Maybank Half-Year Net Profit up 21.2% to a Record RM2.78 billion
Interim Dividend of 32 sen per share declared
16 August 2012
Highlights of 1HFY12
- PATAMI surges 21.2% to a record RM2.78 billion
- Revenue grows 18% to RM8.24 billion
- Return on Equity of 16.1%, ahead of 15.6% target
- Strong profit growth across most business sectors including international markets
- Maybank Islamic maintains No 1 position with total financing of RM55.9 billion representing 28.3% of Maybank's domestic financing; PBT on track to surpass RM 1 billion for full year
- Sustained traction in Investment banking; domestic fee-based income more than doubles to RM359.4 million from RM145.7 million
- Continued strengthening of asset quality with net impaired loan ratio improving further to 1.28%
- Strong Capital Adequacy Ratio of 15.49% (assuming 85% DRP reinvestment rate)
- Earnings per share up 16.5% to 36.28 sen
- Interim Gross Dividend of 32 sen per share totalling RM1.88 billion
Maybank today announced that profit after tax and minority interest (PATAMI) for the half-year ended 30 June 2012 surged 21.2% to a new record of RM2.78 billion, on the back of an 18% growth in revenue. Group profit before tax was up 18.7% to RM3.92 billion.
Revenue topped RM8.2 billion, boosted by a 22.3% growth in fee-based income and 15.2% rise in fund-based income. Growth was strong across almost all business sectors supported by a more than doubling in revenue for Investment Banking and income growth of over 50% for Islamic banking. Group loans which rose by 15.0% further contributed to the better overall performance.
Key drivers for the improved performance for the half-year included:
- A 29.5% rise in non-interest income (excluding fee income from Islamic operations and net income from insurance business) to RM2.75 billion, led by a tripling in investment & trading income (+223.8%) and a 24.3% rise in commissions, service charges & fees. Separately, fee income from Islamic operations grew 110.3%,
- Higher total net fund based income which grew 15.2% to RM4.94 billion, despite further contraction in net interest margin to 2.37% during the half-year from 2.53% in the previous six months to December 2011.
- An annualised expansion of 16.9% in total Group deposits to RM340.3 billion led by 19.6% rise in Malaysian operations. Low cost deposits (including current and savings accounts) make up a significant 33.1% of total deposits.
- Strong asset base which rose further by 17.4% to RM492.3 billion
- Continued robust growth of 42.3% in Global Wholesale Banking's profit before tax (PBT) to RM1.97 billion. This was led by more than a tripling in PBT for Investment Banking (to RM254 million), 42.2% rise in Corporate Banking (to RM917 million) and 19.9% growth in Global Markets (to RM794 million).
- A 54.5% rise in PBT for International Banking to RM1.04 billion with the key home markets of Singapore registering PBT of S$190.3 million (+7.2%) and Indonesia's Bank Internasional Indonesia (BII) recording PBT of Rp 824 billion (+59%).
- Stronger results from Group Islamic banking where profit before tax and zakat rose by 50.9% to RM715.5 million
Maybank Group Quarterly Results Q-on-Q and Y-on-Y
On a quarterly comparison, the second quarter ended 30 June 2012 saw PATAMI rising 6.7% to RM1.44 billion from RM1.35 billion in the previous quarter ended 31 March 2012. PBT for the second quarter was 6.9% higher at RM2.02 billion. Compared to the previous corresponding quarter ended 30 Jun 2011, PATAMI and PBT for the quarter just ended were 24.5% and 17.2% higher respectively.
An interim gross dividend of 32 sen per share less 25% taxation has been declared for the financial year ending 31 December 2012 (31 December 2011: final dividend of 36 sen per share less 25% taxation). Total gross dividend amount is RM2.51 billion and net amount is RM1.88 billion. Of this, a total of RM1.37 billion gross will be paid out to shareholders Permodalan Nasional Berhad and its various unit trust funds (which collectively own 54.47% shareholding in Maybank). This will indirectly benefit their over 10 million unit holders throughout Malaysia.
The Dividend Reinvestment Plan will apply to the interim cash dividend in which an electable portion of 28 sen (21 sen net per ordinary share) can be elected to be reinvested into new ordinary shares and the remaining portion of 4 sen (3 sen net per ordinary share) will be paid in cash.
Comments by Maybank Chairman, Tan Sri Megat Zaharuddin Megat Mohd Nor
"Maybank's strong double digit growth in the current global economic scenario is reflective of the well diversified portfolio and the focused performance culture we have built. We will use our strengths to further pursue regional opportunities, especially with the new IT platforms which we are rolling out".
