Maybank adopts cautious outlook amidst geopolitical tensions, volatility

The Malaysia lender saw its Q1 profits fall compared to the same period last year.

Maybank has adopted a cautious outlook as geopolitical tensions and the resulting market volatility, along with inflationary pressures, dampened any optimistic sentiment the bank held at the beginning of 2022.

Southeast Asia’s fourth largest bank by assets recorded a net profit of approximately $265.4m (RM2.04b) in the first three months (Q1) of the year, down from $545m (RM2.39b) in Q1 2021, according to an announcement. 

Profit before tax (PBT) was also lower at $678m (RM2.97b) from $723m (RM3.17b) a year earlier. 

“Although the reopening of regional economies led to a pick-up in loans growth and reduced impairment charges, the market weakness mitigated this positive impact,” Maybank said.

Maybank Chairman Tan Sri Dato’ Sri Zamzamzairani Mohd Isa said that the start of 2022 looked promising with active resumption of economic activities and the gradual reopening of international borders. However, the escalation of geo-political tensions and resultant market volatility as well as inflationary pressures has somewhat dampened this sentiment. 

“Whilst we are cautious in our outlook for the rest of the year given significant uncertainties, we will remain guided by the forward looking strategies set out in our M25 Plan. We intend to actively drive new business growth in this recovery period, whilst at the same time continue supporting our customers to ensure they are able to remain sustainable in the long term,” the chairman said.

The bank’s gross loans rose to RM562b in Q1 from RM534.4b a year ago, led by Singapore operations, where loans grew 7.2%, and the Malaysian operations, where loans expanded 4.9%. 

However, Maybank’s Indonesia operations registered a 2% decline in loans.

Gross deposits expanded 5.5% in Q1 compared to the same period in 2021. Notably, Islamic financing and advances rose 7.4% during the quarter.

Asset quality also saw a significant improvement, with the gross impaired loans ratio improving to 1.95% from 2.20% in March 2021, Maybank shared.

Alongside their quarterly performance, Maybank welcomed its new group president & CEO, Dato’ Khairussaleh Ramli, who joined on 1 May.