KUALA LUMPUR (Nov 26): Malayan Banking Bhd (Maybank) reported a 7.92% fall in net profit to RM1.61 billion for the third quarter ended Dec 31, 2014 (3QFY14) from RM1.75 billion a year ago, on lower operating profit before impairment losses.
The lower operating profit was largely due to a net loss incurred by Maybank's insurance and takaful business, which recorded a net loss of RM268.6 million for the nine-month cumulative period (9MFY14) compared to a net income of RM76.1 million in 9MFY13.
"The net loss was mainly attributable to higher net benefits and claims incurred, lower net earned premiums and higher tax expense of RM218.8 million, RM156.1 million and RM27.8 million, respectively. However, this was mitigated by lower net fee and commission expenses of RM57.0 million," Maybank told Bursa Malaysia today.
Revenue for 3QFY14 was 7.95% higher at RM8.93billion, from RM8.28 billion in 3QFY13.
Meanwhile, net profit for the nine months ended Sept 30 (9MFY14) was marginal 0.73% lower at RM4.79 billion from RM4.82 billion a year ago, even though revenue was at RM26.05 billion, 4.28% higher than RM24.98 billion in 9MFY13.
Maybank said the group's net interest income and Islamic Banking income for 9MFY14 increased by RM505.4 million or 5.5% to RM9.73 billion compared to 9MFY13, largely due to growth in net loans, advances and financing, which mainly came from its Islamic banking operations.
The group's non-interest income for 9MFY14 declined RM561.5 million or 12.3% to RM3.99 billion, mainly due to a lower foreign exchange gain of RM1.21 billion, a lower gain on disposal of financial investments available-for-sale of RM310.0 million, and a lower gain on disposal of financial assets at fair value through profit or loss of RM91.5 million.
Meanwhile, the group expressed confidence that its common equity tier 1 (CET1) capital ratio will be well ahead of the minimum level of 7% (inclusive of capital conservation buffer) as required by 2019.
"The deepening of Maybank's business portfolio in the region is another near-term priority for the group in 2014.
"It includes improving client interface within the global Banking business, providing cross border banking solutions via the Maybank Islamic business and expansion of insurance and takaful services in other markets," it said, adding that it will continue to focus on controlling cost and improving productivity to enhance profit.
The group expects its financial performance for the financial year ending Dec 31, 2014, to be in line with industry.
Maybank closed the day 8 sen or 0.83% higher at RM9.67, giving it a market capitalisation of RM90.11 billion.