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KUALA LUMPUR: Malaysian Banking Bhd
Net profit fell 2.3% to RM1.95 billion in the third quarter ended September 30, 2020, 2.3% less than RM1.99 billion a year ago due to the continued impact of the pandemic. Covid-19.
Maybank, the fourth-largest bank in Southeast Asia by assets, said on Friday that while the impact of the pandemic affected its net operating income, this was partly offset by lower overhead costs and a decrease in impairments.
In 3Q, Net Operating Income decreased by 6.5% to RM6.08bil from RM6.50bil previously. This was due to a 8.7% year-on-year (YoY) decline in total fund-based net income to RM 4.13 billion, as a result of a 27 basis point (bps) net interest margin compression due to cuts in the rate of the overnight policy.
Additionally, Maybank experienced a 1.3% drop in total commission-based net income to RM1.95bil, particularly from lower core fees following slower business activity due to the pandemic, as well as lower investment earnings.
His profit before tax (PBT) for the quarter was reduced to RM2.61bil from RM2.65bil a year earlier.
Its revenue fell 0.6% to RM 13.75 billion from RM 13.83 billion. Earnings per share were 17.37 sen compared to 17.78 sen. Declared a dividend of 13.5 sen per share.
Compared to the 2Q that ended in June, the net profit in the 3Q increased to RM1.95bil from RM941.7bil earlier. Pre-tax profit for Q3 increased to RM2.61bil from RM1.26bil.
“This was due to a 7.8% increase in total commission-based income and a 7.5% increase in total fund-based income that collectively raised net operating income by 7.6 %, as commercial activities resumed and mobility recovered following the relaxation of motion control restrictions in the quarter, ”he said.
During the nine months, its net profit fell 14% to RM4.94 billion from RM5.74 billion in the corresponding prior period. Their income fell tp RM38.77bil from RM39.86bil.
The decrease was primarily due to lower fund-based net income following interest rate cuts and the impact of the first day modification loss due to the general loan default, as well as a 76.4% increase in the net impairment losses to RM3.57bil from RM2.02bil a year earlier.
“The increase in losses was attributed to the group’s proactive provisioning through management overlap and forward-looking assumptions to weaken macroeconomic variables, as well as the reloading of existing impaired accounts,” he said.
Maybank Chairman Tan Sri Zamzamzairani Mohd Isa said that given the improvement in Q3 results, Maybank has decided to continue its practice of paying an interim dividend to shareholders, albeit at a lower rate compared to the past due to the impact of the Covid-19 pandemic.
“While Maybank’s capital position remains strong, we have nonetheless ensured that we continue to take a prudent approach with a dividend reinvestment plan where the entire portion is eligible. Our key priority has always been to balance the interests of shareholders with the need to maintain sufficient reserves in the event of prolonged uncertainties, as well as to finance our growth plans for the future ”.
The group’s president and CEO, Datuk Abdul Farid Alias, said Maybank had worked to mitigate the impact of the modification loss, interest rate cuts and increased provisioning through various initiatives, such as ensuring growth. in the community financial services segment, leverage the value of some investments and reduce funding. costs and closely managing overhead while ensuring that the Group continues to invest in the areas that are required.
“Our focus going forward will be to leverage our risk management capabilities, diversified operations and digital strengths to drive our business in the coming year. At the same time, we remain committed to supporting our stakeholders during this period so that they can remain sustainable in the long term, ”he said.
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