Maybank Q1 net profit surges 6.2% to RM1.70 billion

Net operating income and loans growth delivered.

The Maybank Group has announced that it has delivered first quarter net profit of RM1.70 billion, a 6.2% increase from the RM1.60 billion achieved in the first quarter of 2014.

According to a release from Maybank, this comes as a healthy rise in fee income coupled with robust loans growth boosted performance across all its business pillars. Profit before tax (PBT) for the quarter rose from RM2.21 billion a year earlier to RM2.24 billion.

Net operating income surged 12.5% Y-o-Y to RM4.99 billion from RM4.44 billion in the quarter ended March 2014, led by Global Banking (11.8%), Community Financial Services (10%) and International Banking (6.6%).

This was on the back of a 19.9% rise in net fee based income as well as a 9.3% rise in net fund based income. The rise in fee income was driven by increases in commissions, service charges and fees as well as higher net earned insurance premiums while net fund based income was lifted by higher conventional and Islamic loans growth.

Loans for the quarter expanded 14.3% Y-o-Y, led by International which grew 19.4%. In the three home markets of Malaysia, Singapore and Indonesia, loans rose 10.2%, 11.6% and 7.1% Y-o-Y respectively. Islamic financing, meanwhile, surged 29.5% Y-o-Y.

Here's more from Maybank:

Maybank Chairman, Tan Sri Megat Zaharuddin Megat Mohd Nor said that this year, the Group's focus remains to find opportunities within our diverse operations to heighten productivity.

"Given the continued global market uncertainties, we have made an encouraging start to the year, and our recent announcement that we are exiting Papua New Guinea demonstrates one example of our resolve to create value."

Meanwhile, Group President & CEO Datuk Abdul Farid Alias said, “We are encouraged by our first quarter performance which validates the strategies that we have put in place. The growth we achieved was a result of rigorous efforts to increase fee income as well as build our financing portfolios responsibly. These were complemented by improved liquidity, proactive capital management and tightly managed expenses.”

“The rest of the year is expected to remain challenging and we are closely monitoring regional developments, particularly the level of business activity post implementation of GST in Malaysia. We, however, remain optimistic that our ASEAN home ground will continue to present us with sustained business opportunities especially with greater realisation of the benefits that will come from the impending formalisation of AEC.”

For the quarter under review, Group deposits expanded 13.0% Y-o-Y, contributed mainly by Singapore which rose 17.1% and Malaysia which grew 7.9%. This helped maintain the ratio of the Group’s CASA (current account & savings account) deposits to total deposits at a stable rate of 35.4%.

The Group’s loan-to-deposit ratio was recorded at 92.2% compared with 91% in March 2014. Net interest margin for the quarter, however, declined 11 bps to 2.26% compared with March 2014; although it was up 6 bps from December 2014, aided particularly by lower funding costs in Malaysia.

The Group’s capital position remained robust with CET1 ratio strengthening to 11.15% from 10.76% in March 2014, while total capital ratio rose to 15.35% from 15.11% a year earlier. The Group also continued to maintain sound asset quality with net impaired loans ratio at 1.06% compared with 1.04% in December 2014, although this was marginally higher than the 0.99% in March 2014.