KUALA LUMPUR (Feb 27): Malayan Banking Bhd (Maybank) recorded a 5.4% growth in net profit for the fourth quarter ended Dec 31, 2022 (4QFY2022), as growth in net interest income and other operating income more than offset headwinds from higher provisions, impairments and overhead expenses.

The banking group, largest in Malaysia, declared a second interim cash dividend of 30 sen.

Net profit for 4QFY2022 rose to RM2.17 billion or 17.98 sen per share from RM2.06 billion or 17.32 sen per share a year ago, driven by a 15% growth in net interest income to RM3.52 billion from RM3.06 billion.

The group’s other operating income rose 78% to RM1.77 billion for 4QFY2022 from RM992.59 million in 4QFY2021, driven by items like unrealised gain on revaluation of financial assets and investment, coupled with net foreign exchange gain and realised gain on derivatives.

Although the group’s allowances for loans impairment nearly doubled to RM308.75 million for 4QFY2022 from RM157.28 million a year ago, Maybank also posted RM170.92 million of writeback in 4QFY2022 from impairment losses arising from financial investments, which provisions amounted to RM465.13 million in 4QFY2021.

Higher overhead expenses of RM3.41 billion for 4QFY2022 from RM2.95 billion a year ago — driven by increase in personnel expenses like salaries, allowances and bonuses — also partially offset Maybank’s profitability.

This led the group to record a higher cost-to-income ratio (CIR) of 49.4% for 4QFY2022 versus 46.9% a year ago.

For the full FY2022, Maybank’s net profit grew 1.7% to RM8.23 billion from RM8.1 billion in FY2021, on the back of a 11% growth in net interest income to RM50.91 billion from RM45.96 billion.

CIR for FY2022 rose to 46.4% from 45.3% in FY2021.

Targets 10.5%-11% ROE in FY2023

Going forward, Maybank said asset quality management will remain a priority for it this year, and that it is targeting a return on equity (ROE) of between 10.5% and 11% in FY2023 as its headline key performance indicator.

“To date, the expiry of repayment assistance programmes have not led to any material effect on the group’s asset quality. Maybank will continue to monitor the loan portfolio and remains committed to offering targeted support to customers if needed,” it said in a stock exchange filing on Monday (Feb 27).

Maybank said it will actively prioritise customer centricity through enhancing end-to-end customer journeys by providing financial solutions and services across various touchpoints.

“Strategic investments will be channelled to further integrate its digital and physical networks, enhance IT capabilities, and drive regional cross-selling synergies aligned to the M25+ corporate strategy,” it said.

“In supporting its ambition of being a sustainability leader in Asean, the group will focus on capacity-building to support the responsible transition of the group and its key stakeholders to a low carbon economy.

“These initiatives include offering sustainable financing and decarbonisation solutions to its customers,” it added.

In addition, Maybank said it will continue to deepen its Islamic wealth management capabilities by developing centres of excellence to lead the group’s aspiration of becoming a global Islamic finance leader.

Shares of Maybank were trading one sen or 0.1% lower at RM8.73 at market break on Monday, valuing it at RM105.23 billion.