KUALA LUMPUR (Oct 29): Malayan Banking Bhd's (Maybank) unit PT Bank Maybank Indonesia Tbk saw its net profit rise 3.4% to Rp1.5 trillion (RM412 million) during the nine-month period ended Sept 30, 2018, on the back of higher net interest income (NII) and improvement in provisioning level.

Stripping out one-off proceeds from the sale of securities in 2017, recurring profits before tax (PBT) increased 19% on-year, mainly supported by better asset quality, solid growth in Sharia business, as well as improvement in subsidiaries, Maybank Indonesia said in a statement today.

It said the bank's asset quality improved as reflected by the lower gross and net non-performing loan (NPL) of 2.7% and 1.5% respectively, compared with 3.9% and 2.4% in the previous year.

Sharia banking assets for the first nine months of this year increased by 25.5% to Rp30.2 trillion, making up 17.4% of the bank's total assets from 14.2% a year earlier.

Total sharia financing rose 39.6% to Rp23.8 trillion, from Rp17.1 trillion as of September 2017, while total deposits grew 26.1% to Rp18.1 trillion, from Rp14.3 trillion previously. Its asset quality also improved with lower non-performing financing (NPF) level of 2.9% as at September 2018, compared with 4% this time last year.

"The implementation of Sharia Leverage Model whereby the Unit Usaha Sharia has access to the resources of the whole bank to develop and market all Sharia products, combined with Sharia First strategy have significantly contributed to the outstanding performance of Maybank Indonesia's Sharia Banking," the bank explained.

Maybank Indonesia said its NII grew by 5.5% to Rp6 trillion in September 2018, compared with Rp5.7 trillion in the previous corresponding period. Net interest margin expanded by six basis points to 5.2%.

Overhead costs decreased by 0.3% on-year to Rp4.5 trillion, thanks to cost management initiatives across business lines and support units, it said.

Meanwhile, loan growth grew 7.8% to Rp131.2 trillion as at Sept 30, from Rp121.8 trillion in the previous year. Global banking booked a 10.4% loan growth to Rp31.1 trillion, from Rp28.2 trillion, mainly contributed by infrastructure projects undertaken by state-owned entreprises, the bank said.

Community financial services (CFS) non-retail loans — comprising micro, small and medium enterprises and business banking — grew 8.6% to Rp55.8 trillion, from Rp51.4 trillion a year ago, while CFS retail loans grew 5% to Rp44.3 trillion, from Rp42.2 trillion previously.

As the bank focuses on transactional banking and cash management services, Maybank Indonesia saw its current accounts grow by 13.6% on-year, which helped improve its CASA ratio to 41.6%, from 38% previously. Its total capital stood at Rp25.3 trillion.

"Total customer deposits were lower at Rp110.8 trillion as of September 2018 compared with Rp119.1 trillion a year earlier, in line with the bank's strategy in managing its cost of funding by reducing its dependence on high cost time deposits," it added.

At 3.25pm, shares of Maybank were down 15 sen or 1.59% at RM9.29, bringing a market capitalisation of RM101.54 billion.