[KUALA LUMPUR] Maybank posted a net profit of RM2.3 billion (S$647.5 million) for the fourth quarter ended December, up 8 per cent from its earnings of RM2.2 billion in the comparative year-earlier period.

This brought the group’s earnings for the full year of 2023 to about RM9.3 billion, an increase of 17 per cent from the same period the previous year, said the largest bank in Malaysia in terms of asset size on Wednesday (Feb 28).

The group’s revenue increased 14 per cent to RM17.1 billion in the fourth quarter. For FY 2023, Maybank posted revenue of RM64.4 billion, 30 per cent higher from RM49.4 billion in previous year.

Maybank attributed the performance to strong gains at its insurance segment and operating income, which offset a decline in net interest income.

In Q4 2023, the group’s insurance segment increased by RM243.5 million to RM283.8 million.

The group’s other operating income for the quarter increased 5 per cent to RM1.9 billion, driven by higher unrealised mark-to-market gain on revaluation of derivatives of RM1.6 billion versus a loss of RM656 million in the year-earlier period.

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Other contributing factors to the higher operating income figures included higher net investment income and fee income of RM75.9 million and RM78.5 million, respectively.

These were, however, offset by declining net interest income, which slid 4.6 per cent to RM5.2 billion for the quarter ended December.

The increasing unrealised mark-to-market loss on revaluation of financial liabilities at fair value through profit or loss of RM1.5 billion and realised loss on derivatives of RM338 million were among the factors that dragged down the earnings.

Overhead expenses also increase 15 per cent to RM3.6 billion due to higher personnel expenses, administration and general expenses.

Maybank’s net allowances for impairment losses on loans, advances, financing and other debts rose 53.6 per cent to RM464.2 million.

The group announced a second interim dividend of 31 sen per share, lifting full-year dividends to 60 sen per share, translating into a payout of 77.4 per cent.

For its operations in Singapore, Maybank’s loans, advances and financing segment in the fourth quarter was up around 16 per cent from end-December 2022 to RM167 billion. Impaired loans, advances and financing for the city-state rose 62.9 per cent over the same period to RM1.3 billion.

In terms of capital adequacy ratios, Maybank Singapore as at end-December had a CET1 capital ratio – which is a measure of spare cash – of about 14.4 per cent. The subsidiary also had a Tier 1 capital ratio of 14.4 per cent, and a total capital ratio of 18.2 per cent.

In comparison, Maybank Singapore’s CET1 capital ratio and Tier 1 capital ratio stood at about 14.1 per cent at end-December last year, while the total capital ratio came in at 18.3 per cent.

In its outlook statement, Maybank said global gross domestic product (GDP) growth is expected to moderate to 2.8 per cent in 2024, reflecting a softer outlook for major economies such as the United States and China.

“However, Asean growth is set to be firmer at 4.5 per cent this year, supported by resilient domestic demand and sustained tourism, as well as the recovery in technology-related manufacturing products and exports following the improved external demand.

For Singapore, Maybank expects the country’s GDP growth to be stronger and expand at 2.2 per cent this year, as the manufacturing sector recovers while spending in the services sector normalises.

Maybank president and group CEO Khairussaleh Ramli said the group will focus on growing the key areas of group community financial services, global banking and insurance business in its home markets.

With the anticipation of improved regional economic outlook, Maybank targets to achieve a headline key performance indicator of a return on equity of 11 per cent for 2024.