KUALA LUMPUR (Feb 24): The country’s largest lender Malayan Banking Bhd (Maybank) registered a 33.78% rise in net profit in the fourth quarter ended Dec 31, 2021 (4QFY21) to RM2.05 billion from RM1.53 billion, in the absence of huge loan impairments that was recorded in 4QFY20.
Allowances for impairment losses on loans and advances were lower by 85.61% to RM157.28 million in 4QFY21, from RM1.09 billion.
This more than offset the slight decline in net operating income before impairment of RM3.34 billion, from RM3.44 billion.
Quarterly earnings per share rose to 17.32 sen, from 13.68 sen a year ago.
The group has declared dividend of 30 sen per share, bringing its full-year (FY21) dividend to 58 sen per share, from 52 sen in FY20.
A 10% rise was recorded in net interest income to RM3.06 billion from RM2.78 billion, as well as a 17% increase in Islamic banking income to RM1.96 billion from RM1.67 billion.
However, total operating income fell 6.39% to RM8.18 billion from RM8.74 billion, amid lower other operating income and net earned insurance premiums.
Overhead expenses rose slightly to RM2.95 billion from RM2.87 billion mainly due to higher personnel expenses, resulting in cost-to-income ratio (CIR) rising to 46.9%, from 45.5%.
The results brought Maybank’s full-year net profit to RM8.09 billion or 69.66 sen per share, up 24.92% from RM6.48 billion or 57.66 sen per share in the year-ago period.
This resulted in its return on equity (ROE) coming in at 9.43% in FY21, compared to 7.67% in FY20 when it booked allowances for impairment losses on loans and advances of RM4.6 billion. It booked RM2.66 billion in FY21.
Full-year net interest income rose 8.5% to RM12.03 billion from RM11.09 billion, similarly Islamic banking segment saw a 23.42% increase to RM7.57 billion, from RM6.14 billion.
The banking group saw a 14.6% year-on-year (y-o-y) increase in total net fund based income to RM19.09 billion as a result of stronger loan growth as well as robust improvement in current account and savings accounts (CASA), which helped net interest margin (NIM) expand 22 bps y-o-y in 2021.
CASA deposits rose 17.2%, driven by strong growth across all home markets. Consequently, the CASA ratio expanded to 47.1% from 42.8% a year earlier, the bank said.
However, FY21 total operating income came in at RM32.94 billion, down 3.12% from RM33.98 billion, mainly led by lower other operating income.
Overhead expenses in the year climbed 2.73% to RM11.52 billion from RM11.22 billion, with CIR flat at 45.3%.
Total group gross loans grew 5.7% y-o-y, lifted mainly by increases of 8.7% in its Singapore and 4.1% in its Malaysia operations, while the Indonesia operations saw a slight decline of 3.2%.
The group sees further economic recovery in FY22, but anticipates its ROE “will be similar to that of FY21”, and it has set a Headline KPI of between 9.5% and 10%, taking into account the 2022 Prosperity Tax announced by the government.
Maybank chairman Tan Sri Zamzamzairani Mohd Isa said: “While we are witnessing gradual recovery regionally supported by the resumption of more economic activities, improving vaccination rates and accommodative policies, we will stay ahead in managing key risks and any resurgence in Covid-19 cases.
“With the completion of our first year under the M25 Plan, we are cautiously optimistic that we can accelerate our ambitions this year for our three strategic priorities, namely digital, sustainability and new value drivers,” Zamzamzairani added.
Shares of Maybank slipped 13 sen or 1.48% to RM8.64 at noon market break, giving it a market capitalisation of RM102.63 billion.