KUALA LUMPUR: Malayan Banking Bhd (Maybank) expects the country’s growth to moderate, going further into 2023, as external trade softens in tandem with a slowdown in domestic demand, which will put the brakes on loan take-up rates for the banking industry.
Nevertheless, the country’s largest banking group believes that the recovery will be buoyed by the return of foreign tourists and positive foreign direct investments into Malaysia.
Maybank, which released its fourth quarter (4Q) and full financial year results for 2022 yesterday, saw net profit inch up 1.7% to RM8.23bil for the year ended Dec 31, 2022, on the back of a 10.8% year-on-year (y-o-y) rise in revenue to RM50.9bil.
For the final quarter itself, net profit grew 5.4% y-o-y to RM2.17bil, supported by turnover for the period that surged by 28.9% y-o-y to RM14.5bil.
Chairman Tan Sri Zamzamzairani Mohd Isa told a media briefing on Maybank’s financial results that the positive performance was underpinned by improving regional economic
activities and the gradual reopening of Asean, especially in the fourth quarter, which supported the group’s high operating income.
Meanwhile, chief executive and group president Datuk Khairussaleh Ramli drew attention to the group’s pre-tax profit, which rose by 21.6% y-o-y to RM2.21bil for the quarter under review, while for the full year, pre-tax profit climbed 11.6% y-o-y to RM12.2bil.
Khairussaleh attributed the marked difference in pre-tax profit and net profit figures to the prosperity tax last year.
He also pointed out there was a 8.4% y-o-y expansion in net interest margins to 2.39%
as a result of a number of hikes in overnight policy rate (OPR) by Bank Negara in 2022.
While the group has seen its loans grow 6.7% in Malaysia last year, Khairussaleh said he is expecting loan take-up to moderate in 2023.
“In Malaysia and many other countries, loan growth tracks very closely to the country’s gross domestic product (GDP) and since we are anticipating our GDP to ease from 8.7%
to 4%, we see the same pattern for loans as well,” he said.
Elaborating on loans, Khairussaleh said although the repayment assistance packages provided by the bank to its debtors during the lockdown in 2020 and 2021 have expired, Maybank continues to monitor the performance of this particular portfolio.
He noted that the current repayment performance of borrowers who took up repayment moratoriums during the lockdown period so far have been encouraging and hence, it is preventing an increase in non-performing loans.
Notably, Maybank is of the opinion that Bank Negara could bring about one more 25- basis-point OPR hike this year to close at 3%, acknowledging that whatever moves the central bank makes would be driven by relevant and current data.
Commenting further, particularly as equities in the United States have sold down last week on inflationary concerns, Khairussaleh said there is currently still less pressure on regulators to move rates upwards, since rate hikes have stabilised state-side.
“Our forecasts on whether the US Federal Reserve or Bank Negara will continue raising rates are also based on the data that they have. Hence, it could be difficult to anticipate further into the future,” he added.
Meanwhile, Maybank said its group Islamic banking has seen pre-tax profit increase by 8% y-o-y to RM4.79bil, contributing 67.2% of loans and financing against 32.8% of conventional financing, up from the 64.9% of 2021.
The group believes that it is poised for global leadership positioning in Islamic banking, having attained the rank of being fifth largest in the world in terms of assets.
“We are focused on our strategy of using Singapore as a hub for both conventional and Islamic wealth management, which is utilised to acquire clients from Indonesia, Malaysia and other parts of the region to help them grow their wealth.
“It does not mean we are going to open more branches beyond Asean but it is about building differentiated offerings in global Islamic wealth management,” Khairussaleh said.
Moving forward, he said the group’s focus will remain on Asean, as about 90% of its income and assets are in this region, having established presence in 10 countries throughout.
“We do have footprints in many other parts of the world including in China, New York and London but those are more for facilitating our clients who are doing business in those locations. Our primary focus will still be here.”
Maybank has declared a full cash second interim dividend of 30 sen per share, bringing its total dividend for 2022 to 58 sen per share, with a payout ratio of 84.6%, exceeding its dividend payout policy ratio of 40% to 60%.
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