Maybank sees slower lending to corporate sector
KUALA LUMPUR: The country’s largest lender, Malayan Banking Bhd (Maybank), expects corporate sector lending to see a slowdown but remains confident about the consumer segment.
The bank, also the fourth biggest in SouthEast Asia, however, has no official estimates as to how much its loans can grow for the entire year, group chief financial officer Datuk Amirul Feisal Wan Zahir said.
Closest rival CIMB Group Holdings Bhd on Wednesday said it was projecting its total group loans to grow by 6% for 2018 after seeing an increase of 3.4% in the first half of the year.
For the six months to June 30, Maybank said its total group loans grew by 4.6%.
“We do see a strong momentum in consumer in tandem with economic growth, but for corporate, particularly on the larger corporate side, we see slower growth,” Amirul said at a results briefing here yesterday.
“For investment banking, there are two parts, one is brokerage fees and the other is capital market-raising and as far as brokerage fees are concerned, we’ve seen some decline in the first half.”
He said it remained “hard to project” how the capital market-rasing part of its business would fare, but added that there remained “windows of opportunity” in this area.
“There are windows of opportunity, for example, in the debt market.
“Because of the increase in volatility, a lot of funds are switching from equity to cash, but they are still looking for yields. So, there will be (chances) of very strong names going out there raising bonds, so we do expect activity on the fixed income side,” Amirul said.
As for the equities market, (opportunities) are possible too but this remains choppy, he added. For the second quarter ended June 30, Maybank reported a net profit of RM1.96bil compared to a net profit of RM1.66bil in the same period a year ago, a hike of 18%.
The increase was supported by higher operating income and lower provisions.
Revenue for the period stood at RM11.5bil compared to RM10.9bil last year.
Its cost-to-income ratio came in at 46.9% from 48.9% a year earlier.
The lender also announced yesterday a single-tier interim dividend of 25 sen per share for shareholders, compared with the 23 sen per share announced for the same period last year.
For the six months up to June 30, Maybank’s net profit stood at RM3.83bil against RM3.36bil a year earlier, higher by 14%.
Over the same period, net fee-based income grew 7.4% to RM3.28bil boosted by higher income from Islamic banking operations and forex profits.
Gross deposits grew 5.5%, helped by an 11.6% increase in Singapore and a 10.1% hike in Malaysia. In terms of net interest margin, this was at 2.33% in June, a dip of eight basis points from a year earlier.
Maybank’s capital position continued to be supported by a total capital ratio of 17.78% and a common equity tier-1 ratio or CET1 ratio of 13.16%.
In terms of the bank’s exposure to the oil and gas (O&G) industry, Amirul said total exposure was currently at about 3.8%.
When asked, he said he could not comment on whether or not the lender had any exposure to debt-laden O&G oufit Sapura Energy Bhd, which recently announced a rights issue to raise up to RM4bil. It has debts amounting to RM16bil.
Recall, Maybank’s Singapore operations took a hit in recent years because of its exposure to the-then beleaguered O&G market.
Amirul said at 3.8%, the banking group’s exposure to the sector had reduced.
At the close of trading yesterday, Maybank finished four sen lower to RM9.96.
Strong momentum: Amirul says the bank sees a strong momentum in the consumer segment in tandem with economic growth but believes that there will be a slowdown in corporate sector lending.