Maybank Q4 profit drops 14.5% as impairment losses rise

[KUALA LUMPUR] Malayan Banking Bhd (Maybank) reported a 14.5 per cent drop in fourth-quarter net profit on Thursday, as Malaysia's largest lender by assets booked higher impairment losses amid a challenging economic environment.

Profit for October-December reached 1.65 billion ringgit (S$551 million) from 1.93 billion ringgit a year earlier, Maybank said in a statement to the stock exchange.

Net interest income rose to 2.9 billion ringgit from 2.44 billion ringgit. Revenue rose 14 per cent to 11.05 billion ringgit.

The lender said quarterly profit was hit by higher allowances for impaired loans and lower recoveries compared with the same period in 2014.

Maybank Group President and Chief Executive Abdul Faris Alias said the second half of 2015 saw increased volatility in the economic environment. "The increased headwinds that developed necessitated us taking pro-active measures including re-assessing our risk appetite to ensure we remained as unaffected as possible," Abdul Faris said in a statement.

Southeast Asia's fourth-biggest bank also said it expected Malaysia's overnight policy interest rate to be lowered by 25 basis points despite higher inflation as the central bank leans towards supporting growth.

Malaysia kept the rate at 3.25 per cent last month. The next policy decision is expected on March 9.

REUTERS