Investment income gain pushes up Maybank's Q3 profit

Kuala Lumpur

MALAYAN Banking Bhd's (Maybank) quarterly net profit rose as it swung to a gain from investment income and turned in higher net interest income as well as earned insurance premiums, helping offset costs.

The lender, however, said it expects its three home markets - Malaysia, Singapore and Indonesia - to be affected by moderate growth projection for South-east Asian countries, with Singapore more exposed to impact from the US-China trade war.

"Against the backdrop of a moderating global growth and uncertainty over trade tensions, Maybank Group will maintain its balance sheet expansion in line with the respective (gross domestic product) growth in its three home markets," it said in a filing with the stock exchange.

For the third quarter ended Sept 30, Malaysia's largest lender by assets reported RM2 billion (S$654.6 million) in net profit, up about 2 per cent from RM1.96 billion a year ago.

The performance was slightly above an average estimate of RM1.99 billion from two analysts polled by Refinitiv.

Revenue rose 14.7 per cent to RM13.83 billion.

It saw a net gain in investment income of RM805.6 million for the quarter, versus a net loss in investment income of RM102.5 million a year earlier.

Maybank's net interest income rose 5.9 per cent to RM3.16 billion, while net earned insurance premiums from its insurance and Islamic insurance units jumped 22.3 per cent to RM1.75 billion. A rise in Islamic banking income also helped results.

The higher incomes in various segments offset a 77.6 per cent rise in allowances for impairment losses on loans, advances, financing and other debts to RM958 million during the quarter, as well as higher overhead expenses.

Net interest margin - a key measure of bank profitability - expanded to 2.32 per cent from 2.19 per cent.

Group president and CEO Abdul Farid Alias said 2019 has proven to be relatively challenging for some of the bank's clients due to the slower growth in global trade.

"We are therefore proactively working with them to restructure their facilities. In the meantime, we will continue to be vigilant in managing our assets quality while growing our portfolio," he said in a statement.

Loans growth has been positive at 3.4 per cent for the three quarters, the bank said, driven by growth in Malaysia and its expansion in Greater China and Indo-China.

Maybank has also set a headline key performance indicator for its return on equity at 10-10.5 per cent. REUTERS