Maybank's profit falls to RM6.48 bln in FY20 on higher impairment losses

KUALA LUMPUR: Malayan Banking Bhd (Maybank) closed its financial year ended Dec 31, 2020 (FY20) with a lower net profit of RM6.48 billion compared with RM8.20 billion in FY19 due to significantly higher net impairment losses, owing to the continued impact from the COVID-19 pandemic.

Its revenue slipped to RM51.03 billion from RM52.86 billion previously, while basic earnings per share fell to 57.66 sen from 73.45 sen, it said in a filing with Bursa Malaysia today.

In the fourth quarter of FY20 (Q4 2020), the bank's net profit declined to RM1.54 billion from RM2.45 billion in Q4 2019, while revenue was down at RM12.24 billion versus RM13.0 billion previously.

For FY20, the board has proposed a final single-tier dividend of 38.5 sen per share, comprising an electable portion of 21 sen per share under its Dividend Reinvestment Plan.

“Together with the interim dividend of 13.5 sen per share, the full-year dividend amounts to 52 sen per share, and translates into a full-year dividend payout ratio of 91.2 per cent,” it said.

Maybank said its Malaysian operations registered a steady 4.0 per cent expansion in gross loans for FY20, outpacing the industry growth of 3.4 per cent; underpinned by a healthy 6.8 per cent rise in the Community Financial Services segment on strong consumer as well as Business Banking and SME demand.

However, the home markets of Singapore and Indonesia registered declines of 1.9 per cent and 14.8 per cent, respectively, mainly as a result of write-offs and repayments as the group continued to manage its exposure in these markets as part of its strategy to continuously rebalance its portfolios to mitigate risks.

Meanwhile, in a statement today, chairman Tan Sri Zamzamzairani Mohd Isa said notwithstanding the challenges presented by the COVID-19 pandemic, the group had been able to demonstrate its resilience and ability to remain agile in managing the unprecedented risks and disruptions.

“Moving forward, our key priority will be to continue focusing on our financial sustainability and creating value for the millions of our stakeholders,” he said.

He said the group is set to launch its M25 Plan, which outlines the bank's roadmap and strategic objectives for the next five years to drive Maybank to the next level and accelerate its growth trajectory.

Meanwhile, group president and chief executive officer, Datuk Abdul Farid Alias said that the group’s performance was underpinned by its diversified operations and focus on ensuring a robust liquidity and capital base.

“Although we expect the environment to remain challenging for the medium term, we are hopeful that economic momentum will be lifted once the vaccination campaigns are rolled out more comprehensively,” he said.

Abdul Farid said that the group remains committed to adhering to the fundamentals of sound banking practices and prudent management, while simultaneously seeking new revenue-generating opportunities and leveraging its technological capabilities to produce world-class products and services.

“We have several exciting digital initiatives designed to deliver next-generation customer experience, which will be rolled out to our customers this year,” he added.

Moving forward, the bank said the global economy is expected to rebound in 2021 following the rollout of COVID-19 vaccines.

Global monetary policies are anticipated to remain accommodative and fiscal policies are to stay expansionary, extending economic stimulus, thus avoiding a policy cliff from premature withdrawals, ending or exiting of stimulus packages.

“Given the challenging environment, Maybank Group will continue to prioritise maintaining its capital and liquidity strength.

“From this position of strength, the group will continue to proactively engage its customers to address asset quality concerns early on, and identify and support on a targeted basis customers that remain affected by the pandemic-induced downturn,” it said.

The group added that it will focus on growing lower cost current and savings deposit balances to mitigate against further net interest margin compression.

-- BERNAMA