Malaysia’s Maybank posts lower Q3 profit as pandemic takes toll

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Malaysia’s Maybank posts lower Q3 profit as pandemic takes toll

Malayan Banking Bhd (Maybank), the largest lender in Malaysia by assets, on Friday posted a 2.3% fall in quarterly net profit, weighed by lower operating income mainly due to the continued impact from the COVID-19 pandemic. Net profit came in at 1.95 billion ringgit ($479.12 million) for the July-September quarter, down from 2 billion ringgit last year, but higher than the 1.55 billion ringgit estimate from two analysts polled by Refinitiv.

Malayan’s revenue slumped 57% to 13.76 billion ringgit, according to a bourse filing. The lender said net operating income for quarter declined by 6.5% to 6.08 billion ringgit versus a year ago, as total net fund based income dropped 8.7% to 4.13 billion ringgit.

However, the group saw a decline in impairment losses and higher net earned insurance premiums during the quarter. Net interest margin – a key measure of bank profitability – contracted to 2.05% from 2.32% last year due to rate cuts. Malaysia has a record 125 basis points of rate cuts this year.

In August, Maybank guided expectations of 20 bps compression for its 2020 net interest margin to 2.07%. The group said loan loss provisions are expected to remain elevated and it will mitigate expected lower income by stepping up its strategic cost-management programme to limit increases in overheads.

“Our focus moving forward will be to leverage our risk management capabilities, diversified operations and digital strengths to drive our business in the coming year,” Group President and Chief Executive Abdul Farid Alias said in a statement. ($1 = 4.0700 ringgit)

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