Friday 29 Mar 2024
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This article first appeared in The Edge Financial Daily on October 30, 2019

KUALA LUMPUR: Malayan Banking Bhd (Maybank) announced yesterday that net profit of its Indonesian unit, PT Bank Maybank Indonesia Tbk, fell 26.7% to 1.1 trillion rupiah (RM327.69 million) for the nine months (9M) ended Sept 30, 2019, from 1.5 trillion rupiah for the same period a year ago.

The bank, in a statement, attributed the fall in its profit after tax and minority interest to an increase in loan loss provision, as it took a conservative stance in setting aside provision for a few accounts in the commercial and corporate segments, which were impacted by weaker financial performances.

“The bank had increased its loan loss provision by 59.4% to 1.6 trillion rupiah as of September. This provisioning was mainly due to a few accounts in the commercial and corporate segments impacted by weaker financial performances.

“The bank continues to take a proactive stance to assist customers facing challenges and maintain its risk posture to safeguard asset quality. This resulted in improved asset quality as reflected by a decline in the NPL (non-performing loan) level from 2.7% (gross) and 1.5% (net) in September 2018 to 2.6% (gross) and 1.5% (net) in September,” the statement read.

Total loans had declined by a marginal 1.1% to 129.8 trillion rupiah as at Sept 30, from 131.2 trillion rupiah a year ago.

“Global banking booked a strong loan growth of 13.7% to 35.4 trillion rupiah from 31.1 trillion rupiah, supported mainly by loans from state-owned enterprises and top-tier corporate for infrastructure and investment.

“However, community financial services (CFS) non-retail loans, which comprise small and medium enterprises, were 7% lower [at] 51.9 trillion rupiah, while CFS retail loans had declined 4% to 42.5 trillion rupiah as at September. As a result, total loans had declined marginally by 1.1% to 129.8 trillion rupiah as at Sept 30, from 131.2 trillion rupiah as at Sept 30, 2018,” Maybank Indonesia said.

Meanwhile, the bank’s operating profit before provisions grew 2% to 3.1 trillion rupiah during the nine-month period, mainly supported by an improvement in fee-based income, sustained strategic cost management and increased net interest income.

It achieved a strong 23.2% growth in fee-based income to 1.9 trillion rupiah up to September, compared with 1.5 trillion rupiah in the same period last year, attributable to global market-related fees, tax refunds, loan administration, loan recovery, and bancassurance as well as other services provided by the bank.

Net interest income rose 1.4% to 6.1 trillion rupiah from six trillion rupiah, while the net interest margin declined by 27 basis points year-on-year to 5% in September from 5.2% in September 2018.

Maybank Indonesia said it continued to preserve a strong liquidity position with customer deposits increasing 4.3% to 115.6 trillion rupiah in September, from 110.8 trillion rupiah in September 2018.

The bank said its loan-to-deposit ratio was at a healthy level of 96.3%, while its liquidity coverage ratio stood at 169.7% as of September, above the mandatory minimum of 100%.

Overhead cost remained under control with a 8.4% growth reaching 4.9 trillion rupiah in September, from 4.5 trillion rupiah in September 2018, while the bank’s capital adequacy ratio stood at 20.1% against 18.8% in the previous year.

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