Maybank Q2 profit rises 43% on lower loan losses

Results show recovery from a difficult 2016; it sees 'satisfactory' earnings for this year

KUALA LUMPUR • Malaysia's largest bank by assets, Malayan Banking (Maybank), yesterday reported a 43 per cent rise in net profit for the three months to June, helped by lower loan-loss provisions.

Profit reached RM1.66 billion (S$527.6 million) in the second quarter from RM1.16 billion for the same period a year earlier.

The result was slightly lower than the RM1.69 billion average of two analyst estimates, Thomson Reuters data showed.

Net interest income rose about 10 per cent to RM3.04 billion.

The results indicated that Maybank was recovering from a difficult 2016 when it had to set aside an unusually large amount of funds to cover losses from loans to the oil and gas sector, including those to now-bankrupt Swiber Holdings.

Allowances for impairment losses on loans and financing shrank to RM830.3 million from RM982 million in the second quarter of last year.

Allowances for impairment losses on financial investments fell to RM5.5 million from RM200 million.

The bank also said it expected earnings for this year to be "satisfactory, given the ongoing challenging global environment".

Its key strategic priorities for this year would be to strengthen revenue drivers by focusing on pockets of opportunities across the various segments in consumer and corporate lending, and capturing regional opportunities through Maybank Kim Eng, Etiqa and Maybank Islamic franchises.

"We will leverage our multi-channel digital capabilities, expand product segments, increase productivity, and drive regional cross-selling synergies while keeping customer needs at the forefront," the bank said in a filing on Bursa Malaysia.

The bank has set a return-on- equity target of 10 per cent to 11 per cent, and loan growth is likely to be in line with the industry, Maybank said in a statement.

The bank had earlier said it was targeting loan growth of 6 per cent to 7 per cent this year.

"Against the backdrop of selective growth in the market, Maybank Group will maintain its approach of proactively managing asset quality," it said.

REUTERS, BERNAMA

A version of this article appeared in the print edition of The Straits Times on August 31, 2017, with the headline 'Maybank Q2 profit rises 43% on lower loan losses'. Print Edition | Subscribe