Maybank Indonesia 1H profit falls on Covid-19 impact

Maybank Indonesia 1H profit falls on Covid-19 impact
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KUALA LUMPUR (Aug 2): PT Bank Maybank Indonesia Tbk recorded a pre-tax profit of Rp762 billion for its first half financial year ended June 30, 2021, a decline of 28.5% from Rp1.1 trillion in the same period last year.

Maybank Indonesia’s profit after tax and minority interest for the first half of the year stood at Rp510 billion, a slide of 37% from Rp810 billion in the same period last year due to the prolonged impact of the Covid-19 pandemic since the first quarter of 2020.

Maybank Indonesia president director Taswin Zakaria said the current pandemic situation has been quite concerning, as Indonesia’s government's data showed an increase in the number of Covid-19 positive cases in the second quarter of 2021.

“This has impacted social and business activities, including financial services. In our view, the implementation of emergency public activity restriction and the acceleration of vaccination programmes could boost the market's confidence and lead to the gradual recovery of Indonesia’s economy,” he said in a statement today. 

However, amid the challenging market conditions, Maybank Indonesia's Shariah banking unit pre-tax profit surged 67.6% to Rp294 billion, supported by the bank's continuous efforts to increase low-cost funding and manage costs efficiently. 

Maybank Indonesia’s net interest income (NII) declined by 12.1% to Rp3.5 trillion, amid weaker loan disbursement and falling loan yields, in line with the reduction in Bank Indonesia rates and ongoing restructuring of customers' loans impacted by the pandemic.

The bank’s net interest margin (NIM) decreased by 54 basis points to 4.47% as of end-June 2021, compared with 5.01% in the same period last year.

However, in the second quarter, Maybank Indonesia’s NIM increased 12 basis points to 4.35% compared with the first quarter of 2021, on the back of improved cost of funding.

Maybank Indonesia had taken conservative measures in recent years to set aside provisions for accounts across all its business segments and the proactive stance has contributed to a drop in loan loss provisions by 21.6% to Rp763 billion, from Rp1.01 trillion.

The bank also continued to keep its overhead costs under control, resulting in it declining by 6.1% to Rp2.9 trillion, as continuous cost management efforts were implemented including a work-from-home policy during the pandemic.

Customer deposits saw an increase of 1.6% to Rp107.4 trillion during the period. The bank has implemented several strategies to maintain strong liquidity and cost-efficient funding by boosting low-cost funds and reducing high-cost funds.

The strategy contributed to a stronger current account savings account (CASA) base, which increased 6.4% to Rp45.1 trillion. The CASA ratio also improved to 41.9% in June 2021, from 40.0%in June 2020.

Maybank Indonesia’s loan to deposit ratio stood at a healthy 80.1%, while its liquidity coverage ratio stood at 188.97% in the first half 2021, exceeding the regulator's minimum level of 100%.

The bank's capital position remained strong, with its capital adequacy ratio standing at 26.3% in June 2021, compared with 22.1% in the previous year.

Its total capital also increased to Rp27.2 trillion in June 2021, from Rp26.4 trillion in the same period last year.