Maybank records FY21 net profit of RM8.10b, boosted by lower provisioning on improving regional economies

Maybank, Southeast Asia’s fourth largest bank by assets, has announced that it posted higher earnings for the financial year ended 31 December 2021 (FY21) with profit before tax (PBT) rising 25.8% year on year (Y o Y) to RM10.89 billion, compared with th e RM8.66 billion a year earlier. Net profit rose to RM8.10 billion, 24.9% higher than the RM6.48 billion recorded a year earlier.

The better results were driven by improving regional economic outlook that supported the Group’s higher operating income an d reduced impairment losses by 36.6% as it had taken pre emptive provisioning for potentially bad loans and financial investments since the pandemic started in 2020.

Net operating income grew 2.8% to RM25.45 billion, tracking Malaysia’s economic growth of 3.1% in 2021. This was achieved on the back of a 14.6% Y o Y increase in total net fund based income to RM19.09 billion as a result of stronger loan growth as well as robust improvement in current account and savings accounts ( which helped net inte rest margin ( expand 22 bps Y o Y. It was, however, partially offset by a 21.6% decline in net fee based income to RM6.36 billion mainly from lower net gain in investment income and marked to market losses on the fixed income portfolio held by its insu rance unit due to rising yields.

Growth in costs, meanwhile, was contained at 2.6%, well below income growth, resulting in pre-provisioning operating profit coming in higher at RM13.93 billion from RM13.54 billion a year ago.

Maybank Chairman, Tan Sri Dato’ Sri Zamzamzairani Mohd Isa said that despite the challenging environment owing to the resurgence of the pandemic and reimplementation of movement restrictions during a good part of the year, the Group remained resilient and delivered a commendable performance. This was mainly due to the Group’s diligent asset and liability management, prudent credit lending and asset quality practices, disciplined cost management and strong governance. While we are witnessing gradual recovery regionally supported by the resumption of more economic activities, improving vaccination rates and accommodative policies, we will stay ahead in managing key risks and any resurgence in COVID-19 cases. With the completion of our first year under the M25 Plan, we are cautiously optimistic that we can accelerate our ambitions this year for our three strategic priorities, namely digital, sustainability and new value drivers.”

Meanwhile, Group President & CEO Dato’ Sri Abdul Farid Alias said that the Group’s ability to deliver a better set of results in 2021 was underpinned by the risk posture to be prudent from the onset of the pandemic in terms of credit and risk management, pursuit of responsible growth and maintaining good shareholder returns.

“Our financial strength and resilience has been a result of our focus in building strong capital, liquidity, credit and risk management practises Group-wide over the years, which has helped us overcome this pandemic and enabled us to support our customers in need. While lingering COVID-19 concerns remain in 2022 due to the recent rapid increase in cases, the upside is that many have been fully vaccinated and we are learning to live with the new virus variants. Maybank will remain steadfast in pursuing its M25 ambitions to enable meaningful and lasting value creation.”

Maybank Indonesia reported a Profit after Tax and Minority Interests of Rp1.64 trillion for FY21, a 29.9% increase from Rp1.27 trillion in the previous year. This was on the back of lower provisions, declining cost of funds and overhead costs as well as better performance from the Shariah banking unit, as the economy gradually recovered in Indonesia. The declining cost of funds was mainly attributed to strong CASA growth of 18.5% to Rp54.26 trillion in December 2021. Net interest income, however, reduced Y-o-Y arising from lower loan growth and loan yields (attributed mainly to COVID-19 related restructuring) while net fee-based income declined on reduced global markets-related fees, offsetting a slight growth in wealth management fees. Nonetheless, the Bank turned in a net profit as overhead expenses declined 4.2% and provisioning costs fell 25.8% to Rp1.54 trillion due to pre-emptive provisioning made in the previous year.

Maybank Singapore registered a robust 77.2% increase in FY21 PBT to S$324.92 million from S$183.41 million a year ago. This was on the back of a 15.7% increase in net fund based income to S$642.38 million, which was driven by loans growth and improving margins. Net fee based income, however, was lower at S$268.44 million compared with S$421.57 million a year earlier due to lower treasury fees arising from market volatility. Loans expanded 8.7% Y-o-Y led by a 9.5% growth in corporate loans and 8.5% increase in CFS loans as the country continued to recover from the pandemic. Deposits, however, declined 6.9% Y-o-Y to S$48.0 billion as Maybank Singapore continued to let go of costly fixed deposits in favour of CASA acquisition. Consequently, its CASA ratio improved to 48.8% from 37.5% a year ago on expanded current account deposits.