KUALA LUMPUR (Nov 29): Malayan Banking Bhd (Maybank) reported today a 3% drop in third quarter net profit at RM1.96 billion from RM2.03 billion a year ago, on lower net operating income as a result of continued global market volatilities which dampened economic growth and demand in key segments.

Nevertheless, Maybank said quarterly revenue rose to RM12.06 billion in the three months ended Sept 30, 2018 (3QFY18) from RM11.59 billion in 3QFY17.

For 3QFY18, the group registered a net operating income of RM5.69 billion, down 3.3% from RM5.89 billion a year ago, impacted by a dip in fee based income owing mainly to lower investment and trading proceeds as well as foreign exchange fluctuations.

"Notwithstanding this, operating profit for 3QFY18 was higher at RM2.61 billion from RM2.6 billion a year ago as the group benefitted from lower overhead expenses which declined 6.2% year-on-year (y-o-y), as well as lower impairment losses which fell 5.5% y-o-y," said Maybank.

For the cumulative nine-month period (9MFY18), Maybank said net profit climbed to RM5.79 billion from RM5.39 billion a year earlier. Revenue was also higher at RM35.09 billion compared to RM33.79 billion.

In a filing with Bursa Malaysia today, Maybank said key priorities for 2018 include maintaining pricing discipline across its products, focusing on attaining cheaper funding sources to support loan growth, growing its loan portfolio within its risk appetite while proactively managing its asset quality.

"The group has implemented MFRS 9 (Malaysian Financial Reporting Standards 9) on Jan 1, 2018, of which the impairment assessment is based on the expected credit loss model that uses forward looking assumptions as opposed to an incurred loss model under the previous accounting standard. The group's capital and liquidity positions remain strong notwithstanding the implementation of MFRS 9.

"Barring any unforeseen circumstances, the group expects its financial performance for 2018 to be satisfactory against the expected growth prospects of its key home markets. The group has set its headline key performance indicator for return on equity at approximately 11%," Maybank said.

In a separate statement, Maybank chairman Datuk Mohaiyani Shamsudin said the period under review was marked by significant global uncertainty and market instabilities, which resulted in some measure of caution amongst customers, particularly corporates.

“Nevertheless, we remained focused on sound risk management as well as maintaining a robust capital and liquidity position, which helped us withstand much of the headwinds that persisted, particularly in the third quarter.

"We will continue to focus on risk and compliance monitoring to ensure that the group can sustain value creation for the benefit of all our stakeholders," she added.

Maybank group president and chief executive officer Datuk Abdul Farid Alias said the prolonged geopolitical situation remains a key concern, as it would influence global growth, including Asia where Maybank has most of its operations.

“However, we believe that our solid franchise in the region as well as our strong fundamentals can help buffer us from much of the uncertainties that could arise in the future.

"We will remain agile to adjust to rapid market changes, while at the same time look for opportunities for growth, such as in infrastructure financing, wealth management, digital banking and Islamic banking. We will ensure that we grow responsibly, as well as maintain strict discipline in pricing and managing costs," said Abdul Farid.