Maybank Expects Better Loan Growth In Second Half

KUALA LUMPUR, Aug 26 (Bernama) -- Malayan Banking Bhd (Maybank) expects a slightly better loan growth in the second half of 2016 (H216) following improving quarterly trends in the corporate, consumer and small and medium enterprise segments. Its Group President/Chief Executive Officer, Abdul Farid Alias, said the group expected H216 to see improvement, with the pick-up in loans expected to gather pace and revenue momentum maintained. He said the bank will remain focused on selective asset growth to drive overall group performance in H216, while maintaining strong liquidity and capital positions. "We continue to see opportunities for growth, especially in ASEAN, and will emphasise on cost discipline, improving productivity and managing costs and risks as we seek to strengthen our franchise in the region. "We will remain vigilant and maintain proactive management of asset quality while building on our capital and liquidity positions to cushion ourselves from unanticipated events that could derail economic recovery," he told a media briefing on the bank's first-half 2016 financial results here Thursday. Malaysia's largest bank by asset continues to register solid growth in income for the half-year ended June 30, 2016 despite the continuing global economic slowdown, although net profit was impacted by higher provisions for loan impairments. Its net operating income for the six months rose 8.7 per cent year-on-year to US$2.67 billion (RM10.74 billion, US$1 = RM4.02) as loans growth picked up pace, deposits surged and the group continued to benefit from its strong retail franchise in key markets. Growth came from all business sectors. Group global banking grew by 17.5 per cent, community financial services (+9.7 per cent) and insurance and takaful (+1.2 per cent). Maybank's Group Financial Controller, Amirul Feisal Wan Zahir, said the bank's net fund-based income rose by 9.3 per cent to RM7.60 billion during the period, while net fee-based income increased 7.4 per cent to RM3.13 billion. He said the credit cost was lower in H216 and the group continued to reap the benefits of its strategic cost management programme which had resulted in overhead expenses growth managed at 6.8 per cent, well below income growth. "The group's cost-to-income ratio improved to 48.7 per cent in June 2016 from 49.5 per cent a year earlier. "Consequently, pre-provisioning operating profit for the half-year reached RM5.49 billion, 10.6 per cent more than the six-month period ended June 2015," he said. He said the bank's pre-tax profit was lower than what was achieved in the corresponding period last year due to higher provisioning. "This was partly due to the group's proactive efforts to reschedule or restructure some of the credit facilities for customers that are impacted by the weaker global economic conditions," he said. He said the other components of the provisions were contributed by non-performing loans, which although escalated, were still within expectations --BERNAMA