Friday, 24 February 2012

Maybank turns in record performance

By Adeline Paul Raj
Published: 2012/02/24

Top lender Malayan Banking Bhd (Maybank) posted a 20 per cent increase in net profit for the last financial year 
comprising just six months and announced a better-than-expected final dividend.

It was a shorter financial year as the group changed its year-end to December 31 from June 30.

Net profit for the six months to December 31 last year came in at RM2.6 billion compared with RM2.1 billion in the same period a year ago. Revenue grew by 21.6 per cent to RM12.9

“Our record performance is a result of our efforts in focusing on fundamentals and ensuring that we grow our business profitably and responsibly. We expect to see reasonable business growth in 2012,” president and chief executive officer (CEO) Datuk Seri Abdul Wahid Omar told reporters at a results briefing here yesterday.

Its second quarter net profit rose by 15.2 per cent to RM1.3 billion as it earned more from loans and insurance, and included the earnings of newly-acquired Kim Eng investment banking group.

The insurance business was boosted by a surplus transfer of RM178.3 million and a one-off RM98.3 million net surplus adjustment that came about from adopting new valuation guidelines issued by the central bank from July last year.

“After squaring off the insurance boost, the results came in within my expectations,” said Eileen Tan, a banking analyst at Affin Securities, who kept her “add” call and target price of RM9.05 on the stock.

Maybank’s shares closed one sen lower to RM8.70 yesterday.

The group beat its return-on-equity (ROE) target of 16 per cent, with ROE – a measure of profitability – coming in at 16.2 per cent.

Group loans grew by 16.3 per cent, led by strong loan growth in Singapore (23.7 per cent) and Indonesia (31.2 per cent). Loans grew by a tenth in Malaysia.

The group is targetting loan growth of 15.2 per cent this year as economies see slower growth. Abdul Wahid said retail loans, including auto loans, will continue to grow this year albeit at a slower pace after Bank Negara Malaysia’s new responsible lending guidelines kicked in this year.

Two-thirds of its auto loans are in the non-national car market and as such, the group is "less affected" by the tighter lending rules, he told analysts.

The group has no plans to acquire other banks or companies at the moment and will focus on organic growth in the region, even in the Philippines where its closest rival CIMB Group plans to buy a bank.

"At this moment, we're not looking ... but we're keeping our options open," he remarked.

Maybank proposed a final gross dividend of 36 sen a share, which works out to a payout ratio of 79.9 per cent, beating analysts' expectations of about a 70 per cent payout.

Shareholders stand to get a net dividend of 27 sen a share, of which 24 sen can be reinvested in new shares under a dividend re-investment plan.

Meanwhile, Maybank's deputy president and chief financial officer Datuk Khairussaleh Ramli will leave to become president director/CEO of Bank Internasional Indonesia (BII) from next month, having already obtained the Indonesian central bank's nod.

On Maybank's requirement to sell down its stake in BII to 80 per cent by June, Khairussaleh said it would probably ask the Indonesian authorities for more time to do so if it can't sell at a profit.

"For all intents and purposes, we will not sell if we incur a loss," he said.

BII's shares have been trading at around 480 rupiah a share, well below Maybank's cost of investment of 510 rupiah a share.

Read more: Maybank turns in record performance

No comments: