Analysts: Maybank to keep upward trajectory
Analysts upbeat as lender’s earnings grew 22.9pc in first 9 months
ANALYSTS are upbeat on Malayan Banking Bhd’s (Maybank) results for last year, expecting the group to maintain its upward trajectory displayed in the first nine months.
They noted that Maybank’s earnings had grown 22.9 per cent to RM5.38 billion in the nine months ended September 30 last year from RM4.38 billion a year ago, while revenue increased 1.1 per cent to RM33.8 billion, from RM33.4 billion previously.
“This growth was mostly driven by mortgages and small and medium enterprise (SME) loans, especially in its home market, where mortgages grew 7.6 per cent year-on-year (y-o-y) to RM79 billion and the SME loans grew 19 per cent y-o-y to RM14.3 billion,” said a banking analyst.
Another analyst said the thirdquarter results were tinted with weaknesses in loan and deposit growth, alongside a soft fee income that could also extend into the final quarter.
“We see the group continuing to be resilient on the broadbased macro-economic aspects that could lift its fourth-quarter and overall financial year 2017 performance. These are basically due to the growing consumer loan demand in Malaysia and Singapore, and a pick-up in corporate lending in Malaysia,” said the Singapore-based analyst.
The analyst added that while Maybank’s asset quality was expected to remain intact in Malaysia, its asset quality for the oil and gas (O&G) support services sector in Singapore could show further deterioration.
“The group’s asset quality is generally good, but on top of the continuation of the O&G weakness there, the retail SME and corporate segments are underperforming.”
Despite all this, the analyst believed that Maybank’s ongoing efforts to further enhance digital initiatives would continue to be a game changer in this financial year and beyond.
“The group’s digital offering has had a positive impact so far, with the most obvious benefit being cost efficiencies due to lower personnel cost, lower cost-toserve and less maintenance spending on vendors.
“This is reflected in the bank’s cost income ratio of 47.9 per cent in the third quarter last year, from 50.3 per cent and 48.9 per cent in the first and second quarter, respectively,” said the analyst. “We believe with all these in place, The Maybank group will be announcing a better-than-2016 financial result next week.”
Maybank is expected to announce its results next Wednesday.