26 November 2024

Maybank’s 9M FY24 net profit rises 8.5% to RM7.56b

Leading the region’s transition to a low-carbon economy with Sustainable Finance surpassing RM100 Billion

9M FY24 at a glance (Y-o-Y)

• Net operating income up 8.7% at RM22.15b
  • Net fund based income increased to RM14.66b from RM14.44b
  • Non-interest income recorded a solid 26.0% increase to RM7.49b, boosted by strong growth in core fees by 13.4%
• Pre-provisioning operating profit rose 7.2% to RM11.38b
• Net impairment provisions stood at RM1.27b from RM1.21b, while net credit charge off rate improved to 26 bps from 31 bps
• PBT increased 7.4% to RM10.29b, while net profit rose 8.5% to RM7.56b
• Healthy growth in group loans of 4.8% (YTD Ann.) across all home markets and key segments in MY 8.0%; SG 14.5% and IDN 8.9%
• Healthy liquidity risk indicators with Group LCR at 132.3% and Group LDR at 93.8%
• Robust capital position: 17.90% total capital ratio & 14.72% CET1 capital ratio

 

Maybank, Southeast Asia’s fourth largest bank by assets, announced a net profit of RM7.56 billion for the nine months’ period (9M FY24) ended 30 September 2024, an increase of 8.5% from the same period a year earlier. Profit before tax (PBT) meanwhile was also up by 7.4% Y-o-Y to RM10.29 billion. The commendable results were driven by strong growth in non-interest income (NOII), driven by improved core fees and insurance performance.

Net operating income for the nine months increased by 8.7% Y-o-Y to RM22.15 billion driven by higher non-interest income (NOII) of 26.0% to RM7.49 billion compared to 2023, boosted by strong growth in core fees which rose 13.4%. Net fund based income also improved 1.5% to RM14.66 billion from RM14.44 billion compared to a year earlier supported by solid loans growth of 4.8% year to date annualised (YTD Ann.) from all key segments in Malaysia, Singapore and Indonesia. Net interest margin (NIM) declined 14 bps Y-o-Y as a result of higher funding cost across the home markets, but has been stable at 2.04% since the second quarter of 2024.

Overhead costs expanded to RM10.77 billion from RM9.77 billion a year earlier on higher personnel costs, IT expenses, administration and general costs and marketing expenses. Notwithstanding that, the Group’s pre-provisioning operating profit (PPOP) was up by 7.2% Y-o-Y to RM11.38 billion.

Net impairment provisions stood at RM1.27 billion from RM1.21 billion a year earlier while net loan provisions decreased by 10.0% to RM1.23 billion, driven by higher recoveries. This resulted in a lower net credit charge off rate for loans of 26 bps from 31 bps the year before. Gross impaired loans ratio decreased to 1.26% from 1.43% a year earlier while loan loss coverage remained comfortable at 125.8%.

3Q FY24 vs 3Q FY23
For the third quarter of 2024, net profit rose 7.6% Y-o-Y to RM2.54 billion compared with the same period last year, while PBT for the quarter was up 7.8% to RM3.40 billion. Net operating income was up by 7.1% Y-o-Y to RM7.23 billion, led by a strong 20.9% rise in NOII to RM2.34 billion while net fund based income grew by 1.5% to RM4.89 billion. PPOP stood at RM3.71 billion, up 7.4% compared with a year earlier although overhead expenses was slightly higher at RM3.52 billion from RM3.30 billion in 2023. 

3Q FY24 vs 2Q FY24
Net profit for the third quarter came in slightly higher by 0.3% compared with the preceding quarter’s (2QFY24) RM2.53 billion. PBT meanwhile was 1.2% lower at RM3.40 billion compared with 2Q FY23. Net impairment provisions was lower by 8.0% following higher recoveries from corporate borrowers.

President & Group CEO, Dato’ Khairussaleh Ramli said that Maybank is making good progress with healthy top lines and a commendable overall nine months earning, albeit growing challenges on the global front and market volatility across the region. Guided by its corporate strategy to focus and drive initiatives on super-growth areas, particularly wealth management, bancassurance and the global banking mid-market segment, has yielded positive outcomes for the Group. This is in addition to the prioritisation of maintaining strong liquidity position while improving asset quality and preserving sound capital levels.

“As we advance through our M25+ journey, we remain committed to embedding customer relationships across segments, leveraging on advanced digital capabilities. A key enabler of our performance is the continued deepening of the Agile ways of working, where we have further enhanced collaboration, improved decision-making speed, and increased our ability to respond effectively to changing customer needs and market dynamics.

On the sustainability front, a recent initiative to elevate our decarbonisation pathway was with the publishing of an updated White Paper which now also covers the steel and aluminium sectors, in addition to the power and palm oil sectors published earlier. The White Paper will serve as a guide for the Group to meet its mid-term target in 2030.”

Loans & Deposits
Group loans also expanded by 4.8% YTD Ann. as at 30 September 2024, lifted by increases of 8%, 14.5% and 8.9% in its home markets of Malaysia, Singapore and Indonesia respectively. Group deposits, meanwhile expanded 6.7% as fixed deposits and CASA grew equally by 0.6%.

Capital & Liquidity Strength
Maybank maintained robust capital and liquidity positions as at 30 September 2024, with its CET1 capital ratio at 14.72%, and total capital ratio at 17.90%. The Group’s liquidity coverage ratio remained stable at 132.3%, well above the regulatory requirement of 100%.

