Company DigestFundingLast updated: 28 August 2024

Maybank's 2QFY2024 Net Profit Rises 8.2% to RM2.53 Billion on Lower Provisions and Tax Expense; Interim Dividend 29 Sen

Malayan Banking Bhd (Maybank) has announced its results for the second quarter of the financial year 2024 (2QFY2024, the three months ended 30 June 2024): net profit rose 8.2% to RM2.53 billion from RM2.34 billion a year earlier, supported by lower impairment allowances and lower tax expenses. The board declared an interim cash dividend of 29 sen per share, bringing total distributions to RM3.5 billion, and reiterated its return on equity target of 11% for FY2024. For the first half of 2024, net profit increased about 9% to RM5.02 billion.

Second quarter: net profit up 8.2% on lower provisions and tax

KUALA LUMPUR, August 28, 2024 — Malayan Banking Bhd (Maybank) reported net profit of RM2.53 billion for the three months ended 30 June 2024, an increase of 8.2% against RM2.34 billion in the same quarter of the previous year. The improvement was driven by lower impairment allowances and lower tax expenses. Corporate announcements and investor materials of the group are published on the company website at https://www.maybank.com/.

The key reported figures for the quarter are as follows:

net profit — RM2.53 billion, up 8.2% from RM2.34 billion in 2QFY2023;
net interest income — RM3.19 billion, down 0.6% year on year;
non-interest income — RM2.41 billion, down 2.8% year on year;
impairment allowances — RM381.28 million, against RM561.68 million in 2QFY2023.

Both income lines were slightly softer than a year earlier, so the growth in net profit came from the cost side of the income statement: the reduction in impairment allowances, together with lower tax expenses, more than offset the modest decline in net interest and non-interest income.

Interim dividend and the 11% return on equity target

The board declared an interim cash dividend of 29 sen per share, with total distributions amounting to RM3.5 billion. At the same time, the group reiterated its return on equity target of 11% for the full financial year 2024. Commenting on the outlook, chairman Tan Sri Zamzamzairani Mohd Isa said: "Looking ahead to the second half of 2024, we remain optimistic about our prospects."

First half: net profit up about 9% to RM5.02 billion

For the six months ended 30 June 2024, Maybank recorded net profit of RM5.02 billion, an increase of about 9% from RM4.60 billion in the corresponding period of 2023. The half-year income mix differed from the quarterly picture:

net interest income — RM6.35 billion, down 1.4% year on year;
non-interest income — RM5.15 billion, up 28% year on year.

The strong expansion of non-interest income in the first half compensated for the pressure on net interest income and underpinned the near-9% growth in half-year net profit.

Margin, loans and deposits

The group's net interest margin narrowed by 15 basis points year on year, reflecting higher funding costs across its home markets of Malaysia, Singapore and Indonesia. Balance-sheet growth nevertheless remained solid: gross loans increased 10.4% and deposits grew 7.9% compared with a year earlier.

Asset quality and capital position

Credit quality continued to improve during the quarter, and capital ratios remained well above regulatory requirements:

gross impaired loans ratio — 1.29%, an improvement of 18 basis points;
loan loss coverage — 128.7%;
common equity tier 1 (CET1) ratio — 14.70%.

The combination of a lower gross impaired loans ratio and loan loss coverage of 128.7% indicates that the group entered the second half of 2024 with a resilient loan book, while the CET1 ratio of 14.70% preserves a substantial capital buffer for lending growth and shareholder distributions.

Market reaction and management commentary

On the market, Maybank shares rose 16 sen, or 1.5%, to RM10.86, valuing the group at a market capitalisation of RM131 billion. Commenting on the results, group chief executive officer Datuk Khairussaleh Ramli said: "We are staying the course and sustaining this momentum."

With the 11% return on equity target for FY2024 reiterated and an optimistic outlook for the second half of the year, the group's management positions the quarterly result as confirmation of the current strategy rather than a reason to change it.