KUALA LUMPUR (May 19): Malayan Banking Bhd (Maybank) reported that net profit of its Indonesian unit, PT Bank Maybank Indonesia Tbk, grew by 29.7% to 538.2 billion rupiah (RM160 million) for the first quarter ended March 31, 2020 (1QFY20) on the back of improved fee-based income as well as sustained strategic cost management. 

According to a statement today, the Indonesian unit saw a healthy growth of 16% in fee-based income to 597.6 billion rupiah for March, compared with 515 billion rupiah for March 2019, mainly from global market-related fees, bancassurance, investment and e-channel transaction fees.

Maybank Indonesia also saw an improvement in its CASA (current account and savings account) ratio at 37.4% in March 2020, from 31.7% in March last year, in which savings accounts increased 18.1%.

The bank attributed the improvement in the CASA ratio to its strategy to reduce cost of funds, implemented since the second semester of 2019, to manage the bank’s liquidity surplus which was built to mitigate unforeseen risks during the first half of the year.

Its digital banking platform, M2U, also contributed to the improvement in the CASA ratio as it provided a simple yet speedy account opening process, said Maybank.

Total loans, however, dipped 9.5% to 122.9 trillion rupiah as the bank continued to maintain its conservative stance and align its portfolio growth with its risk appetite and posture which had been further tightened given the current pandemic situation. 

As of March 2020, global banking loans had declined 1.7% to 35.3 trillion rupiah, while community financial services (CFS) non-retail loans were 17.5% lower at 46.6 trillion rupiah and CFS retail loans declined 5.6% to 41.1 trillion rupiah. 

The net interest margin stood at 4.96% as at March 2020, 14 basis points (bps) higher than 4.81% in March 2019. “The bank will continue to maintain discipline in pricing and active funding management to better mitigate pressures on margin,” said Maybank.

The bank’s gross non-performing loan (NPL) level stood at 3.6% as at March 2020, against 2.9% last year, while net NPLs were at 2.2% versus 1.7% as at March 2019.

The gross impaired loan ratio, on the other hand, was at 5.04% as at March 2020, versus 3.29% as at March 2019, due to full implementation of the new accounting standard, PSAK 71 or IFRS 9, in January 2020. 

Maybank Indonesia president director Taswin Zakaria said the bank’s fee-based income continued to show positive traction, making it the bank’s major source of income.

Datuk Abdul Farid Alias, the president commissioner of Maybank Indonesia and group president and chief executive officer (CEO) of Maybank, said transformation measures over the past years had shown tangible results with strong growth in spite of the extremely challenging quarter experienced.

“We will continue to remain focused on growing responsibly, improving our asset quality, while at the same time prioritising effective management of costs and liquidity. Given the new norm in banking operations that we are witnessing, our group digital transformation agenda will be accelerated to drive Maybank Indonesia’s next phase of growth,” he added.