KUALA LUMPUR: Malayan Banking Bhd (Maybank) posted a net profit of RM1.68bil in the third quarter ended Sept 30, 2021, a 13.71% decline from RM1.95bil in the previous corresponding quarter due to a reduction in fee-based income and higher impairment losses.

Consequently, earnings per share in Q3FY21 was down to 14.41 sen from 17.37 sen a year earlier.

The bank, which is Southeast Asia’s fourth largest by assets, reported that revenue was RM11.15bil, an 18.97% drop from RM13.76bil in the year-ago quarter.

“In 3QFY20, there was a 26.6% decrease in net fee based income to RM1.43bil mainly from lower investment and trading income, coupled with higher net impairment losses on additional proactive provisioning made in view of the varying levels of movement restrictions across home markets Malaysia, Singapore and Indonesia which were emplaced in the recent third quarter,” it said in a Thursday statement.

Net operating income in Q3 however was 1.2% higher year-on-year (y-o-y) to RM6.15bil due to higher net fund-based income of 14.3% to RM4.72bil.

There was no interim dividend declared with respect to the financial period.

For the nine months period ended Sept 30, 2021, the group recorded a net profit of RM6.04bil, marking a 22.16% improvement over the same period in 2020 while revenue slid 10.53% y-o-y to RM34.7bil.

Moving forward, Maybank chairman Tan Sri Zamzamzairani Mohd Isa said despite the impact of the movement restrictions on the group’s Q3 performance, its strong liqudiity and capital base will allow it to tap growth opportunities emerging with the economic reopening.

“As Malaysia sees economic recovery in the fourth quarter of 2021 on the back of strong vaccination rates and an uptick in business and leisure mobility, we will position ourselves for renewed growth and to support our customers in making the most of these early days of economic recovery,” he said.

Meanwhile, group president and CEO Datuk Abdul Farid Alias said the group will continue to provide tailored financial solutions to meet the current needs of customers that have shifted from preservation to growth, with the reopening of economies, while continuing to support customers who require targeted financial assistance.

As at Sept 30, 2021, the bank’s total group gross loans grew 4% year-on-year due mainly to improvements in the Community Financial Services segments.

The current account and saving accounts (Casa) expanded 12.3%, improving the Casa ratio to 46% as at September 2021. The group’s total deposits expanded 2.8%.

Over the nine months period to Sept 30, the group recorded a net interest margin (NIM) of 2.31%, which was improved from 2.08% a year earlier due to lower deposit cost and strong Casa growth.

However, on a quarter-on-quarter basis, NIM in Q3 fell 11bps to 2.26% due to the impact from net modification loss arising from the moratorium granted to consumer and SME borrowers as part of pandemic relief efforts.

As at Sept 30, 2021, the group’s CET1 capital ratio stood at 14.24% while its total capital ratio was 18.21%. The liquidity coverage ratio stood at 138.1%, exceeding the regulatory requirement of 100%.

On asset quality, the group registered improved asset quality as gross impaired loans declined to 1.93% in September 2021 from 2.35% a year earlier.

“Notwithstanding this, Maybank continues to maintain a proactive stance by increasing management overlay for anticipated weakness in credit quality for specific business or corporate borrowers and the retail portfolio, arising from the impact to borrowers given the prolonged movement restrictions.

“Stringent monitoring of credit portfolios remains a priority and the Group continues to actively engage clients who have been impacted by the challenging business conditions to provide assistance and advice in managing their financial obligations,” it said.

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