Maybank Group has achieved a net profit of RM2.39 billion for 1QFY21, compared with RM2.05 billion last year.
The rise was supported by loans that picked up pace on the improving economy economic outlook, with overhead expenses and impairments declining.
Profit before tax (PBT) for the quarter stood at RM3.17 billion compared with RM2.80 billion in 1QFY20.
The Group’s net operating income came in at RM6.83 billion, which was slightly higher than a year earlier, lifted by a seven percent rise in net fund-based income to RM4.65 billion.
This was on the back of a 3.1 percent rise in loans, although it was partly offset by a dip in net fee-based income to RM2.18 billion from RM2.38 billion a year earlier.
Sustained efforts in cost management resulted in overhead expenses declining 4.1 percent to RM2.82 billion in 1QFY21 from RM2.94 billion previously. This helped improve the Group’s cost-to-income ratio further to 41.3 percent from 43.7 percent a year earlier, as income growth of 1.5 percent outpaced the decline of 4.1% in overhead costs during the quarter.
Consequently, the Group’s pre-provisioning operating profit (PPOP) came in at RM4.00 billion from RM3.78 billion in 1QFY20. Net impairment losses, meanwhile, stood at RM868.5 million compared with RM1.02 billion 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.
Spurred by the improving economic outlook, loan demand picked up pace in 1QFY21 with Group gross loans coming in 3.1 percent higher compared with 0.3 percent a year ago.
This was led by the Malaysian operations which saw a steady 4.9 percent increase in loans during the first quarter, underpinned by 7.4 percent rise in Community Financial Services (CFS) on the back of strong demand in the Consumer as well as Business Banking and SME segments.
The Group’s Singapore operations also posted an increase, with loans growing 2.1 percent, supported mainly by its CFS business. Maybank’s Indonesia operations, however, registered a decline of 18.3 percent primarily as a result of write-offs and repayments as it continued to manage its exposure as part of an on-going strategy to rebalance its portfolios to mitigate risks.
In line with the Group’s strategy to maintain a robust liquidity base and expand its low-cost funding structure, gross deposits expanded 10.3 percent Y-o-Y, on the back of a 10 percent increase in Malaysia and 9.6 percent in Singapore.
Consequently, the Group’s current account and savings accounts (CASA) ratio to total deposits expanded further to 44.5 percent as at March 2021 from 38.4 percent a year earlier.
Coupled with the rate cuts seen throughout FY2020, the healthy growth in deposits and CASA ratio helped lift the Group’s net interest margin (NIM) by 8bps to 2.31 percent from 2.23 percent a year earlier.
Maybank Chairman, Zamzamzairani Mohd Isa 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 several 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.”
Meanwhile, Group President & CEO Datuk Abdul Farid Alias said there remains a general sense of caution given that the pandemic is not fully contained. Therefore, 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 to protect the banking system,” he said.
“Meanwhile, we will continue to be guided by our M25 Plan and seek to drive our digitalisation strategy further as it will be key in helping us achieve better efficiencies and offer new frontiers in customer experience.”
