Maybank's net profit for the year to June 30 2009 falls some 76 per cent to RM691.9 million on writedowns and higher provisions for bad loans
Top lender Malayan Banking Bhd (Maybank) (1155) yesterday reported its lowest annual net profit in a decade after it wrote down the value of its overseas banks.
Net profit for the year to June 30 2009 came in at RM691.9 million, some 76 per cent lower than the previous year's RM2.9 billion.
President and chief executive officer Datuk Seri Abdul Wahid Omar said the lower profit was mainly due to writedowns of RM1.97 billion for its banks in Indonesia and Pakistan, and higher provisions for bad loans.
The writedowns, which is the difference between what it paid for the banks and their actual fair value, were expected by analysts.
Wahid, meanwhile, is confident the group will do "significantly" better in the current year.
"We're confident of a significantly improved performance this year based on an expected economic recovery and broad-based growth," he told reporters at a briefing in Kuala Lumpur yesterday.
Maybank is targetting revenue growth of 8 per cent this year, with a return-on-equity (ROE) of 11 per cent on its enlarged capital base. Its ROE came in at 10.4 per cent per cent last year.
The group, which made a string of acquisitions that analysts considered pricey last year, swung to a net loss of RM1.1 billion in the fourth quarter compared with a profit of RM703.2 million in the same period a year ago.
It was its first quarterly loss since 2001. It booked RM1.62 billion in impairment charges for Bank Internasional Indonesia (BII) and RM111.1 million for MCB Bank in Pakistan.
Wahid said the group would have made a "reasonable" net profit of RM2.18 billion for the full year had it not been for the impairment charges.
He doesn't expect to make any further impairments on the overseas banks.
The group's loan loss provisions for the quarter was RM782.5 million compared with RM353.6 million a year earlier.
For the full year, Maybank's net income rose by 10 per cent to RM10.5 billion, boosted by Islamic banking income which grew by almost 27 per cent.
Net interest income expanded by 9 per cent to RM5.92 billion on the back of higher loans growth and improved lending margins, contributed mainly by BII.
Non interest income grew by 6.4 per cent to RM3.4 billion.
Gross loans rose by 13 per cent, reflecting the consolidation of BII. Wahid said the group would pay much attention to driving loans growth at BII this year.
Maybank's asset quality improved, with net non-performing loan (NPL) ratio at 1.64 per cent compared with 1.92 per cent before.
"We might see some NPLs from small-to-medium enterprises come in (later), but we do reckon that the amount would be manageable," Wahid remarked.
Meanwhile, he expects the group to be able to increase its stake in Vietnam's An Binh Bank to 20 per cent from 15 per cent" in the next two weeks".
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