Maybank - Malayan Banking Bhd
Maybank - Malayan Banking Bhd
05/24/2024 | Press release | Distributed by Public on 05/24/2024 00:46
Maybank 1Q FY24 Net Profit up 9.8% to RM2.49b
Financial
Maybank 1Q FY24 Net Profit up 9.8% to RM2.49b
24 May 2024
11-min read
Stronger first quarter results attributed to the Group's continued momentum in net operating income growth
| 1Q FY24 at a glance (Y-o-Y) |
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Maybank, Southeast Asia's fourth largest bank by assets, reported a 9.8% increase in net profit of RM2.49 billion for the financial period ended 31 March 2024 (1Q FY24). Profit before tax (PBT) meanwhile, rose by 12.6% to RM3.44 billion compared with a year earlier. The commendable results were driven by strong growth in core fees as well as an increase in treasury and market gains that supported the Group's net operating income.
Net operating income for the quarter grew by a strong 19.8% to RM7.58 billion. This was mainly on the back of a robust 79.2% Y-o-Y increase in non-interest income (NOII) to RM2.74 billion boosted by improved core fees which rose 17.3% as well as better investment & trading income. Net fund based income also improved to RM4.84 billion from RM4.80 billion compared to a year earlier supported by strong group gross loans growth of 11.2% from all key segments in Malaysia, Singapore and Indonesia. Net interest margin (NIM) declined 19 bps Y-o-Y as a result of higher funding cost across the home markets.
Overhead cost was higher at RM3.66 billion compared with RM3.05 billion a year earlier, as a result of increase in personnel costs, admin and general costs, IT expenses, and marketing expenses. Notwithstanding that, the Group's pre-provisioning operating profit (PPOP) recorded an increase of 19.8% Y-o-Y to RM3.92 billion.
Net impairment provisions stood at RM544.3 million from RM292.9 million a year earlier on increased net provisions for loans by 29.9% to RM467.77 million and RM76.49 million for financial investments and others. As a result, net credit charge off rate for loans increased to 29 bps from 25 bps the year before. Gross impaired loans ratio however improved by 18 bps to 1.32% from 1.50% a year earlier while loan loss coverage remained strong at 127.3% from 133.5% in the same quarter of 2023. The Group continues to undertake proactive engagement with clients facing financial challenges by assisting them in managing their commitments effectively.
President & Group CEO, Dato' Khairussaleh Ramlisaid that the commendable first quarter earnings supported by robust topline, good deposit growth and stable asset quality is testament to Maybank's resilience and focus in executing its M25+ strategy. The Group will continue to drive stronger M25+ momentum, focusing on identified growth areas across Group Community Financial Services, Group Global Banking and Group Insurance & Takaful in ASEAN.
"We remain resolute, adapting and advancing the Agile ways of working to continue our progress on strategic initiatives towards meeting customer expectations. Our leadership in sustainability puts us in a good position to exceed our set targets to deploy sustainable financing and decarbonisation solutions not only to our large corporate customers but also to the mid-sized and small firms."
Loans & Deposits
Group gross loans grew robustly by 11.2% Y-o-Y as at 31 March 2024, lifted by increases in all home markets of Malaysia, Singapore and Indonesia by 8.2%, 12.2% and 13.6% respectively. The Group's deposits meanwhile expanded 8.9% on growth across its Indonesia 13.1%, Singapore 9.8% and Malaysia market of 6.2%.
Capital & Liquidity Strength
For the first quarter of 2024, Maybank maintained robust capital and liquidity positions with its CET1 capital ratio at 14.87%, while total capital ratio stood at 18.21%. The Group's liquidity coverage ratio remained stable at 127.2%, well above the regulatory requirement of 100%.
Sustainability updates
Maybank is set to exceed its sustainability commitment targets for FY25. It continued to record strong progress in sustainable finance for the first quarter ended 31 March 2024, with a cumulative achievement of RM74.33 billion, well ahead of its target to mobilise RM80 billion in sustainable finance by 2025. Under commitment 2, Maybank has improved the lives of 1.48 million households across ASEAN through a combination of its community programmes and financial inclusion efforts particularly for the lower income communities, against the target of 2 million households by 2025.
