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Malayan Banking Bhd (Maybank), which saw net profit jump 18.1% to RM1.96 billion for the second quarter ended June 30, 2018, expects its performance for the second half of the year (2H18) to be driven by its consumer, wealth and insurance businesses, said group CFO Datuk Amirul Feisal Wan Zahir.
He expects the consumer business to drive the loan growth for Malaysia, cautioning that the corporate side may slow down but pointed out that this remains to be seen.
“Loan growth from the consumer market was stronger than corporate in 1H18. We don’t think this will change in 2H18. We typically perform better than the industry for Malaysia (in loan growth),” he said after announcing its 1H18 financial results.
Q2 net profit was up on higher net operating income and lower impairments, while revenue jumped 5.4% to RM11.51 billion from RM10.92 billion.
The group has proposed to declare an interim dividend of 25 sen for the quarter under review.
For the six-month period, Maybank’s net profit increased 13.9% to RM3.83 billion from RM3.36 billion a year ago on the back of higher operating income, lower impairments as well as reduced overheads as a result of better cost management. Revenue went up 3.7% to RM23.02 billion from RM22.20 billion.
Maybank saw a loan growth of 4.6% in 1H18, where Singapore operations expanded 8.9%, followed by Indonesia at 6.6% and Malaysia 6.1%. The Malaysia loan growth of 6.1% was above the industry loan growth of 5% for the country. Singapore and Indonesia fared below its industry loan growth of 9.9% and 10.7% respectively.
It expects its net interest margin, which stood at 2.33% in June 2018, to maintain at last year’s 2.36% or slightly less.
Amirul said the implementation of the SST, which will bring a revenue of RM20 billion to RM25 billion to the government compared with RM42 billion under the GST, will result in more disposable income among the people, providing more expansionary spending on the consumer side.
“The (SST) impact on the bank will be neutral,” he said.
Meanwhile, he said Maybank’s exposure to the oil and gas sector is at 3.86% of its total loan assets and that the level of provisions has reduced having peaked last year.
“Going forward we will be vigilant looking at each markets and we will be more cautious on Indonesia given the volatile environment.”
Amirul also said Maybank’s loan exposure to financially-troubled Hyflux Ltd of Singapore is at the project company Tuaspring Pte Ltd level, which is fully secured and not on the group level.“We made some provisions in Q2,” he said.
