The Maybank Group today announced
that its pre-tax profit for the half-year
ended 31 December 2005 rose 5.2% to RM1.87 billion, from
RM1.77 billion in the previous corresponding period ended 31 December
2004. Profit after tax for the Group increased
to RM1.31 billion from RM1.25 billion previously.
This performance translated into a net return
on equity (ROE) of 15.7% compared to 16.5% in the previous corresponding
period. The decline in ROE is the result of a conscious effort
by the Group to continue with an even more aggressive loan write-off
policy given its strong financial position.
For the interim period under review, 75% of
the collateral value of non-performing loans (NPLs) aged between
5-7 years, as well as 100% of the collateral value of NPLs aged
7 years and above were completely written-off. As a comparison,
for the corresponding period to December 2004, only the collateral
value of NPLs aged 9 years and above was written off.
Apart from cleaning further the balance sheet,
this write-off policy is expected to protect the Group from the
higher carrying cost of aged NPLs, especially with the prospect
of rising interest rates. In addition, it will further enhance
the Group? capital efficiency in preparation for the implementation
of the Basel II, in view that additional capital charges will
be required for impaired assets.
Notwithstanding the decline in ROE, earnings
per share rose to 34.89 sen from 34.56 sen previously, while for
the first time, total assets of the Group surpassed the RM200
billion mark, touching RM208.9 billion from RM191.9 billion previously.
The total assets include that of MNI Holdings Bhd for which the
acquisition was completed in December 2005. However, the profit
and loss statement for this period excludes the results of MNI
Holdings.
Elaborating on the Group's performance, the
President and CEO of Maybank, Datuk Amirsham A Aziz said that
the results were achieved on the back of a 15.7% improvement in
non-fund based income and sustained growth of 4.3% in net interest
income.
Total loans for the Group grew by 7.6% on an
annualized basis (after adjusting for NPLs written off). Loan
growth for the Malaysian operations was 2.02% on an annualized
basis, due to a significant decline in loans to the corporate
sector. However, this was more than offset by the continued strong
growth in the SMI and consumer sectors. Loans for SMIs expanded
by 15.5%, automobile financing by 16.4 % and credit card receivables
by 16.5% while growth in home mortgages moderated further to 6.4%.
For the Group's Islamic banking operations,
total financing grew at an annualized rate of 8.4%, contributed
mainly by an increase in hire purchase (+10.2%), trade financing
(+6.5%) and overdrafts (+4.9%).
Non-interest income during the half-year under
review grew 15.7% while net fund based income rose by 4.3%. The
ratio of non-interest income to gross income for the period continued
to rise, reaching 33.7% compared to 32.7% previously, reflecting
the success of on-going efforts to diversify the Group? income
streams.
Net income for the period rose faster than overheads
(11.2% against 7.5%), resulting in the cost-to-income ratio of
the Group improving further to 37.9% for the half-year just ended,
compared to 39.3% previously.
Datuk Amirsham noted that both the default and
recovery rates of NPLs have improved in the period under review.
The default rate declined to 4.6% from 6.5% previously while the
recovery rate improved to 51.1% respectively from 44.8%.
However, loan loss and provision for the Group
during the period recorded an increase to RM598 million from RM396.7
previously owing to the adoption of the more aggressive loan write-off
policy for the period. If the impact of the additional provision
required as a result of the writing down of the collateral value
of long outstanding NPLs only is excluded, the loan loss and provision
for the half-year just ended would have actually recorded a decline
of RM68.3 million or 18.8%.
Arising from this, the Group's asset quality
as at December 2005 improved further to 4.37% from 4.83% in June
2005. Loan loss coverage for the Group (excluding collateral value)
stood at 70.4% compared to 678.5% previously.
The results of major subsidiaries/business segments
for the period under review were as follows:
| Subsidiaries |
Profit
before tax for
Half-Year ended 31 Dec 2005
(RM million) |
Profit
before tax for
Half-Year ended 31 Dec 2005
(RM million) |
| Maybank |
1,721.5* |
888.9* |
| Aseambankers Malaysia Berhad |
78.85 |
70.98 |
| Mayban Discount Berhad |
33.88 |
36.76 |
| Mayban Securities |
1.72 |
(9.32) |
| Mayban General Assurance |
53.28 |
42.56 |
| Mayban Life Assurance |
2.96 |
2.67 |
| Maybank International Labuan |
9.72 |
52.12 |
| Singapore Operations |
169.09 |
87.35 |
| Other overseas operations |
89.98 |
58.09 |
* excluding dividends from subsidiaries
In view that the Board had, on 17 November 2005,
declared an interim dividend of 50 sen per share for the first
quarter of the financial year which was paid out on 16 January
2006, the Board is not recommending any additional interim dividend
for the half year.
