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INVESTMENT BANKING | Staff Reporter, Malaysia

Maybank’s net profit surges 16.6% to a record RM4.45b in FY11

Group loans grew at its fastest pace in the last decade, touching 21.7%.

Maybank announced another year of record performance with Group profit after tax and minority interest of RM4.45 billion for the year ended 30 June 2011, up 16.6% from the RM3.82 billion recorded in the previous year. Group profit before tax for the year rose 16.8% to RM6.27 billion from RM5.37 billion previously.

The results were achieved on the back of exceptionally strong loans growth in all three home markets of Malaysia, Singapore and Indonesia, and better performance across all business segments. In addition, the continued decline in allowance for losses on loans which fell by more than half contributed to the stronger bottom line.

Group loans grew at its fastest pace in the last decade, touching 21.7%. This was a result of robust overseas loans growth of 29.4%, and a 16.8% rise from Malaysian operations which was well above the industry average of 13.5%. Indonesia and Singapore operations saw loans rising 25.8% each while other international operations were up 38.6%. Within the Malaysia operations, Global Wholesale Banking led the growth with 25.6% followed by Community Financial Services with 12.9%. The Islamic financing portfolio in Malaysia also registered strong growth of 35.1%.

Key drivers for the record performance for the year included the following:

1. A 16.3% increase in non-interest income (including income from Islamic and Insurance businesses), led by doubling of fee income from Islamic operations (+127.1%), insurance business (+31.2%), investment & trading income (+48.4%), commissions, service charges and fees (+12.8%) and foreign exchange income from customer transactions (+8.6%).

2. Higher net interest income which rose 6.1% to RM7.19 billion despite a tightening in the net interest margin.

3. Significant reduction in allowance for losses on loans which fell 59% to RM502.2 million from RM1.23 billion previously.

4. Continued improvement in asset quality with net impaired loan ratio declining further to 2.25% in June 2011 from 2.83% a year earlier.

5. A 19% growth in deposits, the highest rate of increase in the last 5 years, to touch RM 282 billion

6. Strong asset growth of 22.4% to RM412 billion

From a business segment point of view, the drivers were the following:

A 7.5% rise in profit before tax of Community Financial Services which rose to RM 2.99 billion from RM2.78 billion previously. Improved profit before tax from Global Wholesale Banking which rose 26.9% to RM 2.54 billion from RM2.00 billion previously.

A 19.1% growth in profit before tax for International Banking which reached RM 1.49 billion from RM1.25 billion previously, including an RM888.2 million contribution from Singapore and RM289.7 million from Bank Internasional Indonesia.

Better profit from Insurance, Takaful & Asset Management which rose 10.4% to RM 488 million from RM442 million previously. Strong performance by the Group’s Islamic Banking which recorded a 69% rise profit before tax and zakat of RM904.2 million compared with RM535
million previously.

Maybank Group Quarterly Results Q-on-Q and Y-o-Y
On a quarterly comparison, the fourth quarter ended 30 June 2011 saw profit before tax rising to RM1.73 billion from RM1.58 billion previously. PATAMI for the fourth quarter was higher at RM1.15 billion compared with RM1.14 billion in the preceding quarter.

Compared to the corresponding quarter ended 30 June 2010, profit before tax and PATAMI for the fourth quarter ended 30 June 2011 were 27.2% and 26.5% higher respectively.

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