Comments by Maybank President & CEO, Dato' Sri Abdul Wahid Omar
"The results that we see today reflect the success of our transformation journey to build our regional capabilities and network in a responsible manner. We are pleased to see Maybank continuing to lead in the domestic market while simultaneously growing in the international arena. Maybank Kim Eng in particular, has strengthened its industry position in most regional markets, and is also now acknowledged as a leader domestically.
We want to continue building a diversified portfolio of services and resources regionally so that we can remain resilient for the long term. Given the momentum that we have achieved, we are optimistic that the Group will continue its satisfactory performance and meet its targets for the year."
Maybank remains committed to growing profitably and responsibly, and continues to emphasise sound governance as well as good corporate responsibility. During the half year, some RM20 million was set aside by Maybank Foundation for sustainable social initiatives such as providing scholarships to deserving students at both local and top overseas institutions, support for Hospital Selayang's Liver Transplant Centre as well as school adoption, educational, tiger conservation and community empowerment through employee volunteerism programmes, among others.
Community Financial Services
Despite some softening in the consumer market, the Group's Community Financial Services sector continued to build its community franchise, recording a marginal increase of 0.4% in revenue for the half-year to RM3.25 billion.
Annualised loans growth for this sector stood at 12.0% led by mortgage loans which rose 14.9%, followed by automobile financing (+14.3%) and financing of unit trusts (+13.4%). The Group strengthened its presence in the mortgage and automobile financing segments despite intense competition. Market share for the former picked up to 13.3% in May 2012 from 13.1% in June 2011 while that for the latter grew to 20.1% in June 2012 from 18.8% a year earlier.
Maybank's Cards Business also continued to record further gains in market share in May 2012 compared to a year earlier. Its market share for card base grew to 18.3% (from 17.6% previously), billings to 25.2% from 23.2%, receivables 15.1% from 14.9% and merchant sales 31.6% from 29.5%.
It also outperformed the industry in billings (19.5% growth vs 10.1% for industry), receivables (6.2% vs 5.1%) and merchant sales (18.6% vs 10.5%), while bucking the industry trend with a rise of 1.0% in card base compared to a 2.9% drop in the industry.
Business and SME banking segment continued its turnaround momentum, registering an 8.2% annualised increase in loans with Business Banking growing 9.0% and SME growing 4.4%. Market share in the SME segment specifically, improved sharply to 22.4% in June 2012 from 17.0% a year earlier. Deposits from Business and SME Banking customers also grew at an annualised pace of 10.0% to RM53.2 billion.
Global Wholesale Banking
Global Wholesale Banking (GWB) registered a 48.6% rise in revenue to RM2.64 billion, supported by stronger growth from all its sectors as well as the inclusion of Kim Eng Securities. Total GWB loans rose 10.5% on an annualised basis to RM62 billion. Fee based income surged 82.3% while net fund-based income rose by 14.7%.
- Corporate Banking
This sector continued to benefit from the healthy growth in the country's economic transformation initiatives, registering revenue increase of 50.1% to reach RM1.03 billion. Loans growth was at 24.4% boosted particularly by a 21.3% rise in term loans. It also strengthened its trade finance market share which stood at 26.4% compared to 25.7% a year earlier.
- Global Markets
Revenue for the Group's Global Markets operations reached RM894 million for this half-year, up 18.3% from a year earlier. Its Securities portfolio rose 8.5% on an annualised basis, with 60.6% of it in domestic securities and the rest in foreign securities.
- Investment Banking
The Group's Investment Banking business had a particularly robust half-year boosted by a strong pipeline of major deals as well as the inclusion of Kim Eng Securities' results. Revenue for the period rose to RM721 million from RM338 million previously with total income in Malaysia rising 82%. The Malaysian Business contributed 50% of total income with the rest coming from Kim Eng's operations worldwide.
Maybank Investment Bank moved up to top spot in industry rankings for almost all categories such as Mergers & Acquisitions, Equity & Rights Offerings as well as both categories of Debt Markets namely Malaysia Domestic Bonds & Malaysia Ringgit Islamic Bonds. In equity business, Maybank Kim Eng remains top broker in Thailand, in 3rd spot in Malaysia and Indonesia as well as top 5 in Philippines and Singapore.
Insurance, Takaful & Asset Management
Etiqa saw revenue dip by 21.9% to RM492 million as a result of lower net income due mainly to lower actuarial surplus. The actuarial surplus in June 2012 was due to the adoption of the revised Bank Negara Malaysia Guidelines. Nonetheless, Etiqa maintained its No 1 position in Life/Family new business as well as general business. Combined gross premium grew 15.5% with strong increases particularly seen in the Motor category (+20%), Family/Life category (+18.5%), and Marine, Aviation & Transportation (14.8%).
