KUALA LUMPUR: Malayan Banking Bhd recorded a net profit of RM2.39bil for the first quarter ended March 31,2021 (1QFY21) an increase of 16.7% from RM2.05bil last year as loans picked up on an improving economy.
Maybank, South East Asia’s fourth largest bank by assets, said overhead expenses and impairments declined. Profit before tax (PBT) for 1Q21 was RM3.17bil compared with RM2.80bil a year ago.
“The results translate into a return on equity of 11.7% compared with 10.6% a year ago, while earnings per share rose 15.0% to 21.0 sen from 18.2 sen previously.
However, its revenue dipped to RM12.22bil from RM13.23bil a year ago.
It said group net operating income was RM6.83bil, slightly higher than a year earlier, lifted by a 7% rise in net fund based income to RM4.65bil.
This was on the back of a 3.1% rise in loans, although it was partly offset by a dip in net fee based income to RM2.18bil from RM2.38bil a year earlier.
Sustained efforts in cost management resulted in overhead expenses declining 4.1% to RM2.82bil in 1QFY21 from RM2.94bil previously.
This helped improve the group’s cost-to-income ratio further to 41.3% from 43.7% a year earlier, as income growth of 1.5% outpaced the decline of 4.1% in overhead costs during the quarter.
“Consequently, the group’s pre-provisioning operating profit (PPOP) came in at RM4bil from RM3.78bil in 1Q20.
“Net impairment losses, meanwhile, stood at RM868.5mil compared with RM1.02bil previously.
“Notwithstanding this, the group continues to adopt a conservative stance, making top-ups for existing impaired accounts on account of devaluation of collaterals, as well as additional management overlay for the retail portfolio, where necessary, ” it said.
Maybank chairman, Tan Sri Zamzamzairani Mohd Isa (pic, above) said that the encouraging first quarter performance continues to validate the group’s strong operational resilience and affirmed the proactive strategies Maybank has adopted over the last year, despite the uncertain economic climate caused by the pandemic.
“While we see the re-emergence of more Covid-19 infections in a number of markets, we remain hopeful of a gradual economic recovery for the region, as governments work to address this setback and ramp up the roll-out of their vaccination programmes.
“Maybank is well positioned to support the expected improvement in economic activity and we will continue to strengthen our business, stand by our stakeholders and support our customers so that we can collectively emerge stronger,” he said.
Group president & CEO Datuk Abdul Farid Alias (pic, above) said there remains a general sense of caution given that the pandemic is not fully contained.
He said Maybank will remain agile and alert to tap into emerging opportunities, while always maintaining a disciplined approach in managing its business.
“One of the risks financial institutions are facing is that credit implications arising from the movement restrictions due to Covid-19 are still camouflaged owing to the flexibilities under the Repayment Assistance (RA) and Targeted RA programs.
“Banks need to continue monitoring the situation closely, and provide loan loss provisions that are sufficient to address any unexpected outcome. In view of this, we must continue to remain vigilant in order to protect the banking system, ” he said.
Farid said Maybank will continue to be guided by its M25 Plan, and seek to drive its digitalisation strategy further as it will be key in helping the banking group achieve better efficiencies and offer new frontiers in customer experience.