Sustainability updates
Maybank continued to lead the region’s transition to a low-carbon economy and most notably had exceeded the RM100 billion mark in mobilising sustainable finance. Under commitment 2, the Group has on an accumulated basis since 2021, improved the lives of 1.76 million households across ASEAN through a combination of its community programmes and financial inclusion efforts particularly for the lower income communities, against the target of 2 million households by 2025.

Similarly, for commitments 3 and 4, the Group had recorded a 52.0% reduction in carbon emissions as well as close to 1 million hours respectively for the third quarter of 2024. This is compared to the annual target of 52.5% to achieve a Carbon Neutral Position of emissions by 2030 and 1 million hours on sustainability initiatives respectively by 2025.

M25+ progress
M25+ steadily progresses, leveraging advanced digital capabilities as a key enabler for ecosystem expansion and delivering personalised solutions. Through focused efforts in creating convenience, accessibility and relevance, the initiatives have shown commendable improvement in deepening customer relationships.

Among the highlights include a Y-o-Y two-fold increase in CASA account openings through its enhanced digital on boarding experience. On the insurance front, tailored solutions through an algorithm-driven approach contributed close to a three times Y-o-Y increase to RM396.0 million in sales. Significant progress was also seen in Global Banking’s mid-market segment with an increase in deals pipeline to RM35.50 billion from RM18.10 billion as at December 2023. Total mid-market loans for Malaysia and Singapore was also higher by 35.5% Y-o-Y to RM29.0 billion as at September 2024. Group Islamic Wealth Management (GIWM) offerings are also gaining traction in home markets of Malaysia, Singapore and Indonesia with significant growth in wealth fee income by 142% Y-o-Y to RM171.97 million, while assets under management rose 35% to RM85.29 billion compared with a year earlier.

Sectoral Review
Group Community Financial Services (GCFS) continued to strengthen its franchise in the nine months of 2024, registering a 7.1% Y-o-Y increase in net operating income to RM13.4 billion. This was backed by a steady growth in both its NOII and net fund based income by 12.0% and 5.6% respectively compared with a year earlier. Total loans expanded at all home markets of Singapore, Indonesia and Malaysia to 16.7%, 10.0% and 8.8% YTD Ann. respectively. Wealth Management, a key focus segment for the Group, maintained its upward trajectory with Total Financial Assets rising 8.7% from a year earlier to reach RM497.6 billion contributed by growth in loans of 19.2% YTD Ann. and investments of 12.0%.

Group Global Banking (GGB) achieved a 7.7% Y-o-Y increase in PBT for the period ended September 2024, reaching RM4.97 billion, driven by strong income growth. Net operating income rose by 12.0% Y-o-Y to RM7.71 billion, supported by a 42.9% increase in NOII to RM4.04 billion. However, net fund-based income declined by 9.6% Y-o-Y to RM3.67 billion, primarily due to higher funding costs amid ongoing global macroeconomic challenges. Corporate loans growth remained strong across GGB’s three home markets, with Y-o-Y growth of 14.5% in Malaysia, 16.4% in Singapore and 6.7% in Indonesia, contributing to an overall increase of 6.8%.

The Group’s Islamic Banking business saw a rise in PBT by 7.1% Y-o-Y to RM2.97 billion for the nine months of 2024. This was on the back of solid increase in total income by 17.0% to RM6.41 billion. Within the business, Maybank Islamic’s total gross financing grew by 13.9% to RM287.2 billion, contributed by strong growth in its GB business by 21.6% and CFS business by 12.0% in Malaysia. As at 30 September 2024, Islamic financing constituted 70.0% of Maybank Malaysia’s total loans and financing. Maybank Islamic continued to lead in the market share of Islamic assets in Malaysia at 29.6%. Assets under management for Islamic Wealth Management increased 35% Y-o-Y to RM85.29 billion.

Etiqa Insurance & Takaful registered a robust increase in PBT by 56.6% Y-o-Y to RM1.01 billion for the nine months of 2024. Total net adjusted premium was 19.7% higher on the back of a strong 25.5% Y-o-Y increase in Total Life & Family net adjusted premiums and a 12.4% rise in Total General net written premiums. Etiqa maintained its top position in the General Insurance & Takaful (Malaysia) segment with a 16.9% market share and third in the Life/Family (New Business) segment with a 14.3% market share.

Key Home Markets
Maybank Singapore saw a rise in PBT by 3.8% Y-o-Y to S$523.98 million for the 9M FY24 on the back of a healthy net income which rose 9.9% to S$950.77 million. This was mainly attributed to a strong increase in NOII by 57.6% Y-o-Y to S$458.11 million and higher write back in loan loss allowances mitigating the lower fund based income and higher overheads. Net fund based income however reduced 14.3% Y-o-Y, impacted by compressed NIMs as rising funding cost outpaced growth in interest income from higher asset yields and loans expansion.

Maybank Indonesia recorded a PBT of Rp562 billion for 3Q FY24, up by 44% Y-o-Y. The increase was on the back of a higher loans balance and improved fee-based income. Meanwhile, for the 9 months ended 30 September 2024, the Bank recorded a PBT of Rp845 billion. Interest income grew 10.2% Y-o-Y backed by loan expansion and better productive assets composition.

For media queries, please contact sg.corpcomms@maybank.com