Maybank posts higher Q1 profit on loan growth

Kuala Lumpur

MALAYAN Banking (Maybank) logged higher profits than a year ago in its first-quarter earnings as loan demand picked up and net fund based income rose 7 per cent, the bank said on Thursday.

The largest lender by assets in Malaysia reported a net profit of RM2.39 billion (S$763.8 million) in the January-March period versus RM2.05 billion the previous year, beating analysts' forecast of RM1.8 billion in a Refinitiv poll.

The higher profit was despite revenue dropping by 7.7 per cent to RM12.22 billion.

In a financial statement posted on the stock exchange, Maybank said Islamic banking income rose 16.3 per cent, while net earned insurance premiums grew 30 per cent. Meanwhile, allowances for loan impairment losses and overhead expenses dwindled during the quarter.

Key measure of bank profitability, net interest margin, expanded by eight basis points to 2.31 per cent. Loan demand picked up pace as economic outlook improved, with group gross loans up 3.1 per cent compared with 0.3 per cent a year ago, the bank said.

While its Malaysia and Singapore operations saw loan growth, Maybank's Indonesia operations recorded a decline of 18.3 per cent primarily as a result of write-offs and repayments as it continued to manage its exposure.

Group president and chief executive Abdul Farid Alias said the bank remained cautious as loan repayment assistance provided to customers affected by government-imposed movement restrictions to curb the spread of coronavirus infections still camouflaged credit implications for financial institutions.

"Banks need to continue monitoring the situation closely, and provide loan loss provisions that are sufficient to address any unexpected outcome," he said in a statement. REUTERS