Maybank net profit up 14.8% in 1H 2011

Pre-tax profit for the six months ended December 2010 increased to RM2.97 billion compared to RM2.56 billion in the previous corresponding period ended December 2009.

According to Maybank, profit after tax and minority interest for the period rose to RM2.15 billion compared with RM1.88 billion previously.

The improved performance was driven by higher revenues across almost all business segments of the Group as well as significantly lower allowance for losses on loans. The Group’s Indonesian operations continued to lead in loans growth with a robust 27.3% annualised increase followed by Maybank Islamic at 23.5%, Singapore Operations 17.8%, other international operations 20.9% and Community Financial Services 10.1%.

The results also bear testimony to the transformation efforts arising from the reorganisation into the new “House of Maybank” which took effect from July 2010. Amongst others, the Group registered higher growth in SME loans, which are now available throughout the entire branch network instead of only through business centres, undertook the expansion of its Islamic banking business in Indonesia through the establishment of Maybank Syariah Indonesia as well as entered into an agreement to acquire Kim Eng Holdings in a bid to expand its regional investment banking capabilities.

Asset quality has further improved with the net impaired loan ratio declining to 2.74% from 2.83% in June 2010. The Capital Adequacy Ratio of the Group also remains strong at 14.21% as at 31 December 2010.

In summary, the better performance for the six months can be attributed to:

 A 54% rise in profit before tax of Community Financial Services which rose to RM1.43 billion from RM929 million previously.

 Higher profit before tax from Corporate Banking which rose 13.9% to RM439.1 million from RM385.7 million previously

 A 16% growth in profit before tax for International Operations, which rose to RM818.1 million from RM705.5 million previously. Maybank Singapore saw a 15.7% higher profit before tax of SGD197.5 million from SGD170.7 million previously.

 Robust performance by Maybank Islamic which recorded 79.5% growth in profit before tax and zakat of RM429.9 million compared with RM239.6 million previously

 Significantly lower allowance for losses on loans which fell 43.7% to RM382.2 million from RM679.5 million previously 

 An 8.4% increase in net interest income to RM3.59 billion on the back of an annualised 12.5% growth in loans and debt securities across the Group. This was despite a tightening of the net interest margin to 2.70% as at December 2010 compared with 2.78% in December 2009.

 Higher non-interest income which rose 3.5% to RM1.99 billion from RM1.92 billion previously, led by higher investment & trading income (+86.5%), commissions, service charges and fees (+4.7%), foreign exchange income from customers (+4.9%) and unrealised gain on securities and derivatives (+11.6%).

 Deposit growth of 9.5% to RM248.1 billion as well as asset growth of 12.4% to RM357.6 billion

 International Operations now account for 33% and 27% of Group revenue and profit before tax respectively.

Maybank Group Quarterly Results Q-on-Q and Y-o-Y

Compared to the first quarter of FY11 ended 30 September 2010, the second quarter ended 31 December 2010 saw profit before tax rising 11.2% to RM1.56 billion from RM1.40 billion previously. PATAMI for the second quarter was 9.4% higher than the RM1.03 billion in the preceding quarter.

When compared to the second quarter ended 31 December 2009, the profit before tax and PATAMI for this second quarter were 11.6% and 13.3% higher respectively.

Dividend

The Board has declared an interim dividend under the Dividend Reinvestment Plan (DRP) of 28 sen per share less 25% income tax. Out of the amount, 4 sen per share (3 sen net) will be paid in cash while the balance of 24 sen (18 sen net) per share will be in the Electable Portion whereby a shareholder may either elect whether to receive it entirely in cash or reinvest the cash in Maybank shares.

The interim dividend which represents a payout ratio of 71.4%, exceeds the general dividend payout guideline of 40-60%, and will be distributed no later than three months from the date of declaration.