarter was RM1.9 billion (S$640 million), up 10 per cent from RM1.7 billion a year ago. It beat an average estimate of RM1.85 billion from two analysts surveyed by Thomson Reuters. Revenue was 2 per cent higher at RM11.5 billion.
The results were supported by a better cost-to-income ratio of 47.6 per cent, versus 50.1 per cent a year ago, as fee-and fund-based income growth outpaced a rise in overhead expenses, the bank said in a statement yesterday.
Net impairment losses for the quarter ended March fell 7.7 per cent, while gross impaired loans ratio improved to 2.37 per cent from 2.4 per cent, it added.
Maybank's Malaysian operations recorded a strong 6.7 per cent increase in loans, while its Singapore and Indonesia operations saw increases of 5.5 per cent and 2.9 per cent, respectively.
On the group level, loans expanded 1.5 per cent year-on-year.
Maybank chairman Mohaiyani Shamsudin said the bank was buoyed by the positive outlook in the region and Malaysia, despite some uncertainties in the operating environment.
PINNING HOPES ON POLICIES
In particular, we await policies that are expected to be outlined by the new government in Malaysia which we hope will further drive private-sector investments and enhance consumer confidence.
MAYBANK CHAIRMAN MOHAIYANI SHAMSUDIN
"In particular, we await policies that are expected to be outlined by the new government in Malaysia which we hope will further drive private-sector investments and enhance consumer confidence."
The country's lenders are seeing increased domestic loan demand from various sectors, including manufacturing, finance and infrastructure, analysts said.
Malaysian banks with a presence in its neighbouring South-east Asia countries expect stronger demand for corporate and consumer loans as economies improve, which is likely to support credit growth this year.
But slower economic growth is a concern and uncertainty over economic policy has increased after 92-year-old Tun Dr Mahathir Mohamad led an opposition alliance to a surprise election win this month.
Malaysia's first-quarter gross domestic product grew 5.4 per cent from a year earlier, its second straight quarter of slower economic growth.
Maybank's net interest margin - the difference between interest paid and earned and a key gauge of bank profitability - shrank slightly to 2.39 per cent in the first quarter from 2.43 per cent a year ago.