The Group's Islamic Banking business continued to perform well with total income rising 32.6% to RM1.10 billion for the half-year. Fee-based income more than doubled to RM284.8 million from RM135.4 million in June 2011 while fund-based income rose 17.5% to RM816.9 million.
Within the Islamic banking business, Maybank Islamic saw total gross financing grow 14% on an annualised basis to RM55.9 billion. This was on the back of strong growth in Business loans (+22%) and Consumer loans (+11%). In the Business segment, term financing rose 47% while in the Consumer segment, mortgage financing rose 41% and term financing, 8%. Maybank Islamic maintains a strong market position with 30.4% share in the industry's automobile financing, 20.2% in mortgages and 23.2% in term financing.
Asset quality at Maybank Islamic remains outstanding at 0.79% improving further from 1.25% in June 2011, while the financing-to-deposit ratio remained healthy at 84.2%. Islamic financing to total domestic loans has grown to 28.3% from 27.4% a year earlier.International Banking
Revenue for the Group's international banking operations continued to sustain its growth momentum, rising 26.1% to RM2.57 billion. Net fund based income rose 22.8% while fee-based income rose 32.9%. International operations forms an increasingly larger proportion of the Group's business, and makes up 36% of total Group revenue in June 2012 (up from 32% in June 2011), 28% of PBT (from 25%) and 36% of loans (from 35%).
Singapore operations saw total income rising 3.6% to S$344.0 million on the back of an 8.5% growth in non-interest income and 1.4% increase in net fund based income.
Loans growth was relatively moderate at an annualised 4.1% with its total portfolio reaching S$25.1 billion. This was fairly diversified between consumer loans which make up 39% of its portfolio and corporate loans 61%. Asset quality remains excellent with net impaired loans ratio of 0.32% in June 2012.
BII's solid half-year saw gross operating income rising 17% to Rp3.69 trillion. Net interest income surged 32% from a year earlier to Rp 2.58 trillion aided by improving net interest margin which rose to 5.89% from 5.43% a year earlier. Provisions were stable at Rp 556 billion while asset quality continued to improve with net impaired loans ratio declining further to 0.97% in June 2012 from 2.88% a year earlier. The Bank maintains a healthy loan-to-deposit ratio of 89.4% as at June 2012 with a healthy balance in its loan portfolio among consumer, corporate and SME loans.
BII's expansion remains well on track with its branch network growing to 375 branches from 344 in June 2011 and self service terminals across the country reaching 1,218 compared with 1,017 last year.
BII Finance which is focused on the car financing business, saw a 71.8% rise in revenue to Rp 274.1 billion in June 2012 while PBT more than doubled to Rp 92.74 billion from Rp 37.73 billion a year earlier. Total units financed rose 33.2% to 18,380 units with financing amount of Rp 2.94 trillion.
MCB Bank of Pakistan (a 20% associate of Maybank) saw PBT rise 7.3% to Pakistan Rupee (PKR) 17.48 billion for the half-year, despite revenue coming in flat at PKR 26.4 billion. The result was supported by an increase in non-interest income by PKR 1.22 billion as well as lower provisioning which dipped by PKR 2.04 billion.
Gross loans declined 6.4% owing to the challenging business environment but deposits grew 7.4% in the same period. Net interest margin, however, experienced some pressure, declining to 7.32% from 8.96% in June 2011. Nonetheless, the bank continued to maintain a robust return on equity of 27.57%
AnBinh Bank (ABBank)
ABBank of Vietnam (also 20% associate of Maybank) registered a 7% rise in revenue to VND871.8 billion for the half year. This was attributable to higher net interest income (+VND 40.4 billion) and non-interest income (+VND15.2 billion), as well as lower provisioning by VND87.7 billion. PBT meanwhile, rose 15% to VND352.3 billion, resulting in a return on equity of 11.30% up from the 9.68% a year earlier.
Gross loans recorded a mild decline of 6% as a result of lower lending to customers mainly due to compliance with the central bank's rule on the capping of annual credit growth based on the performance of banks. Customer deposits were, however, 25% higher, boosted by increase in corporate and retail deposits. Net interest margin dipped to 4.96% from 5.71% a year earlier while the NPL ratio improved to 3.83% from 4.51% previously.
The Maybank Group is Malaysia's regional financial services leader with an international network of over 2,200 offices in 18 countries namely Malaysia, Singapore, Indonesia, Philippines, Brunei Darussalam, Vietnam, Cambodia, Thailand, Papua New Guinea, Hong Kong SAR & People's Republic of China, Bahrain, Uzbekistan, Myanmar, Pakistan, India, Saudi Arabia, Great Britain and the United States of America. The Group offers an extensive range of products and services, which includes commercial banking, investment banking, Islamic banking, stock broking, insurance and takaful and asset management. It has over 45,000 employees serving more than 22 million customers worldwide.