KUALA LUMPUR - Malayan Banking Bhd (Maybank) posted its best quarterly results as net profit surged 16.4 per cent to RM1.74bil (S$0.68bil) in its third quarter ended Sept 30, boosted by higher net fee-based income and a growing Islamic banking business.
South-East Asia's fourth largest bank by asset reported an improved revenue of RM8.39bil against RM8bil last year, while earnings per share stood at 20.05 sen.
"Yet again, with this quarter's good results, we have created a new profit record for the group.
"I am pleased that we are sustaining this growth momentum, by being focused on finding opportunities across our geographic and diverse financial services portfolio through revenue and cost levers amidst the subdued external business climate," chairman Tan Sri Megat Zaharuddin Megat Mohd Nor said in a statement.
Nine-month net profit climbed 12.4 per cent to RM4.82bil, or 56.19 sen a share. Analysts had predicted Maybank's full-year net earnings to be around 72.6 sen a share before the latest quarterly results were released yesterday.
Alliance Research's banking analyst Cheah King Yoong said Maybank's nine-month financial results made up about 77 per cent of his full-year forecast and was well within consensus numbers.
"For now, we do not see a need to revise our earnings forecast significantly," he said.
Shares in Maybank slipped one sen to RM9.55 yesterday in a weak market, as the FTSE Bursa Malaysia KL Composite Index (FBM KLCI) dipped four points to 1,794.65. At its last-traded price, the stock was valued at 13.1 times its projected earnings.
Shares of most Malaysian banks have lagged behind the FBM KLCI's 6.3 per cent rise year-to-date, partly due to worries that earnings growth might slow down amid tighter credit control.
Maybank president and chief executive officer Datuk Abdul Farid Alias said the results demonstrated the group's continued ability to deliver growth in the midst of difficult operating conditions.
"We believe there continue to remain windows of opportunity in the different markets we serve, and we intend to remain agile in tapping into these segments. At the same time, our focus would be on finalising our strategy to take the Maybank group to the next level and beyond 2015," said Farid.
The group said its return on equity improved to 14.9 per cent, on track for its stated target of 15 per cent for the full year.
Group loans rose at an annualised rate of 9.3 per cent, up from 9.1 per cent in the first six months of this year. This was driven by an 8.7 per cent expansion at home and 10 per cent growth at its international operations, led by Indonesia, which grew 19.8 per cent.
The group's net interest income and Islamic banking income rose RM194.3mil or 6.7 per cent on-year largely due to the growth in group net loans and advances, including Islamic finance.
Last month, Maybank launched its Islamic asset management in London offering Islamic Asian-focused investment capabilities to global investors.
Maybank said its non-interest income rose 19.2 per cent to RM248.3mil from a year ago due to a higher net foreign exchange gain of RM830.1mil and a higher fee-based income of RM99.1mil.
"The increase was, however, offset by a higher unrealised loss on revaluation of financial assets," it said in the notes accompanying its financial results.
Maybank said the allowance for impairment losses on loans, advances and financing increased by RM203.7mil to RM280.3mil for the quarter ended Sept 30.
"The increase was mainly due to higher collective allowance made for the quarter. The group's net impaired loans ratio improved to 1.06 per cent as at Sept 30, compared with 1.22 per cent as at Sept 30, 2012," Maybank said.
Overall, its net income increased 9.9 per cent year-on-year, outpacing overheads growth, which was managed at 5.7 per cent. Consequently, the cost-to-income ratio improved further to 46.6 per cent in the third quarter compared with 51.2 per cent in the same period a year ago.
"Fee-income growth was led by a tripling in net income from the insurance business as well as healthy gains in foreign exchange profit (+81.4 per cent), investment and trading portfolios (+20.6 per cent) and commissions, service charges and fees (+9.8 per cent)," Maybank said.
The bank added that the growth in fund-based income came mainly from global markets (+21.8 per cent), corporate banking (+17.9 per cent) and community financial services (+9.6 per cent).