This article first appeared in The Edge Financial Daily on October 31, 2017

KUALA LUMPUR: Malayan Banking Bhd’s (Maybank) 98.31%-owned subsidiary PT Bank Maybank Indonesia Tbk (Maybank Indonesia) saw its nine-month net profit rise 12% year-on-year (y-o-y), driven by loan growth in particular global banking, effective cost management control and achievement in syariah banking.

Net profit for the nine months ended Sept 30, 2017 (9MFY17) rose to 1.4 trillion rupiah (RM440 million) from 1.3 trillion rupiah a year ago.

In a statement yesterday, Maybank Indonesia said it recorded a modest loan growth of 4.6% to 121.8 trillion rupiah as at September compared with 116.4 trillion rupiah in September 2016. However, its global banking loans saw a growth of 29% y-o-y to 28.2 trillion rupiah in September on the back of infrastructure financing in line with the Indonesian government’s initiatives.

Total customer deposits grew to 119.1 trillion rupiah in September from 115.6 trillion rupiah in September 2016, with Maybank Indonesia’s current account savings account ratio reaching 38%.

Maybank Indonesia’s loan-to-deposit ratio (bank only) stood at 87.6%, while its loan-to-funding ratio (bank only) was at 86.3%. Net interest income rose 4.3% to 5.7 trillion rupiah in September from 5.5 trillion rupiah a year ago, while its net interest margin remained at 5.2% in September.

Syariah banking’s net profit increased by 63.3% y-o-y to 561.6 billion rupiah in 9MFY17. Syariah banking’s total assets increased by 35% to 24 trillion rupiah, contributing 14.2% of the bank’s total assets. Maybank Indonesia’s consolidated non-performing loan level stood at 3.9% (gross) and 2.4% (net) as of September.

Going forward, Maybank Indonesia said it remains conservative in managing asset quality as the economic outlook is expected to remain challenging.

Maybank Indonesia president director Taswin Zakaria said the bank is optimistic about being able to conclude FY17 with commendable results, while at the same time maintain the view of continued challenging market conditions for the remaining year.

“We have strengthened our financial position and product offerings as well as our risk management capabilities to enable us to leverage on growth areas, in particular, opportunities arising from the government’s various economic development projects,” said Maybank Indonesia president commissioner and Maybank group president and chief executive officer Datuk Abdul Farid Alias.