Maybank sees marginally lower net profit for Q3
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Malayan Banking Bhd posted marginally lower net profit for the third quarter ended Sept 30, 2018 of RM1.96 billion, compared with RM2.03 billion in the corresponding quarter in 2017, on lower net operating income, higher allowances for impairment losses on loans, advances, financing and other debts and lower share of profits in associates and joint ventures .
For the quarter under review, the group registered a net operating income of RM5.69 billion, compared with RM5.89 billion a year earlier, impacted by a dip in fee based income owing mainly to lower investment and trading proceeds as well as foreign exchange fluctuations. Notwithstanding this, operating profit for the third quarter ended Sept 30, 2018 was higher at RM2.61 billion from RM2.60 billion a year, as the group benefited from lower overhead expenses which declined 6.2% from a year earlier, as well as lower impairment losses which fell 5.5%.
Maybank group said its key priorities for 2018 include maintaining pricing discipline across our products, focus on attaining cheaper funding sources to support loan growth, growing our loan portfolio within our risk appetite, while proactively managing our asset quality.
The group has implemented MFRS 9 on Jan 1, 2018, of which the impairment assessment is based on the expected credit loss model that uses forward looking assumptions as opposed to an incurred loss model under the previous accounting standard. The group’s capital and liquidity positions remain strong notwithstanding the implementation of MFRS 9.
Barring any unforeseen circumstances, the group expects its financial performance for 2018 to be satisfactory against the expected growth prospects of its key home markets. The group has set its Headline Key Performance Indicator for Return on Equity of 11%.
Net profit for the nine month period ended Sept 30, 2018, was 7.39% higher at RM5.79 billion, compared with RM5.39 billion for the period in 2017.
This was on 3.82% higher revenue of RM35.09 billion, compared with RM33.79 billion.
Questions & Answers
Q.What were the primary reasons for Maybank's lower net operating income in the third quarter?
What were the primary reasons for Maybank's lower net operating income in the third quarter?
The group's net operating income dipped due to lower fee-based income, which resulted from reduced investment and trading proceeds, and negative foreign exchange fluctuations.
Q.Despite the lower net profit, how did Maybank manage to increase its operating profit for the quarter?
Despite the lower net profit, how did Maybank manage to increase its operating profit for the quarter?
Operating profit rose because the group benefited from significantly lower overhead expenses, which declined by 6.2%, and also from a 5.5% reduction in impairment losses.
Q.How did the implementation of MFRS 9 impact Maybank's financial reporting?
How did the implementation of MFRS 9 impact Maybank's financial reporting?
MFRS 9, implemented on January 1, 2018, changed the impairment assessment to an expected credit loss model using forward-looking assumptions, rather than the previous incurred loss model.
Q.What is the bank's financial outlook for the full year 2018?
What is the bank's financial outlook for the full year 2018?
Maybank anticipates a satisfactory financial performance for 2018, assuming no unforeseen circumstances, aligning with expected growth in its main markets.
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