Pre-tax profit up 1.2 per cent to RM3.07 billion, revenue rises to RM11.661 billion

KUALA LUMPUR: Malayan Banking Bhd (Maybank) announced yesterday that pre-tax profit increased 1.2 per cent to RM3.07 billion for the nine months ended March 31, 2008, from RM3.03 billion in the previous corresponding period.

The group’s revenue also rose to RM11.661 billion from RM10.966 billion previously.

Maybank chairman Tan Sri Mohamed Basir Ahmad said the group continued to record growth in revenue from its consumer banking, insurance and international operations as well as significantly lower loan loss and provisions during the period.

“However, the results were impacted by the challenging market conditions arising from the slowdown in the US economy and consequent credit crunch as well the volatile equity and bond markets,” Mohamed Basir said in a statement.

This caused an increase in unrealised losses from market-to-market derivatives and securities held for trading as well as fewer opportunities in the capital markets, he said.

Maybank’s group post-tax profit for the nine-month period was 4.7 per cent higher at RM2.23 billion compared with RM2.12 billion previously.

The group also registered a lower 0.8 per cent pre-tax profit of RM1.02 billion for its third quarter ended March 31, 2008, from RM1.03 billion in the previous corresponding quarter.

Its post-tax profit was also lower by 0.8 per cent at RM758.6 million compared with RM764.6 million previously.

Mohamed Bashir said group revenue after interest expense for the nine months grew 2.4 per cent to RM6.65 billion from RM6.49 billion previously, led by consumer banking (up 13.1 per cent to RM2.96 billion), insurance (up 3.1 per cent to RM532.6 million) and international operations (up 12.6 per cent to RM1.08 billion).

But the higher revenue was moderated by the RM353.4 million in unrealised losses from derivatives recorded during the period compared with only RM90.4 million previously, he said.

If these figures were excluded, adjusted revenue would have grown 6.4 per cent to RM7 billion from RM6.58 billion previously while group pre-tax profit would have registered a 9.5 per cent rise to RM3.42 billion from RM3.12 billion previously.

On the group’s international operations, Maybank president and chief executive officer Datuk Sri Abdul Wahid Omar said its higher revenue translated into a 32.6 per cent rise in pre-tax profit which reached RM656.7 million against RM495.1 million previously.

“The contribution from our international operations in terms of pre-tax profit to the group continues to grow, reaching 18.7 per cent in March 2008 compared with 15.6 per cent in March 2007,” he said.

“This is a result of our strategy to steadily expand this area of business and tap on the significant growth potential in the region,” he added.

Abdul Wahid said the proposed acquisitions of equity in banks in Vietnam, Indonesia and Pakistan announced recently would further accelerate the groups expansion regionally, and generate greater value in line with the target of having international operations contribute 20 per cent of group profit by the 2009/2010 financial year.

The results of the investment banking group was 36 per cent lower in profit tax which totalled RM120.8 million due to more challenging market conditions which resulted in fewer investment banking opportunities, Maybank said.

The insurance and takaful group recorded a 6.5 per cent increase in pre-tax profit totalling RM241.2 million from RM226.5 million previously.

For the nine-month period ended March 2008, the group saw gross loans growing stronger at an annualised rate of 9.7% per cent as the Malaysian operations saw overall loans expand 6.1 per cent on an annualised basis.

Loans growth in Maybanks Singapore operations grew at an annualised rate of 19.2 per cent (in Singapore dollar terms) while other overseas locations collectively recorded a 11 per cent rise, with higher growth coming from Hong Kong/China and the United Kingdom which saw a major portion of the loans growth emanating from the Middle East.

Group net interest income for the nine month increased on the back of the larger gross loan base, rising 6.3 per cent to RM4.08 billion compared with RM3.83 billion previously.

Non-interest income for the period declined 5.7 per cent to RM1.88 billion owing mainly to the unrealised losses from the marking to market of derivatives and provisions for diminution in value of securities.

Transactional non-interest income, however, grew 16.0 per cent to RM1.99 billion due to the groups strong customer franchise, the bank said.

The groups Islamic banking operations registered a 4.5 per cent rise in gross income for the nine-month period to RM691.5 million from RM662 million previously.

Maybank continued to have strong market share in most Islamic banking segments such as overall financing at 23.9 per cent, trade financing at 40.9 per cent, overdraft at 53.1 per cent, automobile financing at 23 per cent, home financing at 31.4 per cent, and deposits at 15.6 per cent.

Group asset quality continued to improve steadily with loan loss and provisions for the nine-month period declining by 30.2 per cent to RM451.9 million compared with RM647.7 million previously.

In addition, newly classified non-performing loans (NPLs) as at March 31, 2008, fell by 7.3 per cent compared with the previous corresponding period.

Consequently, the net NPL ratio of the group fell to 2.43 per cent compared with 3.03 per cent in June 2007.

Total assets of the group grew in the nine-month period to RM258.9 billion compared with RM256.7 billion last year while total deposits from customers expanded 17.52 per cent to reach RM185.2 billion.

On the group’s outlook, Abdul Wahid said Maybank remained confident in sustaining its financial results for the current financial year as domestic and business spending is expected to remain resilient, upheld by sturdy consumer spending, despite some risk of inflationary pressures.

“The slightly restrained economic performance would still provide sustained growth in interest income and recurring non-interest income,” he said.

— Bernama