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Maybank's Q1 profit down 3.3% on lower net interest income, higher expenses
MALAYAN Banking Bhd (Maybank), Malaysia's largest lender by assets, recorded a 3.3 per cent fall in net profit for the first quarter on Thursday due to lower net interest income, higher expenses and allowances for impairment losses on loans.
Chairman Mohaiyani Shamsudin said the results were within expectations, given a softer outlook due to ongoing global geo-political issues.
Maybank said it expects Malaysia, one of the bank's three main markets in the region, to chart stable growth this year on rebounds in the mining and agriculture sectors, the central bank's interest rate cut and revival of major infrastructure and government development spending projects.
However, it flagged potential impact from the outcome of the US-China trade talks and the government's long-term economic growth policy.
Group president and CEO Abdul Farid Alias had in February also pointed to concern among investors about policy clarity.
Malaysia's economy accelerated at a quicker pace than expected in the first quarter at 4.5 per cent as recovery in the agriculture sector lifted growth. However, weakening global demand and the US-China trade war were seen as increasing risks for the country.
The third largest economy in South-east Asia became the first in the region to cut its interest rate earlier this month to support its economy amid concern about global growth.
Maybank posted a net profit of RM1.81 billion (S$596 million) for the three months ended March, compared to RM1.87 billion a year earlier. The result was below the RM1.94 billion average of two analyst estimates compiled by Refinitiv.
Revenue rose 12.7 per cent to RM13 billion on a 4.8 per cent expansion in loans and 1.6 per cent rise in fund-based income.
Maybank's net interest margin - the difference between interest paid and earned and a key gauge of bank profitability - shrank slightly to 2.3 per cent versus 2.39 per cent a year before due to competition.
Smaller rival CIMB Group Holdings Bhd also reported a quarterly profit drop on Wednesday, citing a one-off gain it recognised during the same quarter last year. REUTERS