May­bank’s Q3 net profit slips

> Down 3.4% from a year ago; CEO says ‘pro­longed geopo­lit­i­cal sit­u­a­tion’ a key con­cern

The Sun (Malaysia) - - SUNBIZ -

KUALA LUMPUR: Malayan Bank­ing Bhd (May­bank), Malaysia’s largest lender by as­sets, posted a drop in third-quar­ter profit on lower fee­based in­come, while its CEO cau­tioned that the “pro­longed geopo­lit­i­cal sit­u­a­tion” was a key con­cern for busi­ness.

Smaller ri­val CIMB Group Hold­ings Bhd also sounded a cau­tious note cit­ing weaker re­gional economies and the US-China trade war, even as it posted higher quar­terly earn­ings on bet­ter con­sumer and com­mer­cial bank­ing busi­ness.

May­bank’s net profit for the quar­ter ended Septem­ber dropped 3.4% from a year ago to RM1.96 bil­lion (US$468 mil­lion), lag­ging the RM1.98 bil­lion av­er­age es­ti­mate from two an­a­lysts sur­veyed by Refini­tiv.

The lender at­trib­uted the drop to lower in­vest­ment and trad­ing pro­ceeds as well as for­eign ex­change fluc­tu­a­tions.

In­sur­ance claims and al­lowances for im­pair­ment losses also in­creased, ac­cord­ing to its fi­nan­cial state­ment.

Rev­enue climbed 4% to RM12.1 bil­lion.

“The pro­longed geopo­lit­i­cal sit­u­a­tion re­mains a key con­cern, as it would in­flu­ence global growth, in­clud­ing Asia where May­bank has most of its op­er­a­tions,” May­bank group pres­i­dent and CEO Ab­dul Farid Alias said in a state­ment yes­ter­day.

“We will re­main ag­ile to ad­just to rapid mar­ket changes, while at the same time look for op­por­tu­ni­ties for growth, such as in in­fra­struc­ture fi­nanc­ing, wealth man­age­ment, dig­i­tal bank­ing and Is­lamic bank­ing,” Ab­dul Farid added.

CIMB’s group CEO Zafrul Aziz said his bank would “con­tinue to con­trol as­set qual­ity and cost across its busi­nesses” amid global trade ten­sions.

The coun­try’s No.2 lender by as­sets posted a RM1.18 bil­lion profit for the third quar­ter, 4.2% higher than a year ago and above a con­sen­sus es­ti­mate of 824 mil­lion ring­git from four an­a­lysts sur­veyed by Refini­tiv. Its rev­enue, how­ever, slipped 6.3%.

May­bank and CIMB’s net in­ter­est in­come, a key mea­sure of banks’ fi­nan­cial per­for­mance, in the third quar­ter nar­rowed to 2.3% and 7.3%, re­spec­tively.

The mixed re­sults come against a back­drop of a broader weak­ness in the econ­omy that an­a­lysts have cau­tioned will dampen bank­ing per­for­mance.

Malaysia’s eco­nomic growth is ex­pected to slow to 4.8% in 2018, from the 5.9% pace a year ear­lier.

The econ­omy, South­east Asia’s third largest, grew 4.4% over Jul­y­Septem­ber, its slow­est pace in two years.

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