“Net impairment losses for 2QFY20, however, rose to RM1.74bil compared with RM452.3 million a year earlier as the group maintained a prudent stance and increased its forward looking assumption provisioning, given the heightened possibility of a drawn out pandemic which is expected to further affect businesses and individuals globally, ” it said.
KUALA LUMPUR: Malayan Banking Bhd posted net profit of RM941.73mil in the second quarter ended June 30,2020 as it booked in the impact from the movement control restriction orders as well as the reductions in interest rates across most of its regional markets arising from the Covid-19 pandemic.
Maybank, Southeast Asia’s fourth largest bank by assets, said in a statement on Thursday its profit before tax (PBT) was 52.6% lower at RM1.26bil compared with RM2.65bil a year ago.
“Net profit for the quarter declined by some RM1bil or 51.5% to RM941.7mil from RM1.94bil a year earlier, ” it said. Earnings per share were 8.38 sen compared with 17.46 sen.
Net fund based income for 2Q came in lower by RM326.5mil compared to 2QFY19, mainly as a result of the Day-One modification loss arising from the blanket moratorium for fixed rate financing and the 50 basis points (bps) cut in the Overnight Policy Rate.
This was offset by the higher loan drawdowns, particularly for the SME and mortgage segments, strong growth in our current and savings accounts (CASA) deposits which increased our CASA ratio to 40.2% as well the funding relief plans for the SME segment.
As of Aug 14, the group had disbursed RM1.4bil under the Bank Negara Malaysia Special Relief Facility loans to SMEs.
Maybank said fee-based income rose by 5%, buoyed by better investment and trading returns, as well as improvements in unrealised gain on financial assets and investments.
“Combined together, net operating income was 4.1% lower at RM5.65bil from RM5.89bil a year earlier, ” it said
It said that due to the subdued operating environment in 2Q, cost control remained a key focus of the group, which resulted in overhead costs registering a 4.1% drop to RM2.71bil in 2QFY20 from RM2.82bil in 2QFY19.
“Net impairment losses for 2QFY20, however, rose to RM1.74bil compared with RM452.3 million a year earlier as the group maintained a prudent stance and increased its forward looking assumption provisioning, given the heightened possibility of a drawn out pandemic which is expected to further affect businesses and individuals globally, ” it said.
Maybank also said due to the fluidity of the current environment due to the Covid-19 pandemic, Maybank will continue to prioritise capital and liquidity preservation. It did not propose an interim dividend for the six month period ended June 30 as “we are just beginning to emerge from the pandemic”.
Maybank chairman Datuk Mohaiyani Shamsudin said 2Q has been one of the most challenging the group has experienced as a group and unfortunately, the outlook continues to remain uncertain given that a vaccine has yet to be found, although there are some indications of green shoots.
She said aside from that, the group was encouraged that its core business operations have progressed unhindered throughout this period, even as we have been rethinking our strategy for the future.
Maybank group president and CEO, Datuk Abdul Farid Alias said, “Our results are a reflection of what we have gone through, namely the movement control order (MCO) which was necessary to contain the spread of the outbreak; the subsequent policies on interest rates as well as the proactive measure on the moratorium which was meant to help all of us to have the opportunity to re-group and redraw our plans.
“ That period has given all of us the time to make the necessary adjustments for us to be productive again, albeit within what is now known as a new normal. Once these are done, we can now focus on helping our customers who are affected by the COVID-19 pandemic to be able to continue with their business operations and their lives, ” he said.
For the first half year ended June 30, the group’s net operating income grew by 5.3% to RM12.37bil on the back of a 27.8% rise in net fee based income, mitigating a 3.4% decline in net fund based income.
Pre-provisioning operating profit improved 9.9% as cost discipline yielded flat overheads year-on-year (Y-o-Y).
Net impairment losses, however, rose to RM2.77bil from RM1.09bil a year earlier on account of proactive provisioning recognised in 1H, coupled with some account write-offs.
“This resulted in a 20.6% dip in PBT to RM4.05bil, while net profit came in at RM2.99bil compared with RM3.75bil last year.
Sustained efforts in cost management resulted in the Group’s cost-to-income ratio improving further to 45.6% in 1HFY20 from 47.9% a year earlier, as income growth far outpaced overheads growth by some 5% Y-o-Y.
https://www.thestar.com.my/business/business-news/2020/08/27/maybank-posts-net-profit-of-rm9417m-in-2q
