This article first appeared in The Edge Financial Daily on March 1, 2018

KUALA LUMPUR: Malayan Banking Bhd (Maybank), the country’s biggest lender by assets, saw its annual net profit surpassed the RM7 billion mark for the first time in the financial year ended Dec 31, 2017 (FY17) to hit RM7.52 billion, up 11.5% from RM6.74 billion the previous year.

Maybank said the record earnings were achieved on the back of stronger revenues from all its business segments and key overseas markets, significantly lower impairment losses, as well as better management of its assets and liabilities.

Revenue rose a marginal 2.1% to RM45.58 billion in FY17 from RM44.66 billion in FY16.

However, the group’s net profit fell 9.7% to RM2.13 billion in the fourth quarter ended Dec 31, 2017 (4QFY17) from RM2.36 billion a year ago, due to higher overhead expenses and one-off proceeds from the sale of securities in 2016. This resulted in lower earnings per share of 19.93 sen in 4QFY17 compared with 23.19 sen a year ago.

Quarterly revenue, however, was up 4.8% to RM11.79 billion in 4QFY17 from RM11.25 billion in 4QFY16.

In a filing with Bursa Malaysia yesterday, Maybank said its overhead expenses for 4QFY17 rose 12.1% year-on-year, mainly contributed by higher personnel and marketing expenses as well as establishment costs.

The group also proposed a final single-tier dividend of 32 sen per share for FY17. This brought total dividend payout for the year to RM5.9 billion or 78.5% of net profit, translating into a dividend yield of 5.6%.

Group president and chief executive officer Datuk Abdul Farid Alias said this year looks to be as challenging as 2017 given the volatile markets seen at the start of the year.

“We remain cautious of sudden shocks to the environment, and will maintain a prudent approach in pursuing growth by focusing on profitability as well as effective management of costs and liquidity, instead of just pursuing loan growth per se,” he said in a separate statement.