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ISLAMIC BANKING | Staff Reporter, Malaysia

Maybank’s net profit jumps 25% to RM1.29b in 1Q11

As overseas loans surged 41.4% led by Singapore and Indonesia.

Maybank announced that Group profit after tax and minority interest for the first quarter ended September 2011 in the current financial period ending December 2011, rose 25.1% to RM1.29 billion from RM1.03 billion in the previous corresponding period. Group profit before tax rose 25.3% to RM1.76 billion from RM1.40 billion previously.

The improved performance was driven mainly by double-digit growth in revenue from almost all business sectors. In addition, it was boosted by improvement in asset quality and better bad debts recovery mainly from the corporate banking, business banking and SME and Singapore operations.

Group loans continued to grow at a steady pace, expanding 17.6% on an annualised basis. Overseas loans surged 41.4% led by Singapore (41%) and Indonesia (26.6%). Loans at the Malaysian operations grew 7.2%. Within the Malaysian operations, Community Financial Services led loans growth with 9.4% while Global Wholesale Banking recorded 3.2%. Maybank Islamic continued to register solid financing growth with a rise of 24%.

The Group achieved Return on Equity of 15.8% which is higher than the 15.2% ROE recorded in financial year ended 30 June 2011, and on track towards achieving 16% target for Financial Period ending 31 December 2011.
Key drivers for the quarter’s performance included the following:
1. A 28.1% increase in non-interest income led by investment & trading income (+67.7%), commissions, service charges and fees (+46.1%) and net foreign exchange profit of RM70.7 million.

2. Higher net interest income which rose 5.6% to RM1.87 billion despite a tightening in net interest margin by 23 basis points to 2.46%.

3. A 52.7% rise in Islamic banking income as well as an 11.2% increase in net insurance income.

4. Significant reduction in allowance for losses on loans which fell 62.7% to RM98.7 million from RM264.7 million previously.

5. Continued improvement in asset quality with net impaired loan ratio declining further to 2.18% in September 2011 from 2.99% a year earlier.

6. Sustained customer deposit annualised growth of 14.9% to RM293.3 billion 7. Strong asset growth of 24% to RM430.6 billion from RM347.1 billion in September 2010.

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