Sectoral Review
Group Community Financial Services (GCFS) continued to strengthen its franchise in the first quarter of 2024, registering a 12.4% Y-o-Y increase in net operating income to RM4.41 billion which contributed to a rise in PPOP to RM1.75 billion from RM1.74 billion a year earlier. This was mainly buoyed by a commendable growth in its NOII by 22.3% while net fund based income was also up 9.6% compared to 1Q FY23. Wealth Management, a key focus segment for GCFS maintained its upward trajectory with Total Financial Assets rising 10.3% Y-o-Y to RM480.0 billion contributed by investments growth of 15.7% and loans growth of 12.6%. For CFS Malaysia, loans expanded by 8.6% led by a rise in its Business Banking and SME segment by 10.3% followed by its Consumer segment by 8.2%.
Group Global Banking's (GGB) PBT for Q1 FY24 rose 17.0% Y-o-Y to RM1.60 billion attributed to higher income growth. Net operating income increased 26.1% Y-o-Y to RM2.66 billion on the back of strong fee based income growth of 72.7%. Net fund based income however, was lower by 1.9% Y-o-Y at RM1.29 billion compared to a year ago mainly impacted by higher funding cost. Corporate loans meanwhile continued to grow steadily at 15.5% Y-o-Y across the three home markets of Singapore, Indonesia and Malaysia which was up by 21.1%, 18.1% and 7.4% respectively.
The Group's Islamic Banking business saw a rise in total income by 18.3% Y-o-Y to RM2.1 billion. PBT, however decreased to RM819.3 million for the first quarter compared with RM924.7 million a year earlier mainly from higher provisions and overheads. Within the business, Maybank Islamic's total gross financing for Malaysia grew 11% to RM272.9 billion, contributed by steady growth in CFS business which grew 11.5% and GB business which grew 9.2% Y-o-Y. As at 31 March 2024, Islamic financing constituted 69.3% of Maybank Malaysia's total loans and financing while Maybank Islamic continued to lead in the market share of Islamic assets in Malaysia at 29.4%. Assets under management for Islamic Wealth Management increased 18% Y-o-Y to RM77.6 billion.
Etiqa Insurance & Takafulregistered a robust 52.5% Y-o-Y increase in PBT to RM364.9 million for 1Q FY24. This was on the back of a strong 61.7% rise in net operating income to RM426 million, lifted mainly by a 5.0% increase in net fund based income. Total net adjusted premiums/contribution rose 26.8% boosted by a 35.5% increase in Total Life & Family net adjusted premiums and 17% in Total General net written premiums. Etiqa maintained its top position in the General Insurance & Takaful (Malaysia) segment with a 16.1% market share and in the top 3 for the Life & Family (New Business) segment with a 12.1% market share.
Key Home Markets
Maybank Singapore's 1Q FY24 net income rose 11.1% Y-o-Y to S$304.42 million mainly boosted by an increase in NOII which more than doubled to S$143.62 million compared with a year earlier. The rise in NOII was contributed by treasury income growth as well as strong wealth management income. Net fund based income however declined 21.2% to S$160.80 million as higher interest cost outpaced the increase in interest income from loans growth, effecting net interest margin. PPOP meanwhile grew 9.1% Y-o-Y to S$162.57miilion. However, PBT dipped 13.4% Y-o-Y to S$200.35 million on lower write back in loan loss allowances.
Maybank Indonesia recorded a pre-provisioning operating profit of Rp609 billion as the Bank booked higher interest income of 10.7% Y-o-Y. Due to higher cost of funds, net interest income decreased by 3.0% while NIMs contracted by 61 bps Y-o-Y. Fee-based income was lower at Rp370 billion from Rp574 billion due to the weakening Rupiah, impacted by changing trends and projection in global interest rates movement and geopolitical influence as well as lower asset recovery. Meanwhile, loans grew 14.0% to Rp122.28 trillion in the first quarter of 2024 across all segments of corporate by 18.2%, retail by 9.6% and CFS non-retail loans by 14.6%. The Bank also took a proactive approach to set aside provisions for specific corporate accounts.